SUPPLY AND DISTRIBUTION AGREEMENT
This
Supply and Distribution Agreement (the “Agreement”),
effective as of September 15, 2006 (the “Effective
Date”),
is
made between O2Diesel Corporation (“O2Diesel”),
having its registered office at 000 Xxxxxxxx Xxxxx, Xxxxxx, XX 00000, XXX and
Energenics Pte Limited (“Energenics”)
having
its registered office at 0 Xxxxxx Xxxxxxxxx, Xxxxxx Xxxx Xxxxx 0 #00-00X,
Xxxxxxxxx 000000 (each a “Party,”
and
collectively the “Parties”).
WHEREAS,
O2Diesel has developed proprietary technology for oxygenating diesel fuel,
including a proprietary fuel additive, and market development experience from
its activities in the United States and Brazil;
WHEREAS,
Energenics desires to obtain a supply of O2Diesel’s proprietary fuel additive;
and
WHEREAS,
O2Diesel desires to appoint Energenics as a distributor and provide such
additive and support;
NOW,
THEREFORE, in consideration of the mutual promises contained in this Agreement
and for other good and valuable consideration, the adequacy and sufficiency
of
which are hereby acknowledged, the Parties, intending to be legally bound,
hereby agree as follows.
1. Definitions.
| 1.1 |
“Affiliate”
with respect to a Person, means any other Person controlling, controlled
by or under common control with, such first
Person.
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| 1.2 |
“Change
of Control”
means a merger, consolidation, reorganization, recapitalization or
sale,
transfer or other disposition of all or substantially all of the
assets of
the company.
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| 1.3 |
“Closing”
means the consummation of the purchase and sale of shares of common
stock
and warrants for the future purchase of common stock of O2Diesel,
as such
is contemplated and described by the Common Stock and Warrant Purchase
Agreement executed by O2Diesel and an Affiliate of Energenics on
September
15, 2006.
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| 1.4 |
“Closing
Date”
means the date of Closing as agreed to by the Parties in Section
2.1 of
the Common Stock and Warrant Purchase
Agreement.
|
| 1.5 |
“O2Diesel
Additive”
means an O2Diesel proprietary compound that allows the mixing of
diesel
fuel and ethanol.
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| 1.6 |
“O2Diesel
Product”
means oxygenated diesel fuel comprising base diesel fuel, the O2Diesel
Additive, ethanol and a cetane improver, conforming to the specifications
for such product provided by O2Diesel (including all improvements
or
branded products).
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[*]
=
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED
BY A
“*”.
| 1.7 |
“Person”
means a natural person, a corporation, a partnership, a trust, a
joint
venture, any governmental authority or any other entity or
organization.
|
| 1.8 |
“Term”
shall have the meaning given in Section
11.1.
|
| 1.9 |
“Territory”
means the following countries in South Asia and Asia Pacific, India,
Australia, New Zealand, Singapore and Hong Kong. The countries of
South
Africa, Philippines and Thailand shall be included in the Territory
subject to trials being conducted within twelve (12) months from
the date
of this Agreement.
|
| 1.10 |
“Third
Party”
means any Person that is not a Party to this
Agreement.
|
2. Supply
of O2Diesel Additive.
| 2.1 |
Appointment
of Distributor.
As
of the Closing Date, O2Diesel hereby appoints on an exclusive basis
Energenics as a distributor of O2Diesel Product in the Territory
subject
to the terms and conditions of this Agreement. For as long as Energenics
has materially performed and continues to materially perform its
obligations under this Agreement, O2Diesel is prohibited from entering
into any agreement and/or arrangement to directly or indirectly distribute
or sell and/or authorise a Third Party to distribute and/or sell
O2Diesel
Product in the Territory and distribute or sell to any Third Party
O2Diesel Additive in the Territory. For as long as O2Diesel has materially
performed and continues to materially perform its obligations under
this
Agreement, Energenics is prohibited from purchasing any competing
product
of O2Diesel Additive.
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| 2.2 |
Ordering
and Delivery.
Energenics
shall purchase and O2Diesel shall sell the O2Diesel Additive on the
basis
of Energenics purchase orders. Energenics shall submit the purchase
orders
for a requested quantity of O2Diesel Additive at least twelve (12)
weeks
prior to the requested delivery date. O2Diesel shall supply the requested
quantity at a price agreed in the purchase order and the delivery
shall be
CIF. Further, the terms and conditions of the purchase order shall
be in
addition to the terms of this Agreement provided that, if any term
of the
purchase order is inconsistent with the terms of this Agreement,
the terms
of this Agreement shall prevail.
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| 2.3 |
Minimum
Volume.
The
Parties have agreed that Energenics shall place orders and O2Diesel
shall
supply the minimum of O2Diesel Additive (the “Minimum
Volume”)
at the price as set forth on Schedule
A
and O2Diesel shall in no event fail to supply the Minimum Volume
provided
however that, if the price of ethanol increases by *
(*%)
over the agreed price (“Price
Threshold”)
Energenics may at its option temporarily defer purchasing the Minimum
Volume (“Deferred
Volume”)
and in such a case, Energenics shall be obligated to purchase the
Deferred
Volume once the price decreases below the Price Threshold over the
same
amount of time the Deferred Volume was deferred. For example, if
the
ethanol price is greater than the Price Threshold for six (6) months,
Energenics shall have up to six (6) months to purchase the Deferred
Volume. In the event that O2Diesel ceases to distribute the O2Diesel
Additive in the Territory, O2Diesel shall assist Energenics in obtaining
an agreement with Cognis Deutschland GmbH on the same terms and conditions
that O2Diesel or its subsidiaries was supplying the O2Diesel Additive
in
the Territory.
