DISTRIBUTION AGREEMENT
made on this 12th day of June 2001
BETWEEN
HOME ART & SALES SERVICES AG
a company incorporated under the laws of Switzerland,
whose registered office is at Xxxxxxxxxxxxxx 00, XX - 0000
Xxxxxxx, Xxxxxxxxxxx
(hereinafter referred to as "Home Art")
AND
CREATIVE PARTNERS INTERNATIONAL INC. LLC
a company incorporated under the laws of the State of Delaware,
United States of America,
whose principal place of business is at 0000 Xx Xxxxxxx Xxxxx,
Xxxxxxxx Xxxx, Xxxxxxxxxx
00000, Xxxxxx Xxxxxx of America
(hereinafter referred to as the "Company")
WHEREAS
A. Home Art supplies (or causes to be supplied) around the World
consumer goods, including, inter alia, the Products (as
herein defined).
B. Home Art wishes to appoint the Company and the Company has
agreed to act as the exclusive distributor of the Products in
the Territory (as herein defined) on the terms and conditions
herein contained.
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS
In this Agreement the following words shall have the following meanings:
i) the "Products" shall mean the products (and spare parts therefor)
contained in the patented vacuum system, limited however for the
preservation of foodstuffs, such products bearing the VacSy", the
"Zepter" and/or the "Zepter International" trademarks. All other vacuum
applications used for (cigars, etc.) shall be excluded from this
Agreement. A list of the Products as currently defined and the prices
thereof is annexed hereto as Schedule A.
ii) "Quarter" shall mean the period of three months ending on 31st March,
30th June, 30th September and 31st December of each year.
iii)the "Territory" shall mean the United States of America.
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iv) the "Trademarks" shall mean the VacSy", the "Zepter" and/or the "Zepter
International" trademarks together with any other trademarks used on the
Products supplied by Home Art to the Company during the Term.
2.APPOINTMENT
Subject to the conditions set forth in this Agreement, Home Art
hereby appoints the Company, which accepts such appointment as
its exclusive distributor for the Products to import, sell and
distribute all such Products in the Territory.
3. UNDERTAKINGS OF THE COMPANY
The Company undertakes:
i) to use all reasonable means to ensure that the Products are imported into
the Territory with a minimum of delay and to attend to and complete in a
proper and efficient manner all necessary documents and formalities in
connection therewith. In this respect, all permits, certificates and
licenses required for-the importation, sale and use of the Products in the
Territory are to be obtained by the Company if possible in the name of and
to the benefit of Home Art (or its nominee);
ii) to use its best endeavours to initiate, extend and develop
the sale of the Products
in the Territory and not to do anything which may hinder or
interfere with such
sales. The Company will take Home Art's existing marketing
policies into
consideration;
iii)to pay or ensure payment, pursuant to clause 6 hereof, to
Home Art of all sums
due to Home Art in respect of sales of the Products (or spare
parts) in the Territory;
iv) not to make contracts on behalf of Home Art nor, without
Home Art's prior written
consent,to make any promises, representations, warranties or guarantees with
reference to the Products on behalf of Home Art or otherwise
incur any liability on
behalf of Home Art;
V) to inform Home Art immediately of any changes in the
Company's organisation or
method of doing business which might affect the performance of
the Company's
duties hereunder. Furthermore, the Company shall designate a
contact person,
who must be able to communicate in English, to act as the
liaison between the
Company and Home Art in all matters relating to this Agreement;
vi) to observe all directions and instructions given to it by
Home Art in relation to the
promotion, sale, distribution and exploitation of the Products;
vii)to supply to Home Art on request market reports which shall
include information on
demand and competitive activity in relation to the Products.
