EXHIBIT 10(h)
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EXCLUSIVE DISTRIBUTOR AGREEMENT
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This Agreement is made on September 20, 1996, between United-
Guardian, Inc., a corporation organized under the laws of Delaware with
offices at 000 Xxxxxx Xxxx., Xxxxxxxxx, Xxx Xxxx, 00000 ("UGI") and ISP
Technologies Inc., a corporation organized under the laws of Delaware
with offices at State Highway 146 & Industrial Road, Texas City, Texas
77590 ("ISP").
WHEREAS, UGI is a manufacturer of specialty chemical products;
and
WHEREAS, ISP and its affiliated companies have substantial
experience and expertise in marketing specialty chemical products to
various markets; and
WHEREAS, UGI desires ISP to act as its exclusive distributor in
certain markets and territories of certain of its specialty chemical
products in accordance with the terms and conditions of this Agreement;
NOW THEREFORE, UGI and ISP hereby agree as follows:
I. APPOINTMENT; PRODUCTS
1.1 UGI hereby appoints and authorizes ISP as its exclusive
distributor of the specialty chemical products listed on Schedule A,
which is attached hereto and incorporated herein (the "PRODUCT(S)") to
sell such PRODUCTS in the personal care and industrial markets (the
"MARKETS") in the territories set forth in Schedule B, which is attached
hereto and incorporated herein (the "TERRITORY"). UGI also hereby
appoints and authorizes ISP as its non-exclusive distributor of the
PRODUCTS to sell such PRODUCTS to the medical market in the TERRITORY.
During the entire term of this Agreement, UGI shall not appoint any
additional distributor for the PRODUCTS for the medical market in the
TERRITORY. UGI's present distributors of the PRODUCTS for the medical
market in the TERRITORY are listed on Schedule C, which is attached
hereto and incorporated herein.
1.2 ISP accepts the appointment and agrees to use its
commercially reasonable best efforts to maintain, promote, develop and
increase sales of the PRODUCTS.
1.3 It is understood that the authority granted to ISP hereunder
is the authority to market the PRODUCTS and does not constitute ISP as
the agent or legal representative of UGI for any purpose whatsoever, and
ISP is not authorized to assume or create any obligation or
responsibility, express or implied, on behalf of or in the name of UGI,
or to bind UGI in any manner whatsoever, except as provided pursuant to
the terms and conditions of this Agreement or as may be authorized by UGI
from time to time.
1.4 UGI shall have the right to continue to sell PRODUCTS to
UGI'S pre-existing customers listed on Schedule D, which is attached
hereto and incorporated herein. UGI shall also have the right, as shall
ISP (except as provided in Section 2.3 below), to market and sell
Lubrajel and Hydrajel-based products for use as vaginal moisturizers,
sexual lubricants or for other internal applications, such as mouth or
nose moisturizers. ISP shall not receive any compensation for sales by
UGI of Lubrajel or Hydrajel based products for the aforementioned uses or
for sales by UGI to the distributors listed on Schedule C or customers
listed on Schedule D.
II. EXCLUSIVITY
2.1 From the execution date of this Agreement set forth in the
preamble hereof and during the entire term of this Agreement, UGI shall
not appoint any other distributor of the PRODUCTS for the MARKETS and
TERRITORY other than ISP. UGI represents that Amerchol was UGI's sole
distributor of the PRODUCTS for the MARKETS and TERRITORY, that UGI
terminated its distributor arrangements with Amerchol effective September
1, 1996, and that UGI has no existing distributor arrangements of any
nature whatsoever with any third party regarding direct or indirect sale
and/or marketing of the PRODUCTS for the MARKETS and TERRITORY.
2.2 Except as specified in Section 2.3 below, UGI shall not,
directly or indirectly, sell or market the PRODUCTS in the MARKETS and
TERRITORY, other than to ISP or as otherwise mutually agreed upon.
2.3 UGI shall retain the exclusive right to market and sell
"FINISHED FORMULATIONS," as hereinafter defined. ISP shall not receive
any compensation for sales of FINISHED FORMULATIONS, including FINISHED
FORMULATIONS for use in medical applications, and ISP may sell FINISHED
FORMULATIONS only upon the prior written consent of UGI which consent
shall not unreasonably be withheld or delayed. For purposes of this
Agreement, "FINISHED FORMULATION(S)" shall mean all PRODUCTS which are
formulated with other ingredients and/or a formulation of two or more
products manufactured by UGI which is intended to be used, as is, without
further processing as an end-use product. The current FINISHED
FORMULATIONS are listed in Schedule E, which is attached hereto and
incorporated herein.
2.4 UGI may develop and/or solicit customers for the PRODUCTS in
the MARKET and TERRITORY, either directly or through third parties;
provided, however, UGI shall refer, and shall cause all such third
parties to refer, any such customers to ISP.
