EXHIBIT 10.6
DISTRIBUTION AGREEMENT
Eugene Science Inc.
and
Hokuyo Koeki Co., Ltd.
CONTENTS
Clause:
1. INTERPRETATION........................................................1
2. APPOINTMENT...........................................................3
3. PURCHASE ORDERS AND DELIVERY..........................................4
4. PAYMENT AND PRICES....................................................5
5. DUTIES OF THE DISTRIBUTION............................................5
6. DUTIES OF THE COMPANY.................................................8
7. TRADE MARKS...........................................................9
8. WARRANTIES AND INDEMNITIES...........................................10
9. DURATION.............................................................11
10. TERMINATION..........................................................12
11. EFFECT OF TERMINATION................................................12
12. NO PARTNERSHIP.......................................................13
13. ANNOUNCEMENT.........................................................13
14. CONFIDENTIAL INFORMATION.............................................13
15. ENTIRE AGREEMENT.....................................................14
16. WAIVER...............................................................15
17. COSTS................................................................15
18. INVALIDITY...........................................................15
19. NOTICES..............................................................16
20. COUNTERPARTS.........................................................17
21. GOVERNING LAW AND JURISDICTION.......................................17
22. EXCLUSION OF THIRD PARTY RIGHTS......................................17
23. ASSIGNMENT...........................................................17
SCHEDULE 1....................................................................20
THIS AGREEMENT (THE "AGREEMENT") is made on May 21st, 2002.
BETWEEN the following parties (collectively the "PARTIES" and each a "PARTY"):
(1) EUGENE SCIENCE INC., a corporation duly organized and validly existing
under the laws of the Republic of Korea and having its registered
address at 8th Fl., LG Palace Bldg., 165-8 Donggyo-Dong, Mapo-Gu,
Seoul, Korea (the "COMPANY"); and
(2) HOKUYO KOEKI CO., LTD., a corporation duly organized and validly
existing under the laws of Japan and having its registered address at
29th Fl., Yebisu Garden Place Tower. 4-20-3 Ebisu, Shibuya-Ku,
Tokyo 510-6029, Japan (the "DISTRIBUTOR")
RECITALS
(A) WHEREAS the Company has developed and has the exclusive right to
manufacture and sell the Product in a number of countries, including
Japan.
(B) WHEREAS the Company and the Distributor entered into the Marketing
Agreement under which the Company granted the Distributor the exclusive
rights to (i) develop cholesterol reducing beverages containing the
Product in Japan; (ii) find a suitable Japanese beverages manufacturing
company or brand owner capable of successfully marketing and selling
the beverages containing the Product in Japan; and (iii) be the
exclusive distributor of the Product in Japan for the purpose of making
beverages only.
(C) WHEREAS the Company subsequently granted the Distributor the right to
discuss with Meiji Seika Kaisha, Ltd., ("MEIJI SEIKA") a brand owner,
the development, marketing and sale in Japan of foods and beverages
containing the Product.
(D) WHEREAS the Company, the Distributor and Meiji Seika entered into a
Memorandum of Understanding on 30 October 2001 (the "MEMORANDUM OF
UNDERSTANDING") concerning the development, marketing and sale of food
and beverages containing the Product in Japan.
(E) WHEREAS the Company and the Distributor now desire to enter into an
agreement consistent with the terms of the Memorandum of Understanding.
THE PARTIES AGREE AS FOLLOWS:
1. INTERPRETATION
1.1 In this agreement the following words expressions and abbreviations
shall have the following respective meanings unless the context
otherwise requires:
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"BUSINESS DAY" means a day (excluding Saturdays) on which banks
generally are open in Tokyo and Seoul for the transaction of normal
banking business;
"COMPANY FORECAST" shall mean a six (6)-month forecast of anticipated
monthly volume of the Product to be supplied by the company to the
Distributor in the Territory during the relevant Forecast Period, which
forecast the Company shall provide the Distributor with pursuant to
Clause 3.1, based on the immediately preceding Distributor's Forecast
and the Company's available production volume.
"COMPANY FORECAST DATE" means each of the following: 1 May and 1
November;
CONFIDENTIAL INFORMATION" means all information in relation to the
business of the Company, the Distributor or any of their Group
Corporate Persons which is not publicly known and/or all information
from time to time designated by the Company or the Distributor as being
confidential.
