DISTRIBUTION AGREEMENT
BETWEEN
MITSUBISHI INTERNATIONAL CORPORATION
AND
WAXTECH INTERNATIONAL, INC.
EXECUTION COPY
This Agreement ("Agreement") is entered into as of December, 15, 2002(the
"Effective Date") by and between MITSUBISHI INTERNATIONAL CORPORATION, a
corporation organized under the laws of New York hereinafter referred to as
"MIC") and WAXTECH INTERNATIONAL, INC., a corporation organized under the laws
of the State of Texas in the United States of America (hereinafter referred to
as WXT).
PRELIMINARY STATEMENTS
WXT has a long and close business relationship with EnerTeck and holds certain
exclusive distribution rights for products manufactured by the EnerTeck Chemical
Corporation (EnerTeck).
MIC is a general trading company with extensive expertise in buying and selling
a wide variety of products and services throughout the World, and desires to
market and sell certain products of EnerTeck in the Territory (as defined
herein), and WXT is willing to grant MIC certain rights to market and sell such
products in the Territory on the terms and conditions set forth herein.
1. APPOINTMENT
(a) WXT hereby appoints MIC as its sub-distributor in the country
(countries) listed in Xxxxxxxx "X" xxxxxx ("Xxxxxxxxx") for
the sale of products and services of EnerTeck as defined in
Appendix "B" hereto (the Products). This appointment is
subject to all of the provisions of this Agreement. Provisions
relating to exclusivity are set forth in Section 15 below.
(b) MIC shall not, without the consent of WXT sell, rent or
distribute, directly or indirectly, any WXT products or
services in any country or other location outside the
Territory.
(c) MIC hereby accepts its appointment on the terms and conditions
herein set forth.
(d) The Parties understand and agree that MIC will be working with
one or more of its affiliates in performing its duties under
this Agreement, provided however that: (i.) MIC notifies
EnerTeck in advance of its intentions to engage any such
affiliates and/or disclose Confidential Information, and (ii.)
such affiliate executes EnerTeck's Confidentiality and Non
Analysis Agreement prior to working with MIC or receiving
Product or Confidential Information, and (iii.) such
affiliates' actions and obligations shall be bound by MIC's
obligations set forth herein.
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2. DUTIES OF MIC
In consideration of the above appointment, MIC agrees to perform the
following duties:
(a) MIC shall establish and maintain a sales program for the sale
of Products in the Territory and shall maintain facilities and
personnel as are reasonably adequate to perform its
obligations under this Agreement.
(b) MIC shall make no warranties, representations or
certifications with respect to Products without the prior
consent of WXT. MIC shall hold WXT free and harmless from any
claims, lawsuit, damages and cost and expenses caused by it
having made any such unauthorized warranties and
representations.
(c) MIC, at its sole expense, shall comply with all the laws,
regulations and rules applicable to its operations and to its
performance of this Agreement. MIC shall hold WXT free and
harmless from any claims, damages, lawsuits, penalties and
costs and expenses caused by MIC's failure to comply with any
such laws, regulations and rules.
(d) MIC shall not directly or indirectly, infringe or contest the
validity of or the title of to any of the patents, trademarks
and trade names owned by WXT or under which WXT is licensed.
(e) MIC shall make best efforts to expedite and obtain
registration numbers, or any other government compliance
required to bring WXT's products into MIC's Territory.
(f) MIC will not sell, rent or distribute, indirectly or directly,
any Products for use or sale in any area in or to which WXT
itself would be prohibited by applicable law, regulations or
order of the United States of America, or any of the
governmental agencies thereof, from selling, distributing
renting or otherwise permitting the use of said products and
services. Without limiting the foregoing, it is understood and
agreed that sales of Products by MIC to India and the People's
Republic of China are not allowed under this agreement.
3. AUTHORITY / LIMITATIONS
Each Party understands and agrees that it is an independent contractor
and not an employee of the other party hereto, and that this agreement
does not establish a partnership between the parties, and that neither
party has the authority to act on behalf of or bind the other party in
any way except as otherwise expressly agreed in writing.