Furthermore, the
Company shall inform Home Art of all information relevant to the
sales of the
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Products in the Territory including the Company's sales prices
and applicable rebates and any further information that may be
of interest to Home Art;
viii)to advise Home Art of all respective current statutory,
official and private
regulations, directives, safety standards and other
requirements, including all
amendments thereof, that are relevant to the Products in
the Territory and shall
provide Home Art with the respective documentation and
regulations;
ix) except with the prior express written consent of Home Art
not to assign, transfer,
charge or make over this Agreement or its rights hereunder
or any part thereof nor
to appoint sub-distributors hereunder;
X) except with Home Art's prior written consent to purchase
the Products and spare
parts therefor only from Home Art;
A) not to manufacture or distribute during the Term of this
Agreement goods of the
same description as the Products or goods in competition
with the Products in the
Territory;
xii) to refrain outside the Territory from seeking customers for
the Products;
xiii)to refrain outside the Territory from establishing any branch or
maintaining any distribution depot for the sale of the Products;
xiv) to provide for customers of the Products in the Territory
an efficient maintenance
after sales service and to maintain at the cost and risk of
the Company a stock of
spare parts, accessories and ancillary equipment adequate
therefor;
xv) to sell the Products under the Trademarks and only in those
packages and with
those labels and packaging design supplied by Home Art, and
to cease using the
Trademarks after any termination of this Agreement;
xvi) not to use the Trademarks otherwise than in accordance with
this Agreement;
xvii) not to give to any purchaser of the Products or to anyone,
any guarantee or
warranty with respect to the Products or any instructions
for use or care of the
Products, except those previously approved in writing by
Home Art;
xviii)to notify Home Art promptly after becoming aware of any of the
following in the Territory:
(a)any claim of infringement and of the commencement against it
of any action for infringement of patents, trademarks or
other intellectual property rights made or brought against
the Company and relating to the Products;
(b)any unfair competition relating to the Products;
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(c)any infringement or suspected or threatened infringement by a
third party of the intellectual property rights relating to
the Products;
xix) to furnish Home Art (or its nominee) whatever reasonable
assistance may be
required, at Home Art's request and expense, to enable Home
Art (or its nominee)
to defend any claims or actions referred to in clause
3(xviii)a above made by a third
party that may be threatened or filed against the Company;
and
xx) to take such steps as the parties may agree, including the
institution of legal
proceedings where necessary, in the name of one of the
parties or in the joint
names of Home Art (or its nominee) and the Company in the
event of any
infringement or alleged infringement referred to in clause
3(xviii)c above by a third
party.
4. UNDERTAKINGS OF HOME ART
Home Art undertakes:
i) to use its reasonable endeavours to comply with any delivery
schedule submitted
by the Company and agreed by Home Art. In the event of late
delivery, the
Company shall have no claim whatsoever against Home Art for
damages;
ii) to provide such information and support as may reasonably be
requested by the
Company to enable it properly and efficiently to discharge its
duties hereunder;
iii)to advise the Company in writing sixty (60) days prior to
its withdrawing or adding
any item to the Products available for distribution hereunder;
iv) to provide the Company with such advertising and publicity
materials relating to the
Products, in the English and/or the local language, as the
Company may
reasonably require. However said materials shall be at the
expense of the
Company.
5.TERM
Subject to clauses 9 and 11 below, this Agreement shall remain
in force for an initial term of five years commencing on June 1,
2001 and terminating on May 31, 2006. However, su'6)ect always
to the Company sabsiying the minimum quantity requiTernents, set
ion1h at clause 9 below, this Agreement shall continue
automatically for an indefinite period thereafter unless
terminated by either party giving to the other not less than
three (3) months' written notice of termination expiring at the
end of the initial 5-year term or at any time thereafter.
6. PRICES AND PAYMENTS
6.1. The Prices to be paid by the Company to Home Art for the
Products shall be those prices referred to in the Price
List attached hereto at Schedule A.
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6.2.The prices referred to in the Price Lists shall be fixed on
a semi-annual basis (i.e.,
from January 1 to June 30 and from July 1 to December 31 of each
year of the
Term). In the event that the prices change from one period to
the next, Home Art
shall give the Company at least two (2) months' prior written
notice of such change
(i.e., notification shall be given on or prior to April 30 and
October 30 for the
following semi-annual period).
6.3.The Company shall have the following payment options with
respect to the
Products:
(a) Either payment shall be made in advance by the Company to
Home Art.
