EXHIBIT 4.26
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 22nd day of August, 0000
X X X X X X X:
HYDROGENICS CORPORATION, a company organized and existing
under the laws of Canada (the "Supplier")
- and -
TOYOTA TSUSHO CORPORATION, a company organized and existing
under the laws of Japan (the "Distributor").
RECITALS:
A. Supplier is engaged in the manufacture of fuel cell test stations and
related devices;
B. Distributor has the resources to effectively market and sell the goods
of Supplier, including the required technical knowledge of selling,
distributing and advertising processes and techniques, including
knowledge of the local laws, customs, market conditions, exchange
control and international finance;
C. Distributor desires to purchase such merchandise from Supplier for sale
within the Territory specified herein;
D. The parties are desirous of formalizing their relationship under the
terms of this Agreement.
THEREFORE the parties agree as follows:
- 2 -
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
Wherever used in this Agreement, unless there is something in the subject matter
or context inconsistent therewith, the following words and terms shall have the
respective meanings ascribed to them as follows:
(a) "ACCOUNTING PERIOD" means a three month period commencing on
the first business day of the first month and ending on the
last business day of the third month, with each successive
Accounting Period to commence on the first business day
following the close of the immediately preceding Accounting
Period;
(b) "AGREEMENT" means this agreement entitled "Distribution
Agreement" and all instruments supplemental hereto or in
amendment or confirmation hereof;
(c) "FORCE MAJEURE" has the meaning given to such term in Section
10.4 hereof;
(d) "NOTICE" has the meaning given to such term in Section 10.12
hereof;
(e) "PRIME BANK RATE" means the prime commercial lending rate of
interest (expressed as an annual rate) which Supplier's
bankers establish as the reference rate of interest that the
bank would charge its customers for loans in Canadian funds,
as the same may be in effect from time to time;
(f) "PRODUCT PRICE LIST" has the meaning given to such term in
Subsection 3.4(b)(ii) hereof;
(g) "PRODUCTS" means and is restricted to fuel cell test stations
that are manufactured and supplied by Supplier, including
service and maintenance contracts and all related devices. For
greater certainty the term "Products" shall not include fuel
cell power generators and other non-testing products
manufactured by Supplier. Supplier reserves the right to add a
product to this Agreement, to discontinue a product, and to
modify or amend the standards and specifications of such
product and its packaging during the Term of this Agreement on
Notice to Distributor. In
- 3 -
such event, product added to, modified or amended shall be
considered to be Product and discontinued product shall not be
considered to be Product for the purposes of this Agreement;
(h) "SUPPLIER TRADE-MARKS" means the trade-names, trade-marks and
other commercial symbols of Supplier which may be used in
connection with the sale or servicing of the Products, namely
those trade-marks listed in Schedule "A" hereof;
(i) "TERM" means and includes the initial and any renewal terms of
this Agreement; and
(j) "TERRITORY" shall mean the geographic area of Japan.
1.2 GENDER AND NUMBER
In this Agreement, words importing the singular include the plural and vice
versa and words importing gender include all genders.
1.3 ARTICLE AND SECTION HEADINGS
The insertion of headings and the division of this Agreement into articles and
sections are for convenience of reference only and shall not affect the
interpretation hereof.
1.4 ENTIRE AGREEMENT
This Agreement and any documents incorporated by reference herein constitute the
entire agreement between the parties pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions
with respect to the subject matter hereof whether oral or written. Except as
provided in such materials, there are no conditions, representations,
warranties, undertakings, promises, inducements or agreements whether direct,
indirect, collateral, express or implied made by Supplier to Distributor. No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by Supplier and Distributor.
- 4 -
1.5 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the United
Nations Convention on Contracts for the International Sale of Goods.
1.6 SEVERABILITY
If in any jurisdiction, any provision of this Agreement or its application to
any party or circumstance is restricted, prohibited or unenforceable, such
provision shall, as to such jurisdiction, be ineffective only to the extent of
such restriction, prohibition or unenforceability without invalidating the
remaining provision hereof and without affecting the validity or enforceability
of such provision in any other jurisdiction or its application to other parties
or circumstances.
1.7 NON-WAIVER
The failure of Supplier to exercise any right, power or option given hereunder
or to insist upon the strict compliance with the terms and conditions hereof by
Distributor shall not constitute a waiver of the terms and conditions of this
Agreement with respect to that or any other or subsequent breach thereof nor a
waiver by Supplier of its rights at any time thereafter to require strict
compliance with all terms and conditions hereof including the terms or
conditions with respect to which Distributor has failed to exercise such right,
power or option.
ARTICLE 2
GRANT
2.1 GRANT
Subject to the terms and conditions of this Agreement, Supplier grants to
Distributor the right to act as exclusive distributor of the Products within the
Territory and to use or display Supplier Trade-marks in association therewith.
- 5 -
2.2 ACCEPTANCE
Distributor accepts its appointment as the exclusive distributor of the Products
in the Territory upon the terms, provisions and conditions of this Agreement.