4. PURCHASE AND SALE OF PRODUCTS
All purchases of Products by MIC hereunder shall be made pursuant to
purchase orders issued by MIC to WXT based on orders received by MIC
from customers in the Territory. Each purchase and sale hereunder shall
be evidenced by a contract of purchase substantially in the form of the
standard contract of sale attached hereto as Exhibit A. In the event of
any discrepancy between the provisions of any such contract or purchase
order and the provisions of this Agreement, it is
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expressly understood by the Parties that the terms of this Agreement
shall prevail. In the event of any and all discrepancies between MIC's
General Terms and Conditions of Purchase and the provisions of this
Agreement, it is expressly understood by the Parties that the terms of
this Agreement shall prevail.
5. CONFIDENTIALITY
Both parties shall maintain as confidential all information relating to
their respective products, personnel, customers, business operations,
financial condition, supplied by either party separately and/or
developed jointly by the parties. Both parties further agree to
safeguard as confidential all price books, customer lists, quotations,
discount schedules, product formulations and engineering data, in any
form, and will not permit their use in any way which would be
detrimental to either party. Each party also agrees to return all
confidential data received from the other party hereunder back to the
other party on cancellation or termination of this agreement, and will
not retain copies or memoranda of said information in any form
whatsoever. This clause shall remain effective even after the
cancellation or termination of this agreement for any reason.
6. RIGHT OF REFUSAL
It is the right of WXT, at its sole discretion, to accept or refuse any
order placed by MIC hereunder; provided that any such refusal by WXT
will automatically revive or extend the exclusivity period with respect
to the particular country of the Territory involved for an additional
six months. Any decision to refuse a potential contract will not
entitle MIC to any recourse except as provided herein.
7. PRICES, TERMS AND CONDITIONS OF SALE
All sales shall be subject to WXT's offered prices, terms and
conditions as listed in Appendix B of this agreement; and such prices,
terms and conditions are subject to change with sixty days notice, as
described in Appendix B, unless otherwise agreed by WXT in actual term
sales contracts with MIC's customers.
8. ORDERS AND REPORTS
Without limiting the exclusivity rights set forth herein, MIC will from
time to time, furnish to WXT a list reflecting the correct name and
address of all customers to whom MIC has supplied any of the Products.
9. ADVERTISING
MIC will not issue or publish any form of advertising or literature
which in any way relates to the Products without first submitting the
form and content thereof, in English, together with information
relating to the proposed dates and places of publication, to WXT's
notification address listed in Appendix "C".
Prior to publication or distribution of the advertising or literature,
MIC will obtain WXT's approval and authorization of the form, content
and specifications of the proposed advertising or literature. MIC will
comply with all directions for changes in the form, content or
specifications of such advertising or literature requested by WXT. WXT
will provide to MIC current sales literature, brochures, promotional
items and technical information on the products and services
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covered by this Agreement, as necessary to assist in obtaining business
per the Agreement. This material will be written in the English
language only and will be provided at no charge to MIC. All such
information, brochures, literature, promotional items and technical
information in the possession of MIC shall be returned to WXT upon
request and/or upon the termination of this agreement.
10. RELATIONSHIP OF THE PARTIES
MIC is now and will at all times act as and represent itself as an
independent contractor with respect to WXT. MIC and WXT, hereby agree
that neither this Agreement nor any activity undertaken in accordance
with it shall create any other relationship between the MIC and WXT.
Neither party has been granted by the other any right or authority to
assume or create any obligation or responsibility for or on behalf of
the other unless agreed otherwise in writing.
11. COMPETITION
MIC agrees that it nor its affiliated companies to which MIC has
disclosed Confidential Information or Product shall (i) not furnish
products similar to or that competes with the Products being provided
by MIC to WXT pursuant to this agreement to any third party in
competition with WXT, (ii) not directly engage in, (iii) not enter into
a joint venture, or (iv) not acquire a company or other entity which
engages in the particular market(s) of the Product(s) as described
herein.
12. INDEMNITY
WXT agrees to protect, defend, indemnify and hold harmless and release
MIC, its parent, subsidiary and affiliated companies, its officers,
directors and employees, from and against any manner of loss,
liability, claim, damage, penalty or cost, including but not limited
to, reasonable attorney's fees arising in connection with this
Agreement that is asserted by any third party to the extent that such
loss is caused by any act or omission of WXT.
