EXCLUSIVE SUPPLY AND SOLE SOURCE AGREEMENT
This
Exclusive Supply and Sole Source Agreement (the "Agreement"),
is
entered into as of the 12 day of November, 2006 (the "Effective
Date")
by and
between FARMERGY, Inc. ("FARMERGY")
and
Solar Night Industries, Inc. ("SNI").
RECITALS
WHEREAS,
FARMERGY is in the business of consulting and advising Agricultural Businesses
with respect to conservation and generation of energy and selling products
designed for both purposes directly to Agricultural Businesses;
WHEREAS,
SNI is
in the business of locating manufacturing and integrating and installing
equipment for energy conservation and generation;
WHEREAS,
the
parties desire that SNI locate manufacturing partners, purchase, warehouse,
and
sell to FARMERGY various types of Energy Products (as defined
herein);
WHEREAS,
the
parties desire that FARMERGY purchase all of its requirements for these Energy
Products from SNI; and
WHEREAS,
the
parties by this Agreement desire to set forth their various rights and
responsibilities regarding the sale and purchase of such Energy
Products.
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants contained
herein, the parties hereto agree as follows:
AGREEMENT
1.0 DEFINITIONS.
1.1 “Agricultural
Business”
shall
mean any business or sole proprietorship that derives at least 20% of its
revenue from the sale of agricultural products or that holds itself out to
the
public as a business or sole proprietorship that engages primarily in farming
or
ranching activities.
1.2 "Energy
Products"
shall
mean (i) the products listed on Schedule 1.1 hereto; (ii) products similar
to
those products; (iii) any other products that are used in the generation or
conservation of energy (iv) any product used to deliver such energy to a user
or
the electrical grid; and (v) any New Products developed hereunder.
1.3 "Intellectual
Property"
shall
mean all rights of a person or entity in, to, or arising out of: (i) any U.S.
or
foreign patent (or any similar right) or any application therefor and any and
all reissues, divisions, continuations, renewals, extensions and
continuations-in part thereof; (ii) inventions (whether patentable or not in
any
country), invention disclosures, improvements, trade secrets, proprietary
information, know-how, technology and technical data; (iii) copyrights and
registrations and applications therefor in the U.S. or any foreign country,
and
all other rights corresponding thereto throughout the world; and (iv) any other
proprietary rights anywhere in the world.
1.4 “New
Products”
shall
mean any product not listed on Schedule 1.1 hereto but for which a Purchase
Order is submitted by Farmergy.
1.5 "Shareholder
Agreement"
shall
mean that certain Shareholder Agreement of even date herewith between FARMERGY,
SNI, Xxxxx Xxxx and Xxxx Xxxxx.
1.6 "Specifications"
means
the specifications for the Energy Products set forth in any Purchase Order
or
Technical Proposal.
1.7 "Purchase
Order"
means a
written order from FARMERGY delivered to SNI requesting SNI to sell an Energy
Product and stating the proposed unit numbers and specifications of the Energy
Product, the location at which the Energy Product will be installed (the
"Worksite") and any special conditions thereof that might affect the fabrication
or testing of the Energy Product, shipping instructions, any request for SNI
to
supply labor for installation, if applicable, a requested testing schedule
and
procedure, and the requested delivery date. The Purchase Order may also include
a reference to a "Technical Proposal" of FARMERGY to the end purchaser,
including such information as price, scope of work, system functionality,
delivery schedule, and acceptance test criteria.
2.0 SALES
2.1 Sale.
(a) Manufacturing
and Sale. Upon FARMERGY submitting Purchase Orders therefor and pursuant to
the
terms and conditions of this Agreement, SNI agrees to sell all Energy Products
ordered by FARMERGY to FARMERGY or its designated Affiliates, and, subject
to
Section 2.1(c), FARMERGY agrees to purchase such Energy Products from
SNI.
