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DISTRIBUTION AGREEMENT
THE PARTIES HERETO:
1. CONSERVER INTERNATIONAL, B.V. a company organized and existing under
the laws of the Netherlands having its registered office at Xxxxxxxxxx
0-0, 0000 XX Xxxxxxxxx Xxxx-Xxxx, the Netherlands, hereinafter referred
to as "B.V.";
AND
2. CONSERVER NORTH AMERICA, INC., a company organized and existing under
the laws of Delaware having a registered office at Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware hereinafter referred
to as "NORD" (hereinafter B.V. and NORD are referred to collectively as
"INTERNATIONAL");
AND
3. CONSERVER CORPORATION OF AMERICA, a corporation organized and existing
under the laws of Delaware having a place of business at 0000 Xx Xxxxx
Xxxx, Xxxxx Xxxxxx, XX00000, hereinafter referred to as the
"DISTRIBUTOR";
WHEREAS:
A. By the terms of an agreement dated 1995, CONSERVER ENGINEERING LTD., a
company organized and existing under the laws of Ireland having its registered
office at 0 Xxxx Xxxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx (hereinafter referred to as
"CONSERVER ENGINEERING") has been awarded from CONSERVER 21 S.A., a company
organized and existing under the laws of Spain an exclusive license for, i.a.,
the Territory described hereafter, to distribute the Products, (as hereinafter
defined) and has been granted the right to seek, in its own name, intellectual
property protection of the know how and inventions upon which the Products are
based.
B. Certain patent applications relating to the Products have been filed in Spain
in the name of CONSERVER ENGINEERING under number 9401478 and 9600692 and in The
Hague at the European Office for Patents in the name of Xxxxxxx xx Xxxxx Xxxxxx
on June 24, 1996 ("the Patent"). Copies of the said application documents are
annexed hereto as Annex 1-A and 1-B respectively. Xxxxxxx xx Xxxxx Xxxxxx
(President of Conserver 21 S.A.) and companies of the group to which
INTERNATIONAL belong, are both (direct or indirect) shareholders of both
CONSERVER 21 and CONSERVER ENGINEERING.
C. In addition to the intellectual property rights described above, CONSERVER
ENGINEERING with its own research team has
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developed yet new know how, inventions, and industrial processes enabling it to
manufacture, the products on industrial basis; CONSERVER ENGINEERING has
initiated and is in the process of obtaining additional intellectual property
protection for such new know how, inventions and industrial processes.
On the basis of the rights and the related know how belonging to or
granted to CONSERVER ENGINEERING, CONSERVER ENGINEERING has entered into an
exclusive worldwide marketing and distribution license agreement with B.V. dated
[________] for the manufacture, sale and general commercial exploitation of the
Products;
D. B.V. has entered into an exclusive marketing and distribution license
agreement for the United States, Canada and Mexico with NORD dated [________]
for the manufacture, sale and general commercial exploitation of the Products.
E. The product group described in Annexes 2 and 3, as well as any new products
which INTERNATIONAL or CONSERVER ENGINEERING may later develop or acquire for
preservation of foodstuffs and flowers are herein referred to as "the Products."
F. INTERNATIONAL has also obtained from CONSERVER ENGINEERING on the basis of
the above mentioned license agreements, a non-exclusive trademark license
concerning the trademark "CONSERVER 21" as described in Annex 4 to this
Agreement (hereinafter the "Trademark") , which Trademark is in the process of
being registered in the United States Patent Office.
G. DISTRIBUTOR has advised INTERNATIONAL that it is willing to use, sell,
distribute and otherwise generally exploit commercially the Products (except for
the market of domestic use of the Products) in the Territory (as hereinafter
defined) as the exclusive and independent distributor of INTERNATIONAL and
INTERNATIONAL has expressed its desire to have DISTRIBUTOR act as its exclusive
distributor for the Products in the Territory on the terms described herein.
H. The parties have therefore decided to enter into an agreement setting forth
the terms and conditions under which DISTRIBUTOR shall market, use, promote,
distribute, sell and generally exploit commercially the Products (except for the
market of domestic use of the Products) in the United States of America and its
possessions, territories and dependencies, and Canada (herein, "the Territory"),
and set forth such terms and conditions in this Agreement.
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
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1. SUBJECT MATTER
1.1 INTERNATIONAL hereby grants to DISTRIBUTOR the exclusive right to
import, promote, distribute, market, sell, use and generally exploit
commercially the Products (including the Trademark) in the Territory to
commercial users, excluding domestic consumers.
1.2 Subject to Paragraph 8.7, DISTRIBUTOR shall buy such Products as it may
need from INTERNATIONAL and use or resell them in the Territory in its
own name and for its own account and risk.
1.3 In complying with its obligations under the Agreement, DISTRIBUTOR may
distribute the Products through sub-distributors or agents.
DISTRIBUTOR shall notify INTERNATIONAL in writing of the name and
address of all proposed sub-distributors and shall not retain any sub-
distributors without the prior consent of INTERNATIONAL, which consent
shall not be unreasonably withheld. If disapproval of a proposed
sub-distributor is not given in writing by INTERNATIONAL within two
weeks of such written submission by DISTRIBUTOR, approval shall be
deemed to have been given.
