EXHIBIT 10.40
AGREEMENT
This Agreement is made on the 20th day of August, 2002.
BETWEEN THE PARTIES
A-GAS (AUSTRALIA) PTY LTD ("A-Gas") (ABN 18 066 273 247) whose registered
address is 0-00 Xxxxxx Xxxx, Xxxxxxxx Xxxxx Xxxxxxxx 0000.
AND
VIRTUAL TECHNOLOGIES (AUSTRALIA) PTY LTD ("VTPL") (ABN 17 078 419 646) whose
registered address is 00 Xxxxxxx Xxxxx Xxxxx Xxxxxxxx Xxxxxxxx 0000.
WHEREAS:
A. VTPL has intellectual property and product information (the Information)
and is licensed to manufacture the specialty refrigerant gas known as
SOLPOWER - SP34e (the Product).
B. A-Gas has storage, blending and packaging facilities for CFC replacement
products, used as refrigerants, located at 0 -00 Xxxxxx Xxxx Xxxxxxxx Xxxxx
Xxxxxxxx (xxx Laverton Premises)
C. VTPL has existing blending and decanting equipment (the Plant) and
cylinders (the Bulk Cylinders) for use in the manufacture and distribution
of the Product.
D. VTPL wishes to lease the Plant to A-Gas and to relocate the Plant and the
Cylinders to the Laverton Premises.
E. A-Gas wishes to manufacture, package, distribute and sell the Product
exclusively into the Heatcraft Group, on behalf of VTPL, and to manufacture
and package the Product for VTPL to distribute to customers independent to
the Heatcraft Group.
THE PARTIES HAVE AGREED TERMS AND CONDITIONS AS FOLLOWS:
GENERAL
1.1 VTPL warrants that it is the holder of a license to manufacture and
distribute the Product and is allowed under its license to assign
such intellectual property to A-Gas for the manufacture of the
Product.
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1.2 VTPL will provide A-Gas with all the necessary Information
including, but not limited to, formulation and production protocols
and procedures to allow A-Gas to manufacture the Product to VTPL's
specification. A-Gas undertakes to ensure that all the Information
provided by VTPL remains confidential and A-Gas further agrees to
ensure that at all times during and after the term of this agreement
that the Information remains protected.
1.3 VTPL appoints A-Gas as the sole manufacturer and distributor of the
Product for Australia and New Zealand with effect from the date of
this Agreement (the Commencement Date).
1.4 VTPL agrees to be bound by the A-Gas "Terms and Conditions of Sale"
as amended from time to time by A-Gas, a copy of which is attached
in Appendix 1, (the A-Gas Terms and Conditions). In the event of any
inconsistency between the terms of this Agreement and the A-Gas
Terms and Conditions, this Agreement takes precedence.
DURATION
2.1 Subject to Clause 9, this Agreement shall commence on the
Commencement Date and will continue for a period of five (5) years
thereafter (the Initial Period)
2.2 The Agreement will be automatically renewed for further periods of
three (3) years (the Renewal Periods), unless terminated by either
one of the Parties giving not less than 12 months notice, in
writing, of termination prior to the commencement of a Renewal
Period or as a result of Clause 9.
PRODUCT
3.1 The Information supplied and assigned under this Agreement, are the
processes, procedures and protocols associated with the manufacture
of the Product, as detailed in Appendix 2.
3.2 Under this agreement A-Gas warrants that at all times it will
manufacture and record thee details of each batch of the Product
manufactured at the Laverton Premises, in strict accordance with
only the processes, procedures and protocols provided by VTPL as
detailed in Appendix 2.
3.3 A-Gas accepts that the Product is well established in the Australian
and New Zealand refrigeration industry markets, and will use its
best endeavors to maintain the reputation of the Product and the
associated brand name SOLPOWER - SP34E and to advise VTPL
immediately there is any threat to this in anyway whatsoever.
3.4 A-Gas agrees to supply the Product from time to time to VTPL in
cylinders supplied directly by VTPL, or in cylinders supplied
indirectly by its customers, for use outside of the Heatcraft Group,
subject to these cylinders being compliant with all relevant
Australian statutory standards and regulations.
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3.5 A-Gas agrees to supply the Product to VTPL in cylinders suitable for
export to New Zealand. These cylinders will be supplied by VTPL,
except where affiliates within the Heatcraft Group in New Zealand
require the Product in cylinders with a capacity of 400KG or more,
or in smaller refillable cylinders.
3.6 Additional products may be added to this Agreement as agreed by both
parties from time to time.
PLANT
4.1 The Plant and Bulk Cylinders and all other associated equipment, as
detailed in Appendix 3, remain the property of VTPL.
4.2 VTPL warrants that it is the owner of the Plant and the Bulk
Cylinders and all other associated equipment all of which is fit for
its intended purpose including complying with all statutory
requirements and regulations.