MIC agrees to protect, defend, indemnify and hold harmless and release
WXT, its parent, subsidiary and affiliated companies, its officers,
directors and employees, from and against any manner of loss,
liability, claim, damage, penalty or cost, including but not limited
to, reasonable attorney's fees arising in connection with this
Agreement or that is asserted by any third party to the extent that
such loss is caused by any act or omission of MIC.
The Parties understand and agree that any and all representations and
warranties about the Products are made solely by EnerTeck directly to
each party pursuant to separate agreements and EnerTeck as manufacturer
will be solely liable for any and all product liability claims relating
to the Products. Neither party hereto will assert against the other
party hereto any product liability claim relating to the Products. It
is understood that EnerTeck shall be solely responsible for all product
liability claims and each Party will be responsible for obtaining an
appropriate indemnity directly from EnerTeck.
13. COMPLIANCE WITH U.S. LAW
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Notwithstanding anything to the contrary contained elsewhere in this
Agreement or in any Exhibit hereto, performance by WXT or of any of its
obligations under the provisions of this Agreement shall be strictly in
compliance with all applicable laws and regulations of the U.S.,
including, without limitation, U.S. Department of State, Treasury or
Commerce Export Control or other U.S. Government.
Non-performance in whole or in part by either party because of said
applicable laws shall not constitute a default or breach by such party
of its obligations hereunder, or subject such party to liability to the
other party for damage or convey any right to the other Party to
terminate this Agreement.
MIC covenants that it is familiar with the U.S. Foreign Corrupt
Practices Act of 1977, as amended, "the Act", and it proposes and
represents that neither MIC nor any of its shareholders, officers,
directors, or employees will perform any service or action related to
this Agreement that would or might constitute any such violation.
14. AMENDMENTS
This Agreement may be amended only by written agreement of both MIC and
WXT.
15. ASSIGNMENT
This Agreement is assignable by WXT to EnerTeck upon giving reasonable
written notice to MIC and subject to EnerTeck agreeing to appropriate
changes to reflect that the Agreement would be between EnerTeck and the
distributor. Otherwise, neither party shall have the right to assign
all or any part of its rights, duties or obligations hereunder without
the prior written consent of the other party, which shall not be
unreasonably withheld.
This Agreement is binding and enforceable against the parties and their
respective successors, and permitted assigns.
16. GEOGRAPHIC EXCLUSIVITY
In consideration of MIC's efforts in newly developing the business of
marketing the Products in the Territory, MIC shall have exclusive sales
and distribution rights throughout the Territory for an initial period
of one year from the effective date of this agreement. WXT agrees to
provide to MIC marketing and technical support commensurate with that
provided to WXT's other International distributors of EnerBurn
products. After such initial exclusivity period, MIC shall retain the
right of geographic exclusivity for all countries listed in Exhibit "A"
as long as MIC is providing a satisfactory service to WXT. If the
minimal annual purchase volumes outlined in Exhibit "B" are not met in
any given year, WXT, by its sole decision may terminate the extended
geographic exclusivity for MIC.
During the period of exclusivity for the Territory, WXT shall not sell
Products either directly or indirectly to any entity in the Territory
and shall refer to MIC any inquiries it may receive from any such
entity.
In the event geographic exclusivity is terminated for less than minimum
sales as provided for in Appendix "B" of this Agreement, MIC shall have
extended exclusivity for any customer who has
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either commenced commercial trials or has committed to purchase the
Products in commercial quantities prior to the end of the Geographic
exclusivity period as long as this Agreement is in force.
17. TERM AND TERMINATION
(a) This Agreement shall be effective as of the Effective Date and
shall continue in force for an initial term of five (5) years
and thereafter and shall be automatically renewed for
successive one-year terms unless terminated by either party by
giving a written one-year cancellation notice to the other
party.
(b) Notwithstanding the foregoing, this Agreement may be
terminated by either party with immediate effect and without
recourse against the terminating party upon the occurrence of
any of the following events:
(i) The other party breaches any material obligation
imposed by this Agreement providing that such
material breaches are not reasonably remedied within
sixty (60) days of written notice of breach.
(ii) The other party fails to make any payment of sums
owed by it hereunder when due.
(iii) The other party becomes insolvent, or subject to a
petition in bankruptcy filed by or against it or is
placed under the control of receiver, liquidator or
committee of creditors.