2. PRODUCT RANGE - NON-COMPETITION
2.1 INTERNATIONAL reserves the right to substitute a new Product for any
Product and to modify the specifications, the manufacture or the design
of any Product if and when it deems it necessary or desirable, without
the consent of the DISTRIBUTOR and DISTRIBUTOR shall have no claim for
damages as a result of this action. Any decision by INTERNATIONAL as
described in the preceding sentence must be made for all distributors
and shall be made on no less than 60 days written notice. INTERNATIONAL
shall inform DISTRIBUTOR of any internal discussions of proposed
modifications or substitutions of the Products at the earliest possible
time so as to enable DISTRIBUTOR to control its inventory of Products
and to adjust its marketing as a result of such possible decisions.
INTERNATIONAL warrants that any possible modification or substitution
shall conform to the nature and intended use of the Products, and can
qualify as Products under this Agreement.
2.2 Subject to mandatory trade and commerce statutes, rules and regulations
as may be or become applicable INTERNATIONAL shall not permit any other
distributors to
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import, promote, distribute sell, use or otherwise commercially exploit
the Products directly or indirectly or through agents or
sub-distributors in the Territory during the term of this Agreement
(except for the market of the domestic use of the Products), nor shall
it do so itself, in either case in a manner that would infringe upon
the rights granted to DISTRIBUTOR hereunder. To the extent permitted by
such statutes, rules and regulations, INTERNATIONAL shall use its best
efforts to prevent distribution of the Products in the Territory by
other persons.
2.3 DISTRIBUTOR shall not promote, distribute, market, sell, use or
otherwise commercially exploit the Products:
- through a branch or subsidiary, warehouse, distributor, agent or any
other active means outside the Territory, except after prior written
authorization of INTERNATIONAL (which authorization shall not be
unreasonably withheld to the extent the request relates to situations
that bear a close connection with the Territory and the request would
not infringe upon the rights of other distributors), provided, however,
that if Products are to be used in shipments to the Territory, such
authorization from INTERNATIONAL shall not be required insofar as the
preservation of the goods being so shipped is entirely organized by and
takes place under the responsibility of DISTRIBUTOR; nor
- for purposes other than for the preservation of foodstuffs and
flowers, except as provided in paragraph 6 hereof.
2.4 During the whole term of the Agreement, DISTRIBUTOR shall not in the
Territory, directly or indirectly manufacture, promote, sell or use for
trade purposes under whatever form, products which may compete with the
products, it being understood and agreed, however, that DISTRIBUTOR may
use (i) other products which do not compete with the Products but may
enhance or be used compatibly with the Products, and (ii) competing
products during such times as INTERNATIONAL fails to supply products to
DISTRIBUTOR, or construction of new or expansion of existing production
is taking place, or otherwise in accordance with Paragraph 8 of this
Agreement.
3. OBLIGATIONS OF DISTRIBUTOR
3.1 Subject to paragraph 8.7, DISTRIBUTOR shall purchase the Products for
commercial use in the Territory exclusively
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from INTERNATIONAL or companies designated by INTERNATIONAL.
3.2 DISTRIBUTOR shall inform its customers of the General Conditions of Use
of the Products made by INTERNATIONAL, as described in Annex 5 to this
Agreement. INTERNATIONAL may change these General Conditions on
reasonable notice from time to time.
3.3. DISTRIBUTOR shall promote the use, sale and/or distribution of the
Products in a loyal and diligent way, in accordance with the
manufacturer's General Conditions of Use, within the framework of the
marketing and business arrangements the Parties may from time to time
agree to, and shall abstain from making false or misleading statements
concerning INTERNATIONAL or its Products, provided that the repetition
or reproduction of statements made by INTERNATIONAL with respect to the
market in the Territory shall not be construed as false or misleading
for the purposes of this Agreement.
3.4 DISTRIBUTOR shall cooperate with INTERNATIONAL in obtaining the
authorizations or permits necessary for the use of the Products in the
Territory for all foodstuffs and for compliance with all rules and
regulations applicable to the Products for their marketing and their
use. INTERNATIONAL shall use its best efforts and shall be responsible
for obtaining all authorizations and permits for use of the Products in
connection with fish, meat and poultry, and all authorizations and
permits with respect the anti-microbial and anti-fungal benefits of the
Products for foodstuffs and cut flowers, at INTERNATIONAL'S cost.
3.5 Provided DISTRIBUTOR pays any additional expense generated thereby,
DISTRIBUTOR shall have the right to be named as an additional insured
under the products liability insurance policy maintained by
INTERNATIONAL, covering product liability risk related to the Products,
and, at the request of DISTRIBUTOR, INTERNATIONAL shall supply
DISTRIBUTOR with a copy of such policy. At DISTRIBUTOR's sole option,
DISTRIBUTOR shall obtain and maintain its own product liability
insurance relating to the Products and include INTERNATIONAL as an
additional insured during the whole term of this Agreement. Both such
insurance policies shall contain a provision pursuant to which the
insurers waive any recourse against INTERNATIONAL or DISTRIBUTOR, as
the case may be.
3.6 Periodically during the year DISTRIBUTOR shall consult
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with INTERNATIONAL with respect to its business plan for the coming year and
shall present a formal written business plan to INTERNATIONAL on June 30 for the
next calendar year; INTERNATIONAL shall likewise provide DISTRIBUTOR with its
business plan for the next year on August 31. The Parties acknowledge that their
respective initial business plans for the eighteen month period ended December
31, 1997 has been delivered to and has been approved by each other.
