Electric Fuel Distribution Agreement CONFIDENTIAL
This form of Distribution agreement is used in connection with distribution of
the Company's small batteries, including its agreement with Tessco Technologies
for a three year term.
DISTRIBUTION AGREEMENT
----------------------
This Distribution Agreement (this "Agreement"), is made as of this __ day of
December, 1998 by and between Electric Fuel Limited, a company organized under
the laws of the State of Israel, and having its principal place of business at 5
Kiryat Mada Street, Har Xxxxxxx Xxxxxxx Xxxx, Xxxxxxxxx 00000, Xxxxxx (the
"Company") _______________________ a company duly organized under the laws of
_______________ and having its principal place of business at ________________
(the "Distributor").
WHEREAS, the Company manufactures and markets certain products and desires to
increase the sales of such products;
WHEREAS, the Distributor has represented that it possesses the necessary
expertise and marketing organization to promote and sell such products; and
WHEREAS, the Company is willing to appoint the Distributor and the Distributor
is willing to accept such appointment as a distributor of the Company's products
in the territory defined herein;
NOW, THEREFORE, In consideration of the mutual premises and covenants
hereinafter set forth, the parties agree as follows:
1. DEFINITIONS
1.1 For purposes of this Agreement, the following capitalized terms shall have
the meanings assigned to them in this Article 1 unless the context otherwise
requires:
1.2 Products. "Products" shall mean those products described in Exhibit I
hereto as that Exhibit may be amended by the Company, at its sole discretion,
from time to time. the Company shall give the Distributor thirty (30) days
written notice of any such Amendment.
1.3 Territory. "Territory" shall mean the area specifically described in
Exhibit II hereto as that Exhibit may be amended from time to time.
1.4 Distributor List Price. "Distributor List Price" shall mean the prices
then being quoted by the Company in Exhibt VI for sales of Products to its
distributors.
1.5 Company Information. "Company Information" shall mean all information,
other than information in published form or expressly designated by the Company
as non-confidential, which is directly or indirectly disclosed to the
Distributor or embodied in Products provided hereunder, regardless of the form
in which it is disclosed, relating in any way to the Company's markets,
customers, products, patents, inventions, procedures, methods, designs,
strategies, plans, assets, liabilities, costs, revenues, profits, organization,
employees, agents, distributors or business in general.
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2 APPOINTMENT
2.1 Scope. The Company hereby appoints the Distributor and the Distributor
hereby accepts appointment, as a distributor for the Company's products during
the term of this Agreement with the right to sell or otherwise distribute
Products in the Territory, under the Company's brand names and trademarks,
subject to all the terms and conditions of this Agreement.
2.2 Subdistributors. The Distributor shall not, without the prior written
approval of the Company, appoint any subdistributors or agents to promote and/or
distribute Products in any country within the Territory. Further,
notwithstanding any such appointments, or the Company's approval thereof, the
Distributor shall at all times remain fully liable for the performance of its
subdistributors and/or agents and the Distributor hereby agrees to indemnify and
hold harmless the Company from all damage, losses, costs or expenses arising in
any manner from any act or omission on the part of its Subdistributors or
agents.
2.3 Sales Outside the Territory. Nothing herein shall be construed as
precluding the Distributor from selling Products outside the Territory, provided
that the Distributor shall not actively advertise, promote or solicit customers
for Products outside the Territory nor establish any office through which orders
are solicited or any depot at which inventories of the Company's Products are
stored outside the Territory.
3. GENERAL OBLIGATIONS OF THE DISTRIBUTOR
3.1 Marketing. The Distributor shall have the following obligations with
respect to the marketing and distribution of the Company's Products:
3.1.1 To use its best efforts to further the promotion, marketing, sale and
other distribution of Products in the Territory;
3.1.2 To maintain an adequate and balanced inventory of Products and
supplies;
3.1.3 To promptly respond to all inquiries from customers, including
complaints, process all orders, and effects all shipments of Products;
3.1.4 To diligently investigate all leads with respect to potential customers
referred to it by the Company;
3.1.5 To permit the Company to visit the Distributor's customers and to visit
the Distributor's place of business and inspect its inventories, service
records, and other relevant documents.
3.1.6 To maintain throughout the Territory an adequate sales force dedicated
on a full-time basis to the sale of Products;
3.1.7 To participate actively in sales or merchandising programs; to
participate in all fairs and exhibitions in the Territory where such
participation will, in the judgment of the Company and the Distributor, promote
the Products; and
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to develop and implement sales programs for the promotion of the Products;
3.1.8 To provide the Company contemporaneously with the execution of this
Agreement with a comprehensive yearly business plan of its private label in the
form and detail reasonably requested by the Company, and to update such business
plan each year within ___________ days of the end of the Distributor's fiscal
year; and
3.1.9 To provide the Company with ________________ days of the end of the
Distributor's fiscal year with a report of its activities with respect to the
Products in the Territory during such year, which report shall be in such form
and in such detail as the Company may reasonably require.
