DISTRIBUTION/REPACKAGING AGREEMENT
This Agreement is entered into between NORTECH Forest Technologies, Inc.
("NORTECH") and Grant Laboratories, Inc. ("GLI"), and is effective as of October
7, 1997.
RECITALS
A. Whereas, NORTECH owns and seeks to protect by trade secret its deer
repellent product named "Tree Guard"; and
B. Whereas, NORTECH sub-license the same deer repellent product for the
retail market under the name "This 1 Works" for Voluntary Purchasing Groups,
Inc.; and
G. Whereas, Grant seeks the exclusive right to market and sell said
deer repellent product produced by NORTECH for the retail market with the
exception of Tree Guard and This 1 Works;
Now, therefore, it is agreed as follows:
NORTECH will sell to GLI, and GLI will purchase, the deer repellent product
specified on the attached Exhibit A (the "Product") in prepackaged, finished
form. The Product is identical in formulation to NORTECH's Tree Guard and will,
as outlined in Schedule A attached and when used as directed, effectively deter
deer from browsing.
NORTECH grants to GLI the exclusive right to distribute and sell the Product as
packaged by NORTECH, pursuant to this agreement, to the retail market, under
NORTECH's United States Environmental Protection Agency (EPA) registered
label(s) for the term of this Agreement, except for the rights referred to in
Recitals A and B above.
NORTECH undertakes with GLI not to sell, transfer, license or in any other
fashion grant product manufacture or distribution privileges to any person or
entity that would sell, consign or otherwise distribute the product to any
retailers whatsoever, or any other party, except NORTECH may sell and distribute
Tree Guard and one other deer repellent product to the retail market during the
term of this Agreement, so long as GLI purchases a minimum of 5,000 cases of
Product in each calendar year commencing January 1, 1998. (Any purchases made in
1997 will be applied to 1998.)
Neither party may use in any way the name or trademarks of the other party other
than by agreement of the parties or as may be required by law.
I. TERMS OF SALE/PURCHASE. Price, discounts, rebates and terms of payment
for the term of this Agreement are specified in Exhibit B. GLI shall
have the option at any time during the term of this Agreement,
subsequent to negotiations between the parties, to purchase the Product
in bulk form. Any such bulk form agreement shall continue Grant's
exclusivity in accordance with the terms of this Agreement.
TAXES. If NORTECH is required to pay any sales, use, value-added or
other taxes based on transactions subject to this Agreement (other than
taxes based on NORTECH's income) such taxes shall be billed to and paid
by GLI.
FINANCIAL CONDITION. NORTECH may defer shipments, alter payment terms,
or terminate this Agreement if GLI fails to pay any invoice in
accordance with the terms of the Agreement. If GLI's financial
condition becomes reasonably unsatisfactory to NORTECH, in addition to
remedies provided elsewhere herein, NORTECH may require cash payments
or satisfactory security for future deliveries.
WARRANTY. NORTECH warrants that in the performance of this Agreement,
it will comply with all applicable federal, state, and local laws and
regulations; NORTECH warrants that the Products shipped hereunder shall
conform to the specifications therefor and to the chemical description
on the label and such label conforms to the EPA registered label
therefor; that the Product will perform in accordance with the
representations specified in Schedule A and NORTECH has no reason to
believe the Product is not efficacious throughout the United States;
that good title, free from any lawful encumbrance shall be transferred
by NORTECH hereunder; that the Products sold by NORTECH to GLI will not
infringe any United States patent; and that the Products sold to GLI
hereunder comply with all governmental regulations. This is a guaranty
under ss. 12(b)(1) of Federal Insecticide, Fungicide and Rodenticide
Act ("FIFRA"), 7 U.S.C. ss. 136(j)(b)(1). GLI warrants that in the
performance of this Agreement, it will comply with all applicable
federal, state and local laws and regulations. NORTECH MAKES NO OTHER
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE, NOR IS
THERE ANY OTHER EXPRESS OR IMPLIED WARRANTY ON PRODUCTS SUBJECT HERETO.
NORTECH SHALL NOT BE LIABLE FOR CONSEQUENTIAL DAMAGES EXCEPT FOR ACTS
OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
INDEMNIFICATION. NORTECH shall defend and indemnify GLI against all
claims for property damage, personal injury, costs and expenses
(including reasonable attorney's fees) suffered by third persons
arising out of purchase, storage or use of, or any action taken or
brought by the U.S. EPA or other governmental authority/agency against
GLI arising out of, Products supplied to GLI hereunder whether arising
in warranty, negligence or otherwise, except to the extent such claims
arise out of GLI's negligence.
GLI shall indemnify NORTECH against all claims for property damage,
personal injury, costs and expenses (including reasonable attorney's
fees) arising out of GLI's negligence in its storage, transportation
and distribution of the Products it purchases including sales practices
not in compliance with NORTECH's label specifications, except to the
extent such claims arise out of NORTECH's negligence, provided,
however, GLI shall not be liable for consequential damages except for
acts of gross negligence or willful misconduct.
TITLE AND RISK OF LOSS. Title and risk of loss of the Products shall
pass to GLI under NORTECH's delivery to carrier, FOB Shenandoah, Iowa.
FORCE MAJEURE. Deliveries may be suspended by either party in the event
of war, fire, flood, labor trouble, breakage of equipment, accident,
riot, act of governmental authority (including but not limited to the
U.S. Environmental Protection Agency ["EPA"] or similar state
agencies), acts of God, or contingencies beyond the reasonable control
of such party, interfering with the production, supply, transportation,
or sale of any of the Product covered by this Agreement, or in the
event of inability to obtain on terms deemed by NORTECH to be
practicable any raw material (including energy). Quantities so affected
shall be eliminated from this Agreement without liability, or if by the
mutual written agreement of both parties, may be deferred, but this
Agreement shall otherwise remain unaffected.