(b) SNI
Exclusivity. Provided that FARMERGY fulfills its obligations under this
Agreement or unless FARMERGY provides prior written consent, SNI shall not
sell
any Energy Products directly or to any Agricultural Business (whether sold
by
SNI or sold by a licensee, distributor, integrator, broker or any other third
party authorized by SNI) to any other entity in the business of soliciting
and
transacting sales for Energy Products to Agricultural Businesses (excluding
de
minimis sales not a regular part of such business), the owners or operators
of
any Agricultural Business, or any residence or business sitting on ten acres
or
more of Property dedicated solely to that residence or business in any country
with fewer than 200,000 residents.
(c) FARMERGY
Exclusivity and Sole Source. For so long as SNI is capable of selling to
FARMERGY its required supply of Energy Products in accordance with the terms
hereof, FARMERGY agrees to purchase all of its requirements for Energy Products
from SNI. If SNI fails to provide FARMERGY with all its required supply of
Energy Products ordered pursuant to this Agreement on any particular Purchase
Order reasonably required by FARMERGY, such failure shall not be considered
a
breach of this Agreement but will entitle to FARMERGY to purchase enough
equivalent products from a third party to fulfill such particular Purchase
Order.
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2.2 Orders
and Forecasts.
(a) All
purchases and sales between FARMERGY and SNI, whether consummated directly
or
indirectly through a third party agent of SNI, shall be initiated by FARMERGY's
issuance of written Purchase Orders sent via airmail or by telephone or
facsimile and then confirmed by written Purchase Orders. The acceptance by
SNI
of a Purchase Order shall be indicated by written acknowledgment thereof by
SNI.
In the event of a conflict between the terms and conditions of any Purchase
Order and the terms and conditions of this Agreement, the terms and conditions
of this Agreement shall control as to such conflict, unless the parties agree
in
writing that the terms and conditions of a particular Purchase Order shall
supersede a particular term or condition of this Agreement.
(b) FARMERGY
shall have the right to cancel Purchase Order(s) or any portions thereof for
any
reason by notifying SNI in writing no later than fifteen (15) days after
FARMERGY submits its Purchase Order(s) pursuant to Section 2.2(a). Cancellation
shall be effective upon SNI's receipt of the written cancellation notice from
FARMERGY. SNI shall cease all work on such canceled purchase order(s) in
accordance with the cancellation notice. In the event that SNI incurs any costs
in connection with preparing for or commencing work on a Purchase Order that
is
canceled pursuant to this provision, including without limitation costs for
materials, drawings or labor, FARMERGY shall reimburse SNI for such reasonable
costs within thirty (30) days of receiving an invoice therefor.
2.3 Delivery
and Shipping.
SNI
shall ship the Energy Products to FARMERGY's Worksite suitably packaged for
shipment in SNI’s standard containers. All shipping costs from SNI’s facility to
the Worksite shall be prepaid by SNI but invoiced to FARMERGY.
2.4 Insurance
and Risk of Loss.
Immediately following delivery of the Energy Product to the Worksite, FARMERGY
shall be responsible for and shall bear any and all risk of loss of or damage
to
the Energy Product. FARMERGY shall, at its expense, take out and maintain
insurance in an amount at least equal to the Purchase Price covering all risks
of loss or damage to the Energy Product. Such insurance shall name SNI as an
insured party and shall provide for an insurer's waiver of subrogation in favor
of all insured parties. Prior to delivery of the Energy Product to the Worksite,
SNI shall be responsible for and shall bear any and all risk of loss of or
damage to the Energy Product. SNI, at its expense, shall maintain insurance
in
an amount equal to or greater than the value of all Energy Products that SNI
is
shipping to FARMERGY, such insurance to cover all risks of loss or damage to
the
Energy Products.
2.5 Site
Conditions and Provisions by Purchaser.
FARMERGY, at its own expense, shall provide at the Worksite reasonable means
of
access as shall be set forth in the Technical Specifications. Additional
provisions and conditions related to Worksite conditions and installation may
be
attached to the Purchase Order and acceptance thereof.
