EXHIBIT 10.9
[*] Refers to confidential portions of document omitted pursuant to a
request for confidential treatment under Rule 406 under the Securities
Act of 1933, and filed separately with the Commission.
SALES AGENCY AGREEMENT
BETWEEN:
Igene Biotechnology Inc., 0000 Xxx Xxxxxx Xxxx, Xxxxxxxx, XX
00000, XXX, a Company incorporated under the laws of the
State of Maryland (hereinafter referred to as "Igene" or the
"Principal")
AND:
ProBio Nutraceuticals AS, Forskningsparken i Xxxxxx, 0000
Xxxxxx, Xxxxxx, a joint stock company incorporated under the
laws of the Kingdom of Norway (hereinafter referred to as
"ProBio" or the "Agent")
WHEREAS:
A. The Principal manufacturers and holds various rights for
Astaxanthin referred to and described in Annex 1
(hereinafter "the Products");
B. The Product is an important ingredient in feed to marine
species, especially farmed salmon, and the Principal wishes
to further develop and commercialize the Product by way of
sales to the marine feed market on a global basis.
C. ProBio is in the business of marketing complimentary
products to customers in the market for marine feed world-
wide.
D. ProBio wishes to act as a sales agent for the Principal by
way of establishment and operation of a sales network for
sale either directly or to appointed subagents throughout
the world (the "Territory").
E. The Principal appoints ProBio as its worldwide exclusive
agent under the terms and conditions set out below.
F. The Principal and ProBio intend to seek additional
opportunities to work together and to assist each other in
other areas.
1. Grant and terms of agency
1.1 The Principal hereby appoints the Agent to be the exclusive
worldwide agent for the Principal for the marketing and the
promotion of the sale of the Products to customers resident
or carrying on business in the Territory and for the
soliciting from such customers and transmission to the
Principal of requests for quotations or orders for the
Products for sale in the Territory. The Agent hereby agrees
to act as the Principal's agent for the sale of the Products
in the Territory.
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1.2 During the existence of this Agreement, the Principal shall
not be entitled to appoint any other agent in relation to
the Products.
1.3 This Agreement shall be effective on 1 January 2001, and
shall continue as provided in Section 9.1, unless terminated
in accordance with the provisions of this Agreement.
1.4 This Agreement shall cover sales of Products produced
directly by the Principal or manufactured by a third party
pursuant to an agreement between the Principal and such
third party.
2. The Agent's responsibilities
2.1 During the period of this Agreement the Agent shall serve
the Principal as agent pursuant to the terms of this
Agreement, with all due and proper diligence, observe all
reasonable instructions given by the Principal, and use its
best endeavors to increase the sale of the Products in the
Territory. The Agent shall have the right to appoint sub-
agents, subject to approval of the Principal which shall not
be unreasonably withheld.
2.2 At least ten days prior to the beginning of each month, the
Agent shall pass on to the Principal information of likely
orders for the Products during the next three months.
2.3 The Agent shall solicit requests for quotations and orders
for the Products for sale at the prices and upon the terms
established and notified from time to time by the Principal
to the Agent. The Agent shall forward to the Principal all
quotations and orders received by it. All orders shall be
subject to acceptance by the Principal in its sole and
absolute discretion. The Principal reserves the right to
refuse any business originating from the Territory, for lack
of credit of the customers or otherwise, and the Agent shall
not be entitled to any commissions thereon. The Principal
shall have the right to cancel contracts or orders after
acceptance without any liability to the Agent for
commissions. The Agent shall forward to the Principal,
promptly after receipt, all remittances in any form which it
may collect or which may come into its possession.
2.4 The Principal may require advice and information from the
Agent regarding the laws and regulations that apply in the
Territory or parts of the Territory to which the Products
must conform (e.g. import regulations, labeling, technical
specifications, safety requirements, etc.). The Agent's
reasonable costs and expenses incurred by compliance with
such requests shall be borne by the Principal.
2.5 Except as expressly authorized by the Principal, the Agent
shall not purport to act on behalf of the Principal, or
incur liabilities on behalf of the Principal. The Agent
agrees that it will not act, directly or indirectly, as an
agent for products which are competitive with the Products.
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2.6 The Agent shall be responsible for its own operating
expenses, including costs directly attributable to its sales
efforts. The Agent is not responsible for costs of
marketing and promotion and other costs referred to in
Section 3.5.