4.3 The Plant is to be located at the Laverton Premises as soon as is
practical but no later than 60 days following the Commencement Date.
4.4 The relocation of the Plant will be to VTPL's account.
4.5 A-Gas will use its best endeavors to take care of the Plant,
including performing general maintenance as required in the
day-to-day use of the Plant.
4.6 Regular preventative maintenance of the Plant to ensure correct
on-going performance and compliance with relevant safety standards
will be the responsibility of A-Gas.
4.7 Replacement of items of Plant required to ensure correct on-going
operation will be paid by VTPL, subject to all costs for repairs
being quoted and agreed by VTPL in writing, prior to the
commencement of any work on the Plant.
4.8 The cost of repairs due to damage to the Plant caused by misuse, or
accident of any kind, will be the responsibility of A-Gas.
4.9 A-Gas will be responsible for insuring the Plant against standard
risks of fire and other forms of damage, to the "agreed replacement
value" of $150,000-00, as detailed in Appendix 4.
FEES
5.1 A-Gas will pay VTPL a Royalty Fee on all sales of the Product to the
Heatcraft Group.
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5.2 The Royalty Fee from the Commencement Date is set at $4.75/kg and is
based on the current selling price for the Product to the Heatcraft
Group of $18.00/kg (the Bulk Selling Price).
5.3 A-Gas agrees to verify and confirm the sales volumes into the
Heatcraft Group by independent audit and confirmation by the
Heatcraft Group.
5.4 A-Gas will notify VTPL, in writing, of the volume of Product sold to
the Heatcraft Group in a given month, within seven (7) working days
from the end of that month and will pay the Royalty Fee no later
than 37 days from month end of invoicing.
5.5 All Product sold directly to VTPL will be invoiced FIS to the
designated delivery point within Australia, at $13.25/kg (the Bulk
Manufacturing Price) from the Commencement Date.
5.6 No Royalty Fee is payable on Product sold directly to VTPL.
5.7 A-Gas recognize that within the Bulk Manufacturing Price VTPL are
contributing $0.25/KG to A-Gas toward the cost of supplying suitably
trained and knowledgeable technical and sales representation to
develop sales and technically support the Product in the Heatcraft
Group, on an on-going basis.
5.8 VTPL agree to make a further contribution of $0.25/KG to A-Gas, on a
pro-rata basis, where sales of the Product into the Heatcraft Group
exceed 100,000KG in any Fiscal Year (July 1 to June 30).
5.9 VTPL, at its discretion, may make a further contribution of
$0.25/KG, on a "matched dollar for dollar" basis with A-Gas, to
support mutually agreed marketing and sales initiatives put forward
by A-Gas from time to time to promote the Product within the
Heatcraft Group.
5.10 In return for the use of the Plant, A-Gas agrees to pay VTPL a fee
(Lease Fee) of $1.00 pa.
PRICING, FORECASTS AND REVIEWS
6.1 A-Gas will purchase all raw materials required to manufacture the
Product and will maintain the current price of the major ingredient,
R134a, at $9.45/KG until December 31, 2002. Any price movement,
either a reduction or increase, in the price of R134a, after that
period will be reflected in the Bulk Manufacturing Price and Royalty
Fee.
6.2 The Parties agree to meet not less than quarterly, in May, August,
November and February to review, in good faith, the Royalty Fee and
the Bulk Manufacturing Price, taking into account raw material
costs, FX movement, labour costs for the Product, and all other
Government and Industry charges (AFC levy, RRA levy etc.).
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6.3 In the event that:
* The review is not agreed; and
* VTPL provides a written quote from another source with sufficient
detail to evidence that it is able to purchase the major
ingredient R134a of comparable quantity and quality for a minimum
period of three months; and
* that other source is able to supply the R134a for a quoted price
of at least 10% less than the current A-Gas price on the same
terms and conditions; then A-Gas shall at its option reduce the
price of the R134a to match the quoted price or allow VTPL to
purchase R134a outside of this Agreement for such a period as the
condition persists.
6.4 VTPL will provide A-Gas with a six (6) month sales forecast
detailing the rolled quantities of the Product expected to be
required by VTPL. Such forecasts shall be used by A-Gas for planning
purposes only and shall not be considered in any way binding upon
VTPL.
6.5 The Parties agree to meet not less than bi-monthly, and more
frequently if required, to review and discuss sales results, sales
trends, market trends, and all other relevant business relating to
the Product and the Plant.
6.6 It is agreed all prices quoted are in A$ and are exclusive of GST
and other Government and Industry charges
PAYMENT TERMS
7.1 All invoices for Product will be payable 30 days after end of month
statement, unless otherwise agreed in writing. The Lease Fee will be
paid on each anniversary of the Commencement Date and the Royalty
Fee will be payable by A-Gas to VTPL 37 days after month end of
invoicing of the Product.