Payment in advance shall mean prior to delivery of the Products
by Home
Art to the Company. For advance payments, the Company will
receive a
discount of 2% on the corresponding final invoiced amount; or
(b) The Company shall pay Home Art the amount provided in each
invoice
within thirty (30) days of the date of the invoice, which may be
issued by
Home Art on or at any time after delivery of the Products. In
such case,
payments to be made hereunder shall be supported by an
irrevocable
Letter of Credit, issued by a first class international bank
acceptable to
Home Art, to be opened five (5) working days prior to delivery
of the
Products and in the full amount representing the exact value of
the
Products, in a form and on terms and conditions acceptable to
Home Art.
7. EXPENSES
No claims for or deductions in respect of expenses incurred by
the Company in the performance of its functions and duties under
this Agreement shall be made or allowed except where expressly
agreed to beforehand in writing by Home Art.
8. ORDERS / FORECASTS DELIVERY
8.1.All orders shall be on an Ex-Works (Switzerland) basis or on
an Ex-Works (Italy)
basis (Incoterms 2000), depending on the availability of the
Products. All duties,
import and/or export duties and such other taxes, tariffs and
surcharges of any
nature whatsoever now or hereafter levied or imposed in any
country or territory
either directly or indirectly in respect of the transfer of the
Products to the
Company's warehouse or payments for them and all freight costs
and insurance
costs from the place of delivery to the Company's warehouse will
be paid for by the
Company. Placing the Products at the disposal of the Company in
Home Art's
warehouse in Switzerland or in Italy shall constitute delivery
thereof to the
Company and from the point in time when the Products have been
placed at the
disposal of the Company, the Products shall be at the Company's
risk.
8.2.The Company shall provide th a three month rolling forecast
to Home Art (or its
nominee) by the fifteenth (15 ) day of every month. This
forecast will concern the
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request for goods for the three months in the following quarter.
By way of illustration therefore the Company will, on 15 th
January, provide a forecast in respect of goods required for
April, May and June.
8.3.The quantities required for the first (V) month of each
forecast shall be regarded
as a definitive order to Home Art.
0.0.Xx soon as practicable after receipt of the forecast Home
Art will send to the
Company a confirmation of the order for the deliveries scheduled
for the first (1s)
month referred to in the forecast.
8.5.The quantities provided in the forecast for the second (2 d
) and third (3rd) month of
each forecast may be revised (upwards or downwards) by a maximum
of ten
percent (10%).
8.6.The forecast is binding on the parties except in the case of
"Force Majeure".
9. MINIMUM QUANTITY REQUIREMENTS
9.1.Subject to clause 9.2 below, from September 1, 2001 to May
31, 2006, the
Company hereby undertakes to purchase from Home Art a minimum
quantity of
Products, the total value of which shall not be less than US$
44,000,000 (excluding
VAT, or the equivalent thereof). The purchase schedule for the
Term shall be as
follows:
Minimum
Purchaie Amount
From September 1, 2001 to November 30, 2001 US$ 500,000
From December 1, 2001 to May 31, 2002 US$ 4,000,000
From June 1, 2002 to November 30, 2002 US$ 3,250,000
From December 1, 2002 to May 31, 2003 US$ 3,250,000
From June 1, 2003 to November 30, 2003 US$ 4,000,000
From December 1, 2003 to May 31, 2004 US$ 4,000,000
000 Xx
From December 1, 2004 to May 31, 2005 US$ 5,500,000
From June 1, 2005 to November 30, 2005US$7,000,000
From December 1, 2005 to May 31, 2006 US$ 7,000,000
TOTAL US$ 44,000,000
9.2.The Company acknowledges that the UL approval for certain
Products, namely
VG-017, VG-017-P and VG - 010 as described in Schedule A hereto,
has been
requested and should be granted by September 1, 2001. However,
in the event
that such approval is not granted by September 1, 2001, then the
parties shall
negotiate the revision of the purchase schedule set forth above
in order to reflect
the actual date at which the approval is granted.