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| 2.4 |
Forecasting.
After the first commercial sale of O2Diesel Product, on a quarterly
basis
within five (5) days of the beginning of each quarter, Energenics
shall
provide non-binding forecasts of its expected requirements of O2Diesel
Additive for the following twelve (12)
months.
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| 2.5 |
Use
of O2Diesel Additive.
Energenics shall: (a) use O2Diesel Additive only to make O2Diesel
Product,
in accordance with all specifications and guidance provided by O2Diesel
for the manufacture, use, handling, storage, transportation and disposal
of O2Diesel Additive and O2Diesel Product; (b) resell O2Diesel
Additive only as blended into O2Diesel Product or to Third Parties
who
agree to blend the O2Diesel additive into O2Diesel Product, in accordance
with all specifications and guidance provided by O2Diesel for the
manufacture, use, handling, storage, transportation and disposal
of
O2Diesel Additive and O2Diesel Product; and (c) not analyze or reverse
engineer the O2Diesel Additive to determine its composition or method
of
manufacture.
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| 2.6 |
Sourcing
of Other Supplies.
O2Diesel acknowledges that, excluding O2Diesel Additive, neither
Party is
responsible for ensuring that the end user / blender has sufficient
equipment and supplies for its performance under this Agreement,
including
supplies of base diesel fuel, ethanol and cetane improver for the
production of O2Diesel Product.
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| 2.7 |
Government
Approvals.
Energenics
together with the end user/purchaser shall investigate and determine
whether any governmental approvals will be necessary for the distribution
and use of O2Diesel Product in the Territory prior to selling any
O2Diesel
Product in the Territory. If Energenics together with the end
user/purchaser have determined that governmental approvals are necessary
for the distribution and use of O2Diesel Product in the Territory,
they
shall, promptly thereafter apply for such approvals in their name.
O2Diesel agrees to provide all necessary information and support
Energenics in obtaining such approval. A
report
of this information shall be delivered to O2Diesel promptly. In
any
event, Energenics shall consult with O2Diesel concerning all material
issues in obtaining and maintaining governmental approvals and provide
O2Diesel copies of all test results, applications, correspondence
and
other documents relating to government approvals. O2Diesel shall
neither
have any right to reproduce, use and disclose the foregoing approval
nor
shall it authorize the same for purposes of distributing oxygenated
diesel
fuel or other products without the prior written consent of Energenics.
In
any event, Energenics shall consult with O2Diesel concerning all
material
issues in obtaining and maintaining governmental approvals and provide
O2Diesel copies of all test results, applications, correspondence
and
other documents relating to government approvals. O2Diesel shall
have the
perpetual right to reproduce, use and disclose the foregoing and
authorize
the same for purposes of distributing oxygenated diesel fuel or other
products..
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| 2.8 |
Other
Territories.
Energenics and its Affiliates shall not (a) export any O2Diesel Additive
or O2Diesel Product from the Territory or (b) sell O2Diesel Additive
or
O2Diesel Product to any Third Party with the knowledge that such
Third
Party is likely to resell O2Diesel Additive unblended, resell O2Diesel
Product, or export O2Diesel Additive or O2Diesel Product from the
Territory. O2Diesel shall endeavor that importation and use of O2Diesel
Product in the Territory by a Third Party shall be only from Energenics
and not from O2Diesel or another authorized source outside the Territory.
Notwithstanding the foregoing, each Party shall notify the other
Party
about any such activity and the Parties shall consult in good faith
whether there is any practicable action that should be taken as a
commercial matter to address the
situation.
|
| 2.9 |
Safety
and Blending Procedures.
Promptly after the Effective Date, O2Diesel shall provide to Energenics
a
manual describing procedures for the use, blending and handling of
O2Diesel Additive and O2Diesel Product, including a material safety
data
sheet, procedures for blending O2Diesel Product, fuel tank preparation
procedures for the storage of O2Diesel Product and sample warning
decals
(the “Manual”).
O2Diesel shall have the right to reasonably add to, delete from and
otherwise modify the Manual at any time. Energenics and its customers
shall at all times blend, handle and store the O2Diesel Additive
in
accordance with the Manual. In the event such addition or deletion
results
in any reasonable costs to Energenics, the same shall be borne by
O2Diesel.
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3. Payments.
| 3.1 |
Sales
Targets.
O2Diesel and Energenics have agreed to a sales target for the first
three
(3) years and three (3) months of the Term, as set forth in Schedule A.
If the targets cannot be achieved Energenics will inform O2Diesel
and
mutual accepted targets will be agreed upon. If in good faith the
Parties
can not agree to a target, and Energenics’ orders fall below fifty percent
(50%) of the previously agreed target, O2Diesel shall have the right
to
change Energenics’ as an exclusive distributor of O2Diesel Additive to a
non-exclusive basis.
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| 3.2 |
Payments
Due.