3.2 Advertising. The Distributor shall diligently undertake to advertise the
Products in the Territory. The Company shall furnish the Distributor with a
reasonable quantity of the Company's brochures, in the English language, for use
by the Distributor in preparing its own advertising materials. The Distributor
may utilize such advertising materials to promote sales of the Products and in
preparing its own advertising materials. All expenses incurred by the
Distributor with respect to creating advertising materials and advertising the
Products shall be subject to the terms of Exhibit VII of this agreement.
3.3 Manufacture or Distribution of Competitive Goods. The Distributor shall
not manufacture or distribute any disposable zinc-air battery products which are
directly competitive with the Products.
3.4 Customer Support The Distributor agrees to cooperate with the Company in
dealing with any customer complaints concerning the Products and to take any
action requested by the Company to resolve such complaints. The Distributor
also agrees to assist the Company in arranging for any customer warranty
service.
3.5 Expenses. The Distributor assumes full responsibility for all costs and
expenses which it incurs in carrying out its obligations under this Agreement
including but not limited to all rentals, salaries, commissions, demonstration,
travel and accommodation expenses without the right to reimbursement for any
portion thereof from the Company.
3.6 Private Label Packaging The Distributor may purchase batteries from the
Company in bulk quantities for repackaging into private label packages. The
Company grants the Distributor this non-exclusive, non-transferrable right,
provided that the Company's brand name and trademark are prominently displayed
on the front of any retail packaging and that all relevent technical data
provided by the Company is displayed on the packaging. Any private label
packaging must be approved by both parties in writing.
4. ORDERS FOR PRODUCTS
4.1 Purchase Orders. The Distributor shall submit quarterly purchase orders
to meet demand and maintain adequate inventory of the Products. The purchase
orders for the Products will be sent to the Company in writing or by facsimile
which shall set forth, at a minimum:
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4.1.1 An identification of the Products ordered, including model numbers;
4.1.2 Quantity;
4.1.3 Requested delivery dates; and
4.1.4 Shipping instructions and shipping address.
The Distributor shall place the purchase orders with the understanding that the
Company requires at least a ________ day lead time to deliver the Products.
4.2 Acceptance of Orders. All purchase orders from the Distributor are
subject to acceptance in writing by the Company at its principal offices in
Jerusalem which acceptance shall be delivered by mail or sent by facsimile.
Each purchase order shall be deemed to be an offer by the Distributor to
purchase the Products pursuant to the terms of this Agreement and, when accepted
by the Company as hereinabove provided, shall give rise to a contract under the
terms set forth herein to the exclusion of any additional or contrary terms set
forth in the purchaser order.
4.3 Delivery Terms. All deliveries of the Products shall be made to the
Distributor's facility from the Company's US facility using a carrier chosen by
the Distributor at the Distributor's own cost. The Company shall have no
further responsibility for the Products, and all risk of damage to or loss or
delay of the Products shall pass to the Distributor upon pick up by the
Distributor's chosen carrier.
4.4 Modification of Orders. No accepted purchase order shall be modified or
canceled except upon the written agreement of both parties. The Distributor's
purchase orders or mutually agreed change orders shall be subject to all
provisions of this Agreement, whether or not the purchase order or change order
so states.
4.5 Order Verification. Upon the reciept of a purchase order, the Company
will confirm pricing and scheduled shipment dates. Should there be a change in
scheduled shipment date, the Company will notify the Distributor. Upon
shipment, the Company will notify the Distributor by a fax of the packing slip,
or similar document that shows part number, quantity, and carrier information.
4.6 Product Changes. The Company reserves the right, in its sole discretion
and without incurring any liability to the Distributor, to:
4.6.1 Alter the specifications for any Product;
4.6.2 Discontinue the manufacture of any Product;
4.6.3 Discontinue the development of any new product, whether or not such
product has been announced publicly; or
4.6.4 Commence the manufacture and sale of new products having features which
make any Product wholly or partially obsolete, whether or not the Distributor is
granted any distribution rights in respect of such new products.
Notwithstanding the above, the Company shall provide the Distributor with prompt
written notice of such decisions and shall fill all accepted purchase orders
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from the Distributor for any such altered or discontinued Products of which
manufacturing and commercial deliveries have commenced.
4.7 Quality Assurance. All incoming Product is subject to qaulity assurance
testing based upon acceptable quality levels (AQL). The Distributor reserves
the right to return for replacement or credit all or part of any lot that does
not pass the quality testing.