The parties shall regularly inform each other on the market conditions
and the state of competition in the Territory.
3.7 DISTRIBUTOR and INTERNATIONAL shall cooperate with one another in
connection with the general commercial exploitation of Products to
international customers. In that regard, whenever any party to this
agreement has an opportunity to make a presentation for the commercial
exploitation of the Products to a company which has significant
international business, such party shall immediately notify the other
party of such opportunity so that a united marketing strategy can be
agreed upon.
3.8 Within thirty (30) days following the end of each of the first three
calendar quarters, DISTRIBUTOR shall send INTERNATIONAL a detailed
summary of commercial activities with respect to the use of the
Products made by itself and by all its sub-distributors during the
quarter concerned.
Before February 15 of each year DISTRIBUTOR shall submit to
INTERNATIONAL a detailed summary of revenues received from the use and
commercial exploitation of the Products made by itself and by its
sub-distributors during the preceding calendar year.
DISTRIBUTOR shall provide INTERNATIONAL with the details of quantity of
Product used and of the revenue received therefrom, prices, dates of
delivery for certain specific accounts (to be agreed to by DISTRIBUTOR
and INTERNATIONAL).
INTERNATIONAL may audit the accounts of DISTRIBUTOR yearly at its cost
upon reasonable notice and at a mutually agreeable time and place.
These accounts as well as all related elements will be held at the
disposal of INTERNATIONAL or its representative authorized to effect
verifications.
3.9 At the present time it is not possible for the parties to
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negotiate more than rough estimates of minimum sales of the Products,
which estimate is reflected in Annex 6. After the initial start-up
period through December 31, 1997, the Parties shall negotiate in good
faith reasonable minimum sales for future years, which minimum sales
DISTRIBUTOR shall be responsible for.
4. SALES ORGANIZATION
4.1 DISTRIBUTOR shall be responsible for marketing and sales promotion in
the Territory in a commercially reasonable, proper and diligent manner.
Such marketing shall at all times be within the guidelines established
or approved by INTERNATIONAL, provided, however, that if DISTRIBUTOR;s
Business Plan, submitted in accordance with paragraph 3.6 of this
Agreement shall have been accepted, no further approvals or consents
shall be required from INTERNATIONAL insofar as the Business Plan
expressly refers to the marketing strategy DISTRIBUTOR intends to
pursue. The Parties agree that, other than as provided for hereunder,
all DISTRIBUTOR's initiatives relating to the marketing of the Product
or bearing on the Product's general image in the market, shall have to
be approved by INTERNATIONAL. INTERNATIONAL shall not unreasonably
withhold its approval. If the parties have been unable to agree on a
proper marketing strategy, and, to the extent that DISTRIBUTOR shall
have then pursued the marketing strategy recommended by INTERNATIONAL,
DISTRIBUTOR shall not be accountable if there is a failure to meet the
sales and royalty goals agreed to as provided for in paragraph 3.9.
4.2 DISTRIBUTOR shall have the right to have its initial staff trained in
English at B.V.'s facility in Western Europe at no cost to DISTRIBUTOR
other than the cost of travel and living expenses of its staff while
there.
4.3 DISTRIBUTOR shall have the right to have its commercial staff and the
commercial staff of its sub-distributors and agents participate in
training sessions organized by INTERNATIONAL which shall be conducted
in English. INTERNATIONAL shall maintain a staff of technicians able to
explain the processes and provide technical information and assistance
to be able to market the Products effectively. During the start-up
period through December 31, 1997, if requested by DISTRIBUTOR,
INTERNATIONAL shall make its own experts available to DISTRIBUTOR in
the Territory at no cost to DISTRIBUTOR other than the costs of travel
and living expenses which shall be borne by DISTRIBUTOR.
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5. PUBLICITY - P.O.S. MATERIALS
5.1 DISTRIBUTOR shall be responsible at its own cost for the publicity and
promotion of the Products in the Territory.
5.2 DISTRIBUTOR recognizes that, as the commercial activities of
INTERNATIONAL are international, any advertising concerning the
Products can affect, even outside the Territory, the international fame
and prestige of INTERNATIONAL. DISTRIBUTOR shall therefore submit all
advertising for approval by INTERNATIONAL and such advertising shall be
deemed approved unless INTERNATIONAL shall object within 15 days of
such submission. INTERNATIONAL shall not unreasonably withhold
approval.
5.3 INTERNATIONAL shall provide DISTRIBUTOR, and DISTRIBUTOR shall provide
INTERNATIONAL, on a current basis and at no cost, with individual
copies of all promotional materials which it or any of its other
distributors or sub-distributors have created, including access to all
"camera ready" materials and other marketing materials which might
reduce the cost of producing advertising materials.
5.4 INTERNATIONAL shall keep DISTRIBUTOR informed of all positive and
negative publicity or developments concerning the Products and
competitive products so as to enable DISTRIBUTOR to take advantage of
or to be able to respond to inquiries concerning the Products.
INTERNATIONAL shall also disclose to DISTRIBUTOR all information it has
developed or acquired concerning the Products or any improvement or
modifications thereto which could be helpful in establishing the
commercial utility of the Products.
6. FIRST REFUSAL
6.1 DISTRIBUTOR is granted a right of first refusal of a license or
distributorship with respect to any proposed use of the Products for
uses other than the preservation of foodstuffs and flowers, not for use
by domestic consumers. Such right must be exercised within 45 days
after DISTRIBUTOR is provided with the proposed terms and conditions of
the agreement.