III. PERIOD OF AGREEMENT; PERFORMANCE CRITERIA
3.1 Unless earlier terminated as provided herein, the term of
this Agreement shall commence October 1, 1996, and shall continue through
and including December 31, 2001 (the "INITIAL TERM"); provided, however
(i) in the event ISP purchases at least eighty-seven percent (87%) of the
sum of the PURCHASE TARGETS for the INITIAL TERM (such PURCHASE TARGETS
are set forth in Schedule F, which is attached hereto and incorporated
herein), then ISP shall have the exclusive right to renew this Agreement
for an additional term of three (3) years or (ii) in the event ISP
purchases at least one hundred and thirty percent (130%) of the sum of
the PURCHASE TARGETS for the INITIAL TERM, then ISP shall have the
exclusive right to renew this Agreement for an additional term of five
(5) years (in either case, the "FIRST RENEWAL TERM" and in either case,
provided ISP has not received notice under Section 3.3 below that this
Agreement has been terminated). After the FIRST RENEWAL TERM, this
Agreement shall be renewable for successive five (5) year terms upon the
mutual agreement of both parties.
3.2. Also included in Schedule F are ISP's PURCHASE TARGETS for
each calendar year of the FIRST RENEWAL TERM.
3.3 In the event ISP fails to meet the PURCHASE TARGET for any
calendar year, the amount of the shortfall shall be added to the PURCHASE
TARGET for the next calendar year. In the event ISP fails to attain fifty
percent (50%) of the PURCHASE TARGET for said next calendar year by the
end of the first six (6) month period of said next calendar year
(including fifty percent (50%) of the amount of any shortfall added from
the prior calendar year), then UGI shall have the right to terminate this
Agreement upon sixty (60) days written notice given within ninety (90)
days after the end of said six (6) month period.
IV. PRICES; PAYMENT; DELIVERY; AND TITLE
4.1 Initial prices for the PRODUCTS are set forth on Schedule G,
which is attached hereto and incorporated herein, and are FOB Hauppauge,
New York. Prices shall not increase prior to July 1, 1997, after which,
the prices for each PRODUCT shall be subject to increase on thirty (30)
days prior written notice to ISP; provided, however, any such increase in
prices shall not exceed five percent (5%) each calendar year and;
provided further, the aggregate of such increases shall not exceed
eighteen percent (18%) during any consecutive five (5) year period. Any
such price increase may be instituted only once each calendar year.
Increased prices shall apply with respect to PRODUCT shipped after the
effective date of any such increase. Should UGI suffer hardship caused by
escalating costs by reason of conditions beyond its control, including
but not limited to environmental or regulatory requirements, or
substantial unforeseen increases in the cost of raw material prices
purchased from a third party and used by UGI to manufacture a PRODUCT
(and expressly excluding labor and overhead), then UGI may so notify ISP
in writing (such notice to be accompanied by documentation substantiating
such escalating costs), and the parties shall discuss the practicality of
increasing the price for such PRODUCT hereunder above the amount of any
increase otherwise permissible hereunder.
Should ISP and UGI not agree upon a mutually acceptable price
increase within a reasonable period of time after the date of UGI's
aforementioned notice, UGI may have an independent accounting firm,
mutually acceptable to both UGI and ISP (the "Auditors"), at UGI's sole
cost and expense, conduct an audit of such escalating costs. In the event
the Auditors verify in a certified written statement to ISP and UGI that
such costs have actually increased in a calendar year by an amount in
excess of the percentage price increase permitted for any such affected
PRODUCT for such calendar year, such actual percentage increase in costs
to be set forth in said certified statement, then UGI may increase the
prices for each affected PRODUCT by the actual percentage increase in
costs so certified by the Auditors, such increase to be effective thirty
(30) days following the date of said certified statement; provided,
however, the aggregate of all increases hereunder shall nonetheless not
exceed the aforementioned maximum eighteen percent (18%) during any
consecutive five (5) year period unless UGI, through the Auditors,
justifies any additional increase in accordance with the foregoing
procedure. No more frequently than once each calendar year, ISP may
request an audit of UGI's aforementioned costs after any price increase
which exceeds the annual five percent (5%) cap and/or the eighteen
percent (18%) five (5) year cap has been instituted pursuant to the
foregoing procedure and UGI shall have the Auditors conduct such an audit
at UGI's sole cost and expense. In the event the Auditors verify in a
certified written statement to ISP and UGI that such costs have actually
decreased, then the prices for each affected PRODUCT shall forthwith be
reduced accordingly.
4.2 If at any time during the term of this Agreement, UGI sells
any PRODUCT to another purchaser, including but not limited to another
distributor, at a price (excluding taxes and freight charges) which is
lower than the price to ISP hereunder and/or on better terms and
conditions than those set forth herein, then UGI shall offer such price
and/or better terms and conditions for such PRODUCT to ISP for the period
of time such price and/or better terms and conditions are offered to such
other purchaser.
Once in any twelve (12) consecutive calendar month period, ISP
shall have the right, exercisable by written notice to UGI, to obtain
verification of the prices charged to third party purchasers for the
PRODUCTS. Verification shall be performed by an independent outside
auditor selected by ISP. UGI shall afford such auditor access to customer
invoices and such other records necessary to verify PRODUCT prices. Upon
completion of the review, the auditor shall issue to both parties a
written report of the findings, which shall be final and binding upon the
parties and which shall include the amount of any price adjustment and/or
the better terms and conditions offered to third parties. If the auditor
requires a credit to ISP's account of at least $1000, the cost of the
audit shall be borne by UGI otherwise, the cost shall be borne by ISP.