4.7.1 The Company agrees to work with the Distributor to resolve concerns
with quality or make modifications to the Products in order to meet product
performance or appearance specifications. In addition, if requested, the
Company will provide steps of corrective actions taken for any modifications
required to correct a quality defect, this preventing the defect in the future.
The Company agrees to review, revise, aceept, and sign the Distributor's
inspection program of the Products. For any shipment that does not pass product
inspection, the Company agrees to pay the labor charges for culling the lot,
and/or the freight charges for the return shipment.
4.7.2 The Company must allow Distributor representatives to visit their
facilities to asses Company quality assurance and capabilities.
4.7.3 The Distributor agrees to provide all information pertaining to Product
specifications and the pre-determined product inspection program. The
Distributor will make available the test results of any rejuected lot for review
by the Company.
4.8 Forecasts. The Distributor agrees to provide the Company with a twelve
(12) month forecast indicating the Distributor's intended purchase of Products
during each calendar quarter of such period as well as such other information as
the Company may reasonably request in the format specified by the Company from
time to time. Such forecasts by the Distributor shall be used for purposes of
facilitating the Distributor's marketing plans and in order to meet the lead
times required by certain of the Company's suppliers, but they shall not be
determinative for purposes of establishing the mutually agreed fiscal year
forecast.
5. PURCHASE REQUIREMENTS
5.1 Best Efforts. The Distributor agrees to use its best efforts to
aggressively grow the sale of the Company's Products and purchase the forecasted
quantities of the Products.
6. PRICES AND PAYMENTS
6.1 Prices. The prices to be paid by the Distributor for Products purchased
pursuant to this Agreement shall be the Distributor List Prices in effect at the
time of acceptance of the relevant purchase order submitted by the Distributor,
except as provided in Section 6.2 below. All Distributor unit List Prices do
not include delivery to the Distributor from the Company's facility in the US.
Special packing or handling shall be at the sole expense of the Distributor.
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6.2 Price Increases, Decreases. The Company may, at any time during the term
of this Agreement, increase its prices for the Products by providing the
Distributor with at least _____ days prior written notice. Increased prices for
all Products shall not apply to purchase orders accepted prior to the effective
date of the price increase unless such orders provide for delivery, and delivery
is in fact made, more than _____ days after the date of acceptance of the order.
Price decreases with respect to all Products shall be effective immediately upon
written notice to the Distributor on all such Products. The Company shall
provide the Distributor with price protection equal to the unit price decrease
times the number of affected units remaining in the Distributor's inventory ____
days following the price decrease.
6.3 Payment Terms. All payments shall be due _____ days from the date of
shipment of the Products, or from the date of invoice for such charges as taxes,
duties, interest or like special charges, payable to the bank or banks specified
by the Company in writing from time to time. All payments hereunder shall be
made in U.S. dollars or such other currency as may be mutually agreed upon.
Payment shall be made by wire transfer to the Company's designated account. The
Company shall not be obligated to ship Products against accepted orders in the
event the Company's outstanding accounts receivable from the Distributor then
exceed or would after any such shipment exceed _____ of the U.S. dollar value of
the Distributor's then current fiscal year forecast based on the then current
Distributor List Prices or such other amount as may be mutually agreed upon from
time to time by the Company and the Distributor. In the event of any dispute
arising over any part of an invoice or the total amount due under an invoice,
all undisputed amounts shall be promptly paid by the Distributor in accordance
with this Section 6.3.
6.4 Resale Prices. The Distributor may resell Products at such prices as the
Distributor, in its sole discretion, shall determine. The Distributor shall,
however, provide the Company with a list of its initial sales prices for the
Products to be charged to its customers and shall keep the Company fully
informed by providing the Company with any new list sales prices within then
(10) days of any change in such list prices.
6.5 Overdue Payments. If, and for so long as any payment from the
Distributor to the Company under this Agreement shall be overdue:
6.5.1 Interest at the rate of ten percent (10%) per annum shall automatically
become due on all balances outstanding plus a minimum administrative and
handling charge of U.S. 50 per month or part thereof; and
6.5.2 The Company shall have the right, in its sole discretion, to require
payment for additional shipments of Products either by cash in advance or by an
irrevocable transferrable, divisible letter of credit in U.S. dollars confirmed
by a bank specified by the Company, instead of by open account as provided
above.
7. ACCEPTANCE AND WARRANTY
7.1 Acceptance and Products. In the event of any shortage, damage or
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discrepancy in or to a shipment of Products, the Distributor shall promptly
report the same to the Company and furnish such written evidence or other
documentation as the Company may deem appropriate. The Company shall not be
liable for any such shortage, damage or discrepancy unless the Company has
received notice and substantiating evidence thereof from the Distributor within
thirty (30) days of arrival of the Products at the Distributor's shipping
address in the Territory. If the substantiating evidence delivered by the
Distributor demonstrates to the Company's satisfaction that the Company is
responsible for such shortage, damage or discrepancy, the Company shall promptly
deliver additional or substitute Products to the Distributor in accordance with
the delivery procedures set forth herein; provided that in no event shall the
Company be liable for any additional costs, expenses or damages incurred by the
Distributor directly or indirectly as a result of such shortage, damage or
discrepancy in or to a shipment.