0.0.Xx the event that the Company fails to respect the purchase
schedule set forth at
clause 9.1 above, as may be amended in accordance with clause
9.2 above, or in
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any subsequent six-month period of the Term as may be extended,
then Home Art shall have the right to either revoke the
exclusive right of the Company to distribute the Products (such
that the right becomes non-exclusive), or to terminate this
Agreement, with immediate effect, by advising the Company by
written notice of its wish to do so.
0.0.Xx the event that the Company satisfies the minimum quantity
requirements
contained in the purchase schedule at clause 9.1 above, as may
be amended
pursuant to clause 9.2 above, then the parties shall negotiate,
in good faith, at the
beginning of each subsequent year of the Term the six-monthly
minimum quantity
requirements to be achieved by the Company during each
additional year of the
Term.
10. GUARANTEE BONUS
In consideration of the Company agreeing not to accept any
express warranties by Home Art in respect of the design,
material and workmanship of the Products, Home Art hereby agrees
to deduct 2% (excluding VAT, if applicable) from each invoiced
amount by way of a "Guarantee Bonus". Consequently, to the
extent permitted by law, any defective Products shall not be
returned by the Company to Home Art, nor shall they be replaced
"one-to-one" by Home Art. The Company hereby accepts
responsibility for the after-sales service and for the
replacement of any defective Products towards its customers.
11. LIMITATION OF DAMAGES
00.0.Xx consideration of Home Art providing the Company with the
Guarantee Bonus referred to at clause 10, above, the
Company hereby acknowledges and accepts that Home Art makes
no express warranties concerning the design, material or
workmanship of the Products and that, to the extent
permitted by law, Home Art shall therefore be under no
liability to the Company for any damages or losses, direct
or indirect, resulting from defects in design, materials or
workmanship in respect of the Products.
11.2.Home Art shall have no liability for any indirect or
consequential losses or expenses suffered by the Company in
respect of the Products, however caused, including but not
limited to loss of anticipated profits, goodwill,
reputation, business receipts or contracts, or losses or
expenses resulting from third party claims in relation to
the Products.
12. TERMINATION
12.1.1. If either party shall go into liquidation either
voluntary or compulsory (except for the purpose of
amalgamation or reconstruction previously approved of in
writing) or sell or dispose of its undertaking or the major
part thereof or in any manner assign this Agreement or make
any assignment for the benefit of creditors or cease or
threaten to cease to carry on business or is unable to pay
its debts as they fall due; or
Page 7 of 10
12.1.2. if a receiver or receiver and manager or judicial
manager or administrator is appointed for either party over
the whole or any part of its assets and is not withdrawn
within forty-eight (48) hours of appointment; or
12.1.3. if either party shall commit any material breach
(whether remediable or not) of its obligations under this
Agreement and (if remediable) shall fail to remedy the
breach within thirty (30) days of notice given by the other
party to the former party requiring it to do so,
then upon the happening of any one or more of such events the
other party shall have the right forthwith by notice in writing
to terminate this Agreement.
12.2.Any termination of this Agreement shall be without
prejudice to the right of Home Art to recover any monies
due to it under this Agreement and to the rights or
remedies of either party in respect of any antecedent
breach of this Agreement.
00.0.Xx the event of termination of this Agreement for any
reason, no claims or goodwill shall arise therefrom, and
the Company shall immediately cease from making any
representations regarding its status as a distributor for
Home Art and from taking any other action or doing any
other thing relating it to Home Art or to the Products,
including without limitation to the Trademarks relating to
the Products save that in the event of termination by
effluxion of time the Company shall have the right to sell
off its remaining stock of the Products within three (3)
months from the date of termination and all the obligations
(including payment obligations) of the Company herein
contained shall continue to apply until the end of that
three (3) month period.
12.4.Upon any termination of this Agreement, the Company shall
take all necessary measures in order to transfer any
permits and licenses for the Products that may be in the
Company's name to Home Art (or its nominee).
12.5.The Company hereby waives, to the extent it is able to do so by law, any
statutory
rights or other rights it may have or acquire in respect of
the termination of its
relationship with Home Art arising hereunder and the Company
agrees that the
rights available to it hereunder, in the event of termination of
this Agreement, are
adequate and correctly reflect the Agreement of the parties.