3. The Principal's responsibilities
3.1 The Principal shall supply to the Agent free of charge a
reasonable quantity of samples, sales literature, all other
necessary documentation relating to the Products and all
other information which is necessary to enable the Agent to
perform its duties hereunder to the Principal.
3.2 The Principal will, subject to the confidentiality provisions
set out in Section 5 below, make available to the Agent
documentation including technical specifications, copies of
clinical studies and other know-how relating to the Products,
as set out in Annex 2, as amended from time to time. The
Agent shall have the right to furnish customers and sub-
agents with product information.
3.3 The Principal shall not submit offers or quotations nor
enter into any negotiations with, nor effect sales to any
person or prospective customer without the Agent's prior
written approval, and shall refer all offers, quotations or
tenders relating to the Products to the Agent. The Agent
recognizes that the Principal has granted to a third party
rights to manufacture the Product pursuant to a
non-exclusive toll manufacturing agreement. Both the Agent
and the Principal shall have mutual links to each other's
web sites.
3.4 As the sole and complete compensation for Agent's services
hereunder, the Principal shall pay a commission to the Agent
on all sales concluded by the Agent as follows:
o [ * ] of the net sales price for all Products sold until the
earlier to occur of (i) the first two years of this Agreement
and (ii) [ * ] kilos have been sold pursuant to this Agreement;
and
o [ * ] of the net sales price for all Products sold thereafter.
As used herein, net sales price shall mean the price of the
Products charged by the Principal from time to time as
established by the Principal, less any and all discounts,
returns and allowances and taxes, freight, insurance and
packaging charges incurred in connection with the shipping
of the Products (and not incurred in connection with the
manufacture of the Products). Commissions will be paid by
the Principal to the Agent by the end of the month following
the month in which the Principal has received a payment from
the customer. If the customer pays in installments, the
commission to the Agent will follow the same payment
schedule. The Principal and the Agent shall agree on all
credit terms for the customers. The Principal will furnish
to the Agent copies of invoices and confirmations of
purchase orders and, within 25 days after the end of each
month, a report indicating collections received by the
Principal in the prior month. The Agent agrees to assist
Principal in policing receivables. The Principal shall have
the sole right to charge back to the Agent's commissions the
amount of any commissions already credited in connection
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with all proper and allowable deductions made by the
customer, such as discounts, allowances and adjustments for
returned Products.
3.5 The Principal shall be responsible for all costs and
expenses relating to marketing and promotion efforts,
technical support, studies, and costs relating to compliance
with laws and regulations, including approvals from public
authorities. The Agent will not incur any costs or expenses
on behalf of the Principal without the Principal's prior
consent.
3.6 The amount to be allocated by the Principal to marketing and
promotion shall reflect the aim of the Parties to obtain a
maximum market penetration and the sales targets which are
set out in Section 4.1. The parties shall each year agree
on the Principal's marketing budget.
3.7 With the prior approval of the Principal, the Agent many
undertake to perform additional services for the Principal
at the Principal's expense, including, but not limited to
storing, logistics services, repackaging or labeling. Costs
relating to such services are not included in the commission
to be paid by the Principal to the Agent.
3.8 The Principal will continue through December 31, 2001 its
technical and marketing office in Chile, with all sales and
customer contacts under the supervision of the Agent.
Before the expiration of the period, the parties will agree
on how to organize activities, including sales and technical
support, in the Chilean market.
4. Sales requirements and production capacity
4.1 The parties shall each year agree on production forecasts
for the following year. The sales requirements for the
first five contract years shall be as follows:
Year Sales requirements (kilos of pure
astaxanthin)
2001 [ * ]
2002 [ * ]
2003 [ * ]
2004 [ * ]
2005 [ * ]
After 2005, if this Agreement is renewed by the Agent as
provided in Section 9.1 the sales requirements shall
increase [ * ] per year at a compounded rate of growth.
4.2 The Principal shall at any time have a production capacity
to meet the sales requirements, and agrees to use its best
commercially feasible efforts to extend its production
capacity in order to meet increase in demand. The parties
shall continuously evaluate the expected demand for the
coming 18 months.
4.3 The Principal has the right to withdraw the Agent's
exclusivity if the Agent fails to:
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o Obtain the agreed sales requirements in any two of the first
five years; or
o Sell in any two of the first five years at least 90% of
Igene's production, where the production forecast has been
agreed between the parties; or
o Sell in any one year at least 80% of Igene's production,
where the production forecast has been agreed between the
parties.
unless the failure to meet such requirements can be
attributed to Principal's failure to perform its duties
under this Agreement.
