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EXHIBIT 10.15
DISTRIBUTION AGREEMENT
Nanophase Technologies Corporation of Xxxx Ridge, Illinois (NTC) and C.I. Kasei
Co., Ltd., of Tokyo, Japan (CIK) effective October, 30, 1996, agree as follows:
WHEREAS, CIK desires to have the exclusive right for one year to explore the
opportunity for distributing NTC Products (as defined below) in the Territory
(as defined below) upon the terms and conditions set forth in this Agreement;
and
WHEREAS, for such consideration and upon such terms as hereinafter set
forth, NTC is willing to grant such right to CIK;
THEREFORE, NTC and CIK hereby agree as follows:
1. For the period of one year from the effective date
hereof, NTC hereby appoints, and CIK hereby accepts
appointment, as NTC's exclusive distributor in the Territory
(as defined below) for the Products (as defined below) for use
in the Applications (as defined below). The first half year
shall be a period mainly for the preparation of marketing
such as sample distribution to the potential customers,
obtaining the evaluation results from the customer, narrowing
down the range of the Products to each customer,
establishing the marketing plan, etc., and the second half
year shall be a period for starting regular supply to the
potential customers based on the preparation of the marketing
during the first half year, provided however, that CIK will
make regular supply of the Products to customers during said
first half year upon receipt of orders from such customers.
The scope of this appointment and the nature of the products
hereunder may be modified by mutual agreement of the parties
from time to time during the term of this Agreement.
2. For the purpose of protecting the exclusive right and
opportunity of CIK hereunder, NTC agrees for one year from
the effective date hereof to refrain from appointing or
negotiating with any other distributor or potential
distributor in such Territory for such Products for use in
such Applications. As consideration for the agreement of NTC
to so refrain from such appointments and negotiations for
such period, CIK agrees to pay NTC the non-refundable sum of
$50,000. Such amount shall be fully earned by NTC upon the
effective date hereof and shall be paid within two weeks after
the effective date hereof.
3. The parties acknowledge that the purpose of distributing such Products
in such Territory is to achieve and maintain dominant market positions
for such Products based upon superior performance of such Products in
such Applications.
4. The Products covered by this Agreement are NTC titanium dioxide, iron
oxide, aluminum oxide and zinc oxide, in such forms as may be determined
by NTC in its discretion, for use by CIK's customers (the Products).
5. The Territory is Asian countries, including, but not
limited to, China, India, Japan, Korea, Malaysia, the
Philippines, Singapore and Taiwan (the Territory).
6. The Applications covered by this Agreement are all applications except
cosmetics, skin care and aluminum oxide in any form for use in
chemical/mechanical planarization (CMP) of metal layers in the
production of semiconductor (devices the Applications).
7. The parties agree that the primary role of NTC under this Agreement
shall be to provide Products and related technology support for the
Products, and the primary role of CIK shall be to perform the marketing
functions and to provide the related customer support. Nonetheless, the
parties agree to actively confer and collaborate with each other
concerning significant issues and activities relating to achievement of
the marketing objectives.
8. To achieve the objectives of this Agreement, NTC agrees to:
a. Supply the Products to CIK on schedules and in quantities
adequate to support the marketing objectives.
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b. Use its best efforts to achieve and maintain
quality, technological superiority, and competitive
costs of the Products, and actively provide technical
and marketing assistance to CIK in support of the
marketing objectives, including without limitation
assisting CIK in the preparation of appropriate
technical literature, training of CIK and customer
personnel, and technical presentations to CIK customers
and prospects.
c. Actively collaborate with CIK in efforts to
further develop and enhance the Products in support of
the marketing objectives.
d. Assist CIK in efforts to obtain any regulatory approvals
that may be required.