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2.6 Changes,
Delays.
At any
time prior to delivery, FARMERGY may request in writing any substitutions,
deviations, additions, or deletions (hereinafter referred to as "Changes")
in
the Energy Product and in the specifications or drawings incorporated in this
Agreement or the Purchase Order. All of the terms and conditions of this
Agreement shall apply to such Changes. If SNI's performance is delayed by any
such Changes or by other causes within control of FARMERGY, FARMERGY agrees
to
reimburse SNI for reasonable and documented expenses incurred as a result of
such delay, including without limitation. Upon request by FARMERGY, SNI shall
provide to FARMERGY an itemized list of all such expenses with supporting
documentation. In such event, FARMERGY also agrees to excuse the delay and
accept SNI's performance at any appropriately deferred completion date.
2.7 Test
and Inspection by FARMERGY.
(a) All
Energy Products delivered by SNI may be subject to incoming receiving inspection
by FARMERGY at the Worksite.
(b) Within
five days of delivery of the Energy Product to the Worksite, FARMERGY shall
inspect the Energy Product for damage incurred during shipping and conformity
to
the Purchase Order. If FARMERGY determines that the order it has received does
not conform to the Purchase Order, or is damaged during shipment, FARMERGY
shall
notify SNI in writing within ten days of the date of delivery of the Energy
Product to the Worksite and SNI shall at its own expense repair or replace
such
Energy Product.
2.8 Customer
Satisfaction.
At
least once per year during the term of this Agreement, SNI shall circulate
a
customer satisfaction survey satisfactory to both parties to all customers
who
have purchased Energy Products from FARMERGY. In the event that 15% or more
of
the respondents in such survey indicate that they are not satisfied with such
Energy Product for any reason other than services provided by FARMERGY, FARMERGY
shall have the right to terminate this Agreement by written notice if within
six
months thereafter SNI is not able to demonstrate customer satisfaction with
respect to at least 85% of the customers purchasing Energy Products from
FARMERGY.
2.9 Enterprise
Resource Planning.
SNI
shall be responsible for maintaining date files and inventory information within
the Enterprise Resource Planning system used by FARMERGY. FARMERGY shall provide
all licenses and access codes required for such.
3.0 PRICE
AND PAYMENT.
3.1 Price.
FARMERGY will pay to SNI for Energy Products (other than New Products) as
follows:
(a) FARMERGY
will pay to SNI the actual costs to SNI, including all shipping, import fees,
carriage insurance, or other actual costs paid by SNI to have such Energy
Product delivered to its facilities for a Energy Product, (the “Base Cost”) plus
an amount equal to one-half of the difference between that amount of the price
that such Energy Product is sold by FARMERGY (as set forth in the Purchase
Order) and the Base Price (the “Additional Payment”), provided that the
Additional Payment shall not be less than eight percent or more than twenty
percent of the Base Cost, unless the parties agree to a different pricing
scenario in the Purchase Order.
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3.2 Payment
Method.
(a) FARMERGY
shall pay SNI for all Energy Products (other than New Products) ordered by
FARMERGY as follows. Within ten (10) days of SNI's acceptance of an FARMERGY
Purchase Order, FARMERGY shall pay to SNI a deposit equal to ten percent (10%)
of the Purchase Price. Eighty percent (80%) of the purchase price shall be
paid
within 30 days of delivery to the Worksite. Ten percent (10%) of the Purchase
Price shall be held by FARMERGY as a retainer, to be paid within fifteen (15)
days after the completion of the installation of the Energy Product but in
no
event more than sixty days after delivery (the “last Payment
Date”).