"DISTRIBUTOR FORECAST" shall mean a six (6)-month forecast of
anticipated monthly volume of orders for the Product that the
Distributor shall place during the relevant Forecast Period, which
forecast the Distributor provide the company with pursuant to Clause
3.1.
"DISTRIBUTOR FORECAST DATE" shall mean each of the following: 1 April
and 1 October;
"END PRODUCTS" means any food or beverage product containing the
Product;
"END-USER" means an entity or entities that develops or produces foods
or beverages using the Product, including but not limited to the
Sub-Distributor.
"FORECAST" shall mean a company Forecast or Distributor Forecast.
"FORECAST PERIOD" shall mean the period of six (6) calendar months
commencing on the date falling two calendar months after the relevant
Distributor Forecast Date.
"FOSHU" means Foods for Specified Health Use as designated by the
Japanese Ministry of Health Labour and Welfare;
"GROUP CORPORATE PERSON" means in relation to any Party its holding
companies, subsidiaries and subsidiary undertakings, and subsidiaries
and subsidiary undertakings of its parent companies;
"GUARANTEED QUANTITY" shall mean fifty (50 percent of the volume of a
Company Forecast for a given Forecast Period, provided that the Company
Forecast does not exceed the immediately preceding Distributor
Forecast.
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"MARKETING AGREEMENT" means the agreement dated 8th March 2001 between
the Company and the Distributor; "PRODUCT" means EuCho-S series,
cholesterol reducing substances derived mainly from natural plant
sterol;
"SUB-DISTRIBUTOR" means the entity or entities listed in Schedule 1
hereto as amended from time to time by the mutual written agreement of
the Parties;
"TERRITORY" means Japan;
"TRADE MARK" means EUCHOL-S, the trade mark which is under application
for registration in the Territory.
"WORKING HOURS" means between [9:00 a.m.] and [5:30 p.m.] on any
Business Day; and
"YEAR" means successive periods of 12 calendar months, the first of
which shall commence on and from the date upon which this Agreement
shall be deemed to have commenced in accordance with the provisions of
Clause 9 and the second and subsequent of which shall commence on the
first and subsequent anniversaries thereof respectively.
1.2 The text of this Agreement written in the English language is the
authentic text and all disputes, differences, difficulties or
uncertainties in interpretation and/or construction shall be resolved
exclusively by reference to such English Text.
1.3 In this Agreement unless otherwise specified, reference to:
(a) recitals, clauses, paragraphs or schedules are to recitals,
clauses and paragraphs of and schedules to this Agreement. The
schedules form part of the operative provisions of this
Agreement and references to this Agreement shall, unless the
context otherwise requires, include references to the recitals
and the schedules;
(b) "WRITING" shall include typewriting, printing, lithography,
photography and other modes of representing words in a legible
form (other than writing on an electronic or visual display
screen) or other writing in non-transitory form; and
(c) words denoting the singular shall include the plural and vice
versa and words denoting any gender shall include all genders.
1.4 The index to and the headings in this Agreement are for information
only and are to be ignored in construing the same.
2. APPOINTMENT
2.1 Subject to the terms of this Agreement the Company appoints the
Distributor to be its sole and exclusive distributor of the Products in
the Territory for the purpose of
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making foods and beverages and the Distributor accepts such appointment
on the subject to such terms.
2.2 The Distributor shall import the Product for incorporation into food
and beverage products either by itself or with or by Sub-Distributors.
2.3 The Distributor shall only distribute the Product to End-Users and
Sub-Distributors both of whom have been mutually agreed in writing
between the Parties. Only those Sub-Distributors listed in Schedule 1
hereto shall be regarded as "mutually agreed." Sub-Distributors may
only be added or removed from the list in Schedule 1 upon the written
agreement of the Parties.
3. PURCHASE ORDERS & DELIVERY
3.1 On or before each Distributor Forecast Day, the Distributor shall
provide the Company with a Distributor Forecast for the relevant
Forecast Period. On or before each Company Forecast Date, the Company
shall provide the Distributor with a Company Forecast for the relevant
Forecast Period. Forecasts are intended to allow the Company to plan
production and to determine the Distributor's entitlement.
3.2 The Distributor shall place orders on a monthly basis based on the
Distributor Forecasts. All purchase orders placed by the Distributor
shall be in writing and shall specify the quantity of the Product
ordered and the requested date for shipment and such other information
the Company may reasonably request for in order to fulfill the order.
