EXHIBIT 4.20
EXECUTION COPY
Xxxxx Xxxx Xxxxxxxx
advokat (H), LL.M
CO-OPERATION AGREEMENT
BETWEEN
KIRKEBY CHEESE EXPORT A/S
CVR. NO. 78 49 82 18
RODKILDE XXXXXXXX 0
XX - 0000 XXXXXXXXX, XXXXXXX
AND
HAARBY MEJERI/KIRKEBY DAIRY APS,
XXXXXXXX 0x XX 0000 XXXXXX, XXXXXXX
AND
KIRKEBY INTERNATIONAL FOODS A/S
CVR. NO. 31 05 52 96
RODKILDE XXXXXXXX 0
XX - 0000 XXXXXXXXX, XXXXXXX
SKE-0057
TABLE OF CONTENTS
1. Products ....................................................... 3
2. Exclusivity .................................................... 3
3. Quality ........................................................ 4
4. Prices ......................................................... 4
5. Stock obligations .............................................. 4
6. Trade Mark rights .............................................. 5
7. Packing ........................................................ 5
8. Customer relations ............................................. 6
9. Claims ......................................................... 6
10. Termination .................................................... 6
11. Delivery of material upon a termination of the agreement ....... 7
12. Partial invalidity ............................................. 7
13. Lease of Premises .............................................. 7
14. Non- Competition clause ........................................ 7
15. Counterparts ................................................... 7
16. Law and Venue .................................................. 8
17. Enclosures ..................................................... 8
Side 2.
This Co-operation Agreement is made as of 1st of January 2008
BETWEEN KIRKEBY CHEESE EXPORT A/S
CVR. NO. 78 49 82 18
RODKILDE XXXXXXXX 0
0000 XXXXXXXXX
(HEREAFTER NAMED AS KCE)
AND HAARBY MEJERI/KIRKEBY DAIRY
APS, CVR NO. ___________
` XXXXXXXX 0x XX 0000 XXXXXX
(HEREINAFTER NAMED AS
"KIRKEBY DAIRY")
AND KIRKEBY INTERNATIONAL FOODS A/S
CVR. NO. 31 05 52 96
RODKILDE XXXXXXXX 0
0000 XXXXXXXXX
(HEREAFTER NAMED AS FOODS OR
THE COMPANY)
This Agreement is made as part of the sale of KCE's Kosher division (including
35 designated customers (the "DESIGNATED CUSTOMERS") to the Company. As a newly
established company, the Company expects to initially purchase Kosher products
produced by Kirkeby Dairy, which is a company 100% owned by KCE, a significant
shareholder of the Company.
1. PRODUCTS
The following products (the "PRODUCTS") are covered by this Agreement:
- Blue Cheese under kosher supervision.
- Feta Cheese under kosher supervision.
- Other cheeses and dairy products under kosher supervision.
Foods shall also be entitled to order non-kosher products from Kirkeby
Dairy.
2. EXCLUSIVITY
As long as Kirkeby Dairy continues to supply the Products, under below
stated specific conditions (including price), Foods is obligated to
purchase Products from Kirkeby Dairy.
Side 3.
3. QUALITY
Kirkeby Dairy shall deliver Products (i) with the same specifications of
such Products supplied sold by KCE immediately prior to the date of this
Agreement, (ii) meeting the applicable standards for such Products of the
Danish Producers Union, and (iii) which are acceptable by the customers of
Foods pursuant to criteria agreed with the customer prior to production.
Regarding quality of products which are delivered is referred to point 9
in this Agreement.
4. PRICES
Kirkeby Dairy shall deliver the Products at prices which are no poorer
(for the purchaser) than (i) the price charged by Kirkeby Dairy to other
customers for similar products in a similar quality specified in point 3
and (ii) Foods can obtain from other suppliers for similar products in a
similar quality specified in point 3. The prices from Kirkeby Dairy shall
always be competitive and shall be equal to (a) the price of milk PLUS (b)
Kirkeby Dairy's actual production costs PLUS (c) Dkr 3.00 per kilogram to
cover Kirkeby Dairy's overhead. These prices shall provide for Foods to
achieve a gross margin on kosher products of at least 20% on an annual
yearly turnover of kosher and non-kosher products of at least
US$4,300,000.