II. NORTECH EFFORTS
FORMULATION. NORTECH will formulate the Product in accordance with the
specifications outlined on Exhibit A and it will not change or alter
the specification without notifying GLI. No such change will be made
which adversely affects the efficacy of the Product.
PACKAGE SIZE. NORTECH represents that it will not market its Tree Guard
product in 24 ounce or half gallon containers.
III. GLI EFFORTS
PROMOTIONAL MATERIALS. GLI shall prepare and pay for all promotional
materials for the Product, but all such materials must be approved in
writing by NORTECH prior to their use, which shall not be unreasonably
withheld. If such approval is not given within 10 working days, it
shall be deemed approved.
PRODUCTS STEWARDSHIP. GLI will use commercially reasonable best efforts
ensure that each of its facilities that stocks, handles and ships
Product shall be properly equipped to do so safely, in compliance with
federal, state, and local regulations.
CONTAINER APPROVAL. Containers used by GLI for repackaged Product shall
be approved by NORTECH.
IV. EPA REGISTRATION
REGISTRATION. NORTECH shall exercise its best efforts (i) to maintain
EPA registration number 66676-1 and (ii) to sub-register "Grant's
Repels Deer" for the Product under FIFRA.
MODIFICATION OF LABEL. NORTECH will use best efforts to obtain EPA
approval of the following words on its label: Latex formulation, dries
clear, leaves a nasty
taste, pleasant odor, can be used on flowers, shrubs and trees. Upon
EPA approval of these words, only GLI and NORTECH will have rights to
use these words on labels intended for retail distribution.
TESTING. NORTECH will conduct tests and use best efforts to obtain EPA
approval of "rain resistant" and "lasts a full growing season" for
label use. NORTECH will use its best efforts for such approval for two
years. Upon EPA approval of these words, only GLI and NORTECH will have
rights to use these words on labels intended for retail distribution.
OTHER ANIMALS. NORTECH will pursue testing and approval to add other
animals.
V. STATE REGISTRATION
NORTECH shall maintain and pay the cost of the license of Tree Guard in
each state presently licensing Tree Guard. (Tree Guard is presently
licensed in each state except California, Hawaii and Alaska.)
NORTECH will use its best efforts for a period of two years to obtain
registration for the Product in the State of California. NORTECH will
bear all costs of registering Tree Guard in California.
GLI will maintain and pay the costs of the registration of the Product
in each state in which the Product is sold.
VI. OTHER PROVISIONS
TERM. This Agreement is effective as of the date specified above and
shall continue in effect through December 31, 2003. Six months prior to
the end of the initial term, the parties hereto shall negotiate in good
faith an extension of this Agreement.
TERMINATION. Either party may terminate this Agreement upon the other
party's continuing breach of this Agreement after written notice by the
non breaching party to the breaching party and a thirty (30) day
opportunity to cure.
GLI shall have the right to terminate this Agreement upon six (6)
months written notice, provided, however, that upon giving of such
notice GLI shall have the right to sell out its inventory into the
marketplace and this Agreement shall continue in those aspects
necessary to accommodate such sales. Moreover, GLI shall have the right
to terminate this Agreement for cause if NORTECH fails (a) to obtain
EPA and all other required federal registrations and sub-registrations,
(b) deliver Product in accordance with the specifications and
warranties contained herein. If the Agreement is terminated for cause,
NORTECH will repurchase all of GLI Product inventory at cost.
Paragraphs of this Agreement regarding warranties and Indemnification
will survive the termination under all circumstances.
EPA CANCELLATION. In the event that any Product is suspended and later
canceled by EPA under Section 6 (7 U.S.C. ss. 136d) of the FIFRA,
NORTECH hereby agrees to (i) accept return of GLI's inventory of the
canceled Product and to credit GLI with the net invoice price of such
inventory, and (ii) reimburse GLI or its parent corporation, Central
Garden & Pet Company, for the cost of recall of Product, including
without limitation, the cost of shelf and consumer recall.
TERMS AND CONDITIONS. NORTECH standard terms and conditions outlined on
Exhibit C will apply to each transaction hereunder.
NON-ASSIGNABILITY. The rights and duties of GLI under this Agreement
are not assignable or transferable to any other party, other than to a
party controlling, controlled by, or under common control of GLI,
without the prior written consent NORTECH, which consent shall not be
unreasonably withheld.
NON-WAIVER. Failure of either party to exercise any right under this
Agreement on any occasion shall not in any way waive or reduce its
right to exercise any right on any other occasion.
AMENDMENTS. The terms and conditions herein may only be modified or
added to by an amendment, expressly identified as such, signed by
authorized representatives of both parties.
ARBITRATION. Both parties agree that any disputes arising out of the
performance of this Agreement will be resolved by arbitration conducted
in accordance with the commercial rules of the American Arbitration
Association.
ENTIRETY. This Agreement, with the attached Schedule A and Exhibits A,
B, and C constitutes the entire understanding between NORTECH and GLI
regarding the Product. It supersedes all previous agreements and
understanding and therefore represents the total current relationship.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate by their duly authorized representatives as of the day and year first
above written.
NORTECH Forest Technologies Inc. Grant Laboratories, Inc.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxxx X. Xxxxx Name: Xxxxx Xxxxxxxx
Title: CEO & President Title: President
Date: Oct. 7, 1997 Date: Oct. 16, 1997