Any credit to ISP's account shall be made within ten (10) days of UGI's
receipt of the auditor's written report.
4.3 UGI shall invoice ISP for all shipments, and payment is due
thirty (30) days from the date of the invoice.
4.4 Title, risk of loss of, and liability for the PRODUCTS shall
remain with UGI until delivery of the PRODUCTS to a common carrier
reasonably acceptable to ISP at UGI's facilities in Hauppauge, New York.
UGI warrants that, at the time of delivery, the PRODUCTS shall be free
and clear of all liens and encumbrances.
4.5 Duplicate shipments or overages may be returned by ISP to
UGI freight collect if such duplicate shipment or overage is the fault of
UGI.
4.6 At such time as the quantity of ISP's purchases of PRODUCTS,
in the aggregate, under this Agreement exceeds the applicable PURCHASE
TARGET for a calendar year by the percentages indicated below, the prices
for each pound of PRODUCT purchased by ISP under this Agreement in excess
of such quantity shall be reduced by the percentage discount indicated
below from the prices then in effect for each such PRODUCT and such
discount in price shall apply to PRODUCTS so purchased for the remainder
of said calendar year and the following calendar year (the "Next Year").
In the event ISP's purchases of PRODUCTS, in the aggregate, in the Next
Year do not reach the discount level last in effect in the previous
calendar year, then at the end of said Next Year UGI shall invoice ISP
for the difference in price between what ISP paid for PRODUCTS during
said Next Year and the price that ISP would have paid for such PRODUCTS
had said discount not been applied during said Next Year.
Payment of any undisputed invoice shall be due thirty (30) days from
the date of ISP's receipt of said invoice.
Percentage by which ISP Exceeds
Applicable Minimum PURCHASE TARGET Percentage Discount
10% 5%
15% 6%
20% 7%
25% 8%
30% 9%
35% 10%
4.7 Prices for any PRODUCT may be reviewed and may be amended if
the parties agree that marketing conditions are such that ISP is not able
to compete effectively. If ISP believes it must reduce pricing on a
specific order to meet a competitor's prices and/or to respond to unusual
market conditions, ISP may request price reductions from UGI on a
case-by-case basis and/or request UGI to reduce prices in general to
respond to such unusual market conditions and UGI shall negotiate any
such requested price reduction with ISP in good faith.
V. SPECIFICATIONS
5.1 UGI warrants the PRODUCTS shall meet the specifications set
forth in Schedule H which is attached hereto and incorporated herein. UGI
may propose revisions to Schedule H to narrow the ranges provided therein
upon written notice to ISP. If ISP does not object, in writing, within
thirty (30) days of receipt of such notice, the revisions shall become
effective. ISP shall retain the right to reject any proposed revisions to
Schedule H in its reasonable business judgment. ISP shall have the right
at all times to reject PRODUCTS not meeting the specifications set forth
in Schedule H, which PRODUCTS will then be returned and replaced, and
replacement products shipped as requested by ISP at UGI's sole cost and
expense, and UGI shall reimburse ISP for any and all costs and expenses
incurred by ISP as a result of such rejection. ISP does not waive any
rights, including but not limited to the foregoing, by unloading, selling
and/or using PRODUCT that does not meet such specifications unless it
knew at the time of such unloading, selling, or use that the PRODUCT did
not meet the specifications. UGI shall bear all risks of any nature
whatsoever with respect to such PRODUCTS which have been so rejected by
ISP and shall indemnify ISP as set forth in Section 9.1 with respect to
such PRODUCTS.
5.2 UGI shall provide ISP with certificates of analysis for each
individual lot and Material Safety Data Sheets and any updates thereto,
such certificates to be in the form set forth on Schedule I, which is
attached hereto and incorporated herein.
VI. SUPPORT AND SALES
6.1 All orders of PRODUCTS shall be made by ISP's standard
purchase order. Neither such standard purchase order nor any document
used by UGI shall amend or modify any provisions of this Agreement.
6.2 ISP shall market and sell the PRODUCTS under UGI's
tradenames or trademarks. UGI hereby grants to ISP an exclusive license
to use the UGI tradenames or trademarks associated with the PRODUCTS in
the TERRITORY as long as UGI itself has the right to use such xxxx in a
particular country in the TERRITORY. Except as set forth in Schedule J,
which is attached hereto and incorporated herein, UGI represents and
warrants that, to the best knowledge of its officers and directors, no
third parties have registered UGI's tradenames or trademarks. Upon
termination of this Agreement and after sale or disposal of all PRODUCT
in ISP's inventory, ISP shall cease using UGI's tradenames and
trademarks. In any part of the TERRITORY in which UGI has not registered
its trademarks, ISP shall have the right, but not the obligation, to do
so at its own expense under UGI's name, and shall be entitled to an
exclusive royalty-free license to use the same as long as this Agreement
remains in effect and thereafter as provided in the preceding sentence.