All purchase orders from Energenics will be covered by a letter of
credit
(“L/C”)
from first class bank in favor of O2Diesel at least thirty (30) days
in
advance of such order. Energenics shall make the payment once telephonic
evidence of a shipment is received by Energenics. The terms of payment
covered by L/C will be mutually agreed. Such L/C shall be issued
by a
mutually agreed-upon United States
bank.
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| 3.3 |
Payments
in General.
All amounts payable by Energenics hereunder shall be paid in U.S.
Dollars
to O2Diesel by wire transfer, or by such other method mutually agreed
upon
by the Parties, for value no later than the due date thereof (with
twenty-four (24)) hours advance notice of each such wire transfer)
to such
bank account or accounts as O2Diesel shall designate in writing within
a
reasonable period of time prior to such due date.
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| 3.4 |
Late
Payments.
If
Energenics fails to make any payment required under this Agreement
when
due, Energenics shall pay interest on such amount at the rate of
2% per
month, or the highest rate allowed by law, whichever is less, from
the
date the payment was due until the date the payment is made in full.
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| 3.5 |
Taxes.
Energenics
or the end user/purchaser shall pay applicable import taxes and in
connection with purchase from O2Diesel and all amounts due hereunder
shall
be net of any taxes or similar governmental charges as Energenics
or the
end user/purhcaser may be liable. All other taxes and other associated
costs shall be borne by the party liable for the same.
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4. Use
of Trademarks.
| 4.1 |
License
Grants.
|
| 4.1.1 |
O2Diesel
hereby grants to Energenics an exclusive license,
subject to instances that are beyond O2Diesel’s control, to use the name
“O2Diesel” and the “O2Diesel” logo or such different or additional
trademarks as O2Diesel may specify (the “O2Diesel Trademarks”)
in the Territory during the Term of this Agreement in connection
with the
marketing, sale and distribution of O2Diesel Product that conforms
to
O2Diesel’s applicable specifications therefor and is produced using
O2Diesel Additive purchased from O2Diesel pursuant to this Agreement.
Energenics shall not interfere with the validity and O2Diesel’s ownership
of the O2Diesel Trademarks and shall not do anything inconsistent
with
such validity and ownership. O2Diesel shall give a six months notice
to
Energenics to discontinue the use of O2Diesel Trademark and Energenics
shall cease to use it within a reasonable time, provided that O2Diesel
shall not during the Term of this Agreement notify Energenics to
discontinue the use of O2Diesel Trademark. It is agreed between the
Parties that Energenics shall have the right to sublicense the O2Diesel
Trademarks to its Affiliates on terms and condition contained in
this
Agreement, with O2Diesel’s prior written consent, which consent not to be
unreasonably withheld.
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| 4.1.2 |
Energenics
hereby grants to O2Diesel a nonexclusive, worldwide license to use
Energenics’s name and logo (the “Energenics
Trademarks”)
during the Term to identify Energenics as the exclusive distributor
of
O2Diesel Product in the Territory.
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| 4.1.3 |
Notwithstanding
anything contained herein, Energenics shall be free to re-brand the
O2Diesel Product in the Territory as it may deem fit with O2Diesel’s prior
written consent, which consent not to be unreasonably
withheld.
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| 4.2 |
Limitations
on Use of Marks.
Energenics’s use of the O2Diesel Trademarks and O2Diesel’s use of the
Energenics Trademarks shall (a) be consistent with the high quality
image
of the other Party so as to enhance the marks and the goodwill relating
thereto, (b) conform to the style and usage guidelines prescribed
by the
other Party, (c) inure to the benefit of the other Party, and (d) be
in a manner so as not to cause embarrassment to the other Party,
tend to
discredit the other Party’s image or reputation for quality, or suggest
that any actions undertaken are actions of the other Party. On request,
Energenics promptly shall provide to O2Diesel samples of Energenics’s use
of the O2Diesel Trademarks, and O2Diesel promptly shall provide to
Energenics samples of O2Diesel’s use of the Energenics Trademarks. Nothing
in this Agreement shall interfere with a Party’s use of its marks anywhere
in the world, except that during the Term, so long as the terms and
conditions of this Agreement are met by Energenics, O2Diesel shall
not use
or authorize the use of the O2Diesel Trademarks in the Territory
to
indicate a source of oxygenated diesel fuel in the Territory other
than
Energenics.
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| 4.3 |
Protection
of Marks.
All rights with respect to the O2Diesel Trademarks and Energenics
Trademarks not expressly granted in this Agreement are reserved by
O2Diesel or Energenics, as the case may be. Energenics acknowledges
the
validity and O2Diesel’s ownership of the O2Diesel Trademarks, and O2Diesel
acknowledges the validity and Energenics’s ownership of Energenics’
Trademarks. Neither Party shall challenge the validity or ownership
of the
other Party’s marks or do anything inconsistent with such validity and
ownership. Neither Party shall use any unitary composite xxxx consisting
of marks of both Parties. Neither Party shall apply for registration
of
any of the other Party’s marks as a trademark in any country or oppose
registration of the other party’s marks by the other Party. The Parties
may agree in writing that Energenics shall have the right to enforce
the
O2Diesel Trademarks against any particular infringement by a distributor
of oxygenated diesel fuel in the Territory. In other respects, each
Party
shall have the sole right, but not the obligation, to register, protect
and enforce its marks.
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| 4.4 |
Additional
Trademarks.