6.2 DISTRIBUTOR is granted a right of first refusal of a license or
distributorship with respect to any products acquired or developed by
INTERNATIONAL or CONSERVER ENGINEERING for use as a preserver of
foodstuffs and flowers other than for use by domestic customers. Such
right must be exercised within 45 days after DISTRIBUTOR
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is provided with the proposed terms and conditions of the agreement.
7. PRICES
7.1 DISTRIBUTOR shall buy the Products from NORD at the "distributor"
tariff of NORD (hereinafter the "Tariff") in force at the time the
order is placed by DISTRIBUTOR. DISTRIBUTOR shall benefit from all
discounts applicable to distributors mentioned in the Tariff. No
distributor shall be able to buy Products at a lower cost than
DISTRIBUTOR.
7.2 The Tariff in force at the day of signature of the present Agreement is
described in Annex 7 to this Agreement. The Tariff may be revised by
INTERNATIONAL on 30 days prior written notice, but only if a change in
the costs of the minerals used to manufacture the Products, the cost of
utilities or other increases in direct manufacturing costs (excluding
managerial salaries), or any other event with a direct impact on
production or regulatory compliance, justify such adjustment.
7.3 The Tariff is established FOB an East Coast United States location
("Point of Delivery") including all taxes, freight, insurance and
export or import duties, which shall be for the account of NORD. All
products shall be properly labelled by INTERNATIONAL and customs
clearance shall be the responsibility of NORD.
7.4 NORD retains title to the Products until full payment thereof by
DISTRIBUTOR, even in case of moratorium or bankruptcy of DISTRIBUTOR.
7.5 The term of payment of the Products shall be forty five (45) days
following the date of delivery of the Product to DISTRIBUTOR in the
Territory, by wire transfer to the bank account selected by NORD, as
notified from time to time.
7.6 Any unpaid and overdue amount under this Agreement shall bear interest
at the prime rate of Citibank as in effect from time to time, which
shall be added to the amount due NORD from the date the amount becomes
due until the date of payment.
8. ORDERS - DELIVERY
8.1 DISTRIBUTORS shall place its orders with NORD by fax, E- mail or by
mail at the address indicated by NORD. If an order is sent by fax, a
written confirmation of the order
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shall be mailed.
8.2 NORD shall do its utmost to deliver the orders of DISTRIBUTOR without
delay, within its production capacity limits and taking into account
the other Distribution Agreements concluded with third parties.
8.3 Unless otherwise agreed between the parties, the Products shall be
delivered at the Point of Delivery.
All taxes, duties and excises concerning the sales as of the Point of
Delivery shall exclusively be borne by Distributor other than export
duties or fees and export permits and formalities.
8.4 The Products shall be for the risk of DISTRIBUTOR from the time of
delivery of the Products to the Point of Delivery by NORD to the
carrier.
8.5 INTERNATIONAL shall not be liable for any deterioration or alternation
of the Products caused by the carrier, and in such event it is the
responsibility of the DISTRIBUTOR to take any action required against
the carrier, provided that if the Products shall have been insured
during shipment by INTERNATIONAL, INTERNATIONAL shall cooperate fully
with DISTRIBUTOR in pursuing claims against the insurer.
8.6 DISTRIBUTOR either itself or through its subdistributors, shall, at all
times, maintain sufficient inventory of the Products so as to cover the
reasonably expected needs of the Products during a period of two
months. At DISTRIBUTOR's option, this inventory may be maintained at
NORD's warehouse, charges to be invoiced on a passthrough basis. The
Parties acknowledge that DISTRIBUTOR currently maintains no such
inventory. DISTRIBUTOR hereby undertakes to build up such inventory in
accordance with the approved Business Plan over a period of six months.
8.7 In the event INTERNATIONAL is unable to provide adequate quantities of
the Products to DISTRIBUTOR in a reasonable time after the placing of
an order by DISTRIBUTOR (such reasonableness being determined as from
the placing of the order and with due recognition of the commercial
requirements of DISTRIBUTOR as set forth in the approved Business Plan
or any amendments thereof), INTERNATIONAL shall use its best efforts to
increase its production capacity.
In that event, should INTERNATIONAL fail to achieve such
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increased capacity, or if such increase appears not to be sufficient to
enable INTERNATIONAL to deliver the Products within such reasonable
time, INTERNATIONAL shall cause a plant for the manufacture of Products
to be built in the Territory, Mexico or Canada, to serve as the
supplier of the Products which will primarily service the needs of the
market in the Territory and Canada.
Should it appear that (i) INTERNATIONAL fails to increase its
production capacity so as to satisfy the reasonable delivery demands of
DISTRIBUTOR, or (ii) INTERNATIONAL fails to diligently start or
implement the construction of a production facility in the Territory in
accordance with this subparagraph, (iii) all reasonable corrective
measures by INTERNATIONAL fail to achieve delivery of the Products
within such reasonable time, or (iv) INTERNATIONAL is manifestly unable
to deliver Products in accordance with the terms and conditions of this
Agreement, then DISTRIBUTOR shall have the authority to take over
management responsibility for the production, sourcing and/or
purchasing of the Products for the Territory, and, to the extent this
would appear to be necessary to achieve timely deliveries, to build a
production facility (for the supply of the needs of the market in the
Territory exclusively). To that effect, in such event, INTERNATIONAL
and CONSERVER ENGINEERING hereby agree to license or otherwise provide
all necessary intellectual property rights and know how to DISTRIBUTOR,
as may be reasonably necessary for DISTRIBUTOR to operate a production
facility, and INTERNATIONAL and CONSERVER ENGINEERING shall cooperate
fully with DISTRIBUTOR in such event.
