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EXHIBIT 10(b)
EXCLUSIVE SUPPLY AGREEMENT
AMANA COMPANY, L.P., a limited partnership, whose general partner is
Goodman Holding Company, a Texas corporation ("Amana") and Eye Technologies,
Inc. And Star Tobacco & Pharmaceuticals, Inc., including their successors,
assigns, affiliates, and licensees (collectively referred to as "Star"), in
consideration of the mutual covenants and promises hereinafter made, and for
other good and valuable consideration acknowledged by each party to be
satisfactory and adequate, hereby consent and agree as follows:
1. TERM OF AGREEMENT. The term of this Agreement shall be fifteen (15)
years from the date last executed by the parties hereto.
2. PRODUCT. In accordance with specification provided by Star to Amana,
Amana will manufacture and sell to Star, and Star will purchase or
lease from Amana for resale and cause its licensees and affiliates to
purchase or lease, microwave equipment described below to be used for
the processing of tobacco. (The Product"). The Product will include
only the equipment specified below, and subsequent equipment as agreed
upon in writing by the parties:
- Microwave Applicators
- Microwave generating transmitters (915 MH(2) and 2450 MH(2))
- Microwave System Controllers
Unless otherwise agreed to in writing, all equipment will be new and
unused.
3. EXCLUSIVITY. For the term of this Agreement Star agrees to purchase or
lease, and shall cause its licensees and affiliates to purchase or
lease, exclusivity from Amana, all of Star's requirements and needs for
Product, microwave equipment and parts. This Agreement shall apply to
the sale or use of Product, microwave equipment and parts anywhere in
the World.
4. PRICE AND TERMS OF SALE.
a) Star shall pay the prices shown on Exhibit "A" for all
Products purchased under this Agreement. Prices will remain
firm for six (6) months from first date of volume production.
Prices for subsequent Product will be based on Amana's then
existing commercial terms and conditions and shall be
comparable to sales of products to unrelated third parties.
b) Prices do not include sales, use, property, excise or any
other tax which may be or become applicable to the manufacture
or sale of Product to Star prior to delivery of Product to
Star.
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5. ORDERS/FORECASTS. Star shall provide a rolling twelve (12) month
forecast by the 15th day of each month. Forecasts for the first ninety
(90) days shall be treated as firm orders and will be shipped by Amana
and accepted and paid for by Star per the forecast.
6. INSTALLATION/DESIGN CHANGES. The final system layout, including
specifications and drawings, relating to installation or design of the
equipment shall be provided by Star and agreed upon in writing by Amana
no later than forty-five (45) days before shipment. Subsequent
modifications to the system layout or equipment shall be determined by
Star, subject to additional charges, and paid by Star. Any such
modification and charge therefor shall be specified in a change order
provided to Amana and acknowledged in writing by Star.
7. SUPERVISION OF INSTALLATION. Star is responsible for connection of
electrical and plumbing services to the equipment at the time of
installation and the quality of that service.
Amana service personnel will provide technical support at the time of
installation completion and system start up at the installation site
for up to seven (7) consecutive calendar days.
a) Star shall complete all plumbing and wiring before an Amana
technician arrives at the system site.
b) Star is responsible for assuring that all electrical wiring
and plumbing to and between system components conforms to
local codes.
c) Star will insure main electrical service of:
United States: 480 volts 650 hz with a standard +/-5%
constant supply
Select International Markets: 380 volts 05 hz with a
standard +/-5% constant supply Any power conditioning
necessary to achieve system power requirements is the
responsibility of Star or the end user.
d) If Amana service personnel are required to be present beyond
seven (7) consecutive calendar days or leave the installation
and return later because of any delay caused by Star, Star
will be billed at the rate of $70 per hour for up to eight (8)
consecutive hours (four (4) hour minimum billing) and $105 per
hour for additional consecutive hours and for weekends and
Amana holidays, plus travel and subsistence expenses for the
extended or return period.