Notwithstanding anything contained herein, Energenics shall be free
to
re-brand the O2Diesel Product in the Territory as it may deem fit
with
O2Diesel’s prior written consent, which consent not to be unreasonably
withheld. If Energenics believes that a trademark other than the
O2Diesel
Trademarks should be used to identify O2Diesel Product in the Territory,
it shall give a notice in writing to O2Diesel. In the absence of
a written
agreement to the contrary, any such re-branded xxxx shall be owned
by
Energenics and treated as an Energenics Trademark for the purposes
of this
Agreements.
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5. Confidentiality.
| 5.1 |
Definitions.
In connection with its activities under this Agreement, a Party (the
“Receiving
Party”)
may receive or otherwise have access to “Confidential Information” of the
other Party (the “Disclosing
Party”).
The term “Confidential
Information”
include any material or information relating to the Disclosing Party’s
technology, research, development, product plans, trade secrets,
finances
or business operations that the Disclosing Party treats as confidential
as
well as this Agreement, but not any material or information that
the
Receiving Party can demonstrate (a) is or becomes publicly known
through
no fault of the Receiving Party; (b) is developed independently by
the
Receiving Party; (c) is known by the Receiving Party when disclosed
by the
Disclosing Party if the Receiving Party does not then have a duty
to
maintain its confidentiality; or (d) is rightfully obtained by the
Receiving Party from a Third Party not obligated to preserve its
confidentiality who did not receive the material or information directly
or indirectly from the Disclosing
Party.
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| 5.2 |
Limitations
on Use and Disclosure.
A
Receiving Party shall not use the Disclosing Party’s Confidential
Information for any purpose other than performance of this Agreement
and
shall not disclose Confidential Information to any Person other than
its
employees and its independent contractors subject to a nondisclosure
obligation comparable in scope to this Article, which employees and
independent contractors have a need to know such Confidential Information
for the performance of this Agreement. Upon the expiration or termination
of this Agreement or such earlier time as particular Confidential
Information may no longer be necessary for the performance of this
Agreement, a Receiving Party shall, on request, return or destroy
all
embodiments of the Disclosing Party’s Confidential Information in its
possession or control. The Parties shall notify their employees of
the
confidential nature of the Confidential Information, and the Receiving
Party shall be liable to the Disclosing Party for any unauthorized
use or
disclosure made by any person receiving Confidential Information
the
Receiving Party.
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| 5.3 |
Exception.
Notwithstanding
Section 5.2, a Receiving Party may disclose Confidential Information
to the extent required by a court or other governmental authority,
provided that (a) the Receiving Party gives the Disclosing Party
reasonable notice of the disclosure, (b) the Receiving Party uses
reasonable efforts to resist disclosing the Confidential Information
and
minimize the amount of Confidential Information disclosed, and (c)
the
Receiving Party cooperates with the Disclosing Party on request to
seek a
protective order or otherwise limit the effects of the disclosure.
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| 5.4 |
Acknowledgement.
The Parties acknowledge that either Party’s breach of this Article 7 would
cause the other Party irreparable injury for which it would not have
an
adequate remedy at law. In the event of a breach, the non-breaching
Party
shall be entitled to injunctive relief in addition to any other remedies
it may have at law or in equity.
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6. Other
Intellectual Property Matters.
| 6.1 |
In
General.
Subject to all of Energenics’s obligations under this Agreement, O2Diesel
hereby acknowledges that Energenics may practice O2Diesel’s patents and
trade secrets in the Territory during the Term to the extent necessary
to
blend O2Diesel Product using O2Diesel Additive purchased from O2Diesel
under Article 4. As between the Parties, O2Diesel shall retain all
right,
title and interest in and to its patents, trade secrets and other
intellectual property ( the “O2Diesel
Intellectual Property”).
All rights with respect to O2Diesel Intellectual Property not expressly
granted to Energenics in this Agreement are reserved by O2Diesel,
and
O2Diesel grants no licenses by implication or estoppel. Energenics
shall
take no action inconsistent with such O2Diesel Intellectual Property
rights. For the avoidance of doubt, and without limiting the generality
of
the foregoing, (a) Energenics is not authorized to manufacture, offer
for
sale or sell O2Diesel Additive as such; (b) Energenics shall not
grant
sublicenses under the O2Diesel Intellectual Property to any Third
Party
without the written consent of O2Diesel, which consent not to be
unreasonably withheld; and (c) Energenics shall not challenge the
validity
or enforceability of the O2Diesel Intellectual Property.
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| 6.2 |
Third
Party Infringement.
Energenics shall inform O2Diesel of any infringement by any Third
Party of
any of the O2Diesel Intellectual Property in the Territory of which
it
becomes aware. O2Diesel may, but shall not be required to, take legal
action to enforce the O2Diesel Intellectual Property against infringement
by Third Parties and defend the O2Diesel Intellectual Property against
challenges by Third Parties. Energenics shall cooperate fully with
O2Diesel in any such enforcement or defense and supply all assistance
reasonably requested by O2Diesel in carrying on such action, at O2Diesel’s
expense, including by using commercially reasonable efforts to have
its
employees testify when requested and to make available relevant records,
information, specimens and the like.
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| 6.3 |
Joint
Improvements.