9. SUB-DISTRIBUTOR
9.1 DISTRIBUTOR may grant the distribution rights for the Products in the
Territory to sub-distributors or agents, as provided for in paragraph
1.3 hereof.
9.2 All orders of Products of sub-distributors or agents shall be placed by
DISTRIBUTOR in its own name and DISTRIBUTOR shall be responsible for
payment of the price of the Products ordered.
9.3 In case of expiration or termination for whatever reason of the present
Agreement, sub-distributors and agents shall have no claim vis-a-vis
INTERNATIONAL.
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10. ROYALTY
10.1 In consideration of INTERNATIONAL's entering into this Agreement,
DISTRIBUTOR shall pay a royalty to INTERNATIONAL of six (6%) percent of
Net Revenues of DISTRIBUTOR generated from the commercial use of the
Product for the first One Hundred Million ($100,000,000) Dollars of
such Net Revenues, and a royalty of seven (7%) percent on Net Revenues
generated from the commercial use of the Product in excess thereof.
10.2 DISTRIBUTOR shall pay the royalty to INTERNATIONAL quarterly,
forty-five days after the end of each calendar quarter. Royalties shall
be accompanied by copies of such records as INTERNATIONAL may
reasonably request in order to verify revenues received from the
commercial use of the Products.
10.3 During the term of this Agreement, DISTRIBUTOR shall provide
INTERNATIONAL with a quarterly report of revenues received from the
commercial use of the Products, in a form reasonably satisfactory to
INTERNATIONAL.
10.4 DISTRIBUTOR shall maintain accurate and complete business records with
respect to its commercial use and distribution of the Product.
DISTRIBUTOR shall make the originals of such records (not including
financial statements and records) available to INTERNATIONAL'S
employees or agents during regular business hours.
10.5 For the purposes of this agreement the term "Net Revenues" shall mean
the gross proceeds actually received by DISTRIBUTOR from the commercial
exploitation of Products reduced by the cost of packing, freight, and
insurance of the Product, and by federal, state and local taxes.
11. INTELLECTUAL AND COMMERCIAL PROPERTY RIGHTS
11.1 DISTRIBUTOR shall market the Products under the Trademark or under
another trademark agreed to by INTERNATIONAL, and it shall not use any
other trademark to sell the Product. In the event it is determined that
the Products should be marketed under another trademark, such trademark
shall be registered in the United Stares by CONSERVER ENGINEERING, at
its cost, provided, however, that DISTRIBUTOR shall be entitled to
register such xxxx if CONSERVER ENGINEERING shall fail to do so and
such failure shall continue after notice (in accordance with paragraph
19.4 of this Agreement) shall have been given by DISTRIBUTOR to
CONSERVER ENGINEERING.
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11.2 INTERNATIONAL hereby grants to DISTRIBUTOR the non-exclusive right to
use the Trademark in the Territory for the use and sale of the Products
in conformity with this Agreement. INTERNATIONAL shall not use the
Trademark in the Territory for any other use without the consent of the
DISTRIBUTOR.
11.3 DISTRIBUTOR shall only during the term of the Agreement use the
Trademark only for the use, distribution and sale of the Products in
the Territory in conformity with the conditions of this Agreement. In
this respect Distributor shall not
- use or register the Trademark for other products than those which
from time to time are the subject matter of the present Agreement or
other needs than the marketing of such Products in the context of the
present Agreement;
- except as provided for below, use of the Trademark after termination
or expiration of the Agreement for whatever reason.
11.4 Under the present Agreement DISTRIBUTOR may use the word "CONSERVER" in
its name. DISTRIBUTOR shall in case of termination or expiration for
whatever reason of the present Agreement, immediately change such name
by removing the word "CONSERVER" or any other combination of words,
letters or signs referring to INTERNATIONAL or its Products as they may
from time to time be or have been used by INTERNATIONAL to identify
itself or its Products.
11.5 DISTRIBUTOR shall not file for the registration of the Trademark or of
trademarks or signs which could be confusingly similar to the Trademark
in any country.
11.6 DISTRIBUTOR may authorize sub-distributors or agents to use the
Trademark for the sale of the Products provided DISTRIBUTOR guarantees
compliance by sub-distributors or agents of the conditions of use of
the Trademark and the obligation under the present paragraph towards
INTERNATIONAL.
11.7 DISTRIBUTOR recognizes that CONSERVER ENGINEERING is the licensor of
the know how and of the intellectual property rights in connection with
the Products.
11.8 Other than as provided herein, INTERNATIONAL does not give any
guarantee other than (i) the guarantee that it has been awarded an
exclusive temporary right to distribute
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the Products in the Territory, and (ii) that the Trademark exists and
has been licensed to INTERNATIONAL.
11.9 CONSERVER ENGINEERING and INTERNATIONAL further guarantee that they
shall use their best efforts to secure patent protection for the
inventions and know how upon which the Products are based wherever the
Products are sold or commercial used, including in the Territory.