5. Confidentiality
Agent agrees that any and all trade secrets, confidential
customer information, proprietary information, technical
data and know-how relating to the Products and furnished to
Agent hereunder shall be and remain the exclusive property
of the Principal. Agent further agrees that it will not
(and its stockholders and employees will not) during or
after the termination of this Agreement, directly or
indirectly, use or disclose to any person, firm or
corporation, any information, trade secrets, confidential
customer information, proprietary information, technical
data or know-how relating to the Products acquired by the
Agent during the term of this Agreement, without the prior
written consent of the Principal. The Agent shall use its
best efforts to cause its employees and stockholders to keep
such information confidential. After termination of this
Agreement, all documents furnished by the Principal to the
Agent shall be returned by the Agent to the Principal.
6. Trademarks
6.1 The Products will be sold under the Trademark specified in
Annex 3 (the "Trademark"), which Agent acknowledges is the
property of the Principal. The Principal warrants that it
has no knowledge of any infringement proceedings relating to
the Trademark. Agent agrees not to contest the validity of
the Trademark.
6.2 The Agent shall have an exclusive right to use the Trademark
on promotion materials and in its sales efforts and other
performance of this Agreement. The use of the Trademark is
not subject to payment of royalty or other fees. Principal
and Agent agree to cooperate with each other in preventing
any acts of trademark infringement or unfair competition
with respect to the Trademark, but Principal shall have sole
control over all actions and legal proceedings to suppress
infringement of, or any unfair competition with respect to,
the Trademark.
6.3 The Agent shall notify the Principal of any unauthorized use
in the Territory of the Trademark. At the request and cost
of the Principal, the Agent shall take part in or give
assistance in any legal proceedings and execute any
documents and do any things reasonably necessary to protect
the Trademark. If the Agent is required to defend the
Principal's Trademark due to Principal's failure to assume
such defense, the Principal shall pay the Agent's legal
expenses.
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7. Patents
7.1 The Principal warrants that it holds the title and patent
rights to the Products specified in Annex 4, pursuant to
patents licensed to or owned by the Principal. Agent agrees
not to contest the validity of any patents.
7.2 The Agent shall promptly inform the Principal of all acts of
unfair competition, and all infringements and/or alleged or
attempted infringements of patents, trademarks and similar
rights of the parties, which come to the Agent's attention.
The Agent may not take legal action relating to the
Principal's intellectual property on behalf of the Principal
without the Principal's prior written consent.
8. Indemnity
8.1 The Principal warrants that the Products are manufactured in
accordance with all applicable laws and regulations, and
that the manufacture is in accordance with Good
Manufacturing Standard. The Principal accepts complete
responsibility for the manufacture of the Products and shall
protect, indemnify and hold harmless the Agent from and
against all loss, damage and expense awarded by a court of
competent jurisdiction resulting from all claims, demands,
actions, causes of action and judgments of any kind arising
out of or attributable to the manufacture of the Products.
EXCEPT AS OTHERWISE SET FORTH HEREIN, PRINCIPAL HEREBY
DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS OR APPLICABILITY FOR A PARTICULAR PURPOSE,
REGARDING THE PRODUCTS. PRINCIPAL SHALL NOT BE LIABLE FOR
CONSEQUENTIAL DAMAGES OR FOR ANY BREACH OF ANY EXPRESS OR
IMPLIED WARRANTY, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTY OF MERCHANTABILITY, IF ANY, APPLICABLE TO THE
PRODUCTS.
8.2 The Agent will protect, indemnify and hold harmless the
Principal from and against all loss, damage and expense
resulting from any and all claims, demands, actions, causes
of action, and judgments of any kind arising out of or
attributable to breach of this Agreement or other default or
negligence on the part of the Agent.
8.3 The Principal shall maintain product liability insurance
with limits of coverage fixed with the care and diligence of
a prudent businessman. Proof of valid insurance shall be
sent to the Agent each year.
9. Termination
9.1 This Agreement shall commence on the date hereof and shall
remain in full force and effect until December 31, 2005 (the
"Initial Term"), and may thereafter be renewed by the Agent
upon not less than 60 days prior written notice for an
additional five year term if the Agent has maintained
exclusivity for the first five years.