(iv) The other party assigns transfers or attempts to
assign or transfer this Agreement without the
terminating party's prior consent.
(c) Notwithstanding the foregoing, the Agreement may be terminated
by WXT with immediate effect upon the occurrence of any of the
following events:
(i) A period of one hundred eighty days (180 days) from
the Effective Date of this agreement passes without
WXT receiving a valid and acceptable purchase order
of commercial quantities for the Products in the
Territory.
(d) Notwithstanding any termination of this agreement, WXT agrees
to honor any orders for products placed by MIC prior to the
effective date of termination.
18. NOTICES
All notices and other communications provided for herein shall be
validly given, made or served, in writing and delivered personally or
sent by certified mail postage prepaid, to the addresses listed in
Appendix "C"
Or to such other address as any party hereto, may, from time to time,
designate in writing delivered in like manner - reference Appendix "C".
Notice given by mail, as set out above shall be deemed delivered when
actually received at the appropriate address.
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19. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitration in the United
States and conducted in the English language in Xxxxxx County, Texas,
United States, pursuant to the Rules of Commercial Arbitration of the
American Arbitration Association, and the award rendered therein shall
be final and binding on the Parties and shall be enforceable in any
Texas court having jurisdiction. The prevailing party shall be entitled
to receive, in addition to any other remedy, all costs and expenses
incurred in such proceedings, including reasonable attorney's fees.
This Agreement shall be constructed and enforced in accordance with the
laws of the State of Texas in the United States of America without
regard for any conflicts of law principles.
20. SEVERABILITY
If any provision or provisions of this Agreement shall be held to be in
whole or in part invalid, illegal or unenforceable in any jurisdiction,
or if any governmental agency or authority shall require the parties to
delete any provision of this Agreement, such invalidity, illegality,
unenforceability or deletion shall not impair or affect the remaining
provisions of this Agreement or the validity or enforceability of such
provision in any other jurisdiction.
The parties shall endeavor, in good faith negotiations, to replace the
invalid, illegal unenforceable or deleted provision by valid provisions
the economic effect of which comes as close as legally possible to that
of the invalid, illegal, unenforceable or deleted provision.
21. DESCRIPTIVE HEADINGS
Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.
22. COUNTERPARTS
For the convenience of the parties, any number of counterparts of this
Agreement may be requested by one or more parties hereto and each such
counterpart shall be deemed to be an original instrument if agreed to
and signed by both parties.
23. PRIOR AGREEMENTS
The Parties have entered into non-disclosure agreements. This agreement
does not replace or negate the obligations of the Parties relevant to
those non-disclosure agreements (NDA) and the NDA agreements and
obligations thereunder are not modified by this agreement.
The foregoing terms and conditions represent the entire agreement
between WXT and MIC with respect to the subject matter and supersede
all prior and contemporaneous agreements or understanding that parties
may have, subject to the preceding paragraph.
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24. GENERAL PROVISIONS
(a) This agreement is made in the English language and in the
event of doubt in interpretation between this and any other
version into which this agreement may be translated; the
English language shall prevail.
(b) The parties agree that either party shall keep its own
personnel and equipment insured and each party will cover all
of its own insurance costs.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized representatives as of the effective date,
WAXTECH INTERNATIONAL, INC. MITSUBISHI INTERNATIONAL CORPORATION
/S/ V. XXXXXXX XXXXXXX /S/ XXXXXXXX XXXXXX
----------------------------------- --------------------------------------
V. Xxxxxxx Xxxxxxx Xxxxxxxx Xxxxxx Manager, Catalysts and Specialty
President & CEO Chemicals Unit
Date:_December 23, 2002 Date: 12/23/2002
APPENDIX "A"
TO
AGENCY AGREEMENT
BETWEEN
MITSUBISHI INTERNATIONAL CORPORATION
AND
WAXTECH INTERNATIONAL, INC.
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TERRITORY
COUNTRY
-------
JAPAN
SOUTH KOREA
TAIWAN
SINGAPORE
MALAYSIA
VIETNAM
CAMBODIA
THAILAND
INDONESIA
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APPENDIX "B"
TO
AGENCY AGREEMENT
BETWEEN
MITSUBISHI INTERNATIONAL CORPORATION
AND
WAXTECH INTERNATIONAL, INC.