11.10 DISTRIBUTOR shall inform INTERNATIONAL as soon as possible of any
unfair infringement or infringement actions or nullity actions against
the exclusive rights that do or may exist, or against the Trademark by
third parties concerning the Products, or any other action which could
affect the validity or the scope of protection of the intellectual
property rights of which it may become aware, in order for
INTERNATIONAL to remedy the situation (which it shall be the duty of
INTERNATIONAL to try to do), and, in particular, at INTERNATIONAL's
direction and expense, to take such actions as is required to protect
the rights and Trademark or to request DISTRIBUTOR, at INTERNATIONAL'S
expense, to take such actions on INTERNATIONAL's behalf; in the latter
case DISTRIBUTOR shall follow the instructions given by INTERNATIONAL,
provided, however, that if after such notice of infringement by
DISTRIBUTOR to INTERNATIONAL, INTERNATIONAL shall have failed to take
action to prevent such infringement, DISTRIBUTOR shall be authorized to
take such action as it deems appropriate to prevent such infringement.
11.11 In case the intellectual property rights or the Trademark protection
are not granted or are declared null and void, dependent or infringing
by a final court decision, DISTRIBUTOR may not claim any reimbursement
or damages or discount from INTERNATIONAL concerning the unpaid
invoices still due to INTERNATIONAL at the date of such court decision,
DISTRIBUTOR expressly waiving any and all rights of recovery against
INTERNATIONAL in this respect.
11.12 In case infringement actions are initiated against DISTRIBUTOR
concerning the sales of the Products, International shall give its
technical and legal advice to DISTRIBUTOR for its defense.
INTERNATIONAL and CONSERVER ENGINEERING shall indemnify and hold
DISTRIBUTOR harmless from and against any costs, expenses and damages
including any legal fees resulting directly or indirectly from any
claims or actions for patent or trademark infringement (whether
threatened or actually initiated) or as a result of any breach in whole
or in part of any representation or
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warranty, or from a judgement entered therein, which may be brought
against DISTRIBUTOR for such infringement as a result of its activities
hereunder. However, INTERNATIONAL is not obliged to join the
proceedings.
11.13 INTERNATIONAL and CONSERVER ENGINEERING represent and warrant that
jointly, they are the exclusive licensees of the right to distribute
the Products in the Territory and of the Trademark and all goodwill
associated therewith, free and clear of all liens, encumbrances,
security interests or rights of any other party whatsoever. There is no
litigation, claim or assessment pending or threatened contesting their
rights under the license indicated in the preamble of this Agreement.
To the best of their knowledge, INTERNATIONAL's use of the intellectual
property rights does not, and DISTRIBUTOR's use of the intellectual
property rights as contemplated herein will not, infringe upon any
other person's patents, trademarks or proprietary rights of any nature
whatsoever.
11.14 INTERNATIONAL and CONSERVER ENGINEERING represent and warrant jointly,
that, to the best of their knowledge, (i) the secret formula, processes
and the specifications are their exclusive rights as licensee and
licensor, respectively, do not infringe upon any other person's
ownership or proprietary rights, and that (ii) such secret formula and
processes, will yield Products that are good and merchantable and fit
for use with foodstuffs.
11.15 The execution of this Agreement by INTERNATIONAL has been duly
authorized by all necessary corporate action of INTERNATIONAL and
ENGINEERING and constitute the valid and binding obligation of
INTERNATIONAL and ENGINEERING. The execution of this Agreement by
INTERNATIONAL and the consummation of the transactions contemplated
hereby does not conflict with or result in default under or breach of
(1) INTERNATIONAL and ENGINEERING's Articles of Incorporation or
By-laws or other organization documents; (2) any agreement, indenture,
mortgage, contract or instrument to which INTERNATIONAL and ENGINEERING
are bound or by which any of their properties or assets are subject;
(3) any order, writ, injunction, decree or judgment of any court or
governmental agency applicable to INTERNATIONAL and ENGINEERING or to
which any of their assets are bound; or (4) any law or regulation
applicable to INTERNATIONAL and ENGINEERING or by which any of their
assets are bound.
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12. GUARANTEE
INTERNATIONAL warrants that all products which are to be shipped under this
Agreement shall qualify as Products and shall be of a quality as previously
demonstrated to DISTRIBUTOR.
Except as provided for herein, INTERNATIONAL does not guarantee that the
Products shall be free from defects, as sold by INTERNATIONAL to DISTRIBUTOR, or
concerning any damages or losses direct or indirect material or immaterial,
financial, commercial or otherwise, incurred by DISTRIBUTOR, its
sub-DISTRIBUTORS or agents or any third party.
INTERNATIONAL is not obliged to replace Products which arrive in a damaged
condition, other than Products which were defective when shipped, which shall be
replaced. As a compensation for any such damage, during the first year of the
Agreement commencing with the initial shipment of Products, INTERNATIONAL shall
ship to DISTRIBUTOR an additional 0.5% of the amount of Product ordered on each
order of Products ordered by DISTRIBUTOR.
After such initial year, the parties will negotiate an appropriate percentage
based upon the experience during the first year.
13. ASSIGNMENT OF AGREEMENT
DISTRIBUTOR may not in whole or part assign its rights under the present
Agreement to third parties without the prior written authorization of
INTERNATIONAL, except in the context of an agency or sub-distribution Agreement
as provided above, or to a controlled, controlling or common controlled entity.