UGI shall cooperate fully with ISP in the event ISP decides to pursue any
such registration, and will furnish to ISP any documentation it may
reasonably request to accomplish such registration. In such cases in
which ISP does so register UGI's trademark, it shall be ISP's sole right,
but not its obligation, at its expense to initiate or defend any
trademark infringement actions connected with the use of said xxxx in
those areas on behalf of, and in the name, of UGI as owner of said xxxx.
UGI shall provide ISP with such information and technical
assistance as is reasonably necessary for ISP to service all customers
for the PRODUCTS. The extent of such information and technical assistance
shall be determined solely by UGI in the exercise of its reasonable
business judgment.
6.3 UGI shall designate a UGI employee to be the PRODUCT
representative for ISP. Such employee shall assist ISP in resolving
technical PRODUCT and specification matters and shall provide such other
assistance as may be reasonably requested by ISP for ISP to successfully
market the PRODUCTS and provide a high standard of service in the
promotion and sale of the PRODUCTS. ISP shall designate an ISP employee
to be its technical contact to interface with UGI's PRODUCT
representative regarding technical PRODUCT and specification matters.
6.4 Notwithstanding expiration or earlier termination of this
Agreement for any reason whatsoever, ISP shall have the right to continue
to sell or otherwise dispose of any and all PRODUCTS in ISP's inventory
at such prices as ISP may elect unless UGI agrees to buy back such
inventory at the price paid to UGI by ISP for such PRODUCTS, including
ISP's shipping expenses and related costs. Shipping expenses back to UGI
will also be the responsibility of UGI.
6.5 UGI shall have the right to terminate this Agreement upon
thirty (30) days prior written notice, if during the term of this
Agreement ISP purchases or manufactures, or causes a third party to
purchase or manufacture on its behalf, for sale in the MARKETS and
TERRITORY, any products which have substantially the same specifications
as the PRODUCTS (as set forth in Schedule H) and which are intended to be
used as direct substitutes for the PRODUCTS.
6.6 Within sixty (60) days after the end of the first six (6)
months of each calendar year and within sixty (60) days after the end of
each calendar year, ISP shall submit to UGI a report on its marketing
efforts for the PRODUCTS during that six (6) month period of that
calendar year, and, with respect to the second report, its plans for the
following calendar year. Any data regarding the PRODUCTS that is
generated by ISP in connection with its efforts to market the PRODUCTS or
to obtain regulatory approval, as provided in Section 10.2 hereof, shall
be provided to UGI as obtained by ISP. Such reports shall include
information on sales, customer needs and requests, and problems
encountered and shall be deemed CONFIDENTIAL INFORMATION, as defined in
Section 14.1 hereof, whether or not so marked.
6.7 UGI represents and warrants that its sales of PRODUCTS in
the TERRITORY (excluding sales to the medical market and sales to UGI's
pre-existing customers listed on Schedule D) for the twelve (12) calendar
months September 1, 1995 through August 31, 1996 were as set forth on
Schedule K, which is attached hereto and incorporated herein.
6.8 After termination of this Agreement for any reason, ISP
shall provide to UGI a list of all ISP customers that have purchased
PRODUCTS within the twelve (12) month period prior to the effective date
of such termination. Such list shall include the customer name, PRODUCTS
purchased by that customer, and the quantities of PRODUCTS purchased
during said twelve (12) month period. With respect to customers located
in the United States, such list shall be provided to UGI within fifteen
(15) days of the effective date of such termination, and within such
period of time as is reasonably possible after the effective date of such
termination with respect to customers located in the remainder of the
TERRITORY.
VII. PACKAGING AND SHIPPING
7.1 UGI shall package the PRODUCTS in accordance with the
specifications described on Schedule L, which is attached hereto and
incorporated herein and in accordance with all pertinent provisions of
any applicable federal, state, municipal, provincial or other local law
or regulation of which it is aware or is made aware; provided, however,
ISP may repackage PRODUCT, in which event ISP will use only repackaging
containers and other packing materials and labels that comply with all
pertinent provisions of any applicable federal, state, provincial,
municipal or other local law or regulation.
VIII. SAMPLES AND RETAINED BATCHES
8.1 UGI, at no cost to ISP, shall provide ISP with reasonable
quantities of samples for those PRODUCTS that ISP does not stock, to be
shipped to ISP in accordance with ISP's instructions and at ISP's
expense. For PRODUCTS that ISP does stock, it will be ISP's
responsibility to use its own stock to provide samples.
8.2 UGI shall retain a reasonable amount of PRODUCT as a sample
to allow for testing of each finished batch lot. Such sample shall be
labelled with the PRODUCT name, code, batch/lot number, and date of
sample and shall be retained by UGI for a period of three (3) years from
the date of manufacture of such batch lot. At any time, ISP shall have
the right to request UGI to deliver, and UGI shall thereupon forthwith
deliver, a portion of such sample to ISP or its designee.