2.3 RESTRICTIONS
Distributor shall not sell, distribute or advertise products which are similar
to, which perform the same functions as or which compete with the Products
during the Term of this Agreement without the prior written consent of Supplier.
2.4 TERM
Unless otherwise terminated pursuant to this Agreement, this Agreement shall
remain in force for a period of two (2) years from the date of execution.
2.5 RENEWAL
This Agreement may be renewed by Distributor for additional renewal terms of two
(2) years each, provided that Distributor shall have substantially complied with
all of the provisions of this Agreement, Distributor shall have given to
Supplier at least two (2) months' Notice prior to the expiry of the then current
Term of its intention to renew this Agreement, and the parties shall have agreed
in writing to the renewal Term purchase requirements. In the case of a failure
by the parties to reach an agreement on the renewal Term purchase requirements
and/or a failure by the Distributor to meet the purchase requirements of the
initial Term or any subsequent renewal Term, this Agreement shall become
non-exclusive, provided, however, that in either case Distributor shall retain
the right to distribute Products in the Territory for an additional two (2) year
period, subject to the terms and conditions of this Agreement.
- 6 -
ARTICLE 3
ORDER AND PRICES
3.1 ORDERS
All Distributor orders for Products shall be subject to the terms and conditions
contained in this Agreement, and such further additional terms and conditions
which may from time to time be agreed between the parties and appended or
attached to Supplier's quotations and/or Distributor's purchase orders. In the
event that such additional terms and conditions are different from or
inconsistent with the terms and conditions of this Agreement, the terms and
conditions of such additional terms and conditions shall govern. Notwithstanding
anything herein to the contrary, Distributor's wholly-owned subsidiary, Toyota
Tsusho America, Inc., may place orders to Supplier pursuant to this Agreement
strictly for resale to Distributor, which order and sales procedure shall not
otherwise effect the rights and responsibilities of Supplier and Distributor
under this Agreement.
3.2 PURCHASE REQUIREMENTS
Distributor shall (but not be obliged to), during the Term of this Agreement,
endeavour to complete the purchase from Supplier of a minimum of US$5 million of
Products. For greater certainty, sales generated by Distributor prior to the
signing of this Agreement shall be included in the calculation of the amount of
Product purchased by Distributor during the initial Term.
3.3 RIGHT TO PURCHASE
Supplier agrees to sell to Distributor and Distributor agrees to purchase from
Supplier and pay Supplier for such quantities of the Products as Distributor may
reasonably request and as Supplier, using its best efforts, is capable of
supplying at the prices and subject to the other terms and conditions of sale
established by Supplier and in effect at the time of shipment including, without
limitation, invoice and/or purchase order terms.
- 7 -
3.4 PRODUCT PRICING
(a) Distributor acknowledges and agrees that competitive pricing
of Products and competitive rates for the servicing of
Products in the Territory is an essential ingredient in
adequately servicing the needs of Supplier hereunder.
(b) Distributor shall be free to sell the Products in the
Territory at whatever price it is able to obtain, provided,
however, that:
(i) Distributor quotes and sets prices for the Product in
the Territory in accordance with the spirit and
intent of Section 3.4(a) hereof;
(ii) Distributor quotes and sets prices for the Product in
the Territory by reference to Supplier's non-binding
retail Product price list for the Territory (the
"Product Price List"), as determined by Supplier in
its sole discretion, after consultation with
Distributor. The current Product Price List is
appended as Schedule "B" to this Agreement.
Distributor acknowledges receipt of the Product Price
List and agrees that such price list (as it may be
issued, amended and modified by Supplier from time to
time) shall be an integral part of this Agreement and
incorporated by reference hereto; and
(iii) the gross price at which a Product is sold by
Distributor in the Territory shall be reported in
writing to Supplier in accordance with the reporting
obligations described in Sections 4.3 and 6.2 (1)
hereof.
(c) The prices at which Supplier sells the Products to Distributor
shall be determined on a quotation basis, based on Supplier's
"Ex Works" Mississauga price as determined by Supplier, its
sole discretion, provided, however, that Supplier shall set
its price by reference to the then current Product Price List
less applicable distributor discounts.
3.5 RESERVATIONS OF SUPPLIER
(a) Supplier reserves the right to:
- 8 -
(i) solicit orders from and sell Products directly for
its own account to parties located in the Territory
who specifically request Supplier in writing to
transact directly with the Supplier;
(ii) accept orders from customers outside the Territory to
their subsidiaries in the Territory; and
(iii) use distributors in the Territory from time to time,
solely in order to effect the sales described in
Subsections 3.5(a)(i) and (ii).
(b) Upon the exercise by Supplier of the rights described in
Subsection 3.5(a) hereof, Supplier agrees to notify
Distributor and to pay Distributor a commission of 5% on the
value of all such deliveries made by Supplier in the
Territory, provided that Distributor initiated and/or assisted
in effecting such sales.