14. TERM
14.1 The present Agreement shall remain in effect for an initial period as
follows (the "Initial Period"):
(i) at the time of the signing of this Agreement, the Initial Period
shall be equal to the duration provided for in the license granted
to CONSERVER ENGINEERING Ltd. and INTERNATIONAL, i.e. until May
12, 2005;
(ii) however, to the extent CONSERVER ENGINEERING Ltd. or INTERNATIONAL
succeed in obtaining a license for a longer duration, or succeed
in obtaining exclusive proprietary rights to the intellectual
property rights or on the Trademark and on all rights relating to
the know how and inventions upon which the Products are based, the
Initial Period
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shall be extended to a total duration of twenty (20) years as of
the date of this Agreement.
14.2 M. Xxxxx Xxxxx, who co-signs this Agreement to xxxx his approval to be
bound by the provisions of this section, agrees to use his best efforts
to secure, for CONSERVER ENGINEERING or INTERNATIONAL, (i) either
proprietary rights on the know how and inventions upon which the
Products are based, or (ii) an amendment to the existing license
granted to CONSERVER ENGINEERING Ltd. relating to the same, providing
for an exclusive license for the Territory for a period of 20 years
and, if possible, to have it renewable thereafter for additional terms
so as to satisfy section 14.3 hereof.
14.3 Subject to paragraph 14.4 this Agreement shall be automatically
renewable beyond the Initial Period for subsequent periods of three (3)
years.
14.4 The present Agreement can be terminated by either party without any
indemnity being due at the end of its term, by written notice one year
prior to the end of the initial twenty (20) year term and thereafter by
written notice six (6) months' prior to the end of each succeeding
three year term.
14.5 The Agreement can be terminated prematurely only pursuant to the
condition provided for in paragraph 15 hereunder.
15. PREMATURE TERMINATION
15.1 Each party may terminate the Agreement in case:
- of insolvency or bankruptcy of the other party, howsoever
manifested;
- substantial breach of any material provision of this Agreement by
the other party provided written notice has been given to the
other of the alleged breach and the other party has not cured or
commenced the cure of the breach within thirty (30) days after
delivery of such notice;
- the material breach by the other party is caused by force majeure
and the situation is prolonged beyond one hundred eighty (180)
days.
- failure of DISTRIBUTOR to reach seventy-five (75%) percent of the
minimum sales level of Products provided for in paragraph 3.9
hereof for two consecutive years,
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provided, however, that this paragraph shall not apply in respect
of the start-up period through December 31, 1997 nor if such
failure is caused by the inability of INTERNATIONAL to provide
DISTRIBUTOR with adequate quantities of Products on a timely
basis, and provided further that if DISTRIBUTOR believes this
marketing guidelines established by INTERNATIONAL are
inappropriate for marketing the Products in the Territory, it
shall advise INTERNATIONAL of its concerns with such strategy and
if the parties are unable to agree on the proper marketing
strategy DISTRIBUTOR shall not be accountable if there is a
failure to meet the sales goals agreed to as provided for in
paragraph 3.9.
15.2 INTERNATIONAL may terminate the present Agreement in case DISTRIBUTOR
does not pay the amounts due under the present agreement with twenty
(20) business days of receipt of notice to that effect.
15.3 In case of expiration or termination of the Agreement for whatever
reason, DISTRIBUTOR shall immediately stop selling the Products
purchased from International in the Territory, provided, however, that
DISTRIBUTOR shall have the right to sell its inventory over the 60 days
following such termination or expiration or, at INTERNATIONAL's option,
by INTERNATIONAL purchasing such inventory at DISTRIBUTORS's cost,
including all duties, shipping and other directly related costs.
15.4 Notwithstanding any other provision of this Agreement to the contrary,
if this Agreement is terminated as a consequence of the insolvency of
INTERNATIONAL, howsoever manifested, or if INTERNATIONAL's failure to
deliver sufficient Products on a timely basis has led to the
authorization of DISTRIBUTOR to manage the production, sourcing and/or
purchasing of the Products, or to produce directly the Products, all in
accordance with paragraph 8.7 of this Agreement, then DISTRIBUTOR shall
have a continuing right to produce, market, use and generally exploit
commercially the Products and use the Trademark in conjunction
therewith, such right to be coterminous with the license (and any
extension thereof) described in paragraph 14.1 of this Agreement.
16. CONFIDENTIALITY
16.1 All technical and commercial information provided to DISTRIBUTOR by
INTERNATIONAL or which comes to the knowledge of DISTRIBUTOR in the
context of the execution
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of the present Agreement, shall be considered confidential by
DISTRIBUTOR and shall not be disclosed to any other company, person or
organization except after prior written authorization by INTERNATIONAL,
provided, however, that if a court orders that DISTRIBUTOR disclose any
such confidential information, DISTRIBUTOR shall immediately notify
INTERNATIONAL of such order, and thereafter shall be excused from the
obligations of this paragraph to the extent and within the limits of
that court order.
16.2 However, DISTRIBUTOR may give this information to its employees, its
agents (including consultants and advisers) or its sub-distributors if
necessary for the marketing of the Products, provided these persons
shall comply with the obligations of the present paragraph.