(b) In
addition to the Purchase Price, FARMERGY shall pay all shipping costs, taxes
(including without limitation, state, federal, local sales or value added taxes
and personal property taxes), import or export duties, and business license
fees
to ship the Energy Product from SNI’s facilities to the Worksite, as shall be
set forth in the Purchase Order. Any of the foregoing for which SNI has a legal
obligation of payment may be invoiced by SNI to FARMERGY for payment within
fifteen (15) days unless FARMERGY furnishes SNI with the applicable tax
exemption certificate or direct payment certificate. FARMERGY hereby indemnifies
and holds SNI harmless from and against any claims by any third party for
payment of any of the foregoing taxes or fees. FARMERGY shall have the right
to
audit all records relating to Energy Products at least once every six months
during the term of this Agreement by written notice to SNI. SNI shall be
required to pay the costs of such audit if the variance in prices charged by
SNI
from the amounts actually owed hereunder is more than ten percent in favor
of
FARMERGY.
4.0 NEW
PRODUCTS.
In
the
event that FARMERGY desires to purchase an Energy Product that is not included
on Schedule 1.1 hereto, FARMERGY shall submit a purchase order for such which
shall set out in detail the technical specifications and any other requirements
for such product. SNI shall have 10 days from receipt of such Purchase Order
to
determine if it can acquire such product and the Base Cost, payment terms
chargeable and applicable delivery terms for such New Product, which shall
be
set forth in writing to FARMERGY. FARMERGY shall have 10 days to accept such
terms in writing. If FARMERGY accepts such terms, the Purchase Order shall
be
deemed accepted and FARMERGY shall be required to make payments for such New
Products as set forth in the Purchase Order, except that the Additional Payment
attributable to such shall be payable on or before the Last Payment Date for
such New Product.
5.0 TERM
AND TERMINATION.
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5.1 Term
of this Agreement.
This
Agreement shall become effective on November 12, 2006 (the “Effective Date”) and
shall continue in force until November 12, 2016 (such period, the "Term") unless
terminated earlier pursuant to Section 8.3.
5.2 Renewal
Option.
During
the Term and through any Extension Period, FARMERGY shall have the option,
in
its sole discretion, to extend the Term for successive one (1) year periods
(each such period an "Extension Period"). FARMERGY shall exercise its option
to
extend the Term by giving SNI written notice no later than sixty (60) days
prior
to the end of the Term or Extension Period thereof.
5.3 Termination.
This
Agreement may be terminated only in accordance with the following:
(a) Either
party hereto may terminate this Agreement for cause if the other party hereto
becomes the subject of a voluntary or involuntary petition in bankruptcy or
any
proceeding relating to insolvency, receivership, liquidation, or composition
for
the benefit of creditors, which petition or proceeding is not dismissed with
prejudice within sixty (60) days after filing.
(b) Either
party hereto may terminate this Agreement for cause if the other party breaches
any express material term or condition of this Agreement and fails to cure
that
breach within sixty (60) days after receiving written notice of the breach.
If
the nature of the cure for any non-monetary breach is such that it is reasonably
expected to take longer than sixty (60) days, the breaching party shall be
given
an additional forty-five (45) calendar days to cure such breach, provided the
cure is commenced during the original sixty (60) day period and is diligently
carried out thereafter. In the event the material breach is not cured within
the
periods specified above after delivery of the notice, the non-breaching party
may terminate this Agreement in writing as of a date specified in the
termination notice. The terminating party shall have all rights and remedies
available at law or equity as well as any other rights and remedies set forth
in
this Agreement.
(c) By
a
party to this Agreement after six months notice that such party has sold at
least 50% of its outstanding capital stock or substantially all of its assets
to
an unrelated third party.
(d) In
accordance with Section 2.10 hereof.
5.4 Survival.
The
provisions of Sections 4.4 (Survival), 6.0 (Warranties and Indemnification),
7.0
(Confidentiality), 8.0 (Jurisdiction and Applicable Law), and 9.0
(Miscellaneous) shall survive termination of this Agreement for any
reason.
6.0 WARRANTIES
AND INDEMNIFICATION.