It is of the parties' opinions that a reasonable profit shall be obtained
on all products, also products purchased through KCE or Kirkeby Dairy. In
the past KCE has been in position to obtain a gross profit of an average
of 20% by sale of kosher products. Foods shall try to keep this gross
profit as far possible. Foods are justified to demand a documentation of
the "cost breakdown" for products delivered through Kirkeby Dairy.
Subject to the foregoing, Kirkeby Dairy and Foods shall every year in
December and June negotiate prices, payment terms and delivery terms for
the coming 6 months period. The initial prices and payment terms shall be
as set forth in EXHIBIT A annexed hereto.
In any event, the matter of prices will be subject to approval of the
Company's board of directors following execution of this Agreement.
5. STOCK OBLIGATIONS
Kirkeby Dairy is not obligated to carry a stock for Foods, but is
obligated to deliver in accordance with written purchase orders from
Foods.
Orders from Foods shall be made with minimum 2 weeks notice, eventual more
if possible, in order to supply a full matured product.
Side 4.
6. TRADE MARK RIGHTS
KCE represents and warrants that it is the sole beneficial and registered
owner of the trade mark "SOL".
Foods is obligated not to violate the trade mark rights of KCE.
At the same time KCE grants Foods the right and exclusive license to use
the trade mark "SOL" for the next 15 years, with respect to kosher
products only. KCE also grants Foods the right and non-exclusive license
to use the trade mark "SOL" for the next 15 years, only with respect to
non-kosher products purchased from KCE, Kirkeby Dairy or their respective
affiliates or business partners.
Every other use no matter which market in contains will be without
justification unless KCE has given a written permission.
Foods shall not register the "SOL" trade mark elsewhere without written
permission from KCE and that the registration belongs to KCE.
There is not any permission given to Foods to use other trade marks belong
to KCE.
Kirkeby Dairy hereby represents and warrants that it is the sole
beneficial and registered owner of the trade marks Karavel" and "Hamlet".
Foods is obligated not to violate the trade mark rights of Kirkeby Dairy.
Kirkeby Dairy hereby grants Foods the right and non-exclusive license to
use the trade marks "Karavel" and "Hamlet".
Foods shall not register the "Karavel" and "Hamlet" trade marks elsewhere
without written permission from Kirkeby Dairy and that the registration
belongs to Kirkeby Dairy.
There is not any permission given to Foods to use other trade marks belong
to Kirkeby Dairy.
7. PACKING
Kirkeby Dairy shall deliver the mentioned Products to Foods in packed
condition and carry a satisfactory volume of packing material, labels,
etc., marked with the trade mark of Foods and eventual customer
information. Kirkeby Dairy shall package the Products in Kirkeby Dairy's
customary manner but shall use commercially reasonable efforts to provide
special packaging at Foods' written request. Kirkeby Dairy is responsible
for compliance with all packaging, labeling, bar code and any other
marking and packaging requirements in respect of the Products in all
applicable jurisdictions.
Side 5.
8. CUSTOMER RELATIONS
Foods, KCE and Kirkeby Dairy, mutual agree that they will not encourage
sales of the Products directly to one of the other parties' customers who
are known to be such by the selling party, unless it is a common customer.
Foods are without justification to sell non-kosher products to customers
who are known to Foods to be KCE's customers and on KCE present markets as
defined on EXHIBIT B as well, except for the Designated Customers.
The mentioned stipulation has to be understood so that it is not allowed
to take direct contact nor make direct deliveries to any of the other
parties' customer.
