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Exhibit 10(v)
Exclusive Distributor Agreement-Horticulture
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EXCLUSIVE DISTRIBUTOR AGREEMENT-HORTICULTURE
THIS AGREEMENT, entered into effective as of the 22nd day June of 1998
by and between The Scotts Company, a corporation organized and existing under
the laws of the State of Ohio with its principal offices at 14111 Scottslawn
Road, Marysville, Ohio 43041 ("Scotts"), and AgrEvo USA Company, a general
partnership organized and existing under the laws of the State of Delaware with
its principal offices at 2711 Centerville Road, Wilmington, Delaware 19808
("AgrEvo").
WHEREAS, AgrEvo desires to enter into an agreement with Scotts in order
to appoint Scotts as the sole and exclusive distributor for certain AgrEvo
products in the markets in the territory, both of which are described herein;
and
WHEREAS, Scotts desires to accept such appointment and to distribute
such products on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Definitions.
(a) "Territory" shall mean the United States and its territories
and Canada.
(b) "Market" shall be limited to the Professional Horticulture
Field consisting of Indoor Greenscape and Outdoor Nursery,
including, but not limited to field and container grown
ornamentals foliage plants. "Market" specifically excludes all
golf course, professional lawn care, agricultural and consumer
applications.
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(c) "Products" shall mean certain formulations of products for
sale in the Market in certain package sizes, as set forth in
Exhibit 1(c), whether in Scotts- or AgrEvo-labeled containers.
(d) "Exclusive" shall mean that AgrEvo will sell Products
exclusively to Scotts and Scotts shall buy Products exclusively
from AgrEvo for resale in the Market and Territory during the
Initial Term and any Extended Term of this Agreement.
(e) "First Contract Year" shall mean the period starting with the
Effective Date, as defined below, and terminating on December 31,
1998. Thereafter, each period of January 1 through the following
December 31 during the Initial Term and any Extended Term of this
Agreement shall be called a "Contract Year".
(f) "Effective Date" shall mean the date first set forth above.
(g) "Initial Term" shall mean the period of time commencing on
the Effective Date and terminating on December31, 2005.
(h) "Extended Term" shall mean one or more one (1) year periods
after the end of the Initial Term, subject to the negotiation of
the parties pursuant to Section 3, hereof.
(i) "Transition Year" shall mean, subject to Subsection (c) of
Section 3, below, the period January 1, 2006 through and until
December 31, 2006, or any subsequent one (1) year period as
defined in Section 3 herein after the expiration of an Extended
Term.
2. Appointment
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(a) AgrEvo hereby appoints Scotts, and Scotts hereby accepts
appointment, as an Exclusive distributor of Products, for the Market in and
throughout the Territory and Scotts covenants and agrees to purchase Products
exclusively from AgrEvo during the term hereof. AgrEvo understands that Scotts
will resell Products under Scotts' own brand names, except for Products
containing flutolanil and buprofesin, which shall be distributed under an AgrEvo
label. Scotts shall have the right to appoint subdistributors or sales agents or
representatives within the Territory for the Products for the Market, but any
such subdistributors or sales agents or representatives shall be subdistributors
or sales agents or representatives of Scotts and not of AgrEvo and shall have no
authority or power to bind AgrEvo, and AgrEvo shall not be liable for any acts
or omissions of such subdistributors or sales agents or representatives.
(b) If this Agreement is in effect during the Transition Year,
AgrEvo shall not sell or distribute the Products directly or grant any
additional distributorships for the Products for the Markets within the
Territory.
(c) AgrEvo obtained registration for the Products from the
Environmental Protection Agency ("EPA") pursuant to Section 3 of the Federal
Insecticide, Fungicide and Rodenticide Act of 1947, as amended by subsequent
authorizations and the Food Quality Protection Act of August 3, 1996 ("FQPA").