(c) Supplier agrees that the Product price of sales effected in
the Territory pursuant to the Supplier's rights described in
Subsection 3.5(a) hereof shall be set by reference to the then
current Product Price List.
3.6 ORDERS FOR PRODUCTS
Distributor shall order all Products by completion of a standard order form as
may be prepared and supplied from time to time by Supplier. Notwithstanding the
foregoing, Distributor may use its own purchase order or other business form to
order Products under this Agreement, provided that no provisions contained in
any such purchase order or business form or other Distributor document or
communication which are different from or additional to this Agreement or
Supplier's standard order form then in effect shall be binding upon Supplier or
have any force or effect whatsoever. No failure by Supplier to object to any
such provisions shall be deemed a waiver hereof.
3.7 ACCEPTANCE OF ORDERS
All purchase orders for Products are subject to acceptance by Supplier. Each
proposed purchase order of Distributor shall be deemed void and without effect
if not accepted by Supplier within 15 days after the date of receipt thereof by
Supplier. Supplier reserves the right to reject any purchase order in its sole
discretion.
- 9 -
ARTICLE 4
DELIVERY AND PAYMENT
4.1 PRODUCT DELIVERY
(a) Unless otherwise stipulated by the terms of standard purchase
orders as may be prepared by the parties from time to time,
all deliveries of the Products shall be "Ex Works" Mississauga
facility. Risk of loss shall pass to Distributor when the
Products are put into the possession of the carrier, at which
point Supplier shall be deemed to have completed good delivery
to Distributor.
(b) Distributor shall be responsible for all duties, taxes, costs
and procedures and compliance with all local laws, associated
with importing all material shipped to Distributor under this
Agreement into the country of destination.
(c) Distributor shall make a thorough inspection of each shipment
of Products upon receipt by Distributor thereof. If
Distributor believes that the shipment does not conform to the
subject order in any respect, Distributor shall give Supplier
notice in writing, setting out the full particulars of the
alleged nonconformance, within (30) calendar days after
receipt by Distributor of the shipment and shall make such
shipment available at Distributor's premises for inspection by
Supplier or its representative. Failure to give such notice
within the 30-day period shall bar Distributor from making any
claim excluding latent defect that the shipment of Products
failed to comply with the order.
(d) The parties agree to exclude the application of article 50 of
the United Nations Convention on Contracts for the
International Sale of Goods, which would otherwise authorize
Distributor to reduce the price in accordance with the formula
set out in that article when the goods tendered do not
conform.
- 10 -
4.2 PAYMENT
Unless otherwise stipulated by the terms of standard purchase orders as may be
prepared by the parties from time to time, payment in full for Products
purchased by Distributor from Supplier shall be remitted to Supplier within
thirty (30) days after the delivery of Products so purchased. Unless otherwise
stipulated in the terms of individual quotations, all payments to be made to
Supplier hereunder shall be made to Supplier in United States dollars and shall
be sent to Supplier at Supplier's address as provided herein or to such address
as Supplier may specify in writing. Distributor agrees that all amounts to be
paid to Supplier by Distributor shall be paid notwithstanding Distributor's
failure or inability to collect amounts owing to it from customers.
4.3 PERIODIC STATEMENTS
Distributor agrees to submit to Supplier within thirty (30) days of each
Accounting Period a complete and accurate operating statement for that period in
the form and manner prescribed by Supplier detailing such matters as Product
sold by Distributor in such period.
4.4 OVERDUE AMOUNTS
Any amounts owed to Supplier by Distributor pursuant to this Agreement or
otherwise shall bear interest from the due date until paid in full at a rate of
interest equal to the Prime Bank Rate plus five percent (5%) or the highest
amount permitted by applicable law, whichever is lower, such amount to be
calculated and payable weekly, both before and after default, with interest on
overdue interest at the same rate. The acceptance by Supplier of any interest
payment shall be without prejudice to Supplier's right to terminate this
Agreement in respect of such default.
4.5 CONFORMITY
(a) Notwithstanding article 39(1) of the United Nations Convention
on Contracts for the International Sale of Goods, the parties
agree that Distributor loses the right to rely on a lack of
conformity of the goods if Distributor does not give notice to
the Supplier specifying the nature of the lack of conformity
within thirty (30) days after Distributor has discovered it or
ought to have discovered it.
- 11 -
(b) Notwithstanding article 39(2) of the United Nations Convention
on Contracts for the International Sale of Goods, the parties
agree that Distributor loses the right to rely on a lack of
conformity of the goods if Distributor does not give the
Supplier notice thereof at the latest within a period of seven
months from the date on which the goods were actually handed
over to Distributor.
ARTICLE 5
WARRANTY
5.1 WARRANTY
Except as set out in Supplier's standard warranty, Supplier makes no claims,
statements, warranties, assurances, guarantees or representations whatsoever,
whether express, implied, statutory, collateral or otherwise concerning the
Products other than that they shall meet Supplier's specifications, tolerances
and quality standards as they may be in effect from time to time. Any
recommendation made by Supplier concerning uses or applications of Products are
believed reliable but Supplier makes no warranty, assurance, guarantee or
representation in respect thereof. Distributor shall make no warranties or
guarantees with respect to the Products except as may be authorized by Supplier
in writing. Distributor agrees to comply at all times with all applicable
consumer product warranty legislation and take all actions that Supplier may
from time to time request for the purpose of compliance with such legislation.