To the extent that employees of O2Diesel or its Affiliates together
with
employees of Energenics or its Affiliates jointly invent or discover
any
improvements to the O2Diesel Additive, O2Diesel Product or to any
other
invention, discovery, know-how or technology, the Parties shall jointly
own the same, and each Party shall be free to exploit or authorize
the
exploitation of the same without the consent of or accounting to
the other
Party, subject to any other relevant intellectual property rights
of the
other Party. If a Party becomes aware of any such joint invention,
discovery, know-how or technology, it shall verify that the other
Party is
aware of the same and the parties shall consult and cooperate with
respect
to the protection of the same.
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| 6.4 |
Energenics
Improvements.
Before commencing any research or testing efforts with respect to
the
oxygenation of diesel fuel, the Party commencing such research/testing
(“Research
Party”)
shall disclose the same to the other Party. Subject to Section 6.3,
to the extent that the Research Party may during the Term invent
or
discover or otherwise acquire rights to any improvements to the O2Diesel
Additive, O2Diesel Product or any related know-how or technology
for the
oxygenation of diesel fuel, such Party shall promptly disclose the
same to
the other Party., and the grants of a worldwide, perpetual, royalty-free,
paid-up, nonexclusive license to practice and authorize the practice
of
such improvements and other know-how and technology shall be agreed
to by
the Parties.
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| 6.5 |
Patent
Marking.
Energenics shall, if applicable, comply with any laws and regulations
in
the Territory concerning the marking or other identification of O2Diesel
Product as being patented.
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7. Representations
and Warranties.
| 7.1 |
Representations
and Warranties of Both Parties.
Each Party represents and warrants
that:
|
| 7.1.1 |
it
is a company duly organized, validly existing and in good standing
under
the laws of, in the case of O2Diesel, the state of Delaware, and
in the
case of Energenics, Singapore;
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-8-
| 7.1.2 |
the
execution of this Agreement on its behalf has been properly authorized
by
all necessary corporate action;
|
| 7.1.3 |
this
Agreement is valid and binding on it and enforceable against it in
accordance with the terms hereof, subject to applicable bankruptcy
and
similar laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity;
|
| 7.1.4 |
neither
the execution nor the performance of this Agreement will constitute
a
breach or violation of the terms of its charter or organizational
documents or any contract, agreement or other commitment to which
it is a
party or by which it or any of its properties are
bound;
|
| 7.1.5 |
there
are no bankruptcy,
insolvency, receivership or similar proceedings involving it or any
of its
Affiliates either pending or being contemplated, or any other pending
or
threatened actions, suits, arbitrations or other proceedings by or
against
it;
|
| 7.1.6 |
its
business is being conducted in compliance in all material respects
with
all applicable laws and regulations;
and
|
| 7.1.7 |
it
is not in default with respect to any governmental or court order
and
there are no pending lawsuits or unsatisfied judgments against
it.
|
| 7.2 |
Representations
and Warranties of Energenics.
Energenics represents and warrants that: (a) Energenics is experienced
in
fuel distribution; (b) Energenics has had a reasonable opportunity
to, and has in fact, investigated independently its business prospects
under this Agreement before entering into this Agreement; (c) Energenics
is not relying upon any information, representation or warranty provided
by O2Diesel except as expressly set forth in this Agreement; and
(d)
Energenics is not relying upon O2Diesel’s providing significant assistance
with or control over Energenics’s method of operation under this
Agreement.
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| 7.3 |
Representations
and Warranties of O2Diesel.
|
| 7.3.1 |
O2Diesel
warrants that the O2Diesel Additive delivered to Energenics hereunder
complies with O2Diesel’s specifications for such product, provided that
Energenics notifies O2Diesel of any defects therein within thirty
(30)
days after taking delivery thereof. Energenics’s exclusive remedy for a
breach of this Section 7.3 shall be, at O2Diesel’s option, a refund
of any amounts already paid for the nonconforming O2Diesel Additive
or
prompt redelivery of the same quantity of conforming O2Diesel
Additive.
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| 7.3.2 |
O2Diesel
represents and warrants that it has the right title interest in the
O2Diesel Additive and O2Diesel Product and it has the right to distribute
O2Diesel Additive and/or O2Diesel Product. O2Diesel (as contemplated
in
this agreement) represents and warrants that the O2Diesel Additive
and
O2Diesel Product are fit for the purposes for which they would ordinarily
be used and are free from any defect of manufacturing and material.
O2Diesel further represents and warrants that all the O2Diesel Trademarks
and Intellectual Property are registered in the name of O2Diesel
and that
the use of such Trademark and Intellectual Property by O2Diesel or
Energenics does not violate in any manner whatsoever or infringe
any third
party's right or intellectual
property.
|
-9-
| 7.3.3 |
To
the best of its knowledge, O2Diesel has disclosed in its public filings,
all technical and logistical issues relating to the O2Diesel Additive.
|
8. Indemnification.
| 8.1 |
In
General.