9. To achieve the objectives of this Agreement, CIK agrees to:
a. Use its best efforts to diligently market and
promote the Products in support of the marketing
objectives.
b. Provide NTC with an initial and rolling
schedule of confirmed or planned presentations,
samplings and evaluations.
c. On-going and on a current basis, provide NTC
with empirical feedback from presentations, samplings
and evaluations that are arranged or conducted by CIK,
and otherwise provide NTC with all information
available to CIK concerning Product performance, and
concerning market requirements relying to Product
performance.
d. Within one month after the effective date of
this Agreement, purchase, on a L/C basis, 1500 kgs of
the Products for Immediate shipment, selected from
aluminum oxide, iron oxide, titanium dioxide and Zinc
oxide at the price agreed to by NTC as follows:
Price, $/Kg (FOB NTC Plant Xxxx Ridge, IL)
Alumina 55
Iron oxide 53
Titanium dioxide 53
Zinc oxide 47
The assortment of the Products shall be fixed by CIK when it
issues its purchase order hereunder.
e. Purchase and maintain inventories of Products
on schedules and in quantities adequate to support the
marketing objectives, including sufficient on-going
inventories to serve as a buffer and to accommodate
prompt shipment to customers on a day-to-day basis.
f. As soon as practicable after initial market launch of the
Products, place on-going orders with NTC at least three months
before expected delivery by NTC.
g. Provide NTC monthly with a rolling six-month forecast of CIK's
Product requirements.
h. Provide NTC every 3 months with CIK's estimates of the current
year's tonnage size and one-year forecast of the total relevant
markets.
10. For as long as this Agreement remains in effect, unless the parties
otherwise agree in writing, NTC will not directly or indirectly
knowingly sell any of the products to anyone other than CIK for use in
the Territory, except that NTC shall retain its right to sell any of the
Products in the Territory for use in cosmetics, skin care applications
or aluminum oxide in any form for use in chemical/mechanical
planarization (CMP) of metal layers in the production of semiconductor
devices.
11. For as long as this Agreement remains in effect, unless the parties
otherwise agree in writing, CIK will not directly or indirectly,
knowingly sell any products, including, but not limited to,
nanometer-sized products, which could, in NTC's sole opinion, compete
with the Products for use in the applications.
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12. Pricing for the sale of Products by NTC to CIK shall be determined
solely by NTC. Pricing for the sale of Products by CIK to CIK's
customers shall be determined solely by CIK. Standard posing of NTC is
FOB the NTC facility.
13. NTC warrants that the Products meet the specifications stated in any
lot-specific certificate of analysis. NTC provides no performance
warranty and no implied warranty of merchantability or fitness for a
particular purpose. NTC is not responsible for consequential damages,
and assumes no risk or liability involved in the use of the Products,
including without limitation liability with regard to third party
patent claims. However, NTC warrants and represents to the best of its
knowledge there exists no valid third-party patent which will cover the
Products and that NTC will do its best to avoid third-party patent
claims against the Products. All warranties by NTC are to CIK only, and
are limiteded to the purchase price paid to NTC.
14. In the event of any material breach of this Agreement, the
non-defaulting party may terminate this Agreement if the breach is not
cured within 30 days following notice of breach.
15. The term of this Agreement shall be automatically extended for one year
without additional payment by CIK unless either party shall send to the
other party a written notice not to extend this Agreement 30 days prior
to the expiration of this Agreement. In the event that the distribution
arrangement between the parties is further extended by mutual agreement
beyond the term hereof, and in the event that sales of Products in the
Territory increase to the point where manufacturing in the Territory
becomes appropriate to accommodate customer demand, as determined by
mutual agreement between the parties, the parties agree to negotiate in
good faith concerning the local production in the form of joint venture
or any other form of local production in the Territory, as determined by
mutual agreement by the parties.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.
17. All notices required or desired to be given hereunder shall be given by
hand delivery, or by registered or certified mail, return receipt
requested, to the addresses stated below, and shall be effective upon
receipt.
18. The parties agree to the terms of the confidentiality and non-use
agreement executed on August 13, 1996. The sale of Products by NTC to
CIK shall not constitute a license from NTC to CIK.
19. Each party is an independent contractor. Neither party is the agent of
the other, and neither shall have authority to bind the other.
AGREED:
Nanophase Technologies Corporation C. I, Kasei Co., Ltd.
000 Xxxxxxxx Xxxxxx 18-1, 1-Chome, Kyobashi, Xxxx-xx
Xxxx Xxxxx, xxxxxxxx 00000 Xxxxx, Xxxxx
By: /s/ Xxxxxx X. Xxxxx By /s/ Xxxxxx Xxxx
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Xxxxxx X. Xxxxx, Vice President Xxxxxx Xxxx, Senior Managing
Director