7.2 Product Warranty. The Company warrants against all manufacturing defects
for a period of twelve (12) months. The Company's sole obligation in the event
of a breach of such warranty shall be to provide at no charge to the Distributor
replacement parts for all defective parts. In no event shall the Company have
any responsibility or bear any liability for the cost of labor for the repair of
any defective Products or parts, the removal of defective parts or the
installation of replacement parts. All costs of shipment of the replacement
parts to the Distributor shall be borne by the Company. The Distributor shall
retain all replaced parts subject to the foregoing warranty for the Company's
inspection for a period of six (6) months after their replacement. All such
replaced parts shall become the property of the Company upon their replacement.
7.3 Notice. Warranty claims hereunder must be made promptly and in writing;
must recite the nature and details of the claim, the date the cause of the claim
was first observed and the serial number of the Product concerned.
7.4 Excessive Claims. If the number of Products returned and/or number of
warranty claims exceed(s) a level deemed acceptable by the Ditributor, the
Distributor and the Company agree to jointly resolve the issue in the best
interest of both, the Company and Distributor.
7.5 Excluded Claims. The Company shall have no obligation under Section 7.2
above in the event that:
7.5.1 Repair or replacement or Products or parts shall have been required
through normal wear and tear or necessitated in whole or in part by force
majeure as defined in Section 15.1 hereof, or by the fault or negligence of the
Distributor or its customers; or
7.5.2 The Products or parts have not been properly used, maintained, or
repaired in accordance with the Company's then applicable operating and/or
maintenance manuals, whether by the Distributor or its customers, or shall have
been modified in any manner without prior written consent of the Company.
7.6 Limited Warranty. The warranties set forth in this Article 7 are
intended solely for the benefit of the Distributor. All claims hereunder shall
be
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made by the Distributor and may not be made by the Distributor's customers. The
warranties set forth above are in lieu of all other warranties, express or
implied, which are hereby disclaimed and excluded by the Company, including
without limitation any warranty of merchantability or fitness for a particular
purpose or use and all obligations or liabilities on the part of the company for
damages arising out of or in connection with the use, repair or performance of
the products.
8. LIMITATION OF REMEDIES
8.1 Delay. The Company shall not be liable for any loss or damage caused by
delay in furnishing products and services or any other performance under or
pursuant to this Agreement.
8.2 Sole Remedies. The sole and exclusive remedies for breach of any and all
warranties and the sole remedies for the Company's liability of any kind
(including liability for negligence) with respect to the products and services
covered by this Agreement and all other performance by the Company under or
pursuant to this Agreement shall be limited to the remedies provided in Section
7.2.
8.3 Consequential Damages. In no event shall the Company's liability of any
kind include any special, indirect, incidental or consequential losses or
damages, even if the Company shall have been advised of the possibility of such
potential loss or damage.
8.4 Product Indemnification. The Company agrees to indemnify and defend the
Distributor from all claims arising out of any products supplied by the Company.
This includes, but is not limited to, indemnification against all claims that
any of the products delivered by the Company directly infringe any third party's
patent, copyright, or trade secret under the laws of the United States or any
state of the United States. The only exception would be claims resulting solely
from the Distributor's act of negligence. The Company agrees to this
indemnification, provided that the Distributor gives the Company immediate
notice in writing of any notice or claims arising out of any products supplied
by the Company and if the Company so wishes and at the Company's sole
discretion, permits the Company through the Company's counsel to defend the same
and gives the Company all available information, assistance and authority to
enable the Company to assume such defense. Should the Company so decide, the
Company shall have control of the defense of such suit, including appeals from
any judgement therein and any negotiations for the settlement or compromise
thereof with full authority to enter into a binding settlement or compromise.
8.5 Product Liability: The Company agrees to provide evidence of liability
insurance (including product liability), with the Distributor as an additional
name insured on such policy, with coverage up to at least _________ US dollars
_________ general aggregate. The Company agrees to renew the insurance policy
yearly for as long as this agreement is valid.
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9. CONFIDENTIALITY
9.1 The Distributor acknowledges and agrees that all Company Information is
confidential and proprietary to the Company. The Distributor agrees not to use
any of such Company Information during the term of this Agreement and for a
period of five (5) years thereafter for any purpose other than as permitted or
required for performance by the Distributor hereunder. The Distributor further
agrees not to disclose or provide any of such Company Information to any third
party and to take all necessary measures to prevent any such disclosure by its
employees, agents, contractors or consultants during the term hereof and for a
period of five (5) years thereafter. Nothing herein shall prevent the
Distributor from using, disclosing or authorizing the disclosure of any Company
Information which is, or hereafter becomes, part of the public domain.