16.3 DISTRIBUTOR shall adopt internal procedures to preserve the
confidential character of the information, including procedures of
transmission of information.
16.4 The above mentioned obligations shall remain in force after the
expiration or termination of the present Agreement for whatever reason,
but do not apply to information which has fallen in the public domain
or would fall in that domain in the course of the performance under the
present Agreement, as long as the disclosure was not caused by the
DISTRIBUTOR or its personnel, its sub-distributors or its agents.
17. INDEPENDENCE
Neither Party is an agent or employee of the other. The Parties have no
authority whatsoever to assume, create or incur any obligation or liability on
behalf of the other or to bind the other in any manner.
18. APPLICABLE LAW
18.1 Delaware law is applicable to this agreement.
18.2 Any dispute or controversy arising out of this agreement shall be
submitted for resolution by arbitration to the International Chamber of
Commerce in Paris, France.
19. MISCELLANEOUS
19.1 Neither party is responsible for any loss or damages by delays or
non-performance of obligations under this Agreement caused by force
majeure, provided each party notifies the other as soon as possible if
such events.
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Such event, however, does not exempt DISTRIBUTOR form its obligation to
pay INTERNATIONAL the amounts due.
19.2 The present Agreement (including the Annexes to the Agreement which
form an integral part of the Agreement) constitutes the whole Agreement
between the parties and supersedes all other prior oral or written
agreements between the parties.
19.3 Except if expressly provided to the contrary, this Agreement may not be
modified or amended except by a writing, signed by the parties'
authorized representatives.
19.4 All notifications or claims of whatever nature should be addressed by
one party to the other in writing and delivered personally or sent by
mail return receipt requested:
If to Conserver International,
M. Xxxxx Xxxxx
0, Xxx Xxxxxxx Xxxxxxxx
00000 Xxxxx, Xxxxxx
With a copy to:
X. Xxxxxxx Van Leynseele
Stibbe Simont Xxxxxxx Duhot
00-00 Xxx Xxxxx Xxxxxxxxx
0000 Xxxxxxxx, Xxxxxxx
If to Conserver Engineering,
0 Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx
With a copy to:
X. Xxxxxxx Van Leynseele
Stibbe Simont Xxxxxxx Duhot
00-00 Xxx Xxxxx Xxxxxxxxx
0000 Xxxxxxxx, Xxxxxxx
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If to Conserver North America, Inc.
Corporation Trust Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx
If to Conserver Corporation of America,
Mr. Xxxxxxx Xxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxxx Xxxxxxxxx, Esq.
Mezan, Xxxxxxxxx & Xxxxxxxxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
And to:
Xxxxxxx Xxxxxxxxxx, Esq.
XxXxxxxx, Xxxxxxxxxx & Xxxx
Xxxx Xxxxx, Xxxxx 0
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
or to such other address as may hereby be designated in writing to the
other parties. Notifications shall be deemed to be made on the third
day after the date of delivery to the postal services. When made by
personal delivery, they shall be effective when made.
19.5 The titles of the paragraphs of the present Agreement are for
information purposes only and are not a part of the present Agreement
and cannot be used for its interpretation.
19.6 Except if expressly provided to the contrary, the failure of a party to
insist upon strict performance under this Agreement, on any occasion,
shall not be considered a waiver or deprive that party of the right to
insist upon strict compliance to that term or any other term of this
Agreement, now or in future, while any waiver should be made in
writing.
19.7 If any provision of this Agreement is considered null and void by an
enforceable decision of any competent Court or administrative
authority, such invalidity shall not affect
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the validity of the remaining provisions. The parties shall substitute
for any invalid provision a mutually acceptable valid one which shall
as much as possible meet the commercial aims of the former invalid
provision.
IN WITNESS WHEREOF, the parties hereto have signed and executed the
present Agreement at the place and date mentioned hereunder.
CONSERVER CORPORATION OF CONSERVER INTERNATIONAL B.V.
AMERICA
BY: By:
----------------------------- ---------------------------
Date: 10/9/96 Date: 10/9/96
----------------------------- ---------------------------
Place: Place:
----------------------------- ---------------------------
Title: Chairman Title:
----------------------------- ---------------------------
Signature: /s/ Xxxxxxx X. Xxxxx Signature: /s/ B. Xxxxx Xxxxx
----------------------- ---------------------
Title: Executive Vice President Title:
Signature: /s/ Xxxx Xxxxxx Signature:
----------------------- -----------------------
CONSERVER NORTH AMERICA, INC.
BY: By:
----------------------------- ---------------------------
Date: 10/9/96 Date:
----------------------------- ---------------------------
Place: Place:
----------------------------- ---------------------------
Title: B. Xxxxx Xxxxx Title:
----------------------------- ---------------------------
The undersigned does hereby agree
to be bound but hereto but only with
respect to Items. A., B., C., D., E.,
F., 6.1, 6.2, 8.7, 11.1, 11.8, 11.9,
11.10, 11.12, 11.13, 11.14, and 11.15;
CONSERVER ENGINEERING
BY: By:
----------------------------- ---------------------------
Date: 10/9/96 Date:
----------------------------- ---------------------------
Place: Place:
----------------------------- ---------------------------
Title: Title:
----------------------------- ---------------------------
The undersigned does hereby agreed to
be bound but only with respect to
item 14.2
/s/ B. Xxxxx Xxxxx
-----------------------------
B. Xxxxx Xxxxx