Pursuant to the terms hereof, AGREVO will grant to Scotts supplemental
distribution rights for the Products (excluding flutolanil and buprofezin). In
order to perfect such supplemental distribution rights, AgrEvo agrees to execute
jointly with Scotts EPA Form 8570-5, "Notice of Supplemental Distribution of a
Registered Product", wherein AgrEvo as Registrant, will agree that Scotts as
Distributor, may distribute and sell the Product subject to the conditions
specified in said EPA Notice and 40 CFR ss. 152.132. Scotts shall be solely
responsible for complying with all administrative requirements imposed by the
EPA and individual states related
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thereto and shall assume and bear all costs of obtaining such registrations.
Further, AgrEvo agrees to provide data citation authorization letters to all
states which may request them in order for Scotts to obtain registrations in
such states.
3. Term, Extensions, Obligations on Termination or Expiration.
(a) The Initial Term of this Agreement shall commence on the
Effective Date and shall end on December 31, 2005, subject to earlier
termination as provided in Section 13 hereof. AgrEvo and Scotts acknowledge that
they may wish to extend the term of this Agreement after the Initial Term, but
that neither party shall be obligated to do so.
(b) Either party may, by notice to the other given not later
than April 1 of the last Contract Year of the Initial Term or any Extended Term,
advise the other party that it wishes to enter into discussions for an extension
of the term of this Agreement. If the party receiving such a notice wishes to
consider such an extension, the parties shall enter into negotiations, not later
than June 1 of the year in which such notice is given, as to the prices for
Products that shall be in effect for the term extension. If the parties agree to
extend the Agreement, they may enter into one or more Extended Terms.
(c) If the parties are unable to reach agreement by October 1
of the year in which such notice is given, the terms, prices and other
conditions in effect during the last Contract Year of the Initial Term or any
Extended Term shall continue during the Transition Year. The Transition Year is
intended to provide both parties an opportunity for a smooth transition away
from the relationship defined by this Agreement. Scotts shall be permitted to
sell inventories of Products not sold during the Transition Year on a
non-exclusive basis after the termination of the Transition Year.
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4. Duties of AgrEvo.
AgrEvo shall:
(a) deliver Products promptly in response to firm written
purchase orders received from Scotts, but in any event not later than fourteen
(14) days after receipt of such orders;
(b) comply with all material federal, state and local laws
applicable to the manufacture, sale and delivery to Scotts of the Products;
(c) notify Scotts promptly in writing should AgrEvo become
aware of any condition which it believes may render any of the Products in
violation of any applicable law, governmental regulation, rule or order in the
Territory;
(d) provide reasonable assistance to Scotts, at Scotts' cost
and upon Scotts' reasonable request, in complying with applicable laws and
government regulations affecting Scotts' sale and distribution of the Products
in the Territory; and
(e) notify Scotts in advance of the availability for the
Market of new products in order to permit Scotts to negotiate a contractual
relationship with AgrEvo concerning such products.
5. Duties of Scotts.
Scotts shall:
(a) submit firm written purchase orders for delivery of
Products not less than fourteen (14) days prior to the date specified for
delivery therein;
(b) comply with all federal, state and local laws and
regulations affecting Scotts' purchase, shipment, transportation, handling, use,
resale, disposal and distribution of the Products in the Territory;
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(c) notify AgrEvo promptly in writing should Scotts become
aware of any condition which it believes may render any of the Products in
violation of any applicable law, governmental regulation, rule or order in the
Territory; and
(d) notify AgrEvo promptly, but no later than five business
(5) days after Scotts' management becomes aware of any reported adverse effect
resulting from the use of any of the Products.
6. Price.
(a) The price for the Products for the first Contract Year is
set forth on Exhibit 6(a).
(b) AgrEvo will establish the price for the Products for the
second Contract Year and thereafter with notification of such price to Scotts on
June 30 of the first Contract Year and on June 30 of each succeeding Contract
Year, such price to be effective January 1 of the next succeeding Contract Year
and on January 1 of each succeeding Contract Year thereafter.