5.2 LIMITATION ON LIABILITY
Supplier's sole liability, and Distributor's sole remedy and entitlement against
Supplier, in respect of any of the Products shall be limited to an amount which
shall not exceed US$5 million. In no event shall Supplier be liable for any
loss, injury or damage, whether direct, indirect, collateral, special or
consequential, whether suffered by Distributor, any party dealing with
Distributor or any third party, whether in connection with the Products, or
resulting from the sale, use or application of the Products or otherwise,
including without limitation, personal injury, loss of profits or other economic
loss.
- 12 -
ARTICLE 6
OBLIGATIONS OF SUPPLIER AND DISTRIBUTOR
6.1 SUPPLIER'S OBLIGATIONS
During the term of this Agreement, Supplier shall provide Distributor with such
reasonable assistance as Supplier shall deem reasonably necessary to assist
Distributor in effectively advertising, distributing and promoting the Products
throughout the Territory. Without limiting the generality of the foregoing,
Supplier shall:
(a) maintain Products for display and demonstration at Supplier's
Tokyo showroom;
(b) extend to Distributor and its customers in respect of all
Products sold to Distributor hereunder Supplier's applicable
standard warranty for such Products, and provide applicable
warranty service in respect thereof; and
(c) provide first-line technical support for the installation,
maintenance and use of the Products by customers in the
Territory;
(d) assist Distributor by furnishing Distributor with standard
descriptive literature and standard information such as
technical data and manuals as are necessary to promote the
sale of the Products, and including trade advertisements and
promotional literature, if requested by Distributor.
Distributor shall be responsible for the expense of any
translation, reproduction and printing necessary to make the
information suitable for use in the Territory. Special price
lists or literature shall be the responsibility of
Distributor;
(e) provide technical support to Distributor, by answering
technical questions promptly; and
(f) advise Distributor of all improvements and changes regarding
the Products, and assist Distributor in communicating such
information to customers in the Territory.
- 13 -
6.2 DISTRIBUTOR'S OBLIGATIONS
In order to maintain the high reputation and goodwill associated with Supplier
and the Products, Distributor shall, except where otherwise agreed to in writing
by Supplier:
(a) use its best efforts to develop and promote the sales and
distribution of the Products in the Territory;
(b) establish and maintain a competent sales staff to call upon
prospective purchasers of Products in the Territory as is
necessary for the performance of its obligations under this
Agreement;
(c) display and/or distribute all advertising and promotional
materials (if any) which may be provided by Supplier and
co-operate fully with Supplier in connection with all
promotional programs and sales programs (if any) offered by
Supplier;
(d) at no time engage in any activities which may adversely affect
the reputation and goodwill of Distributor, Supplier or the
Products. Without limiting the foregoing, Distributor shall
not engage in any illegal, deceptive, unfair or unethical
trade practices with respect to the Products nor make any
false, misleading or disparaging representations about
Supplier or the Product;
(e) comply with all reasonable mandatory procedures and
specifications (if any) from time to time prescribed by
Supplier relating to the sale and distribution of the
Products;
(f) comply with all laws, regulations, by-laws, orders, rulings
and ordinances, including without limitation consumer
protection and trade practices laws, and obtain all necessary
permits and licences which may have application to the
advertising, sale and distribution of the Products; and
(g) extend to Distributor's customers in respect of all Products
sold to Distributor hereunder all applicable standard Supplier
product warranties;
(h) ensure that the Products comply with local regulations as to
safety, packaging and marking;
- 14 -
(i) advertise and promote sales in accordance with policies
established by Supplier from time to time;
(j) attend and actively participate in appropriate trade shows in
the Territory which are or could be useful or appropriate for
the sale of the Products;
(k) in consultation with Supplier, design, develop and implement
annual marketing plans which shall include the development and
implementation of a marketing strategy, including catalogues,
literature, advertisements, mailings, trade shows, sales
training programs and promotions;
(l) provide on each anniversary of this Agreement, a detailed
written market report including but not limited to such
information as a review of the previous twelve months, a
preview of the forthcoming year, market conditions and
competition. Such report shall also include an updated
detailed marketing plan in writing for discussion with
Supplier in order that an agreed program may be implemented
the following year;
(m) to the extent that Distributor displays Products in one its
showrooms, consult with Supplier and obtain the permission of
Supplier, prior to demonstrating Products or allowing persons
access to the Products. Without the prior written consent of
Supplier, under no circumstance shall Distributor demonstrate
the Products to, or permit access to, persons associated with,
in any capacity, the following entities: Chino Corp., Nissei
Sangyo Co. Ltd., Toyo Technica, Tsukasa Sokken, Globetech and
Giner;
(n) pay all expenses for the implementation of marketing research,
telex, fax, telephone, postage, travel, promotion,
advertising, the cost of all personnel and independent
contractors employed or engaged in the implementations of the
marketing plan and the sales of the Product;
(o) use its best efforts to maintain good commercial relations
with customers and potential customers of the Products in the
Territory, and promote the interests of Supplier in the
Territory. In this regard, Distributor shall: make prompt
deliveries of orders; communicate to Supplier promptly all
customer service, repair and
- 15 -
replacement service requests in the Territory; and, pass on to
Supplier all complaints concerning the sales of the Products;
(p) provide monthly reports in respect of the quotation activity
of the Distributor during the month, including customer names,
delivery dates, quotation prices and internal Distributor
rankings; and
(q) ensure that any registration or notification required by the
laws of the Territory shall have been carried out. Distributor
shall comply with all laws and regulations as may apply with
the Territory, as applicable to this agreement and all
transactions and activities contemplated or to be performed
hereunder, and shall procure and maintain all approvals,
licences, permissions and permits necessary to the performance
of its business and conduct its business in a manner so as to
not bring discredit upon the reputation of the Products or
Supplier. Distributor shall keep Supplier informed of any laws
or regulations of the Territory which may affect the
promotion, sales, services or maintenance of the Products in
order that Supplier will not breach any such laws or
regulations through lack of awareness thereof.