The first purchase order shall be placed at least three (3) months
prior to the requested date of shipment, and purchase orders thereafter
shall be placed at least two (2) months prior to the requested date of
shipment. In case, until the end of the first three (3) months of a
Forecast Period (i.e., twenty five (25) percent of the volume of the
company Forecast for the Forecast Period), the company may demand, via,
inter alia, sending a demand letter to the Distributor, that the
Distributor make best efforts, such as intensive and efficient
promotions and advertisements, to meet the requirement of ordering at
least the Guaranteed Quantity for the Forecast Period.
3.3 Such purchase orders placed by the Distributor shall be subject to a
written acceptance by the Company. The Company shall have the right to
cancel any acceptance of orders or to refuse, suspend or delay shipment
of any orders if the Distributor is in default of its payment
obligations or fails to comply with any obligations under this
Agreement. The exercise of such right by the company shall not
constitute a breach of this Agreement by the Company.
3.4 If the company accepts the Distributor's purchase order, it shall send
a written acceptance within ten (100 days from the date of receipt of
the purchase order. The Company shall use reasonable efforts to
promptly fill and deliver all orders for the Product submitted by the
Distributor by the requested shipping date.
3.5 The Distributor shall conduct any incoming acceptance test and inform
the results to the Company within either fourteen (140 days from the
date when the Distributor receives
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the product ordered at its facilities in Japan, or twenty one (210 days
from the date when the Products arrive in a port of the territory,
whichever is earlier. Any Product not rejected by the Distributor in
written format to the company within such period of incoming acceptance
shall be deemed accepted, and the company shall not be liable for any
defects whatsoever of the Products after such period elapses.
3.6 The Company shall not be obliged to accept a request for delay once the
Company has accepted a purchase order. If the Company allows for a
request for delay, the Distributor shall pay for any storage, insurance
or other costs incurred due to such delay. If the Company accepts a
purchase order from the Distributor, the Distributor shall make the
payments in accordance with Clause 4.1 below.
4. PAYMENT AND PRICES
4.1 The Distributor shall make payments for the Product to the Company in
Japanese Yen by means of an irrevocable and revolving letter of credit
in Japanese Yen. Within seven (7) days after receiving the Company's
acceptance of a purchase order as provided in Clause 3.3 above, the
Distributor shall open an irrevocable and revolving letter of credit in
favor of the Company in such form and with such a prime bank as is
satisfactory to the Company. Such letter of credit shall contain terms
covering, inter alia, the total price and additional charges and/or
expenses to be borne by the distributor, and shall be opened such
letter of credit on a yearly basis by the Distributor.
4.2 The Company shall ship the product ordered by the Distributor hereunder
F.O.B. Busan or Incheon by commercial surface transportation.
4.3 The prices of the Products shall be determined in accordance with the
price lists to be issued from time to time by the Company. The Company
shall grant most favored status to the Distributor in terms of pricing
of the Products. The Company may change the price of the Product with
not less than six (6) months' notice to the Distributor.
4.4 The price of the Product agreed between the Parties shall be exclusive
of value added tax, excise duty and similar imposts. However, this does
not mean that the distributor is exempt from value added tax, excise
duty and similar imposts.
5. DUTIES OF THE DISTRIBUTOR
5.1 The Distributor shall order at least the relevant Guaranteed Quantity
for a Forecast Period until the last day of the Forecast Period.
5.2 The Distributor shall at all times use all reasonable efforts to
advertise, promote, market and sell the Products in the Territory.
5.3 Before planning or commencing any major advertising or promotional
activity for the Products in the Territory, the Distributor shall
furnish to the Company a copy of such promotional materials for the
Company's review. The Distributor agrees to accept any
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changes recommended by the Company, provided that such changes are
reasonable based on regulatory requirements and/or preservation of good
will associated with the Company's Trade Mark.
5.4 The Distributor shall inform the Company in writing every month of the
status of its business related with this Agreement and any other
information it acquires that is likely to be a significant interest,
use, or benefit to the Company, including but not limited to monthly
shipped volumes, sales prices at which the Products were sold to
Sub-Distributors and End-Users, and new or continuing relationships
with its customers and/or Sub-Distributors (including the details of
all contracts entered into with its customers and/or Sub-Distributors
in connection with the Product or foods or beverages containing the
Product).
5.5 The Distributor shall insure that the Product is sold or resold in good
condition.