6.1 Warranties.
SNI
represents and warrants as follows:
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(a) That
it
owns or has full legal right to sell the Energy Products and that it has
satisfied any and all applicable conditions precedent to such sale and that
the
sale by it of the Energy Products hereunder does not violate any obligations
to
or rights of third parties.
(b) That
it
has full power to enter into this Agreement, to carry out its respective
obligations pursuant to this Agreement, and to grant the rights granted pursuant
to this Agreement. Further, SNI represents and warrants that it has obtained
all
corporate, third party, and governmental approvals necessary to enter into
this
Agreement and carry out the transaction contemplated thereby.
(c) That
it
is not engaged in nor has it been notified of any potential claims, suits,
actions, investigations, or proceedings relating to any Intellectual Property
rights concerning the Energy Products. SNI will immediately give written notice
to FARMERGY of any such event known to it during the term of this
Agreement.
(d) SNI
warrants that (a) the Energy Product shall be free from all liens, charges
or
encumbrances, except any lien of SNI in respect of any unpaid portion of the
Purchase Price; (b) the Energy Product shall be free from defects in material
and workmanship and shall conform to the specifications of the Energy Product
set forth in a Purchase Order and also conform to the functionality defined
in
the agreed to Technical Proposal attached to the Purchase Order, if any; and
(c)
the Energy Product shall be new and, in the absence of specification of a nature
consistent with SNI's usual and normal products. SNI shall, at its option,
repair or replace (at SNI's expense) any defective Energy Product or component
thereof, provided however, that SNI is given written notice of any defect during
the warranty period. For this purpose the warranty period shall commence on
the
earlier of the date of first use or the date on which SNI tendered the Energy
Product for use, and the warranty period shall end one year after such
commencement date. The date of effective commercial use shall be thirty (30)
days after delivery to a Worksite, unless otherwise specified in
writing.
FARMERGY
shall give SNI prompt written notice of any claim under the foregoing Warranty
and permit SNI to inspect the Energy Product in order to verify the defect
or
nonconformity. Failure of FARMERGY to give SNI such notice and opportunity
to
inspect shall not relieve SNI of all obligations with respect to such
claims.
Subject
to SNI's obligations under section 6.2 of this Agreement, FARMERGY's remedies
and SNI's obligations in connection with any claim made under this warranty
shall be limited to repair or, at SNI's option, replacement of the equipment
or
part thereof which is found to be defective. Labor performed at the Worksite
with regard to such claims is not included in this warranty. FARMERGY shall
be
responsible for the normal maintenance and repair of the Energy Product and
shall perform the same in accordance with generally accepted maintenance
procedures or such other procedures as are set forth in maintenance and repair
manuals provided by SNI to FARMERGY. SNI shall not be responsible for and shall
not be obligated to pay or to reimburse Purchaser for (a) any work or repairs
performed on the Energy Product by third parties except for mutually agreed
subcontractors, (b) any materials furnished by third parties for use in
connection with the Energy Product if the same was undertaken or furnished
without mutual prior written consent or (c) any loss or damage arising from
improper operation or maintenance of the Equipment or from ordinary wear and
tear.
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Notwithstanding
other provisions of this Article, in instances of a "major failure" during
the
warranty period. SNI will provide all necessary parts and installation labor,
directly or pursuant to the applicable manufacturer’s warranty (in SNI’s
description) to correct the defect. A "major failure" is defined as failure
of
the Energy Product or portion of the Energy Product, to operate as described
in
the Technical Proposal, which FARMERGY, through the diligent efforts of its
maintenance personnel or available contractors, cannot remedy. SNI will
immediately dispatch a serviceman upon request and notification of a "major
failure" by FARMERGY.
THERE
ARE
NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY
OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN AS SPECIFICALLY
SET FORTH ABOVE.
6.2 Indemnity
by SNI.