In addition the Company acknowledges and agrees that all ideas, information,
designs and data provided by TESSCO shall remain the property of the
Distributor. The Company agrees to hold in strictest confidence, during the
term of this agreement and for at least five (5) years thereafter, any and all
information of a confidential nature regarding ________ business or affairs.
10. TRADEMARKS
10.1 Use of Trademarks. The Company hereby grants to the Distributor a non-
exclusive, non-transferable, and royalty-free right and license to use the
Company's trademarks specified in Exhibit V attached hereto, as such Exhibit may
be modified from time to time during the term of this Agreement, in connection
with the sale or other distribution, promotion, advertising and maintenance of
the Products for so long as such trademarks are used by the Distributor in
accordance with the Company's standards, specifications and instructions but in
no event beyond the term of this Agreement. The Distributor shall afford the
Company reasonable opportunities during the term hereof to inspect and monitor
the activities of the Distributor in order to ensure the Distributor's use of
the trademarks in accordance with the Company's standards and instructions. The
Distributor shall acquire no right, title or interest in such Company trademarks
other than the foregoing limited license, and the Distributor shall not use any
Company trademarks as part of the Distributor's corporate or trade name or
permit any third party to do so without the prior written consent of the
Company.
10.2 Registration. The Company shall use its best efforts to register the
Company trademarks specified in Exhibit V, as such Exhibit may be modified
during the term of this Agreement, in such jurisdictions within the Territory in
which the Company determines that registration is necessary or useful to the
successful distribution of the Products. In addition, in the event the Company
believes that it is advisable to effect any filing or obtain any governmental
approval or sanction for the use by the Distributor of any of the Company's
trademarks pursuant to this Agreement, the parties shall fully cooperate in
order to do so. All expenses relating to the registration of the Company's
trademarks in the Territory as well as the marking of any filing or obtaining
any governmental approvals for the use by the Distributor of the Company's
trademarks shall be
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borne by the Company.
10.3 Markings. The Distributor shall not, without the prior written consent
of the Company, remove or alter any patent numbers, trade names, trademarks,
notices, serial numbers, labels, tags or other identifying marks, symbols or
legends affixed to any Products or containers or packages.
10.4 Infringements. The Distributor shall promptly notify the Company of any
use by any third party of the Company's trademarks or any use by such third
parties of similar marks which may constitute an infringement or passing off of
the Company's trademarks. The Company reserves the right in its sole discretion
to institute any proceedings against such third party infringers and the
Distributor shall refrain from doing so. The Distributor agrees to cooperate
fully with the Company in any action taken by the Company against such third
parties, provided that all expenses of such action shall be borne by the Company
and all damages which may be awarded or agreed upon in settlement of such action
shall accrue to the Company.
10.5 Termination of Use. The Distributor acknowledges the Company's
proprietary rights in and to the Company's trademarks and any trade names
regularly applied by the Company to the Products, and the Distributor hereby
waives in favor of the Company all rights to any trademarks, tradenames and
logotypes now or hereafter originated by the Company. The Distributor shall not
adopt, use or register any words, phrases or symbols which are identical to
confusingly similar to any of the Company's trademarks. Upon termination of
this Agreement, the Distributor shall cease and desist from use of the Company's
trademarks in any manner. In addition, the Distributor hereby empowers the
Company and agrees to assist the Company, if requested, to cancel, revoke or
withdraw any governmental registration or authorization permitting the
Distributor to use the Company's trademarks in the Territory.
11. PATENTS
11.1 Indemnification. The Company shall, at its own expense, defend any suit
instituted against the Distributor which is based on an allegation that any
Products manufactured by the Company and sold to the Distributor hereunder
constitute an infringement of any patent of the United States of America and
shall indemnify the Distributor against any award of damage and costs made
against the Distributor by a final judgment of a court of last resort if it is
determined therein that any such Product constitutes an infringement of any
patent of the United States of America, provided that the Distributor gives the
Company immediate notice in writing of any notice or claims of infringement and
permits the Company through the Company's counsel to defend the same and gives
the Company all available information, assistance and authority to enable the
Company to assume such defense. The Company shall have control of the defense
of such suit, including appeals from any judgement therein and any negotiations
for the settlement or compromise thereof with full authority to enter into a
binding settlement or compromise. In the event that any Product is held to
infringe and its use is enjoined, the Company shall, at its option and expense,
(i) procure for the Distributor the right to continue using such Product, (ii)
provide
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the necessary parts and documentation to replace or modify such Product so that
it no longer infringes, or (iii) grant the Distributor a credit for such Product
upon its return to the Company, allowing for reasonable depreciation for use,
damage and obsolescence.