6.3 PROHIBITIONS OF DISTRIBUTOR
Distributor shall not:
(a) apply any attachments or accessories to the Products or modify
or alter the Products without the prior written approval of
Supplier;
(b) advertise the Products outside the Territory except where
advertisements are included in international publications;
(c) seek customers, establish any branch or maintain any office or
depot in relation to the Products anywhere outside the
Territory; and
(d) during the Term of this Agreement, except with the prior
written consent of Supplier, sell, distribute or advertise,
either directly or indirectly, any products in the Territory
which are like or similar to, or which, either alone or in
conjunction
- 16 -
with some other product, perform or are designed to perform
the same or similar function to, or which might otherwise
compete or interfere with, the Products.
ARTICLE 7
TRADEMARKS / INTELLECTUAL PROPERTY
7.1 USE OF SUPPLIER TRADE-MARKS
Distributor agrees and acknowledges that Supplier is the exclusive owner of
Supplier Trade-marks and that the rights granted herein to Distributor to use
Supplier Trade-marks apply only to their use in connection with the advertising,
marketing and sale of the Products to Distributor's current and potential
customers within the Territory in accordance with this Agreement and not
otherwise. Supplier grants Distributor the right to affix its name, address and
telephone number to brochures, sales literature, graphics and data sheets
concerning the Products provided that Distributor must in all cases state that
it is an authorized, independent distributor of the Products. Distributor shall
not:
(a) directly or indirectly attempt to dilute the value of the
goodwill attached to any of Supplier Trade-marks, nor counsel,
procure or assist anyone to do any of the foregoing; or
(b) dispute or contest for any reason whatsoever, directly or
indirectly, during or after the term of this Agreement, the
validity, ownership or enforceability of any of Supplier
Trade-marks.
7.2 INFRINGEMENT
Distributor agrees to notify Supplier promptly of any attempt by any person
other than Supplier or a licensed distributor of Supplier to use Supplier
Trade-marks or any variation or imitation thereof and to notify Supplier
immediately of any action involving Supplier Trade-marks that is threatened or
instituted by any person against Distributor and to allow Supplier to undertake
the defence of any such action. Should any action involving Supplier Trade-marks
be threatened or instituted by any person against Distributor, Supplier agrees
to defend Distributor and to indemnify and hold it harmless from all fines,
suits, proceedings, losses, claims, demands or actions of any nature or kind
whatsoever directly or indirectly arising out of or associated or
- 17 -
connected with the use of Supplier Trade-marks and against any and all damages,
costs, expenses and fees (including, without limitation, reasonable legal
expenses) incurred by or on behalf of Distributor in the investigation or
defence of any and all such suits, proceedings, claims, demands or actions;
provided, however, that Supplier shall have full control of such action
including the right to settle such suits, proceedings, claims, demands or
actions on Distributor's behalf. Supplier shall have the sole right, but no
obligation, to commence proceedings to restrain any unauthorized uses of
Supplier Trade-marks or any variations or imitations thereof and to receive the
benefits of any such suits, proceedings, claims, demands or actions. Distributor
shall fully co-operate with Supplier, at Supplier's expense, in providing any
support that Supplier might reasonably request in respect of the defence or
prosecution of any such suits, proceedings, claims, demands or actions.
7.3 INTELLECTUAL PROPERTY
Distributor acknowledges that all intellectual property relating to the Products
is owned by or licensed to Supplier. Distributor agrees that it shall not
violate or infringe such intellectual property rights nor shall it, nor any of
its affiliates, attempt to reverse engineer the Products or manufacture, use,
sell, distribute or advertise products which have been derived from the reverse
engineering of the Products during or after the Term of the Agreement.