Each Party (the “Indemnifying
Party”)
shall defend, indemnify and hold harmless the other Party (the
“Indemnified
Party”),
its Affiliates, and its and their employees, officers, directors,
agents,
distributors and licensees against any loss, damage, expense, or
cost,
including reasonable attorneys fees, arising out of any claim, demand,
action, suit, investigation, arbitration or other proceeding by a
Third
Party (an “Action”)
based on (a) the Indemnifying Party’s breach of this Agreement; (b)
negligence, willful misconduct or violation of any law or regulation
by
the Indemnifying Party, its Affiliates, or its or their employees,
officers, directors, or agents;
or (c) the Indemnifying Party’s manufacture, use, sale, handling, storage,
transportation or disposal of O2Diesel Additive, O2Diesel Product
or other
products.
|
| 8.2 |
Procedure. If
an Indemnified Party becomes aware of any Action it believes is
indemnifiable under Section 8.1, (a) the Indemnified Party shall give
the Indemnifying Party prompt written notice of such Action; (b) the
Indemnifying Party shall assume, at its expense, the sole defense
of such
claim or cause of action through counsel selected by it and reasonably
acceptable to the Indemnified Party, except that in the case of a
conflict
of interest between the Parties, the Indemnifying Party shall, at
the
Indemnifying Party’s expense, provide separate counsel for the Indemnified
Party selected by the Indemnified Party; (c) the Indemnifying Party
shall
maintain control of such defense, including any decision as to settlement,
except that any settlement of an Action shall require the written
consent
of both Parties, which consent shall not to be withheld or delayed
unreasonably; (d) the Indemnified Party may, at its option and
expense, participate in such defense, and in any event, the Parties
shall
cooperate with one another in such defense; and (e) the Indemnifying
Party
shall bear the total costs of any court award or settlement in such
Action.
|
| 9. |
Insurance.
Energenics
shall during the Term maintain general liability and product insurance
as
per Singapore law covering at least claims arising out of the manufacture,
use, sale, handling, storage, transportation and disposal of O2Diesel
Product by Energenics.
|
-10-
10. Limitation
of Liability.
| 10.1 |
Neither
party shall be liable to the other party
for any indirect, incidental, special, consequential or punitive
damages
arising out of or related to this Agreement, even if the party has
been
advised of the possibility thereof. O2Diesel’s liability to Energenics for
other damages, if any, shall in no event exceed the total amount
distributor has paid to O2Diesel for any product or service giving
rise to
a claim of liability.
|
| 10.2 |
The
Parties have agreed that Energenics shall not in any circumstance
whatsoever be liable for the O2Diesel Additive and the O2Diesel Product
to
O2Diesel or to any third party for any deficiency in the product
so long
as it uses the product per the instructions provided by
O2Diesel.
|
11. Term
and Termination.
| 11.1 |
Term.
|
| 11.1.1 |
This
Agreement shall commence as of the Effective Date and, unless terminated
as provided in Section 11.2, continue in full force and effect for
an
initial term of five (5) years (the “First
Term”).
Upon expiry of the First Term, this Agreement shall be automatically
renewed for another term of five (5) years (the “Second
Term”),
unless written notice is provided to O2Diesel by Energenics at least
six
(6) months prior to the termination of the First Term.
|
| 11.1.2 |
Notwithstanding
the above, if O2Diesel proposes to sell the assets and intellectual
property, unless pursuant to a Change of Control, with respect to
O2Diesel
Additive and/or O2 Diesel Product, in the territory, Energenics shall
have
the first right of refusal with respect to any such transfer, sale
or
disposal. The consideration for such transfer shall be determined
by
independent valuation by an independent registered public accounting
firm
who is not appointed by either party as its advisor or
auditors.
|
| 11.2 |
Termination
for Default.
If either Party materially breaches this Agreement and fails to cure
the
breach within thirty (30) days after receiving written notice thereof
from
the other Party, the other Party may terminate this Agreement upon
further
written notice to the breaching Party at any time that the breach
remains
uncured. Either Party may terminate this Agreement if it has reasonable
grounds for insecurity concerning the other Party’s future performance and
does not receive reasonably adequate assurance of performance within
ten
(10) days after giving written notice demanding the
same.
|
| 11.3 |
Rights
and Obligations of Parties upon Expiration and
Termination.
|
| 11.3.1 |
Termination
of this Agreement by either Party for any reason shall not affect
and
shall be without prejudice to the rights and obligations of the Parties
accrued prior to the effective date of termination.
|
-11-
| 11.3.2 |
To
the extent that Energenics has outstanding orders for O2Diesel Additive
at
the expiration or termination of this Agreement, such orders shall
be
deemed cancelled unless O2Diesel notifies Energenics within thirty
(30)
days after expiration or termination that it will deliver the ordered
quantity of O2Diesel Additive. If O2Diesel so honors such orders,
Energenics shall take and pay for the O2Diesel Additive in accordance
with
the provisions of this Agreement.
|
| 11.3.3 |
Within
thirty (30) days after the expiration or termination of this Agreement,
Energenics shall notify O2Diesel of the quantity of O2Diesel Additive
that
Energenics then has on hand (“Remaining
Quantity”).