11.2 Limitation of Obligation. Notwithstanding the provisions of Section
11.1 hereof, the Company shall have no liability whatsoever to the Distributor
with respect to any patent infringement or claim thereof which is based upon or
arises out of (i) the use of any Product in combination with an apparatus or
device not manufactured or supplied by the Company, if such combination causes
or contributes to the infringement, (ii) the use of any Product in a manner for
which it was neither designed nor contemplated, or (iii) any modification of any
Product by the Distributor or any third party which causes the Product to become
infringing. Section 11.1 hereof states the entire liability of the Company for
or arising out of any patent infringement or claim thereof with respect to
Products furnished to the Distributor under this Agreement.
12. TAXES
12.1 The Company shall be solely responsible for and shall pay, or reimburse
the Distributor for, all taxes, duties, import deposits, assessments and other
governmental charges, however designated, which are now or hereafter imposed
under or by any governmental authority or agency, that are (a) associated with
the performance by the Distributor of its obligations hereunder; the payment of
any amount by the Company to the Distributor pursuant to this Agreement, (b)
based on the Products or their use, or (c) relate to the import of the Products
into the Territory in accordance with then prevailing law or regulations.
12.2 All payments to be made by the Distributor to the Company pursuant to
this Agreement represent net amounts the Company is entitled to receive and
shall not be subject to any deductions for any reason whatsoever other than the
price reduction on the Distributor's Product inventory, outlined in Article 6.2.
In the event any of said charges become subject to taxes, duties, assessments or
fees of whatever kind or nature levied outside Israel, said payments shall be
increased to such an extent as to allow the Company to receive the net amounts
due under this Agreement.
13. IMPORT AND EXPORT OF PRODUCTS
13.1 Import Documentation. The Company shall be responsible for obtaining
all licenses and permits and for satisfying all formalities as may be required
to import Products into the Territory in accordance with then prevailing law or
regulations.
13.2 Export Regulations. The Distributor shall supply the Company on a
timely basis with all necessary information and documentation requested by the
Company in order to permit the Company to export the Products with respect to
any sale or order solicited by the Distributor hereunder. The Distributor shall
not dispose of any Israel-origin Products, software, know-how, technical data,
documentation or other products or materials furnished to it pursuant to this
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Agreement to any party or in any manner which would constitute a violation of
the export control regulations of Israel now or hereafter in effect.
14. TERM AND TERMINATION
14.1 Term. This Agreement shall take effect with respect to each country
comprising the Territory as set forth in Exhibit II as of the date first above
written and shall continue in force for the initial period specified in Exhibit
III. Thereafter, this Agreement shall be renewed for additional periods of one
(1) year each, commencing on January 1 of each year, if each of the parties
shall have given the other written notice of its renewal of this Agreement no
later than July 1 of the previous year.
14.2 Termination. Notwithstanding the provisions of Section 14.1 above, this
Agreement may be terminated in accordance with the following provisions:
14.2.1 Either party hereto may terminate this Agreement at any time by giving
notice in writing to the other party, which notice shall be effective upon
dispatch, should the other party file a petition of any type as to its
bankruptcy, be declared bankrupt, become insolvent, make an assignment for the
benefit of creditors, go into liquidation or receivership, or otherwise lose
legal control of its business, or should the other party or a substantial part
of its business come under the control of a third party;
14.2.2 Either party may terminate this Agreement by giving notice in writing
to the other party should an event of Force Majeure continue for more than six
(6) months as provided in Section 15.5 below;
14.2.3 Either party may terminate this Agreement by giving notice in writing
to the other party in the event the other party is in material breach of this
Agreement and shall have failed to cure such breach within thirty (30) days of
receipt of written notice thereof from the first party;
14.3 The Distrubutor may terminate this Agreement upon giving the Company a
written notice at least ninety (90) days prior to the effective date of
termination in the following cases:
14.3.1 The Distributor deems the Products are inferior, due to lesser product
quality and/or uncompetitive pricing in comparison to products similar to the
Products.
14.3.2 The Distributor deems the time of delivery of the Products unacceptable,
in which the Company repeatedly fails to deliver the Products by the scheduled
delivery dates.
14.4 The Company may terminate this Agreement upon giving the Distributor a
written notice at least ninety (90) days prior to the effective date of the
termination if the Company deems the Distributor's efforts inferior as such
efforts are defined under Article 3 of this agreement.