7. Forecasts. Subject to Section 8, below, at least sixty (60) days
prior to the beginning of each Contract Year, Scotts shall provide AgrEvo with
an non-binding annual written forecast for purchases of Products. AgrEvo
understands that these annual forecasts are estimates intended only for planning
purposes. At least thirty (30) days prior to the beginning of each quarter,
Scotts shall provide AgrEvo with binding quarterly written forecasts.
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8. Minimum Purchases.
(a) During the Initial Term of this Agreement, Scotts agrees
to purchase from AgrEvo on an exclusive basis minimum aggregate dollar values of
Products which are set forth on Exhibit 8(a).
(b) If, during any Contract Year, Scotts fails to purchase the
minimum aggregate dollar value of the Products required in Exhibit 8(a), it
shall be afforded the right to purchase such minimum aggregate dollar value of
Products (the "Arrearage") in the immediately succeeding Contract Year. If, in
such succeeding Contract Year, Scotts fails to purchase the Arrearage and the
minimum aggregate dollar value of Products required to be purchased in such
Contract Year as required in Exhibit 8(a), AgrEvo has the right to:
(i) waive such requirement;
(ii) terminate the exclusivity provisions of
Subsection 2; or
(iii) determine Scotts to be in default of the terms
of this
Agreement pursuant to Section 13, below.
9. Limited Warranties.
(a) AgrEvo warrants only that (i) at the time of shipment the
Products conform to the specifications set forth in Exhibit C attached hereto or
on the respective AgrEvo label; and that (ii) the Products, at the time of
shipment to Scotts, will be in material compliance with all applicable laws and
regulations in the Territory.
(b) Scotts warrants that it has received and is familiar with
AgrEvo's material safety data sheets which are attached hereto as Exhibit 9(b)
and other technical literature provided by AgrEvo for the Products, has full
knowledge of the hazards associated with the use and handling of the Products,
and will carry out measures for providing warnings for such hazards to its
employees, agents, representatives and third parties who may handle the
Products.
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10. Force Majeure. Except as otherwise provided herein, neither party
to this Agreement shall be liable, or be in breach of any provision hereof for
any failure or delay on its part to perform any obligation, other than the
obligation to make payments when due, under any provision of this Agreement
because of force majeure, including, but not limited to, any act of God, flood,
fire, explosion, strike, lockout, labor dispute, war, insurrection, riot,
sabotage, or any injunction, law, ordinance or demand or requirement of any
governmental authority, or material inability to procure or use materials,
labor, equipment or energy sufficient to meet manufacturing needs from customary
sources at customary prices after best efforts have been made to do so, but
without litigation, beyond the reasonable control of such party. In the event
either party receives notice of any United States federal, state or local
regulatory or legislative action which shall, after final action, prevent AgrEvo
from manufacturing or selling Products covered by this Agreement, or shall
prevent Scotts from distributing or selling Products covered by this Agreement,
then the party so prevented shall immediately notify the other. After
consultation with the other party, the party so prevented may terminate this
Agreement immediately upon written notice to the other party, or, in the event
such regulatory or legislative action applies to less than all of the Products
covered by this Agreement, then the party so prevented may terminate this
Agreement, but only with respect to the Products so affected, immediately upon
written notice to the other party. If as a result of regulatory or legislative
action, either party is required to expend significant additional capital in
order to continue the manufacture, sale, packaging, formulating or distribution
of the Products covered by this Agreement, such that such expenditure would
result in gross economic hardship to such party, then the party required to make
such expenditures may terminate this Agreement upon reasonable written notice to
the other party.
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11. Relationship of Parties. The relationship hereby established
between AgrEvo and Scotts is solely that of an Independent contractor, and this
Agreement shall not create an agency, partnership, joint venture, or
employer/employee relationship between Scotts and its subdistributors, sales
agents, representatives and AgrEvo, and nothing hereunder shall be deemed to
authorize either party to act for, represent or bind the other or any of its
affiliates.