SNI
agrees to indemnify and hold FARMERGY and its Affiliates harmless from any
and
all loss, cost, liability, or expense (including court costs and reasonable
fees
of attorneys and other professionals) arising out of or resulting from the
breach or claimed breach of the above warranties and representations, including
but not limited to any such loss, cost, liability, or expense arising out of
or
resulting from any claim brought by a third party against FARMERGY, including
any claims that the Energy Product infringe the Intellectual Property rights
of
any third party. In the event of any such claim, FARMERGY (or its Affiliate)
agrees to notify SNI promptly of the claim and to permit SNI, at SNI's expense,
to assume control of the defense thereof with counsel of SNI's choosing, and
cooperate with SNI in such defense at SNI's expense.
6.3 FARMERGY's
Representations, Warranties, and Covenants.
(a) FARMERGY
represents and warrants that it has full power to enter into this Agreement
and
to carry out its respective obligations pursuant to this Agreement. FARMERGY
also represents and warrants that it has obtained all corporate, third party,
and governmental approvals necessary to enter into this Agreement and carry
out
the transaction contemplated thereby.
(b) FARMERGY
covenants that it shall not modify any Energy Product without the express
written consent of SNI.
6.4 Indemnity
by FARMERGY.
FARMERGY agrees to indemnify and hold SNI harmless from any and all loss, cost,
liability, or expense (including court costs and reasonable fees of attorneys
and other professionals) arising out of or resulting from the breach or claimed
breach of the above warranties and representations, including but not limited
to
any such loss, cost, liability, or expense arising out of or resulting from
any
claim brought by a third party against SNI. In the event of any such claim,
SNI
agrees to notify FARMERGY promptly of the claim and to permit FARMERGY at
FARMERGY's expense, to assume control of the defense thereof with counsel of
FARMERGY's choosing, and cooperate with FARMERGY in such defense at FARMERGY's
expense.
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7.0 CONFIDENTIAL
INFORMATION.
7.1 "Confidential
Information"
means
any information disclosed by one party to the other party in connection with
this Agreement and which the disclosing party believes to include confidential
information, is designated with an appropriate legend such as "CONFIDENTIAL:"
(or other label indicating its confidential status) at the time of disclosure
if
in documentary or other tangible form, or if such disclosure is initially oral
or visual and not reduced to written or documentary form at the time of
disclosure, such Confidential Information shall be identified as confidential
at
the time of disclosure, summarized or identified in a written document that
is
marked with an appropriate legend indicating its confidential status, and
provided to the other party within twenty (20) days following such oral or
visual disclosure. For each item of Confidential Information, the party
disclosing the item shall be called the "Disclosing Party," and the party
receiving the item shall be called the "Receiving Party."
7.2 Confidentiality
Obligations.
The
Receiving Party shall hold all Confidential Information of the Disclosing Party
in trust and confidence, and protect it as the Receiving Party would protect
its
own confidential information (which shall in any event shall be no less than
reasonable protection) and shall not use such Confidential Information for
any
purpose other than that contemplated by this Agreement. Unless agreed by the
Disclosing Party in writing, the Receiving Party shall not disclose any
Confidential Information of the Disclosing Party, by publication or otherwise,
to any person other than employees and contractors (such as contract
manufacturers or software developers) bound to written confidentiality
obligations consistent with and at least as stringent as those set forth herein
and who have a need to know such Confidential Information for purposes of
enabling a party hereto to exercise its rights and perform its obligations
pursuant to this Agreement.
7.3 Exceptions.
The
obligations specified above shall not apply to any Confidential Information
to
the extent that (a) it is already known to the Receiving Party without
restriction prior to the time of disclosure pursuant to this Agreement; (b)
it
is acquired by the Receiving Party from a third party without confidentiality
restriction and does not originate with the Disclosing Party; (c) it is
independently developed or acquired by the Receiving Party by employees or
contractors without access to such Confidential Information; (d) it is approved
for release by written authorization of the Disclosing Party; (e) it is in
the
public domain at the time it is disclosed or subsequently falls within the
public domain through no wrongful action of the Receiving Party; or (f) it
is
furnished to a third party by the Disclosing Party without a similar restriction
on the third party's right.