ARTICLE 8
TERMINATION
8.1 TERMINATION
This Agreement and all rights granted herein shall terminate effective
immediately if:
(a) either party makes a general assignment for the benefit of
creditors or a proposal or arrangement under any bankruptcy or
creditor protection legislation, if a bona fide petition is
filed against either party under any bankruptcy or creditor
protection legislation, if either party shall be declared or
adjudicated bankrupt, if a liquidator, trustee in bankruptcy
or any other officer with similar powers shall be appointed of
or for either party or if either party shall commit an act of
bankruptcy or shall propose a compromise or arrangement or
institute proceedings
- 18 -
to be adjudged bankrupt or become insolvent or consent to the
institution of such appointment or proceedings;
(b) either party assigns or attempts to assign or transfer this
Agreement or any rights hereunder to any person without the
prior written consent of the other party;
(c) either party is in default of any of its obligations under
this Agreement for reasons other than Force Majeure including
ceasing, taking steps to cease or threatening to cease its
operations as a going concern and fails to cure such default
or satisfy the other party that such default has been cured
within fifteen (15) days of receiving Notice from the other
party to cure the same; or
(d) either party has received from the other party during any
consecutive twelve (12) month period two (2) or more Notices
relating to a default under this Agreement (whether such
Notices relate to the same or different types of default and
whether or not such defaults have been remedied by the
defaulting party).
8.2 DISTRIBUTOR'S OBLIGATIONS ON TERMINATION
Upon the termination, expiration or non-renewal of this Agreement for any reason
whatsoever, the rights granted herein shall forthwith cease and terminate and
Distributor shall:
(a) immediately pay to Supplier all fees, amounts and other
charges as have become due hereunder or under any agreement of
purchase and sale between the parties;
(b) immediately cease to and thereafter not, directly or
indirectly, hold itself out as a Supplier distributor;
(c) ship to Supplier, at Supplier's expense and at such location
as Supplier may designate, all advertising and promotional
materials provided or made available by Supplier;
(d) immediately cease to use, directly or indirectly, in
advertising or in any other manner whatsoever the Supplier
Trade-marks and remove such trade-marks from or deliver up to
Supplier or its duly authorized representatives all materials
including signs and advertising materials in its possession,
custody or control
- 19 -
upon which the Supplier Trade-marks appear (except for
documents not for public display or reasonably required for
archival purposes).
8.3 UNFILLED ORDERS
Supplier agrees that it shall honour all Distributor orders accepted by it prior
to the termination or expiration of this Agreement. Distributor orders that have
not been accepted by Supplier at the termination or expiration of this Agreement
shall be deemed cancelled and Supplier shall have no liability to Distributor or
to any other party by virtue of the termination or expiration of the Agreement
including, but not limited to, any claim for loss of profits or prospective
profits from anticipated sales of the Products.
8.4 OTHER RELIEF
Any termination under Article 8 hereof shall be without prejudice to any other
rights (including any right of indemnity), remedy or relief vested in or to
which either party may otherwise be entitled against the other. Any refusal to
renew this Agreement shall not give rise to any liability for indemnity or other
compensation to Distributor and Distributor expressly waives any right to
indemnity or compensation if Supplier terminates this Agreement as provided
herein or exercises its right not to renew this Agreement. The foregoing remedy
shall not exclude any other remedies which either party may have at law or in
equity by reason of default, breach or nonobservance by the other party of any
provision hereof.
8.5 PERIODS OF NOTICE
Each party acknowledges that the periods of notice (if any) provided for
termination of this Agreement are adequate under the circumstances to permit
each party to take all actions required to adjust its business operations in
anticipation of the termination of this Agreement.
- 20 -
ARTICLE 9
RELATIONSHIP AND INDEMNIFICATION
9.1 INDEPENDENT PARTIES
The relationship between Distributor and Supplier is intended to be and shall be
that of buyer and seller, and Distributor and its employees, agents and
representatives shall under no circumstances be considered agents, partners,
joint venturers or representatives of Supplier. Distributor shall not act or
attempt to act, or represent itself, directly or by implication, as agent, joint
venturer, partner or representative of Supplier or in any manner assume or
attempt to assume or create any obligation or liability of any kind, nature or
sort, express or implied, on behalf of or in the name of Supplier. Neither party
shall be bound in any manner whatsoever by any agreements, warranties or
representations made by the other party to any other person nor with respect to
any other action of the other party.
9.2 NON-LIABILITY
Supplier shall not be obligated or liable for any injury or death of any person
or damage to any property caused by or relating to Distributor's actions,
failure to act, negligence or willful conduct, nor for any liability of
Distributor.