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9.2 Notwithstanding anything to the contrary contained in this
Agreement, either Principal or the Agent shall have the
right to terminate this Agreement for cause, with immediate
effect, by giving written notice of such termination to the
other, upon the occurrence of the following:
(a) suspension or cessation of business by the other party
or the dissolution or liquidation of the other party;
(b) Insolvency of the other party or the voluntary
institution by the other party of any proceeding under
any statute of any governmental authority for the
relief of debtors seeking the relief or readjustment of
indebtedness, either through reorganization,
composition, extension or otherwise or the involuntary
institution against the other party of any such
proceeding which is not vacated within ten days from
the institution thereof, or the appointment of a
receiver or other officer having similar powers for the
other party or its business who is not removed within
ten days from such appointment, or any levy under
attachment, execution or similar process which is not
vacated or removed within ten days by payment or
bonding; or
(c) Any substantial breach or violation by the other party
of any material obligation contained in this Agreement
which breach or violation is not corrected by the
offending party within thirty days of its receipt of
written notice thereof from the other.
9.3 In addition to its rights under Section 9.2, and not in
limitation thereof, either Principal or Agent shall have the
right to terminate this Agreement, with immediate effect, by
giving written notice of such termination to the other, upon
the occurrence of any of the following:
(a) Any sale, assignment or transfer or attempted sale,
assignment or transfer of this Agreement by the other
party, in whole or in part, or any sale or attempted
sale by the other party of its business or all or
substantially all of the assets comprising its
business, without the prior written consent of the
party terminating this Agreement;
(b) Grossly negligent or willful conduct on the part of the
other party harmful to the goodwill of the party
terminating this Agreement, the reputation of the
Products or the marketing of the Products; or
(c) Submission by the other party of a fraudulent report or
statement or of a fraudulent claim for reimbursement,
refund or credit.
9.4 Nothing contained in this Article 9 shall affect or impair
any rights or obligations arising prior to or at the time of
the termination of this Agreement, or which may arise by an
event causing the termination of this Agreement.
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9.5 The Principal shall have the right to terminate this
Agreement at any time without cause, upon not less than 60
days prior written notice to the Agent.
(a) If this Agreement is terminated by the Principal
pursuant to this Section 9.5 hereof and the termination
notice is served on or before 31 December 2005, ProBio shall
be entitled to the higher of the following compensation
amounts:
(i) USD[ * ], payable in 36 equal monthly installments; or
(ii) Compensation equal to three times the commissions paid
to the Agent in the year prior to termination, payable
in 36 equal monthly installments;
provided, however, that if this Agreement is terminated
by the Principal in connection with the sale of the
Principal (whether by way of sale of assets, merger or
otherwise) (a "Sale"), then if (a) the Sale is for
cash, the payment will be payable within nine months
after the closing of the Sale or (b) the Sale is for
notes or other non-cash consideration, the payment will
be payable within 15 months after the closing of the
Sale.
(d) If this Agreement is terminated by the Principal
pursuant to this Section 9.5 hereof and the termination
notice is served on or after January 1, 2006 and on or
before December 31, 2010, ProBio shall be entitled to
the higher of the following compensation amounts:
(i) USD [ * ] payable in 24 equal monthly installments; or
(ii) Compensation equal to two times the commissions paid to
the Agent in the year prior to termination, payable in
24 equal monthly installments;
provided, however, that if this Agreement is terminated
by the Principal in connection with a Sale, then if (a)
the Sale is for cash, the payment will be payable
within nine months after the closing of the Sale or (b)
the Sale is for notes or other non-cash consideration,
the payment will be payable within 15 months after the
closing of the Sale.
9.6 If the Agreement is terminated by the Principal pursuant to
Section 9.5 hereof, and the termination notice is served on
or after 1 January 2004, ProBio shall receive compensation
in accordance with Section 9.5 (b).
9.7 Upon termination of this Agreement, all rights of the Agent
to commissions on orders for the Products shall cease,
except as to orders placed with the Principal by the Agent
prior to the effective date of termination which shall then
or thereafter be accepted by the Principal. In such event,
the Principal shall not be liable to the Agent, except for
commissions on orders subsequently filled as above provided,
for compensation or damages of any kind, whether on account
of the loss by the Agent of present or prospective profits
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or anticipated sales or expenditures, investments or
commitments made in connection with this Agreement, or on
account of any other thing or cause whatsoever.