12. Delivery Risk of Loss Indemnification.
(a) Title to, and risk of loss of Products sold hereunder
shall pass to Scotts upon delivery of Products to a common carrier. Any
relabeling of the Products by Scotts shall be in compliance with all laws
applicable to Scott's sale or distribution of the Products and any such
re-labeling shall be reviewed and approved by AgrEvo prior to Product sale by
Scotts. AgrEvo shall provide any comments on such re-labeling to Scotts within
thirty (30) days and shall not unreasonably withhold or delay its approval.
(b) Scotts shall indemnify and hold harmless AgrEvo and its
subsidiaries, affiliates, directors, officers, employees and
agents from and against any and all loss, cost, claim, damage,
liability or expense (including reasonable attorney's fees,
costs of suit and costs of appeal) incurred by any of them
arising out of or in connection with any claim, action, suit,
proceeding or investigation ("AgrEvo Claim") filed or
threatened, with respect to shipment, transportation, handling,
re-packaging, cleanup, sale and/or resale or disposal of
Products or with respect to any Product-related health,
environmental or deleterious contamination claims, following
delivery of Products by AgrEvo into the possession of Scotts or
the common carrier for shipment to Scotts, other than any
AgrEvo Claim resulting from AgrEvo's negligence or willful
misconduct.
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(c) AgrEvo shall notify Scotts in writing within thirty (30)
days of receiving material information concerning any AgrEvo Claim for which
AgrEvo is seeking to be indemnified under this Section 12. Scotts shall have the
right and opportunity to defend or settle any AgrEvo Claim, and AgrEvo shall
cooperate fully with Scotts in the defense of any such Claim and shall not make
or negotiate any settlement with the claimant without Scotts prior written
consent.
(d) AgrEvo shall indemnify and hold harmless Scotts and its
subsidiaries, affiliates, directors, officers, employees and agents from and
against any and all loss, cost, claim, damage, liability or expense (including
reasonable attorney's fees, costs of suit and costs of appeal) incurred by any
of them arising out of or in connection with any claim, action, suit, proceeding
or investigation ("Scotts Claim") filed or threatened with respect to
formulation, handling, cleanup, resale or disposal or with respect to any
Product-related health, environmental or deleterious contamination claims prior
to delivery of Products by AgrEvo into the possession of Scotts or the common
carrier for shipment to Scotts, other than Scotts Claim resulting from Scotts'
negligence or willful misconduct.
(e) Scotts shall notify AgrEvo in writing within thirty (30)
days of Scotts' management receiving material information concerning any Scotts
Claim for which Scotts is seeking to be indemnified under this Section 12.
AgrEvo shall have the right and opportunity to defend or settle any Scotts
Claim, and Scotts shall cooperate fully with AgrEvo in the defense of any Scotts
Claim and shall not make or negotiate any settlement with the claimant without
AgrEvo's prior written consent.
13. Termination. This Agreement may be terminated "for cause" prior to
expiration of the Initial Term, or any Extended Term, by either party
immediately upon notice. A party shall have the right to terminate this
Agreement "for cause" in the event of: (I) any material breach of
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this Agreement by the other party which shall go uncorrected for a period of
thirty (30) days after written notice of such breach, setting forth the details
thereof with reasonable particularity, has been given to the other party; or
(ii) the institution against the other party of voluntary proceedings in
bankruptcy or under any insolvency law or law for the relief of debtors, the
making by or on behalf of the other party of an assignment for the benefit of
creditors, the filing by or on behalf of the other party of an involuntary
petition under any bankruptcy or insolvency law, unless such petition is
dismissed or set aside within sixty days from the date of its filing, or the
appointment for such other party of a receiver or trustee, unless such
appointment is dismissed or set aside within sixty (60) days from the date of
such appointment.
14. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided, however, that neither party shall have the right to transfer or assign
its interest in this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld, unless such transfer or
assignment is to an affiliate of the parties.
