EXHIBIT 10.27
AMENDMENT DATED AUGUST 3, 1998, TO DISTRIBUTER AGREEMENT BY AND BETWEEN THE
COMPANY AND NOVUS INTERNATIONAL, INC. DATED MAY 21, 1997.
NOVUS
Novus International, Inc.
530 Maryville Centre Drive
St. Louis, MO 63141
314-576-8401
314-576-4250: Fax
W. Joseph Privott
President & CEO
August 3, 1998
Joseph A. Sasenick
President & Chief Executive Officer
Alcide Corporation
8561 154th Avenue North
Redmond, WA 98052
RE: AGREEMENT DATED MAY 21, 1997 BY AND
BETWEEN ALCIDE CORPORATION ("ALCIDE") AND
NOVUS INTERNATIONAL, INC. ("NOVUS")
Dear Joe:
As you know, we are currently attempting to negotiate a new agreement.
During this renegotiation period, Novus proposes that certain new terms and
conditions apply to the current Agreement. The current Agreement has not
brought us the results we anticipated, and until the efficacy of the SANOVA-TM-
technology is firmly established, Novus' marketing efforts will continue to be
hampered. Alcide and Novus will enter into good faith negotiations to reach a
renegotiated agreement which will supersede and replace the current Agreement
between the parties, and if a renegotiated agreement has not been signed by
October 31, 1998, then Novus may, in its discretion, terminate the Agreement
upon not less than 30 days written notice to Alcide.
Below we have set forth the new terms and conditions that we propose govern
our arrangement while we renegotiate our Agreement. These new terms and
conditions are as follows(1):
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(1) All capitalized terms shall have the same meaning as such terms in the
Agreement.
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Joe Sasenick
August 3, 1998
Page 2 of 3
1) While we are renegotiating, Novus shall continue to focus efforts on
satisfying poultry customers currently using SANOVA. Novus will commit to
enter into new SANOVA customer contracts, additional development
commitments, or international regulatory efforts only after receiving
Alcide's prior approval. Customers and potential customers will be
informed promptly of the status of the Agreement as the parties
renegotiate.
2) Novus will make the final payment due Alcide of $1.0 million on August 31,
1998. No further minimum payments will be due to Alcide under the
Agreement.
3) Alcide will bear all costs for any application systems installed on or
after August 1, 1998 (including start-up costs until revenue generation
begins) and will take assignment of all customer contracts entered into
after that date.
4) Cost of goods sold (COGS) will be paid from revenues received monthly. If
revenues are inadequate to cover external COGS (i.e., all costs of goods
other than depreciation), the parties shall share such costs equally.
5) Alcide and Novus will agree to a budget and Alcide will bear all of the
external costs of all agreed to future regulatory, new applications, and
customer proof of performance trial and activities. Those currently
include: a trial at Lohmann, Germany; a red meat regulatory trial (USDA)
at Monfort; one, and possibly two or three, proof of performance trials at
Tyson Foods; and up to five regulatory trials (USDA) for continuous on-line
processing approval. Others may be added to this list by mutual agreement.
6) If the Agreement terminates, then Novus will grant Alcide a royalty-free
license to the applications systems' design and patent (application
pending).
7) If the Agreement terminates, Novus will offer to provide Alcide AIMS and
PROVUS services on mutually agreeable terms, not to exceed $10 thousand per
site per year and for a period not to exceed two years.
8) Upon execution of this letter by both parties, Novus will revoke its notice
of termination dated July 31, 1998.
9) Alcide and Novus agree jointly to release the press release attached hereto
at 6:00 p.m. CT on Monday, August 3, 1998.
Except as modified herein, the remaining terms and conditions of our
current Agreement would continue to apply during this interim renegotiation
period. We are hopeful that a renegotiated agreement can be reached that is
mutually beneficial to both Novus and Alcide.
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Jos Sasenick
August 3, 1998
Page 3 of 3
Please evidence your acceptance of the terms and conditions set forth
herein by signing below.
Sincerely,
/s/ W.J. Privott tws
ACCEPTED AND AGREED TO
this 3 day of August, 1998.
ALCIDE CORPORATION
/s/ Joseph Sasenick
- --------------------------------
Joseph Sasenick
President and Chief Executive Officer
WJP/sjb:U27SasenickL5
Enclosure
- -Registered Trademark-AIMS is a service mark of Novus International, Inc. and is
registered in the United States and other countries.
- -TM-PROVUS is a trademark of Novus International, Inc.
- -TM-SANOVA is a trademark of Novus International, Inc.
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