14.5 Partial Termination. In the event the Company shall have the right
pursuant to the provisions of Sections 14.2(b), 14.2(c) to terminate this
Agreement in its entirety, the Company may elect to terminate this Agreement
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solely as it applies to any specific country or countries within the Territory
upon providing the Distributor with written notice in accordance with the
relevant Section referred to above; provided, that nothing in this Section 14.3
shall be construed as creating a precondition to or otherwise precluding the
Company from terminating this Agreement in its entirety in accordance with the
terms of Section 14.2
14.6 Rights and Obligations on Termination. In the event of termination of
this Agreement for any reason, the parties shall have the following rights and
obligations;
14.6.1 Termination of this Agreement shall not release either party from the
obligation to make payment of all amounts then or thereafter due and payable;
14.6.2 The Company shall have the right, at its option, to (i) cancel any or
all accepted purchase orders which provide for delivery after the effective date
of termination, and/or (ii) repurchase any part of all of the Distributor's
inventory of Products in the Distributor's possession as of the termination date
at the Company's invoiced price to the Distributor for such products, less any
appropriate amount for excessive wear. The Company shall exercise its option
under this subsection by notifying the Distributor in writing no later than
thirty (30) days after the effective termination date.
14.6.3 The Distributor's obligations pursuant to Article 9 hereof shall
survive termination of this Agreement.
14.7 No Compensation. In the event either party terminates this Agreement
for any reason in accordance with the terms hereof, the parties hereby agree
that, subject to the provisions of Section 14.4(a) hereof and without prejudice
to any other remedies which either party may have in respect of any breach of
this Agreement, neither party shall be entitled to any compensation or like
payment from the other as a result of such termination.
15. FORCE MAJEURE
15.1 Definition. Force Majeure shall mean any event or condition, not
existing as of the date of signature of this Agreement, not reasonably
foreseeable as of such date and not reasonably within the control of either
party, which prevents in whole or in material part the performance by one of the
parties of its obligations hereunder or which renders the performance of such
obligations so difficult or costly as to make such performance commercially
unreasonable. Without limiting the foregoing, the following shall constitute
events or conditions or Force Majeure: acts of State or governmental action,
riots, disturbance, war, strikes, lockouts, slowdowns, prolonged shortage of
energy supplies, epidemics, fire, flood, hurricane, typhoon, earthquake,
lightning and explosion. It is in particular expressly agreed that any refusal
or failure of any governmental authority to grant any export license legally
required for the fulfillment by the Company of its obligations hereunder shall
constitute an event of Force Majeure.
15.2 Notice. Upon giving notice to the other party, a party affected by an
event of Force Majeure shall be released without any liability on its part from
the
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performance of its obligations under this Agreement, except for the obligation
to pay any amounts due and owing hereunder, but only to the extent and only for
the period that its performance of such obligations is prevented by the event of
Force Majeure. Such notice shall include a description of the nature of the
event of Force Majeure, and its cause and possible consequences. The party
claiming Force Majeure shall promptly notify the other party of the termination
of such event.
15.3 Confirmation. The party involving Force Majeure shall provide to the
other party confirmation of the existence of the circumstances constituting
Force Majeure. Such evidence may consist of a statement of certificate of any
appropriate governmental department or agency where available, or a statement
describing in detail the facts claimed to constitute Force Majeure.
15.4 Suspension of Performance. During the period that the performance by
one of the parties of its obligations under this Agreement has been suspended by
reason of an event of Force Majeure, the other party may likewise suspend the
performance of all or part of its obligations hereunder to the extent that such
suspension is commercially reasonable.
15.5 Termination. Should the period of Force Majeure continue for more than
six (6) consecutive months, either party may terminate this Agreement without
liability to the other party, except for payments due to such date, upon giving
written notice to the other party.
16. MISCELLANEOUS
16.1 Relationship. This Agreement does not make either party the employee,
agent or legal representative of the other for any purpose whatsoever. Neither
party is granted any right or authority to assume or to create any obligation or
responsibility, express or implied, on behalf of or in the name of the other
party. In fulfilling its obligations pursuant to this Agreement each party
shall be acting as an independent contractor.
16.2 Assignment. Neither party shall have the right to assign or otherwise
transfer its rights and obligations under this Agreement except with the prior
written consent of the other party; provided, however, the Company shall be
entitled to assign any or all of its rights and obligations hereunder to any of
its subsidiaries or related companies, provided that the Company shall remain
fully liable for the performance of all its obligations hereunder; and further
provided that a successor in interest by merger, by operation of law,
assignment, purchase or otherwise of the entire business of either party shall
acquire all rights and obligations of such party hereunder. Any prohibited
assignment shall be null and void.
16.3 Notices. Notices permitted or required to be given hereunder shall be
deemed sufficient if given by registered or certified air mail, postage prepaid,
return receipt requested, addressed to the respective addresses of the parties
as first above written or at such other addresses as the respective parties may
designate by like notice from time to time. Notices so given shall be effective
upon (a) receipt by the party to which notice is given, or (b) on the fourteenth
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(14th) day following the date such notice was posted, whichever occurs first.