7.4 Compelled
Disclosure.
A
Receiving Party may disclose Confidential Information if it is disclosed
pursuant to the requirement of a court or other governmental agency or
disclosure is permitted or required by operation of law, provided that the
Receiving Party use its best efforts to notify the Disclosing Party in advance
and seeks confidential treatment for such Confidential Information.
7.5 Return
of Confidential Information.
Upon
written request of the Disclosing Party, the Receiving Party shall return to
the
Disclosing Party any Confidential Information in its possession or shall certify
in writing as to its destruction. In any event, upon termination of this
Agreement for any reason, the Receiving Party shall promptly return all
Confidential Information to the Disclosing Party.
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7.6 Confidentiality
of Agreement.
Each
party agrees that the terms and conditions of this Agreement shall be treated
as
Confidential Information; provided that each party may disclose the terms and
conditions of this Agreement: (i) as required by any court or other governmental
body or as otherwise required by law; (ii) to legal counsel; (iii) in
confidence, to accountants, banks, and financing sources and their advisors;
and
(iv) in confidence, in connection with the enforcement of this Agreement or
rights under this Agreement.
8.0 JURISDICTION,
APPLICABLE LAW, AND DISPUTE RESOLUTION.
8.1 Governing
Law and Venue.
This
Agreement and any matters hereunder shall be governed by and construed in
accordance with the internal laws of the State of Missouri, excluding its
conflict of law rules. The parties hereto hereby consent to the exclusive
jurisdiction and venue of the state and federal courts of Missouri with respect
to the resolution of any suit, action or proceeding hereunder. In any such
suit,
action or proceeding, the non-prevailing party shall pay to the prevailing
party
all reasonable attorneys' and expenses incurred by the prevailing party in
such
suit, action or proceeding. For purposes of the immediately preceding sentence,
"attorneys' fees" shall include, without limitation: fees for services relating
to the claim or dispute rendered prior to litigation (including investigation);
at both trial and appellate levels; after judgment in seeking to obtain any
execution or enforcement thereof; and in connection with any bankruptcy or
similar proceeding.
8.2 Dispute
Resolution.
The
parties agree to adopt the following procedures with respect to the resolution
of any disputes or controversies which may arise during the term of this
Agreement:
In
the
event that one party believes that the other party has failed to perform any
of
its obligations under this Agreement, such party's nominated representative
shall promptly so notify the other party's nominated representative in writing
and request a performance review meeting. The nominated representatives or
their
designated representatives will discuss the problem and negotiate for at least
30 days in good faith in an effort to resolve the dispute without any formal
proceeding. No litigation for the resolution of such disputes may be commenced
until the designated representatives have met and either party has concluded
in
good faith after 30 days that amicable resolution through continued negotiation
does not appear possible.
9.0 MISCELLANEOUS.
9.1 Independent
Contractors.
Each
party acknowledges that the relationship between the parties pursuant to this
Agreement is that of independent contractors. No provision of this Agreement
shall be construed to (i) constitute the parties as partners, joint venturers
or
participants in a joint undertaking, or (ii) give any party the power to direct
and control the day-to-day activities of the other. Further, no employees of
any
party shall be deemed or treated as employees of another party, and each party
shall be solely responsible for any and all payroll, employment and related
taxes, and withholding applicable to its
own
employees.
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9.2 Waiver.
Any
waiver of breach or default pursuant to this Agreement shall not be a waiver
of
any other subsequent default. Failure or delay by either party to enforce any
term or condition of this Agreement shall not constitute a waiver of such term
or condition.
9.3 Conflicts
in Provisions.
In the
event of any apparent conflicts or inconsistencies between this Agreement and
any Exhibits hereto, to the extent possible such provisions shall be interpreted
so as to make them consistent, and if such is not possible, the provisions
of
this Agreement shall prevail.