IX. INDEMNIFICATION
9.1 Neither party hereto shall be liable for any indirect,
incidental, or consequential damages or lost profits caused by or arising
out of its performance or failure to perform hereunder. However, UGI will
defend, indemnify and hold ISP, its affiliates, assigns, and their
respective agents, representatives, officers, directors and employees
harmless from and against all claims, demands, settlements, judgments,
losses, liabilities and any and all related costs and expenses (including
reasonable and necessary attorneys' fees) arising out of or related, in
any manner whatsoever, to (i) the PRODUCTS (including but not limited to
the manufacture, transportation, sale, use and/or disposal of the
PRODUCTS) except to the extent solely and directly caused by ISP's
negligence or willful misconduct in handling, storing, repackaging, or
transporting the PRODUCTS, (ii) any breach of any representation,
warranty or agreement made by UGI herein; (iii) any failure to comply
with applicable laws and regulations; and/or (iv) any act or omission of
UGI in any way related to this Agreement.
ISP will defend, indemnify and hold UGI and its affiliates,
assigns and their respective agents, representatives, officers, directors
and employees harmless from and against all claims, demands, settlements,
judgments, losses, liabilities and any and all related costs and expenses
(including reasonable and necessary attorneys' fees) arising out of or
related to (i) ISP's handling, storing, repackaging, transportation,
marketing, advertising, sale, use, disposal, or label content of the
PRODUCTS (except if such sale, handling, storing, repackaging,
transportation, marketing, advertising, use, disposal or label content is
based on erroneous information provided by UGI) or (ii) ISP's failure to
comply in all material respects with applicable laws and regulations, and
with respect to both (i) and (ii), only to the extent the same are solely
and directly caused by ISP.
9.2 Notwithstanding any other provision set forth herein, the
indemnity provisions set forth in Section 9.1 and elsewhere in this
Agreement shall survive termination or expiration of this Agreement.
X. REGULATORY, HEALTH AND SAFETY MATTER
10.1 UGI, at its sole cost and expense, shall perform such
health and safety tests related to the PRODUCTS and take any other action
which may be required by any governmental authority having jurisdiction
of the same, which are or may become necessary to ensure the continued
manufacture of the PRODUCTS. UGI represents and warrants that, to the
best knowledge of its officers and directors, it is not aware of any
regulations prohibiting the sale of the PRODUCTS in the MARKETS or to the
medical market and TERRITORY. UGI does not warrant that it will be able
to comply with the health and safety regulations in all parts of the
TERRITORY, but shall use commercially reasonable efforts to comply when
so requested by ISP. UGI shall share with ISP the results of any such
health and safety tests and all other health, safety and/or regulatory
information now or hereafter in its possession relating to the PRODUCTS
and their uses.
10.2 ISP may, in its sole discretion and at its own expense,
choose to obtain governmental approvals that may be required to market
the PRODUCTS in the TERRITORY. UGI will, at ISP's request and expense,
execute and deliver whatever documents are necessary in order to enable
ISP to obtain such approvals; however, all such documents or information
which UGI deems confidential will, at UGI's option, be provided directly
to the regulatory agencies involved, with appropriate procedures
satisfactory to UGI (in its reasonable business judgment) being followed
to maintain the confidentiality of the information.
10.3 In the event UGI cannot, or chooses not to, and ISP chooses
not to comply with any government regulations affecting the sale of
PRODUCTS in the TERRITORY, the parties shall in good faith, renegotiate
the PURCHASE TARGETS set forth in Schedule F hereto to account for
diminished sales potential.
XI. INSURANCE
11.1 UGI shall maintain, at its sole cost and expense, the
following kinds of insurance with minimum limits as set forth below and
naming ISP as additional insured (and such insurance shall be primary
without regard to any other insurance ISP shall maintain or otherwise
have in force):
Kinds of Insurance Limits of Liability
Comprehensive General Minimum $1,000,000
Liability (including products per occurrence
liability) and a broad form
vendors endorsement naming ISP
Excess (umbrella) $4,000,000
liability (including products
liability) and a broad form
vendors endorsement naming ISP
The insurance coverages set forth in this Article XI shall be
provided by insurers reasonably acceptable to ISP. UGI shall provide ISP
with a certificate of insurance evidencing that all such insurance
coverages are in effect prior to commencement of the INITIAL TERM, and
that none of such policies of insurance shall be terminated, canceled or
modified by the insurers unless ISP is provided with at least thirty (30)
days prior written notice of the same.
11.2 Notwithstanding any other provision set forth herein, the
insurance provisions set forth in Section 11.1 shall survive expiration
or earlier termination of this Agreement.
XII. DEFAULT
12.1 In the event that either party hereto shall default in any
material respect in the performance of any obligation specified herein,
the non-defaulting party shall have the right in addition to any other
rights or remedies it may have hereunder or at law or in equity, to so
notify the other party thereof in writing specifying the nature of such
default and, if such default is not remedied within thirty (30) days from
the date of such notice, then the non-defaulting party shall have the
right, in addition to any other rights or remedies it may have hereunder
or at law or in equity, to terminate this Agreement immediately.
12.2 In the event either party shall initiate any bankruptcy,
insolvency, receivership or similar proceedings, or such proceedings are
initiated against either party, and such party fails to have such
proceedings dismissed within forty-five (45) days after such proceedings
are initiated, the other party may terminate this Agreement immediately.
12.3 In the event either party transfers all or substantially
all the business to which this Agreement relates to a competitor of the
other party, such other party shall have the right to terminate this
Agreement upon thirty (30) days prior written notice.