5.6 The Distributor shall not present the Product in a way that is
inconsistent with the reality, by spreading unjustified and exaggerated
opinions about the Product's quality, content, applications,
effectiveness, granted attestations, country of origin, availability,
etc.
5.7 The Distributor shall not make any settlement offers or accept claims
in connection with complaints regarding the Product sold in a way that
is inconsistent with the terms of this Agreement.
5.8 The Distributor shall not make any settlement offers or accept claims
in connection with complaints regarding the Product sold in a way that
is inconsistent with the terms of this Agreement.
5.9 The Distributor shall not directly or indirectly (i) establish any
branch, warehouse or distribution center outside the Territory for the
promotions, distribution, or sale of the Products, (ii) promote,
distribute, or sell the Products outside the Territory, (iii) advertise
or solicit customers outside the Territory, or (iv) sell or otherwise
dispose of the Products within the Territory if the Distributor knows,
suspects, or has a reason to know or suspect that the Products will be
resold in or to any area outside the Territory.
5.10 In the event that the Distributor receives inquiries from sources
outside the Territory, the Distributor shall redirect or transfer such
inquiries to the Company.
5.11 The Distributor shall at all times have under its control or in its
possession such stocks of the Products as shall be sufficient in all
respects to meet reasonably anticipated demands of the Sub-Distributors
and/or customers (both actual and anticipated) for the Products in the
Territory. The Distributor shall store such stock in its proper
warehouse and all deliveries shall be dealt with through such storage
facility.
5.12 The Distributor shall be responsible for complying with any and all
necessary or proper laws, rules, regulations, decrees and other
applicable government or administrative procedures for the distribution
and sale of the Products in the Territory. The Distributor
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shall be responsible for obtaining or causing Sub-Distributors to
obtain all government approvals and authorizations for the distribution
and sale of the Products in the Territory, including but not limited to
obtaining the FOSHU designation from the Japanese Ministry of Health
Labour and Welfare.
5.13 The Distributor shall use all reasonable efforts to find additional
sub-distributors to sell the Products in the Territory. The Company has
the right to approve a sub-distributor found and recommended by the
Distributor as a Sub-Distributor. The Distributor shall not distribute
the Products to any sub-distributor not approved by the Company.
5.14 The Distributor shall make all reasonable efforts to develop
cholesterol reducing foods and beverages containing the product which
food and beverages should be suitable for the Japanese food and
beverage market.
5.15 The Distributor shall maintain close marketing relationships with the
Sub-Distributors and other customers so that their relevant needs and
future plans are ascertained.
5.16 The Distributor shall diligently respond to routine service inquiries
from the Sub-Distributors and other customers either by telephone, fax,
e-mail or in the field, including:
(a) maintaining liaison with the Sub-Distributors and other
customers; and
(b) assisting the Sub-Distributors and other customers in the
implementation of the Company's warranty for the Product.
5.17 The Distributor shall promptly draw to the attention to the company any
new or revised legislation, regulation or orders related to the food
and beverage sector in the Territory when such legislation, regulation
or orders comes to its attention.
5.18 Immediately after entering into any significant contract with the
Sub-Distributors or other customers in connection with the Product or
foods or beverages containing the product (including but not limited
to, all contracts with a potential volume of (10 Metric Ton or more of
the Product for one (1) year), the Distributor shall inform the Company
of the terms and conditions of such contract.
5.19 The Distributor shall maintain and coordinate, at its own cost, such
technically competent sales, commercial and service staff to render
satisfactory service to the Sub-Distributors and other customers of the
Product and/or foods and beverages containing the product.
5.20 In order to protect the Company's rights to the Product in its original
form, the Distributor shall not in any way modify, adapt or develop
quality, composition and/or designs of the Products supplied by the
Company to the Distributor under this Agreement, without prior written
consent of the Company. If so consented, the intellectual property
rights (including, but not limited to, copyrights, design rights,
rights in Trade Mark, know-how and confidential information) in any
such modifications, adaptations or developments shall be jointly owned
by the Company and the Distributor,
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with each Party having full rights of exploitation thereof
independently of the other Party, but the Distributor's such rights
being limited to the Territory, and the Distributor shall enter into
such deeds and documents and do such things as may be necessary to give
full and proper effect to the Company's rights under this Clause 5.20.
The intellectual property rights in any modifications, adaptations or
developments of quality, composition and/or designs of the Products
made by the Distributor without the company's said prior written
comment shall become the exclusive property of the Company.