13. ENTIRE AGREEMENT
This Agreement is the entire and sole agreement and
understanding of the parties hereto and supersedes all other
prior agreements, understandings and communications (if any),
whether oral or written.
14. HEADINGS
The headings of the clauses and sub-clauses of this Agreement
have been added for convenience only and shall not affect the
interpretation of this Agreement.
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15. FORCE MAJEURE
15.1.The obligations of the parties hereunder (other than an
obligation to pay money) shall be suspended during the
period and to the extent that such party is prevented or
hindered from complying therewith by "Force Majeure" (as
hereinafter defined). In such circumstances such party
shall give notice of suspension as soon as reasonably
possible to the other party stating the date and extent of
such suspension and the cause thereof and the omission to
give such notice shall forfeit the rights of such party to
claim Force Majeure. Either party whose obligations have
been suspended as aforesaid shall resume the performance of
such obligations as soon as reasonably possible after the
removal of the cause and shall so notify the other party.
In the event that the circumstances of Force Majeure
continue for more than six (6) months, either party may
terminate this Agreement on thirty (30) days written
notice.
15.2."Force Majeure" means any cause beyond the reasonable
control of such party including (insofar as beyond such
control but without prejudice to the generality of the
foregoing expression) strikes, (whether official or
unofficial), lock-outs, labour disputes, act of God, war,
warlike operations, riot, civil commotion, malicious
damage, or shortage of labour, raw material or other
supplies, and compliance with any law or governmental
order, rule, regulation or direction.
16. CONFIDENTIALITY
The Company hereby undertakes to maintain the confidentiality of
any trade secrets, knowhow, customer files, financial
information, strategic planning information, or other
information relating to Home Art which is not a matter of public
knowledge at the time such information is disclosed to the
Company, both during the Term and after the expiry or earlier
termination of this Agreement, until such time as that
information becomes a matter of public knowledge through no act
or omission of the Company.
17 INVALIDITY OF PARTICULAR PROVISION
If any term of this Agreement shall, to any extent, be invalid,
illegal or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each provision of this Agreement
shall be valid and enforceable to the fullest extent permitted
by law.
18. NOTICES
All notices shall be in writing and shall be served personally
or by registered or certified air mail (return receipt
requested) or courier service to either party at its address set
forth in this Agreement or at such other address as each party
may provide to the other in writing from time to time. Service
of any such notice served at such address in accordance with
this clause shall be effective upon receipt or within five (5)
working days from the date of posting (postage prepaid, properly
addressed and registered) whichever is the earlier.
Page 9 of 10
19. LIMITATION OF AUTHORITY
The Company shall act solely as an independent contractor and
shall have no legal power or authority, either expressed or
implied, to act for, bind or commit Home Art in any way
whatsoever and the parties hereby acknowledge that nothing in
this Agreement is intended to result in the appointment of the
Company as an agent of Home Art, or to create a joint venture
between the parties hereto. Furthermore, Home Art shall retain
title and ownership of all know-how for the Products and of all
information and material made available to the Company, which
are subject to copyright.
20. COMPLIANCE WITH GOVERNMENTAL REGULATIONS
The parties hereby acknowledge that the sale and delivery of the
Products are subject to the import, export and re-export laws
and other laws and regulations of the countries involved.
21. APPLICABLE LAW
21.1.This Agreement shall be governed by and construed in
accordance with the laws of Switzerland.
21.2.Any disputes arising in connection with this Agreement
shall (if an amicable settlement cannot be reached between
the parties) be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber
of Commerce by three arbitrators appointed in accordance
with the said rules. The arbitration shall be held in the
English language and shall take place in London, England.
IN WITNESS whereof this Agreement has been executed by the duly
authorised representatives of the parties hereto on the day and
year first above-mentioned.
For and on behalf of For and on behalf of
HOME ART & SALES SERVICES AG CREATIVE PARTNERS INTERNATIONAL
BY BY
Duly Authorised Representative Duly Authorised Representative
tiome. Art 6 Sales swwces 041
Xxxxxxxxxxxxxx 00
0000 Xxxxxxx (XxxxxxxxxxX
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