8. FORCE MAJEURE. Delivery dates quoted are approximate and are based on
current schedules. Amana shall incur no liability for failure to
deliver for any cause beyond its control, including by way of
illustration and not limitation, fire, flood, strike, unusually severe
weather, windstorm, severe accidence at plant, unavailability of
adequate material or labor, acts of God or governmental action of any
kind.
9. PATENTS. All inventions, devices and processes developed by Amana which
relate to microwave devices shall be owned by Amana. All inventions,
devices and process which relate exclusively to the processing of
tobacco shall be owned by Star. No license under any patent rights held
by Amana or Star shall be deemed to be granted by virtue of this
agreement.
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10. TRADEMARKS.
a) With respect to Star's trademarks or trade names, Star
warrants and represents to Amana that Star has the full right
to use the same as applied to all or any of the Products, and
that the use of any such trademarks and/or trade names shall
not constitute an infringement of the rights of any third
party.
b) Star shall indemnify and hold Amana harmless against any
claim, demand, suit, expense or proceeding brought against
Amana based on the use of any of such trademarks or trade
names upon any of the Product hereunder, and shall pay all
damages and costs awarded therein against Amana. Star shall
pay for all costs of counsel, court costs, attorneys fees, and
other expenses arising from any such claim.
c) Star will not use any Amana trademarks or make reference to
Amana as the manufacturer of the Product, except as may be
required by law. Star shall prevent any use of Amana
trademarks or trade names by any dealer, distributor, agent,
licensee, assignee or user in connection with the Product.
11. STAR INDEMNIFICATION. Star agrees to indemnify and hold Amana harmless,
from and against any and all liabilities, costs, expenses, demands,
claims, lawsuits, causes of action, and damages (i) arising out of or
occasioned by negligent, faulty or improper installation and/or
servicing or alteration of Product by Star or its employees or agents,
or (ii) arising out of or occasioned by the use of parts or
specifications supplied by Star or Star's vendors for the production of
the Product. Amana will timely notify Star of any claim, demand,
lawsuit or proceedings.
12. WARRANTY. THE LIMITED WARRANTIES SET FORTH HEREIN ARE EXPRESSLY IN LIEU
OF OTHER WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, AND
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE IS HEREBY EXPRESSLY EXCLUDED.
a) Amana warrants all new industrial microwave equipment and
accessories to be free from defects for a period of one (1)
year from date of original installation.
b) Amana warrants that all refurbished Amana industrial microwave
equipment and accessory parts to be free from defects for a
period of ninety (90) days from date of original installation.
c) New equipment magnetron tube and circulator parts are
warranted for 4000 run-time hours of life on a prorata basis,
or two (2) years from date of shipment, whichever occurs
first.
d) Amana's liability under this warranty is limited to:
1) The repair or replacement, at its sole discretion, of
any part found to be defective under normal use and
service within the warranty period specified
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for the particular part and labor for ninety (90)
days from date of original system installation,
exclusive of parts exchange freight and technician
travel and subsistence charges, provided:
a) Amana is promptly notified in writing upon
discovery of such defects.
b) The defective parts are returned to Amana,
transportation charges prepaid, in
accordance with Amana's instructions and
authorization.
c) Misuse, abuse, neglect, accident, or
adjustments not specified in the Amana
Operating and Maintenance Manual do not
cause such defects.
d) Equipment has been installed in accordance
with Amana's installation instructions and
operated in accordance with good engineering
practice.
e) Star pays part exchange freight cost and, technician travel
and subsistence charges if an Amana service technician is
required at the system site to replace the defective part.
f) This warranty applies only to equipment and accessories
manufactured by Amana. Any products, parts, and accessories
not manufactured by Amana carry only the warranty provided by
the manufacturer thereof, which upon request shall be assigned
by Amana to Star.
g) All warranty replacement parts assume the unexpired portion of
the original parts warranty. After expiration of the original
warranty period, replacement parts manufactured by Amana are
warranted for ninety (90) days from shipment.
h) THE WARRANTY IS INVALID IF SYSTEM EQUIPMENT IS MODIFIED
WITHOUT ADVANCE CONSENT AND WRITTEN APPROVAL FROM
AMANA.