16.4 Entire Agreement. This Agreement, including Exhibits I through VI
attached hereto and incorporated as an integral part of this Agreement,
constitutes the entire agreement of the parties with respect to the subject
matter hereof, and supersedes all previous distributorship agreements by and
between the Company and the Distributor as well as all proposals, oral or
written and all negotiations, conversations or discussions heretofore had
between the parties related to this Agreement. The Distributor acknowledges
that it has not been induced to enter into this Agreement by any representations
or statements, oral or written, not expressly contained herein.
16.5 Amendment. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
written amendment signed by the parties hereto.
16.6 Publicity. This Agreement is confidential and no party shall issue
press releases or engage in other types of publicity of any nature dealing with
the commercial and legal details of this Agreement without the other party's
prior written approval, which approval shall not be unreasonably withheld.
However, approval of such disclosure shall be deemed to be given to the extent
such disclosure is required to comply with governmental rules, regulations or
other governmental requirements. In such event, the publishing party shall
furnish a copy of such disclosure to the other party.
16.7 Severability. In the event that any of the terms of this Agreement are
in conflict with any rule or regulations of any government or subdivision
thereof, such terms shall be deemed stricken from this Agreement, but such
invalidity or unenforceability shall not invalidate any of the other terms of
this Agreement and this Agreement shall continue in force, unless the invalidity
or unenforceability of any such provisions hereof does substantial violence to
or where the invalid or unenforceable provisions comprise an integral part of,
or are otherwise inseparable from, the remainder of this Agreement.
16.8 Governing Law. This Agreement shall be governed by, and interpreted
and construed in accordance with the laws of the State of Maryland.
16.9 Counterparts. This Agreement shall be executed in two or more
counterparts in the English language, and each such counterpart shall be deemed
an original hereof. In case of any conflict between the English version and any
translated version of this Agreement, the English version shall govern.
16.10 Waiver. No failure by either party to take any action or assert any
right hereunder shall be deemed to be a waiver of such right in the event of the
continuation or repetition of the circumstances giving rise to such right.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first above written.
The Company:
ELECTRIC FUEL, LTD.
By: __________________________
Name:
Title:
The Distributor:
By: __________________________
Name:
Title:
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EXHIBIT I
Products
Product Number
Description
Rated Capacity
Availability
EF-M1-29
Standard size, zinc-air battery which fits Motorola "MicroTAC" series
2900 mAh
April 1999
EF-M1-45
Ultra-capacity, zinc-air battery which fits Motorola "MicroTAC", series
4500 mAh
June 1999
EF-M2-29
Standard size, auxiliary zinc-air battery which fits Motorola brand "StarTAC"
phones
2900 mAh
June 1999
EF-N6-29
Standard size, zinc-air battery which fits Nokia brand 6100 & 5100 series phones
2900 mAh
June 1999
EF-E3-29
Standard size, zinc-air battery which fits Ericsson brand 300 series phones
2900 mAh
April 1999
EF-E6-29
Standard size, zinc-air battery which fits Ericsson brand 600 series phones
2900 mAh
April 1999
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EXHIBIT II
Territory
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EXHIBIT III
Term of Agreement
The term of the agreement shall be ________ years from the date first above
written in this Agreement, subject to the terms of articles as defined in the
Distribution Agreement.
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EXHIBIT IV
Initial Forecast
The initial term of this Agreement shall commence on the date first above
written in this Agreement and shall continue through _________________.
Initial Forecast
To be determined
Q2 `99
Q3 `99
Q4 `99
Q1 `00
Q2 `00
Q3 `00
Q4 `00
Unit Volume
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EXHIBIT V
Trademarks
To be determined.
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EXHIBIT VI
Price List
Distributor Initial Unit Price
Product #
Suggested Retail Price
__ discount from xxxx. Retail
XX-X0-00
XX-X0-00
XX-X0-00
XX-X0-00
XX-X0-00
XX-X0-00
Prices good through _______________
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Exhibit VII
Cooperative Marketing Program
The Company will engage in marketing activities in order to promote and enhance
the sales of the Company's products. These activities shall include but are not
limited to the following:
Public Relations
Advertising
Trade Shows
Training
The Distributor must submit to the Company for approval an annual marketing plan
on which the above activities are based. Any amendments to such a marketing
plan must also be submitted to the Company for approval. The marketing plan
must be submitted and approved by the Company prior to the payment by the
Company for any expenses related to such marketing activities.
The Distributor will be compensated by the Company for such activities as
follows:
In order to be eligible for payment, the Distributor must issue detailed
invoices, as well as copies of any third party invoices to the Company.
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