The present stipulation do not limit KCE's export rights except to respect
the exclusive right of Foods to sell Kosher products world wide.
9. CLAIMS
Deliveries made by Kirkeby Dairy, will be in non-broken cooling chain from
Kirkeby Dairy to the customers of Foods.
Kirkeby Dairy accepts to compensate Foods for all damages and losses in
respect of claims that Products did not meet the quality standards
provided in Section 3 above within the date of expiration, printed on the
product in question.
In connection with the handling of claims, both parties accept that
eventual customer visit will be agreed separately. Costs due to visits
will be split between the parties.
In all cases where the justification of the claim can be decided out of
the Danish Producer Unions standards, a judge panel from this Producer
Union will decide the justification.
In other cases the parties will in common handle the claim. If the claim
is handled outside Denmark the costs shall be agreed beforehand.
10. TERMINATION
Present agreement can be terminated by boths Parties only, with a written
notice of minimum 24 months starting end of a month. The other parties may
not terminate this agreement for convenience.
The Agreement can not be terminated for the first 3 years.
Within the termination period the parties are obligated to continue the
co-operation.
Side 6.
If the agreement is terminated by Foods as aforesaid, they are without
justification to use the trade mark "SOL", unless a special agreement
regarding the trade mark has been made.
11. DELIVERY OF MATERIAL UPON A TERMINATION OF THE AGREEMENT.
Upon a termination of the agreement KCE is obligated to return all
material which may belong to Foods or, upon Foods request, to destroy such
materials.
This material include all printed material or material stored on
electronic medias, including all packing material, labels, stickers, etc.
marked with Foods' special trading signs and product names.
Foods is at the same time obligated to collect all above mentioned
material if not destroyed by KCE the date of the termination of the
agreement.
12. PARTIAL INVALIDITY
If few of the present agreements points are declared invalid or against
the laws the parties co-operation shall be regulated by the agreements
terms in general, and as complementing of the invalid terms, the rules in
the Danish agreement law about complementing interpretation will be used.
The contact do not repeal totally by partial invalidity.
13. LEASE OF PREMISES
The Company intends to initially lease office facilities (including
premises equal to 20% of KCE's current offices) including paper, printer,
computer services etc. The payment for these services is expected to be
equal to 20% of KCE's actual costs therefore and is estimated at
approximately USD 11,000 per quarter. This matter will be subject to
approval of the Company's board of directors following execution of this
Agreement.
14. NON- COMPETITION CLAUSE
KCE and Foods acknowledge and confirm their non-competition obligations
pursuant to the Share Purchase Agreement dated as of the date hereof.
Kirkeby Dairy shall not sell kosher products except to Foods.
Side 7.
15. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument. Any party may enter into this
Agreement by signing any such counterpart and each counterpart may be
signed and executed by the parties and transmitted by facsimile
transmission and shall be as valid and effective as if executed as an
original.
The parties agree that the contents of the present agreement must not be
published except as required by law or any regulatory, stock exchange or
governmental body.
16. LAW AND VENUE
15.1 This Agreement shall be governed by and construed in accordance with
the law of the Kingdom of Denmark and disregarding its rules on choice of
law.
15.2 Any dispute or claim arising out of or in connection with this
Agreement, or the breach, termination or invalidity thereof, shall be
subject to arbitration in accordance with the rules of procedure of the
Danish Institute of Arbitration. The arbitration clause does not imply a
waiver of preliminary remedies such as prohibitory injunction.
The arbitration shall be in Copenhagen. The language of the Arbitration
shall be English.
17. ENCLOSURES
A: Initial Prices
B: KCE Present Markets
, the of February, 2008
_____________________________
x. Xxxxxxx Cheese Export A/S
, the of February, 2008
___________________________________
f. Haarby Mejeri/Kirkeby Dairy ApS
, the of February, 2008
Side 8.
___________________________________
x. Xxxxxxx International Foods A/S
Signature Page - Co-operation Agreement
Side 9.