Energenics shall have the right to use such O2Diesel Additive to
make and
sell O2Diesel Product subject to the applicable terms of this Agreement,
but in no event shall such right continue for longer than six (6)
months
after the date of expiration or termination. If Energenics does not
use
the Remaining Quantity, O2Diesel shall have the option to purchase
from
Energenics the Remaining Quantity at the same price Energenics paid
for
such O2Diesel Additive. After the expiration or termination of the
Agreement and any further period of distribution permitted under
this
Section 11.3.3, Energenics shall take no action that would infringe
O2Diesel Intellectual Property or use O2Diesel Confidential Information.
|
| 11.3.4 |
After
the expiration or termination of this Agreement and any further period
of
distribution permitted under Section 11.3.3, Energenics shall, within
thirty (30) days after O2Diesel’s request, return to O2Diesel or destroy
any materials provided by O2Diesel and any excess marketing materials
for
O2Diesel Product.
|
| 11.3.5 |
The
provisions of Sections 2.5, 3 (for so long as any amounts payable
remain
unpaid) and 11.3 and Articles 4 through 8, 10, and 12 through 14
of this
Agreement shall survive the expiration or termination of this
Agreement.
|
12. Dispute
Resolution.
| 12.1 |
Discussions.
The Parties shall use reasonable efforts to amicably resolve any
disputes
arising out of or relating to this Agreement by direct discussions
between
them.
|
| 12.2 |
Arbitration
of Disputes.
Any dispute not resolved as set forth in Section 12.1 within fifteen
(15) days after one Party notifies the other Party that it wishes
to
discuss the matter (“Dispute”),
shall be resolved by arbitration. The venue of the arbitration shall
be
London, United Kingdom and the arbitration shall be governed by the
Rules
of the London Court of Arbitration. The language of the arbitration
shall
be English language.
|
| 12.3 |
Arbitration
Procedures.
The arbitration shall be presided by a panel of three (3) arbitrators.
Each Party shall appoint one arbitrator and the third arbitrator
shall be
appointed by the two arbitrators so appointed by the
Parties.
|
-12-
| 12.4 |
Judicial
Action.
Notwithstanding the above, either Party may seek from any court having
jurisdiction hereof any interim, provisional or injunctive relief
or
specific performance that may be necessary to protect the rights
or
property of any Party or to maintain the status quo before, during
or
after the pendency of the arbitration proceeding. The institution
and
maintenance of any judicial action or proceeding for any such interim,
provisional or injunctive relief shall not constitute a waiver of
the
right or obligation of either Party to submit the dispute to arbitration,
including any claims or disputes arising from the exercise of any
such
interim, provisional or injunctive
relief.
|
13. Notices.
| 13.1 |
Delivery
of Notices.
All notices sent under this Agreement shall be in writing and (a)
hand
delivered; (b) transmitted by legible facsimile with a copy sent
concurrently by certified mail, return receipt requested; or (c)
delivered
by prepaid priority delivery
service.
|
| 13.2 |
Addresses
for Notices.
Notices shall be sent to the Parties at the following addresses or
such
other addresses as the parties subsequently may
provide:
|
|
If
to O2Diesel:
|
000
Xxxxxxxx Xxxxx
Xxxxx
000
Xxxxxx,
Xxxxxxxx 00000
|
|
Attention:
|
Xxxx
Xxx
|
|
Telephone:
|
(000)
000-0000
|
|
Fax:
|
(000)
000-0000
|
|
If
to Energenics:
|
0
Xxxxxxx Xxxxxxxxx
|
|
Xxxxxx
Xxxx Xxxxx 0 #00-00X
|
|
|
Xxxxxxxxx
000000
|
|
|
Attention:
|
Xxxxx
Xxxxxxxx
|
|
Telephone:
|
x00
0000 0000
|
|
Fax:
|
x00
0000 0000
|
14. Miscellaneous.
| 14.1 |
Relationship
Between Parties.
O2Diesel and Energenics are separate business entities, and shall
not be
considered as joint ventures, partners, agents, servants, employee,
or
fiduciaries of each other. Neither this Agreement nor the relationship
between the Parties shall be considered in any way to deem Energenics
a
franchisee of O2Diesel for any purpose whatsoever. The Parties
specifically agree that any obligation to act in good faith and to
deal
fairly with each other which may be implied in law shall be deemed
satisfied by the Parties’ compliance with the express terms of this
Agreement.
|
| 14.2 |
Technical
Services Agreement.
Within thirty (30) days of the Closing, the Parties shall enter into
a
Technical Services Agreement that will establish the terms for the
reimbursement of any technical services provided by O2Diesel in the
Territory.
|
-13-
| 14.3 |
Compliance
with Laws.
In obtaining necessary government approvals and in other aspects
of
Energenics’s business relating to O2Diesel Product, Energenics shall: (a)
in compliance with the U.S. Foreign Corrupt Practices Act, Title
15 United
States Code § 78dd, not directly or indirectly pay, give, offer or promise
any money, gift or anything else of value to (i) any officer or employee
of any government or any department, agency, or instrumentality thereof,
(ii) any person acting in an official capacity for or on behalf of
any
foreign government or any department, agency, or instrumentality
thereof,
(iii) any political party, or (iv) any candidate for political office
(collectively “Governmental
Official”),
or to any family member of any Governmental Official, to influence
any act
or decision of such Governmental Official, induce such Governmental
Official to do or omit to do any act in violation of the lawful duty
of
such Governmental Official, or secure any advantage in obtaining,
retaining or directing business for or with any Person; (b) not export
or
reexport any information, products or other items in violation of
U.S.
export control laws and regulations; and (c) comply with the conditions
of
any applicable governmental approvals and all other applicable laws
and
regulations.
|
| 14.4 |
Governing
Law; Jurisdiction.