9.4 Headings.
The
Section headings herein are for reference and convenience only and shall not
enter into the interpretation hereof.
9.5 Severability.
To the
extent than any provision of this Agreement is found by a court of competent
jurisdiction to be invalid or unenforceable, that provision notwithstanding,
the
remaining provisions of this Agreement shall remain in full force and effect
and
such invalid or unenforceable provision shall be deleted.
9.6 Assignment.
Any
assignment permitted hereunder shall be subject to the written consent of the
assignee to all the terms and provisions of this Agreement. This provision
shall
not be construed to prevent the assignment of this Agreement or any rights
hereunder to a secured lender as collateral for a loan or to prevent the use
by
either party of independent contractors in the ordinary course of
business.
9.7 Authority.
Each
party warrants to the other party that it has the authority to enter into this
Agreement and that all necessary corporate or other approvals have been or
will
be obtained.
9.8 Notices.
Any
notice required or permitted pursuant to this Agreement shall be in writing
delivered by hand, overnight courier, telecopy, facsimile, or certified or
registered mail to the address first set forth above and shall be effective
upon
receipt
9.9 Amendment.
No
alternation, waiver, cancellation, or any other change or modification in any
term or condition of this Agreement, or any agreement contemplated to be
negotiated or reached pursuant to the terms of this Agreement, shall be valid
or
binding on either party unless made in writing and signed by duly authorized
representatives of both parties.
9.10 Approvals
and Similar Actions.
Wherever agreement, approval, acceptance, consent or similar action by either
party hereto is required by any provision of this Agreement, such action shall
not be unreasonably delayed or withheld. For purposes of this Agreement, Xxxxx
Xxxxx shall have the full authority and be designated as the contact person
for
SNI and Xxxx Xxxxx shall be designated as such for FARMERGY, until such time
as
such person is changed by written notice to the other party.
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9.11 Force
Majeure.
In the
event of any condition or contingency, existing or future, which is beyond
the
reasonable control and without the fault or negligence of either party ("Event
of Force Majeure") which prevents or delays, or materially increases the cost
of, the performance under this Agreement, each party shall be entitled to an
appropriate and reasonable extension of time for performance and an equitable
adjustment of the Purchase Price. Events of Force Majeure shall include, without
limitation, Acts of God, fire, floods, transport delays, labor disputes, and
interference by military or civil authorities. If an Event of Force Majeure
occurs, the party whose performance is affected shall take reasonable measures
to mitigate and minimize the effect of such Event and to continue with the
performance of its obligations under this Agreement.
9.12 Limitation
of Liability.
Notwithstanding any other provision of this Agreement, SNI shall not be liable
to FARMERGY or anyone claiming through FARMERGY for any special, incidental,
indirect or consequential damages of any kind whatsoever, whether such damages
arise from the use, inability to use, failure of, defects in, the conditions
of,
delay in delivery of, or nondelivery of, the Energy Product or otherwise.
9.13 Entire
Agreement.
The
terms and conditions herein contained constitute the entire agreement between
the parties with respect to the subject matter of this Agreement and supersede
any previous agreements and understandings, whether oral or written, between
the
parties hereto with respect to the subject matter hereof; except for the
Shareholders Agreement, there are no other agreements, understandings,
representations, or promises between the parties with respect to the subject
matter of this Agreements.
9.14 Construction.
This
Agreement is the result of negotiation between the parties and their respective
counsel. This Agreement will be interpreted fairly in accordance with its terms
and conditions and without any strict construction in favor of either party.
Any
ambiguity shall not be interpreted against the drafting party.
9.15 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, but all of which taken together will constitute one and
the
same instrument.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective duly authorized representatives as of the Effective
Date.
FARMERGY,
INC.
Xxxx
Xxxxx, President
/s/
Xxxxx
Xxxxx
Xxxxx
Xxxxx, President
11/13/2006
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