XIII. ASSIGNMENT
13.1 Neither party shall assign this Agreement, in whole or in
part, whether by operation of law or otherwise, without the other party's
prior written consent, which consent shall not be unreasonably withheld
or delayed, except that either party may assign this Agreement without
such consent to an affiliate or to any subsequent purchaser of all or
substantially all of the business to which this Agreement relates.
XIV. CONFIDENTIAL INFORMATION; PATENTS
14.1 Each party hereto shall keep confidential and shall not
disclose in any manner to any third party nor use for any purposes other
than those contemplated by this Agreement, during the term hereof and for
a period of ten (10) years from the expiration or earlier termination of
this Agreement, any proprietary technical or business information marked
as "CONFIDENTIAL" and acquired from the other party hereto in connection
with or in the course of performance of this Agreement ("CONFIDENTIAL
INFORMATION").
14.2 CONFIDENTIAL INFORMATION shall not include any information
which: (a) was in the possession of the receiving party prior to the
disclosing party's disclosure to the receiving party and which was not
previously obtained either directly or indirectly from the disclosing
party; (b) was at the time of the disclosing party's disclosure to the
receiving party or thereafter becomes, through no fault of the receiving
party, part of the public domain by publication or otherwise; or (c) was
furnished to the receiving party by any third party not subject to
restrictions on disclosure.
14.3 Notwithstanding Section 14.1, any invention, discovery or
improvements which either party hereto or its employees, agents or
advisors solely develops or makes as a result of information received
under this Agreement or the performance of its obligations hereunder,
shall become the property of such party as long as such invention,
discovery, or improvement is not the result of use of the proprietary
CONFIDENTIAL INFORMATION of the other party. Both parties agree to
perform, and agree to use best efforts to have their employees, agents
and advisors perform, all lawful acts requested by the party owning such
property, at such owning party's expense to:
(a) perfect title therein in such owning party or its nominee and;
(b) enable such owning party or its nominee to obtain and maintain
patent or other legal protection therefor anywhere in the world.
14.4 ISP and UGI shall have joint ownership of any invention,
discovery or improvements made as a result of the parties' joint efforts,
or the joint efforts of their employees, agents or advisors. ISP and UGI
shall file joint applications for all patents arising from such efforts
in all countries the parties deem necessary. The costs of obtaining such
patents shall be borne equally by the parties, however, if one party
seeks to file a patent in a jurisdiction where the other party does not
wish to file, that party may make such a filing and all such costs shall
be borne by the filing party.
14.5 The terms and conditions of this Agreement shall be treated
as CONFIDENTIAL INFORMATION hereunder, except to the extent required by
government regulations. ISP acknowledges that UGI may be required to file
this Agreement with the Securities and Exchange Commission ("SEC"),
disclose the subject matter hereof in a letter to its shareholders,
and/or issue a press release regarding the subject matter hereof. If this
Agreement is filed with the SEC, UGI shall use its best efforts to obtain
confidential treatment of all market information. ISP and UGI shall
mutually agree to any press release to be issued with respect to the
subject matter hereof.
14.6 Notwithstanding any other provision set forth herein, the
provisions of this Article XIV shall survive expiration or earlier
termination of this Agreement.
XV. INTELLECTUAL PROPERTY RIGHTS
15.1 Except as disclosed in Schedule J, UGI represents and
warrants, to the best knowledge and belief of its officers and directors,
that UGI owns all right, title and interest in and to the manufacturing
process and the patents, trademarks, copyrights and other intellectual
property rights relating to the PRODUCTS.
15.2 Except as disclosed in Schedule J, UGI represents and
warrants, to the best knowledge and belief of its officers and directors,
that the manufacture and sale of the PRODUCTS by UGI to ISP and the
distribution, promotion and sale of the PRODUCTS by ISP, does not and
will not infringe any United States or foreign patent, trademark,
copyright or other intellectual property rights of any third party.
15.3 UGI shall defend, indemnify and hold ISP, its affiliates,
and their respective agents, representatives, officers, directors,
employees and customers harmless from and against all claims, demands,
settlements, judgments, losses, liabilities, penalties, fines and any and
all related costs and expenses (including reasonable attorney's fees)
arising out of any allegation that any PRODUCT sold by UGI to ISP under
this Agreement infringes any United States or foreign patent, trademark,
copyright or other intellectual property rights of any third party, up to
an amount equal to the total REVENUES earned by ISP with respect to the
infringing PRODUCT(S) in the country where such infringement allegedly
occurred. For purposes of this Section 15.3 "REVENUES" shall exclude (a)
discounts, rebates, returns and allowances, if actually allowed or
granted to customers; and (b) sales, excise, and other taxes,
transportation and insurance charges; if such items are actually included
in the gross sales price to customers. ISP shall notify UGI of the
commencement of any such suit or action promptly after receiving written
notice of the same and provide UGI with reasonable and necessary
cooperation, at UGI's sole cost and expense, in defense or resolution of
any such suit or action.