9.3 DISTRIBUTOR INDEMNITY
Distributor hereby indemnifies and undertakes to defend Supplier and its
shareholders, directors, officers, employees and agents and hold them harmless
from all fines, suits, proceedings, losses, claims, demands or actions of any
nature or kind whatsoever, directly or indirectly, arising out of or in any
manner whatsoever associated or connected with Distributor's performance,
purported performance or non-performance of its rights and obligations under
this Agreement and against any and all damages, costs, expenses and fees
(including without limitation reasonable legal expenses) incurred by or on
behalf of any of the foregoing in the investigation or defence of any and all
such suits, proceedings, claims, demands or actions.
- 21 -
9.4 INSURANCE
(a) Distributor shall procure and maintain, in full force and
effect, a comprehensive general liability insurance policy or
policies with personal injury liability blanket, contractual
liability, product liability and completed operations
liability insurance endorsements protecting Distributor and
Supplier and their officers and employees against any loss,
liability or expense due to personal injury, death or property
damage or otherwise arising out of or occurring in connection
with the business of Distributor. Supplier shall be an
additional insured in such policy or policies which shall be
written by a responsible insurance company or companies
licensed to do business in the Territory and meeting with the
reasonable approval of Supplier, with a combined single limit
of not less than $5 million for bodily injury or death and for
property damage. Such policy or policies shall provide that
they will not be cancelled or altered without at least sixty
days' prior written notice to Supplier. Within ten days after
execution of the agreement, Distributor shall furnish Supplier
with a certificate or certificates of such insurance, together
with evidence that the premiums therefor have been paid.
Maintenance of such insurance and the performance by
Distributor of its obligations under this paragraph shall not
relieve Distributor of liability under the indemnity
provisions.
(b) Supplier shall maintain $10 million of product liability
insurance coverage on the Products. A certificate of insurance
shall be provided to Distributor upon Distributor's written
request.
ARTICLE 10
GENERAL
10.1 CONFIDENTIALITY OF DISTRIBUTOR
Distributor acknowledges that as a consequence of being a distributor of the
Products, certain confidential information may be disclosed to it by Supplier,
including without limitation technical information and business information
(collectively the "Supplier Confidential Information"). Distributor acknowledges
that such Supplier Confidential Information shall be
- 22 -
and remain solely the property of Supplier and agrees and covenants that during
the term of this Agreement and within three (3) years after its termination:
(a) such Supplier Confidential Information shall be kept
confidential and secret; and
(b) neither Distributor nor any individuals associated with
Distributor in any capacity, whether as directors, officers,
agents, employees or otherwise, shall use such Supplier
Confidential Information for any purpose or disclose such
Supplier Confidential Information to any third person, except
to the extent such Supplier Confidential Information must
necessarily be used for the performance of this Agreement or
is disclosed with the prior written consent of Supplier.
The foregoing restrictions on disclosure and use will not apply to (a)
information which Distributor can prove was previously known to it, (b)
information lawfully received by Distributor from a third party without
obligation of confidentiality, (c) information which becomes known to the public
other than by a disclosure prohibited by this Article.
10.2 CONFIDENTIALITY OF SUPPLIER
Supplier acknowledges that as a consequence of being a supplier of the Products
to Distributor, certain confidential information may be disclosed to it by
Distributor, including without limitation technical information and business
information (collectively the "Distributor Confidential Information"). Supplier
acknowledges that such Distributor Confidential Information shall be and remain
solely the property of Distributor and agrees and covenants that during the Term
of this Agreement and within three (3) years after its termination:
(a) such Distributor Confidential Information shall be kept
confidential and secret; and
(b) neither Supplier nor any individuals associated with Supplier
in any capacity, whether as directors, officers, agents,
employees or otherwise, shall use such Distributor
Confidential Information for any purpose or disclose such
Distributor Confidential Information to any third person,
except to the extent such Distributor Confidential Information
must necessarily be used for the performance of this Agreement
or is disclosed with the prior written consent of Distributor.
- 23 -
The foregoing restrictions on disclosure and use will not apply to (a)
information which Supplier can prove was previously known to it, (b) information
lawfully received by Supplier from a third party without obligation of
confidentiality, (c) information which becomes known to the public other than by
a disclosure prohibited by this Article.
10.3 DISPUTE RESOLUTION
All disputes arising out of this Agreement shall be submitted to final and
binding arbitration. If the respondent in such arbitration is Distributor, the
arbitration shall be held in Tokyo, Japan in accordance with the rules of the
Japan Commercial Arbitration Association. If the respondent is Supplier, the
arbitration shall be held in the Xxxxxxx, Xxxxxxx, Xxxxxx in accordance with the
Rules of Conciliation and Arbitration of the International Chamber of Commerce.
10.4 FORCE MAJEURE
Neither party shall be responsible to the other for non-performance or delay in
performance (other than any payment of money) occasioned by any causes beyond
its control including without limitation acts or omissions of the other party,
acts of civil or military authority, strikes, lock-outs, embargoes,
insurrections or Acts of God. If any such delay occurs, any applicable time
period shall be automatically extended for a period equal to the time lost
provided that the party affected makes reasonable efforts to promptly correct
the reason for such delay and gives to the other party prompt Notice of any such
delay. Such Notice shall include an estimate of the time that will be taken to
correct the reason for such delay.