PRICE SCHEDULE, MINIMUM PURCHASES AND MARGIN SHARING
The Base Price of EnerBurn 5805C (or equivalent) to MIC shall be USD 66.00
(sixty-six dollars) per US Gallon in bulk. Other packaging such as drums or
pails will be price-adjusted as necessary to reflect additional packaging and
handling costs to WXT.
WXT can amend the base price with sixty days (60) notice to MIC to reflect
changes in WXT's product acquisition cost. Product is offered FOB the Port of
Houston, Texas, USA.
The base price will be adjusted for volume incentive for any particular country
of destination/sale as follows:
Up to 6500 US Gallons per any given calendar quarter. - No Adjustment.
6500 US Gallons to 12,999 US Gallons per any given calendar quarter. - USD 2.00
Discount.
13,000 US Gallons to 19,999 US Gallons per any given calendar quarter. - USD
4.00 Discount
20,000 plus US Gallons any given calendar quarter - USD 6.00 Discount.
Example: Sales to Japan in 1st quarter 2003 are 13,200 US Gal. (two isotanks).
Base price would be adjusted by USD 4.00. At a Base Price of USD 66.00, the net
FOB price is USD 62.00 per gallon.
EXCESS MARGIN SHARING FORMULA
If MIC's net sales price to any of MIC's customers exceeds a certain amount per
gallon, MIC and WXT agree to share excess margin as follows:
MIC Sales Price to a given customer is at or less than USD 90.00 per US Gallon -
No Margin sharing.
MIC Sales Price to a given customer is 90.01 to 100.00 USD, MIC and WXT share
the difference between USD 90.00 and the sales price as follows:
50 percent to MIC and 50 percent to WXT
MIC Sales Price to a given customer is 100.00-150.00 MIC and WXT share the
difference between USD 90.01 and the sales price as follows:
60 percent to MIC and 40 percent to WXT
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APPENDIX "B" CONTINUED (PAGE TWO OF TWO)
MIC Sales price to a given customer is 150.01 or higher, MIC and WXT share the
difference between USD 90.01 and the sales price as follows:
75 percent to MIC and 25 percent to WXT.
Example for clarity: MIC's customer purchases EnerBurn 5805C for 105.00 USD per
US gallon. MIC shares margin with WXT as follows:
Excess Margin share for MIC = (105.00 - 90.01)*0.60 = USD 8.994 Excess Margin
share for WXT = (105.00-90.01)*0.40= USD5.996
MINIMUM PURCHASE VOLUME FOR CONTINUEDGEOGRAPHIC EXCLUSIVITY
YEAR ONE (2003) 15,150 US GALLONS
NOTE: (IN YEAR ONE AND ONLY YEAR ONE, ACTUAL MIC PURCHASES OF PRODUCT AND THE
ANNUAL PRODUCT VOLUMES OF BONA-FIDE FULLY RATIFIED CONTRACTS OF FOR SALE OF
PRODUCTS SHALL BE CONSIDERED IN THE CALCULATION OF FOR FULFILLMENT OF MINIMUM
PURCHASES FOR EXCLUSIVITY PURPOSES HEREIN.)
YEAR TWO (2004) 30,300 US GALLONS
YEAR THREE (2005) 60,600 US GALLONS
EACH YEAR THEREAFTER 60,600 US GALLONS
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APPENDIX "C"
TO
AGENCY AGREEMENT
BETWEEN
MITSUBISHI INTERNATIONAL CORPORATION
AND
WAXTECH INTERNATIONAL, INC.
CONTACT INFORMATION
MITSUBISHI (MIC) WAXTECH INTERNATIONAL, INC. (WXT)
Xxxxxxxx Xxxxxx V. Xxxxxxx Xxxxxxx
Catalysts and Specialty Chemicals Unit President & CEO
0 Xxxxxxx Xxxxxx, #0000 403 Briarpark
Houston, Texas 77010 Xxxxxxx, Xxxxx 00000
Telephone (000) 000-0000 Telephone (000) 000 0000
Fax (000) 000-0000 Fax (000) 000 0000
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Exhibit "A"
MIC Contract of Sale
attached
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