XVI. NOTICES
16.1 All notices and consents required to be given hereunder
shall be in writing and given: by hand; by first class mail (return
receipt requested); by facsimile confirmed by first class mail (return
receipt requested); or, by recognized overnight courier service,
addressed to the intended recipient as follows:
If to ISP ISP Technologies Inc.
c/o ISP Management Co., Inc.
0000 Xxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to UGI: United-Guardian, Inc.
000 Xxxxxx Xxxx.
Xxxxxxxxx, Xxx Xxxx 00000
Attn: President
Telephone: (000) 000-0000
Fax:(000) 000-0000
or to such other address as either party may from time to time designate
in writing to the other.
XVII. DISPUTE RESOLUTION
17.1 The parties agree to make a diligent, good faith attempt to
resolve all disputes concerning the terms and conditions of this
Agreement. If the parties are unable to resolve a dispute within fifteen
(15) days after notice from one party to the other, such dispute shall be
submitted to arbitration before one arbitrator under the Large Complex
Case Program (the "LCCP") of the American Arbitration Association (the
"AAA") at the of offices of AAA in New York City.
17.2 If the parties cannot agree on an arbitrator from the LCCP
list of panelists, either party can request AAA to appoint such an
arbitrator, which appointment shall be binding upon the parties. The
arbitrator shall render a reasoned written decision together with his or
her award.
XVIII. GOVERNING LAW
The validity and interpretation of this Agreement and the legal
relations of the parties shall be governed by the laws of the United
States of America and State of New York without regard to the choice of
law provisions. Each party consents to submit to the exclusive
jurisdiction of the federal or state courts located in the State of New
York for the enforcement of any arbitration award made pursuant to
Article XVII.
XIX. FORCE MAJEURE
Neither party shall be liable for delay or failure to perform in
whole or in part any provision of this Agreement by reason of
contingencies beyond its control, including but not limited to: acts of
God; fires; floods; earthquake; lightning; storms; explosions; mechanical
breakdowns; military operations; civil commotions; failure of public
services; wars; sabotage; accidents; labor disputes or shortages;
governmental laws, ordinances, rules, regulations, whether valid or
invalid; inability to obtain material, equipment or transportation; and
any other similar occurrences. The party so affected shall promptly give
written notice to the other party whenever such contingency or other act
becomes reasonably foreseeable, and the affected party shall use its best
efforts to overcome the effects of the contingency as promptly as
possible, and shall promptly give written notice to the other party of
the cessation of such contingency. Neither party, however, shall be
required to resolve a strike, lockout or other labor problem in a manner
which it, in its sole discretion, does not deem proper and advisable. In
the event of a force majeure circumstance which prevents UGI from
supplying and/or ISP from purchasing PRODUCTS, the PURCHASE TARGETS for
each calendar year or portion thereof set forth in Schedule F hereof
shall be reduced prorata based upon the length of time the force majeure
circumstance is in effect.
XX. ENTIRE AGREEMENT AND AMENDMENTS; WAIVER; CAPTIONS
20.1 This Agreement and the Schedules, which are attached hereto
and incorporated herein, constitute the entire agreement and
understanding between the parties with respect to its subject matter and
supersede all prior agreements, written or oral, between the parties
concerning such subject matter. This Agreement and the Schedules hereto
may not be changed or modified except in writing signed by a duly
authorized representative of each party. The parties may use purchase
orders, acknowledgments or other documentation but the same are intended
for convenience and record purposes only and any provisions which may be
contained therein are not intended to (nor shall they serve to) add to or
otherwise amend or modify any provisions of this Agreement.
20.2 No failure of either party to enforce any provisions hereof
shall constitute a waiver by that party of its right subsequently to
enforce the same or any other provision hereof.
No waiver of any provision of this Agreement shall be effective
unless in writing signed by the party claimed to have waived such
provision.
20.3 The captions used herein are for reference only, and shall
not in any way affect the meaning or interpretation of this Agreement.
XXI. SEVERABILITY
If any provision of this Agreement shall hereafter be held to be
invalid or unenforceable for any reason in a particular jurisdiction,
such provision shall be reformed to the maximum extent permitted to
preserve the parties' original intent, failing which such provision shall
be severed from this Agreement and the remainder of this Agreement shall
continue in full force and effect. Such occurrence shall not have the
effect of rendering the provision in question invalid in any other
jurisdiction or in any other case or circumstance, or of rendering
invalid any other provision contained herein, to the extent that such
other provision is not actually in conflict with any applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
ISP TECHNOLOGIES INC. UNITED-GUARDIAN, INC.
By: /s/ Art Xxxxxxx By: /s/ Xxxxxxx X. Globus
Name: Art Xxxxxxx Name: Xxxxxxx X. Globus
Title: Vice President Title: President
Schedule A
PRODUCTS*
Lubrajel
Grades: LC, MS, CG, NP, DV, TW, Oil, Karajel and Creamjel
Oil of Orchids (water soluble)
Oil of Orchids (oil soluble)
Lubrasil
Aquathik
Thixotrate
B122
Lubraslide
Klensoft
Super Ti Powder
Unitwix
Confetti
Any improvements to, or variations of, the above-listed PRODUCTS will
also be deemed PRODUCTS for purposes of this Agreement with the exception
of (a) the FINISHED FORMULATIONS listed on Schedule E hereto and (b) any
improvements to, or variations of, Lubrajel and Hydrajel-based products
for use as vaginal moisturizers, sexual lubricants or for other internal
applications, such as mouth or nose moisturizers, which may be marketed
and sold by both UGI and ISP as provided in Section 1.4 hereof.