15. Notice. All notices, requests, demands and other communications
which are required or permitted to be given under this Agreement shall be in
writing and shall be deemed to be duly given upon the delivery or mailing
thereof as the case may be, if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid, or upon delivery to
an express courier service, addressed in any such case:
(i) if to Scotts: THE SCOTTS COMPANY
14111 Scottslawn Road
Marysville, OH 43041
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Attn: Marketing Manager of Horticulture Products
w/a copy to the General Counsel
(i) if to AgrEvo; AgrEvo USA Company
2711 Centerville Road
Wilmington, Delaware 19808
Attention: Legal Department
16. Choice of Law. This Agreement shall be governed by the laws of the
State of Delaware, without regard to its provisions concerning conflicts of law.
17. Severability. In the event that any provision of this Agreement is
held invalid, such invalidity shall not affect other provisions of this
Agreement.
18. Waiver. Failure of either party to exercise any of its rights under
this Agreement shall not act as a waiver of the same right on separate
occasions.
19. Entire Agreement. This Agreement constitutes the entire and
exclusive understanding between the parties regarding the subject matter hereof
and supersedes all other agreements, understandings, promises and
representations. This Agreement may only be modified by express written
amendment specifically referencing this Agreement and signed by both parties.
20. Miscellaneous.
a.) Scotts hereby acknowledges AgrEvo's exclusive right, title
and interest in and to all trademarks pertaining to AgrEvo's Products which it
sells ( hereinafter "Trademarks"), and will not at any time do or cause to be
done any act or thing contesting or impairing or tending to impair any part of
such right, title and interest. Scotts shall not in any manner represent on
Scott's labels, or on other literature offered to the public, that it has any
ownership interest in such Trademarks, without AgrEvo's advance written
permission.
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b.) Claims pertaining exclusively to the physical condition in
which Products were received by Scotts (other than claims pertaining to chemical
specifications), which claims do not otherwise result from acts within the
reasonable control of the carrier delivering the same, shall be deemed waived
unless made in writing within one hundred eighty (180) days following such
receipt. Claims pertaining to chemical specifications shall be deemed waived
unless made in writing promptly, but in no event more than ninety (90) days
subsequent to receipt of the Products. All other claims shall be deemed waived
unless made in writing promptly, but in no event more than ten (10) days
subsequent to the date on which Scotts knew of such claims.
c.) After consultation with Scotts, AgrEvo shall have the
right to determine, in its sole discretion, if the uses of the Products
contemplated by Scotts herein can be supported by AgrEvo based upon financial
return on investment on Product sale and/or on Product-related data development,
versus risk and consumption of the acceptable daily intake ("ADI") for the class
of active ingredients of the Products in accordance with the FQPA. If AgrEvo
decides to withdraw a Product registration, it will give Scotts twelve (12)
months written notice of such withdrawal. The class of active ingredients is
defined as a group of chemically-related compounds which perform by a similar
mode of action on the target pest.
(d) Both parties hereto covenant and agree that they will notify the
other on a timely basis and in accordance with all relevant requirements
promulgated by the EPA, of any and all adverse effects related to the Products.
AGREVO covenants and agrees that it will assume responsibility for the reporting
of such Product-related adverse effects to the EPA.
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(e) Any and all Exhibits attached to this Agreement are hereby
incorporated in this Agreement by this reference.
IN WITNESS THEREOF, the parties have caused this Agreement to be
executed in duplicate by their duly authorized representatives.
The Scotts Company AgrEvo USA Company
By: /s/ Scott C. Todd By: /s/ Michael McDermott
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Scott C. Todd Michael McDermott
Title: Vice President Title: Business Group Director
Date: 6/22/98 Date: 6/18/98
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LIST OF EXHIBITS
Exhibit 1C Product List and Formulations
Exhibit 6A Product Price List
Exhibit 8A Annual Minimum Aggregate Dollar Value of Purchases
Exhibits to the Agreement have not been filed. Titles to the omitted Exhibits
appear above. The Registrant hereby agrees to furnish supplementally a copy of
any omitted Exhibit to the Securities and Exchange Commission upon its request.