10. Miscellaneous provisions
10.1 Waivers
No consent or waiver, express or implied, by any party to or
of any breach or default by any other party of any or all of
its obligations under this Agreement will:
(a) be valid unless it is in writing and stated to be a
consent or waiver pursuant to this paragraph;
(b) be relied upon as a consent to or waiver of any other
breach or default of the same or any other obligations;
(c) constitute a general waiver under this Agreement; or
(d) eliminate or modify the need for a specific consent or
waiver pursuant to this paragraph in any other
subsequent instance.
10.2 Force Majeure
In case of an event of force majeure preventing or hindering
any party from performing its obligations under this
Agreement, the affected party may give written notice to the
other containing reasonable particulars of the force majeure
event in question and the effect of such event as it relates
to not constituting a default under this Agreement, provided
that the party affected by the delay makes reasonable
efforts to correct the reason for such delay. Such notice
shall entitle the affected party to suspend deliveries or
payments, as the case may be.
10.3 Severability
If any provision or part of any provision of this Agreement
is held by a court of competent jurisdiction to be
unenforceable:
i. such part of the provision or such provision shall
be severed from this Agreement;
ii. such holding shall not in any way affect or impair
the validity of the remaining part of such
provision or any other provision of this
Agreement, and the remaining part of such
provision and the other provisions of this
agreement shall be separately valid and
enforceable to the full extent permitted by law;
and
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iii. each party hereby waives all defenses to the
strict enforcement of any such provision or any
part thereof by the other party to this Agreement.
The parties further agree that if a court of competent
jurisdiction at any time should determine that any of the
restrictions placed on a party under this Agreement are
unreasonable and accordingly unenforceable under the
applicable law, the party so restricted agrees that such
restrictions shall still apply to the greatest extent
enforceable in terms of scope, term and area, and each party
attorns to the jurisdiction of such court to rectify this
Agreement to provide for the greatest restrictions in terms
of scope, term and area as such court deems reasonable.
Delegation without such consent shall be of no force or
effect.
10.4 Successors
This Agreement will enure to the benefit of and be binding
upon the parties to this Agreement and their respective
successors and permitted assigns.
11. Notices
11.1 All notices to be given by any party to another shall be in
writing signed by a duly authorized officer of the party or
legal advisor to such party, and shall be deemed to be
effective when delivered on any Business Day at the address
for notice of the intended recipient.
11.2 The address for notice of each of the parties will, until
changed be:
i. for Igene: Igene Biotechnology Inc.
0000 Xxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000, XXX
Attention: Xxxxxx Xxx, Ph.D.
Telephone: x0 000 000 0000
Facsimile: x0 000 000 0000
E-mail: xxx@xxxxx.xxx
ii. for ProBio: ProBio Nutraceuticals AS
Forskningsparken i Xxxxxx,
0000 Xxxxxx,
Xxxxxx
Attention: Xxxxx Xxxx
Telephone: x00 00 00 00 00
Facsimile: x00 00 00 00 00
E-mail: xxxxxx@xxxxxx.xx
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11.3 Delivery may be effected personally, by courier, by
facsimile, or by any other method which permits a
confirmation of the time and date of receipt. Any notice
sent by facsimile or e-mail, received outside of the hours
9AM and 5PM on a Business Day shall be deemed to have been
received at 9AM on the next Business Day in the jurisdiction
to which such notice was sent.
12. Governing law and Arbitration
12.1 This Agreement shall be governed by and interpreted in
accordance with the laws in force in the Kingdom of Norway,
and all statutes and regulations referred to in this
Agreement, unless otherwise is specifically identified or
follows from the context, are statutes and regulations of
the Kingdom of Norway.
12.2 The parties shall undertake reasonable attempts to resolve
all disputes arising out of this Agreement in an amicable
manner. Should such attempts fail, disputes shall be
referred to and finally resolved by arbitration in
accordance with the Civil Procedure Act Chapter 32. The
place of arbitration shall be Oslo.
13. Assignment of rights
13.1 Neither of the parties hereto shall be entitled to assign
any of its rights under this Agreement apart from assignment
to a company within the same group of companies. The other
Party hereto shall receive written information prior to any
such assignment and no such assignment shall prejudice the
contractual rights of the other party. Where this Agreement
is assigned the assignee shall enter into the contractual
rights and obligations of the assignor.
This Agreement is executed in two originals.
/s/ Xx. Xxxxxxx Xxxxxxxx /s/ Xx. Xxxxx Ulve
_________________________ ________________________
Igene Biotechnology Inc. ProBio Nutraceuticals AS
12/5/00 12/5/00
New York, NY Columbia, MD
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