* Lubrajel LC, Creamjel and Confetti will become PRODUCTS
hereunder only upon ISP's receipt of specifications for the same
from UGI.
Schedule B
Territory
All of North America, Central America and South America.
Schedule C
UGI DISTRIBUTORS FOR THE
MEDICAL MARKET IN THE TERRITORY
Horizon Medical, Inc. - Santa Ana, CA
Schedule D
UGI PRE-EXISTING CUSTOMERS
THE INFORMATION CONTAINED IN THIS SCHEDULE IS CONSIDERED BY THE
REGISTRANT TO BE PROPRIETARY AND CONFIDENTIAL, AND HAS, THEREFORE, BEEN
OMITTED FROM THIS FILING. THE INFORMATION CONTAINED IN THIS SCHEDULE HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
Schedule E
FINISHED FORMULATIONS
Razoride
Hydrogen Peroxide Gel
NCL-818
Protective Skin Lotion
After Sun Cooling Gel
Witch Xxxxx Gel
Phosphocholate
Colostrum (liquid and powder)
Gamma radiation resistant line of Lubrajel and Hydrajel products
Lubrajel or Hydrajel products in 100% concentrations for use in
medical applications or for use as vaginal moisturizers, sexual
lubricants or for other internal applications, such as mouth or
nose moisturizers
Schedule F
AGGREGATE PRODUCT PURCHASE TARGETS FOR THE INITIAL TERM
THE INFORMATION CONTAINED IN THIS SCHEDULE IS CONSIDERED BY THE
REGISTRANT TO BE PROPRIETARY AND CONFIDENTIAL, AND HAS, THEREFORE, BEEN
OMITTED FROM THIS FILING. THE INFORMATION CONTAINED IN THIS SCHEDULE HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
Schedule H
PRODUCT SPECIFICATIONS
THIS SCHEDULE HAS NOT BEEN FILED HEREWITH SINCE THE MATERIAL
CONTAINED THEREIN IS NOT DEEMED TO BE MATERIAL TO THIS CONTRACT. ALL
PRODUCT SPECIFICATIONS ARE AVAILABLE FROM REGISTRANT UPON REQUEST.
Schedule I
FORM OF CERTIFICATE OF ANALYSIS
THIS SCHEDULE HAS NOT BEEN FILED HEREWITH SINCE THE MATERIAL
CONTAINED THEREIN IS NOT DEEMED TO BE MATERIAL TO THIS CONTRACT. ALL
CERTIFICATES OF ANALYSIS ISSUED BY THE REGISTRANT ARE AVAILABLE FROM THE
REGISTRANT UPON REQUEST.
Schedule G
PRICING IN U.S. DOLLARS FOR PRODUCTS
THE INFORMATION CONTAINED IN THIS SCHEDULE IS CONSIDERED BY THE
REGISTRANT TO BE PROPRIETARY AND CONFIDENTIAL, AND HAS, THEREFORE, BEEN
OMITTED FROM THIS FILING. THE INFORMATION CONTAINED IN THIS SCHEDULE HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
Schedule J
UGI PATENTS, TRADENAMES AND TRADEMARKS
REGISTERED TO THIRD PARTIES
TRADEMARKS COUNTRY THIRD PARTY
Lubrajel Japan Showa Denko
Lubragel Japan Showa Denko
PATENTS COUNTRY THIRD PARTY
Lubrajel in Japan Kose (1)
Cosmetic uses
1. Kose Japanese patent No. 3-72042 (and related patents) covers the
use of Lubrajel in cosmetic applications in Japan.
Schedule K
SALES IN TERRITORY
FOR THE TWELVE (12) CALENDAR MONTHS -
SEPTEMBER 1995 - AUGUST 1996
THE INFORMATION CONTAINED IN THIS SCHEDULE IS CONSIDERED BY THE
REGISTRANT TO BE PROPRIETARY AND CONFIDENTIAL, AND HAS, THEREFORE, BEEN
OMITTED FROM THIS FILING. THE INFORMATION CONTAINED IN THIS SCHEDULE HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
Schedule L
PACKAGING SPECIFICATIONS
Lubragel
LC, MS, NP, EL, DV, TW 45 lbs. net weight
WA, Oil, Karajel, per pail.
Creamjel 500 lbs. net weight
per drum.
CG 50 lbs. net weight
per pail.
540 lbs. net weight
per drum.
Oil of Orchids (Water Soluble) 40 lbs per pail
Oil of Orchids (Oil Soluble) 40 lbs per pail
Lubrasil 45 lbs per pail
Aquathick 100 lbs per drum
Thixolrate 40 lbs per pail
B122 55 lbs per drum
Klensoft 40 lbs per pail
Lubraslide 55 lbs per drum
Super Ti Powder 50 lbs per drum
Unitwix 20 lbs per pail
200 lbs per drum
Confetti 40 lbs per pail
450 lbs per drum