CYLINDERS
8.1 All Cylinders supplied and owned by A-Gas for the packaging of the
Product, for distribution into the Heatcraft Group, remain the
property and responsibility of A-Gas at all times. Should VTPL
require the Product in A-Gas Cylinders, for whatever reason, VTPL
agrees to pay the A-Gas Cylinder Service Charges including all costs
for lost or damaged Cylinders in accordance with Appendix 5.
8.2 In the event of termination of this Agreement, for whatever reason,
VTPL are responsible for returning all A-Gas Cylinders to A-Gas
within three (3) months of the termination date. In the event that
Cylinders are not returned within that period, VTPL agree to pay to
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A-Gas the full replacement costs for those Cylinders not returned as
detailed in Appendix 5.
8.3 A-Gas acknowledge that VTPL have supplied a quantity of Bulk
Cylinders of 400KG and 800KG capacity, complete with copies of the
Manufacturer's Data Reports. (See Appendix 3 for details). These
cylinders are to be used exclusively for the supply of the Product
direct to VTPL, for distribution to customers independent of the
Heatcraft Group. These VTPL cylinders will be generally maintained
by A-Gas for this exclusive purpose and will be stored, flushed and
vacuumed by A-Gas at the Laverton Premises before each refilling.
These tanks will always remain the property of VTPL.
8.4 VTPL will remain solely responsible for the whereabouts and return
of their Bulk Cylinders and will be responsible for their Bulk
Cylinders being compliant with all relevant Australian statutory
standards and regulations as well as all costs associated with any
repairs required from time to time.
TERMINATION
9.1 Either Party may terminate this Agreement with immediate effect by
giving notice to the other party if:
* that other party breaches any provision of this Agreement and
fails to remedy the breach within 30 days after receiving notice,
in writing, requiring them to do so.
* that other party breaches a material provision of this Agreement
where that breach is not capable of remedy; or
* any event referred to below happens to the other party.
9.2 Each party must notify the other party immediately if:
* that party disposes of the whole or part of its assets,
operations or business other than in the ordinary course of
business;
* that party ceases to carry on business;
* that party ceases to be able to pay its debts as they become due;
any step is taken by a mortgagee to take possession or dispose of
the whole or part of that party's assets, operations or business;
or
* any step is taken to enter into any arrangement between that
party and its creditors;
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* any step is taken to appoint a receiver, a reviver and manager, a
trustee in bankruptcy, a provisional liquidator, a liquidator. An
administrator or other like person of the whole of part of that
party's assets, operations or business.
9.3 Termination if this Agreement under this clause does not affect any
accrued rights or remedies of either party
CONFIDENTIALITY
10.1 All information of a proprietary nature, excluding that which is
public knowledge at the Commencement Date, disclosed by one party to
the other during the term of this Agreement shall be considered as
confidential and shall not be disclosed to any party outside the
field of this Agreement. This includes all secrets, know-how,
technical or commercial data, discoveries and methods provided by
one party to the other for the performance of this Agreement and
covers individuals as well as corporate entities associated with
either party.
NOTICES
11.1 All written notices in connection with this Agreement may be
addressed:
In the case of A-Gas to:
A-Gas (Australia) Pty Ltd
0-00 Xxxxxx Xxxx
Xxxxxxxx Xxxxx XXX 0000
Attn: Mr Xxxxx Xxxxxx
In the case of VTPL
Virtual Technologies (Australia) Pty Ltd
XX Xxx 0000
Xxxxxxxxx Xxxx, XXX 0000
Attn: Xx Xxx Xxxxxxxxx
ENTIRE CONTRACT
12.1 This Agreement, and the appendices hereto, contains all the express
provisions agreed on by the Parties with regard to the subject
matter of this Agreement and the Parties waive the right to rely on
any alleged express provision not contained in the Agreement or the
appendices hereto.
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NO REPRESENTATIONS
13.1 Neither Party may rely on any representation, which allegedly
induced that party to enter into this Agreement, unless the
representation is recorded in this Agreement or appendices hereto.
ASSIGNMENT
14.1 Neither party may assign its rights or delegate its obligations
without the prior written consent of the other party, which shall
not be unreasonably be withheld or delayed.
15. APPLICABLE LAW
15.1 This Agreement shall be interpreted and implemented in accordance
with the laws of the State of Victoria, Australia and any dispute
shall be referred to the exclusive jurisdiction of the Victorian
Courts.
EXECUTED AS AN AGREEMENT
Signed for and on behalf of )
A-GAS (AUSTRALIA) PTY LTD ) /s/
the presence of ) ---------------------------------
Signature
---------------------------------
Title
--------------------------------- ---------------------------------
Witness Date
Signed for and on behalf of )
VIRTUAL TECHNOLOGIES (AUSTRALIA) PTY LTD. ) /s/
In the presence of ) ---------------------------------
Signature
---------------------------------
Title
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Witness Date
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