This Agreement shall be governed and construed in accordance with
English
Law. Subject to the arbitration clause set out above, the High Court
in
London shall have jurisdiction with respect to any matter/dispute
arising
out of this Agreement.
|
| 14.5 |
Recordkeeping
and Inspection.
During the Term and for three (3) years thereafter, or such longer
period
as may be required by law, Energenics shall keep and maintain reasonable
records of all agreements, approvals and other activities relating
to this
Agreement. O2Diesel may, at its expense, during regular business
hours and
with reasonable prior notice, examine, review, and inspect all facilities
in which O2Diesel Additive or O2Diesel Product is stored, blended
or
distributed by or on behalf of Energenics, and review, audit and
analyze
Energenics’s records relating to this Agreement and representative samples
of O2Diesel Additive and O2Diesel Product in Energenics’s custody or
control.
|
| 14.6 |
Force
Majeure.
Neither Party shall be liable for the consequences of any failure
to
perform, or default in performing, any of its obligations under this
Agreement, if that failure or default is caused without the fault
or
negligence of the Party by any act of “Force Majeure.” For the purposes of
this Agreement, “Force
Majeure”
shall mean war (whether declared or not); act of God; revolution;
acts or
omissions of third parties beyond the control of either Party; faulty
or
impassable roads; invasion; insurrection; riot; civil commotion;
sabotage;
military or usurped power; lightning; explosion; fire; storm; drought;
flood; earthquake; epidemic; quarantine; strikes; acts or restraints
of
governmental authorities; inability to secure materials, machinery,
equipment or labor; and laws and regulations of any governmental
authority.
|
-14-
| 14.7 |
Severability.
The provisions of this Agreement are severable, and the unenforceability
of any provision of this Agreement shall not affect the enforceability
of
the remainder of this Agreement. The Parties acknowledge that it
is their
intention that if any provision of this Agreement is determined by
a court
to be unenforceable as drafted, that provision should be construed
in a
manner designed to effectuate the purpose of that provision to the
greatest extent possible under applicable
law.
|
| 14.8 |
Construction
of Agreement.
The Parties acknowledge that they thoroughly have reviewed this Agreement
and bargained over its terms. Accordingly, this Agreement shall be
construed without regard to the Party or Parties responsible for
its
preparation and shall be deemed to have been prepared jointly by
the
Parties.
|
| 14.9 |
Cumulative
Rights and Remedies.
The rights and remedies provided in this Agreement and all other
rights
and remedies available to either Party at law or in equity are, to
the
extent permitted by law, cumulative and not exclusive of any other
right
or remedy now or hereafter available at law or in equity. Neither
asserting a right nor employing a remedy shall preclude the concurrent
assertion of any other right or employment of any other remedy, nor
shall
the failure to assert any right or remedy constitute a waiver of
that
right or remedy.
|
| 14.10 |
Assignment.
No
Party shall transfer or assign any of its rights, including by a
Change of
Control, under this Agreement to any Third Party without the prior
written
consent of the other Party, provided that if Energenics enters into
a
sub-distributor arrangement with Affiliates of Energenics, the terms
and
conditions of the sub-distributorship shall be same as the terms
and
conditions set out in this Agreement.
|
| 14.11 |
Amendments.
This Agreement may be modified or amended only by written agreement
of the
Parties.
|
| 14.12 |
Entire
Agreement.
This Agreement constitutes the entire agreement between the Parties
concerning the subject matter of this Agreement and supersedes all
prior
agreements between the Parties concerning the subject matter
hereof.
|
| 14.13 |
Counterparts.
This
Agreement may be executed in any number of counterparts, each of
which
when so executed shall be deemed to be an original and all of which
when
taken together shall constitute this
Agreement.
|
-15-
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
respective duly authorized officers as of the Effective Date.
O2DIESEL
CORPORATION
By:
/s/
Xxxx X. Xxx
Name:
Xxxx
X.
Xxx
Title:
Chief
Executive Officer
ENERGENICS
PTE LIMITED
By: /s/
Xxxxx Xxxxxxxx
Name:
Xxxxx
Xxxxxxxx
Title:
Director
-16-
SCHEDULE
A
SALES
TARGETS
1st
Contract Period September 1, 2006 to December 31, 2007: *
liters1
2nd
Contract Period January 1, 2008 to December 31, 2008: *
liters
3rd
Contract Period 1 January 1, 2009 to December 31, 2009: *
liters
PRICING
IBC’s
$*
per
MT
*%
retrospective discount on achieving *
MT
equivalent to $*
per
MT
An
additional *%
retrospective discount on achieving *
MT
equivalent to $*
per
MT
An
additional *%
retrospective discount on achieving *
MT
equivalent to $*
per
MT.
ISO’s
$*
per
MT
*%
retrospective discount on achieving *
MT
equivalent to $*
per
MT
An
additional *%
retrospective discount on achieving *
MT
equivalent to $*
per
MT
An
additional *%
retrospective discount on achieving *
MT
equivalent to $*
per
MT.
The
above
prices are CIF Singapore and shall apply until 12/31/2006. From 1/01/2007,
the
price for the O2Diesel Additive shall be adjusted by the mutual agreement
between the parties based on evidence of the feedstock prices and changes to
these prices from the prior year.
_________________________
1
The Parties agree that the * of O2Diesel Additive purchased by Energenics
prior
to the date of this agreement shall be included in the Minimum Volume for
the
1st Contract Period.