13. CONSEQUENTIAL DAMAGES. Except as otherwise expressly set forth in this
Agreement, in no event shall Amana be liable on a claim of any kind
(whether in contract, tort or warranty) for any special, incidental or
consequential damages under any provision of this Agreement.
14. STAR WARRANTY. Star will assume full responsibility for the promotion,
sale and delivery of all Product sold by Star to its customers and will
indemnify and hold Amana harmless from any and all claims arising out
of or occasioned by (a) Star's improper promotion, sales or delivery,
(b) the use of Star's trademarks or production descriptions, (c)
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any misrepresentations by Star, its agents, employees regarding Product
or the qualities or attributes of Product.
15. NOTICES. Notices required or permitted hereunder will be deemed to have been
properly given if sent by United States mail, first class, postage prepaid,
return receipt requested or by telecopy, telex or telegram, confirmed by letter,
addressed to:
Amana Appliances Star Tobacco & Pharmaceuticals, Inc.
ATTENTION: Legal ATTENTION: CEO
0000 000xx Xxxxx 00 Xxxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000 Xxxxxxxxxx, Xxxxxxxx 00000
Notices shall be deemed to have been given upon receipt by the party to
which they are addressed.
16. RELATIONSHIP OF THE PARTIES. Neither party is an agent for the other.
Each party acknowledges that the relationship between Amana and Star is
that of a vendor-vendee. This Agreement and any subsequent actions
between Star and Amana shall not be construed to create a partnership,
joint venture, or agency relationship. All improvements, inventions,
discoveries, and work product resulting from the work performed by
Amana or discussions between the parties, relating to microwave
equipment or devices shall be owned by Amana.
17. ASSIGNMENT. Neither this Agreement, nor any of the rights or interests
of Star or Amana hereunder may be assigned, transferred or conveyed by
operation of law or otherwise without the prior written consent of the
other except that either party may assign this Agreement to one or more
affiliated entities.
18. APPLICABLE LAW. This Agreement will be binding upon the parties hereto,
their successors and assigns and will be construed, enforced and
performed in accordance with the laws of the State of Texas.
19. ARBITRATION. All disputes arising under this agreement shall be subject
to mandatory binding arbitration under the rules of the American
Arbitration Association (AAA). The arbitration shall take place in
Houston, Xxxxxx County, Texas. The parties shall chose an arbitrator to
settle the dispute. If the parties cannot agree upon an arbitrator
within ten (10) days from the date upon which notice is given, the AAA
shall appoint an arbitrator. Each party waives any objection to
personal jurisdiction in Houston, Xxxxxx County, Texas, and submit to
jurisdiction over the person and entity in Houston, Xxxxxx County,
Texas.
20. ENTIRE AGREEMENT. This Agreement and all Exhibits, attachments and
appendices together constitute the entire agreement on the subject
matter hereof between the parties hereto and supersedes all prior
agreements and understandings between the Parties. This Agreement may
not be amended or modified unless set forth in writing and signed by
both Amana and Star. In case of any conflict between this Agreement and
any purchase order,
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acceptance, correspondence, memorandum, or document exchanged between
Star and Amana during the term of this Agreement, this Agreement
shall govern and prevail.
IN WITNESS WHEREOF, the parties have agreed, accepted, and executed this
Agreement in duplicate this _____ day of ______________________, 1998.
STAR TOBACCO & AMANA COMPANY L.P.
PHARMACEUTICALS, INC. Goodman Holding Company,
General Partner
BY: BY:
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NAME: NAME:
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TITLE: TITLE:
----------------------------- --------------------------
DATE: DATE:
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EXHIBIT "A"
I. Microwave Applicators
II. Microwave Generating Transmitters (915 and 2450 MH(2))
Mega Hertz Price
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a) 915 MH(2) $62,000.00
b) 2450 MH(2) TBD
III. Microwave System Controllers for Above
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TBD - To be determined
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