10.5 ASSIGNMENT
This Agreement is not assignable by either party, either directly or indirectly,
without the prior written consent of the other party, which consent shall not be
unreasonably withheld.
10.6 SUCCESSORS AND ASSIGNS
This Agreement shall enure to the benefit of and be binding upon Distributor and
Supplier and their respective successors and permitted assigns.
- 24 -
10.7 CONFORMITY WITH LOCAL LAWS
(a) The rights and obligations of the parties under this Agreement
shall be subject to all applicable laws, orders, regulations,
directions, restrictions and limitations of the governments
having jurisdiction of the parties. In the event, however,
that any law, order, regulation, direction, restriction or
limitation, expropriation, seizure or interpretation thereof
shall in the judgment of either party substantially alter the
relationship between the parties under this Agreement, or the
advantages derived from such relationship, either party may
request the other party to modify this Agreement, and if,
within fifteen days subsequent to making such request, the
parties are unable to agree upon a mutually satisfactory
modification of this Agreement, then the adversely affected
party may terminate this Agreement on fifteen days' notice
given to the other party, not later than thirty days following
the end of such thirty-day period.
(b) Any provision or provisions of this Agreement which in any way
contravene the law of any state or country in which this
Agreement is effective, shall in such state or country, to the
extent of such contravention of law, be deemed severable and
shall not affect any other provision or provisions of this
Agreement.
(c) The parties shall each at its own expense in its own
countries, take such steps as may be required to satisfy the
laws and requirements of the respective countries with respect
to declaring, recording, or otherwise rendering this Agreement
valid.
10.8 LANGUAGE
(a) Upon execution, this Agreement may be translated into the
language of the Territory provided, however, that in the event
of any diversion between the English version and any other
version, the English version shall prevail.
(b) When a comparison of the authentic text of a provision of the
United Nations Convention on Contracts for the International
Sale of Goods reveals a difference
- 25 -
of meaning that cannot be reconciled by looking to the object
and purpose of the Convention provision, the English language
version shall prevail.
(c) The rights and obligations of the parties under this Agreement
shall be governed by the authentic English-language text of
the United Nations Convention on Contracts for the
International Sale of Goods to the exclusion of the other
authentic language versions.
10.9 TRADE TERMS
Trade terms shall where appropriate, and where not inconsistent with the
provisions of this Agreement, be interpreted in accordance with the current
International Rules for the Interpretation of Trade Terms of the International
Chamber of Commerce ("Incoterms") in force on the date of this Agreement.
10.10 CURRENCY
Unless otherwise specifically provided in this Agreement, all references to
dollar amounts or other money amount are expressed in terms of lawful money of
the United States of America.
10.11 SURVIVAL
All obligations of Distributor and Supplier including obligations of indemnity
which expressly or by their nature survive the termination or assignment of this
Agreement shall continue in full force and effect subsequent to and
notwithstanding such termination or assignment and until they are satisfied or
by their nature expire.
10.12 NOTICE
All written notices, consents and approvals (herein referred to as a "Notice")
permitted or required to be given hereunder shall be deemed to be sufficiently
and duly given if written and delivered personally or if transmitted by
facsimile transmission or other form of recorded communication tested prior to
transmission, if to Supplier addressed as follows:
HYDROGENICS CORPORATION
0000 XxXxxxxxxx Xxxx
- 00 -
Xxxxxxxxxxx, Xxxxxxx
XXXXXX, X0X 0X0
Attention: Xxxx Xxxxxx, Vice President, Sales and Marketing
Fax: (000) 000-0000
and if to Distributor addressed as follows:
TOYOTA TSUSHO CORPORATION
Toyota Xxxx.
0-00, Xxxxxx 0-Xxxxx
Xxxxxxxx-Xx, Xxxxxx,
000-0000 XXXXX
Attention: Xx. Xxxxxx, Manager, Machinery & Multimedia
Planning Division
Fax (000) 000-0000
Any Notice so given or made shall be deemed to have been given or made and
received on the date of delivery or on the day of transmission by facsimile
transmission or other form of recorded communication, as the case may be. Any
party from time to time by Notice may change its address for the purpose of this
Agreement.
10.13 CUMULATIVE RIGHTS
The rights of Distributor and Supplier hereunder are cumulative and no exercise
or enforcement by Distributor or Supplier of any right or remedy hereunder shall
preclude the exercise or enforcement by Distributor or Supplier of any other
right or remedy hereunder of which Distributor or Supplier is otherwise entitled
by law to enforce.
10.14 FURTHER ASSURANCES
The parties agree to do or cause to be done all acts or things necessary to
implement and carry into effect this Agreement to its full extent.
- 27 -
IN WITNESS OF WHICH the parties have duly executed this Agreement.
HYDROGENICS CORPORATION
By: /s/ XXXXXX XXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: President and CEO
TOYOTA TSUSHU CORPORATION
By: /s/ XXXXXXXX XXXXXX
-----------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Director