5.21 The Distributor shall pay to the Company all costs and/or expenses in
relation to all assistance, advice and information provided by the
company under Clauses 6.2 and 6.3 in Japanese Yen by wire transfer to
the bank account designated by the Company before the Company provides
such assistance, advice and information. If the Distributor fails to
pay such costs and/or expenses, the Company is not obliged to provide
such assistance, advice and information. The Company has the right to
decide the amount of all costs and/or expenses of such assistance,
advice and providing information.
5.22 The Distributor shall make all reasonable efforts to arrange all
End-Users to enter into agreements for the payment of royalty to the
company and shall further make all reasonable efforts to require the
End-Users to uphold its obligations to pay royalty to the Company under
such agreement. If an End-User does not make any payment of the royalty
which it has agreed for the use of the Product to the Company under
such agreement, the Distributor shall not sell or distribute the
Product to the Sub-Distributor upon the written notice by the Company.
5.23 Recognizing its obligations to protect the reputation of the Company,
the Distributor undertakes that it shall not undertake any obligations
in respect of the performances of the Product in excess of the limits
specified by the Company in respect of the Product concerned.
6. DUTIES OF THE COMPANY
6.1 The Company shall supply the Products for use and/or resale in the
Territory only to the Distributor for the purpose of making foods and
beverages.
6.2 The Company undertakes to provide such information and support as may
reasonably be requested by the Distributor to assist the Distributor in
using or re-selling the products and/or End Products in the Territory.
6.3 The Company shall supply the Distributor with all non-confidential
technical information that the Company may have that is directly
applicable to the marketing of the Products, such information to be in
the (English) language, and shall if requested:
(a) provide technical assistance and advice to the Distributor
and/or Sub-Distributor in relation to the Products and End
Products;
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(b) provide instruction at the Company's promises for such sales
and technical personnel of the Distributor as is reasonably
necessary;
(c) provide the services of such sales and technical personnel of
the Company for such period as is reasonably necessary; and
(d) provide the Distributor with information on the Company's
advertising and promotion methods and supply such quantities
of advertising and promotional material as the Distributor may
reasonably request time to time.
6.4 The Company shall not:
(a) supply the Products to any user in the Territory for the
purpose of making End Products; nor (b) itself use the Product
in the Territory for the purpose of making End Products, nor
(c) supply the Products to any buyer in the Territory for the
purpose of making End Products other than the Distributor; nor
(d) supply the Product to any buyer outside the Territory for the
purpose of making End Products for sale in the Territory, with
the knowledge that such buyer intends to make and sell End
Products in the Territory; nor
(e) solicit orders from within the Territory for the purpose of
End Products; nor
(f) after the quality or composition of the Products or the design
of the labels thereon, unless the Parties mutually agree to
make such alternation.
6.5 In the event that the Company receives an enquiry from a party within
the Territory for supply of the Product for the purpose of making End
Products, the Company shall refer such enquiry to the Distributor.
7. TRADE MARKS
7.1 The Company's intellectual property rights (including, but not limited
to, copyrights, design rights, rights in Trade Mark, know-how and
confidential information and any applications for or rights to register
the foregoing) in and associated with the Product are and shall remain
vested in the Company. The Distributor shall not under any
circumstances acquire any rights whatsoever in any copyright, patent,
trademark or other proprietary right of the Company, nor shall the
Distributor acquire any rights whatsoever in relation to the Product.
7.2 The Distributor shall immediately notify the Company in writing of any
instance within the Territory as shall come to its notice of any
infringement or intended or threatened infringement or wrongful use of
the Trade Mark or any intellectual property rights (including, without
limitation, copyrights, design rights, rights in trademarks, know-how
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and confidential information) of the company and of any instance of the
passing off of other goods as and for the Products and of any flaw
which may affect the importation, marketing, distribution and/or sale
of the Products. The Distributor shall at the Company's cost give the
Company such assistance as it may require in prosecuting and defending
any claim arising out of such infringement. The Company shall have full
control over any litigation or threatened litigation brought by a third
party in connection with alleged infringement of the third party's
intellectual property rights by the performance of any part of this
Agreement, and the Distributor shall make no admission or statement
prejudicial to the company's interests in relation to such claim,
litigation or threatened litigation.
7.3 The Distributor shall not in any way modify, adapt or develop the
Company's Trade Mark without prior written consent of the company. If
so consented, the intellectual property rights in any such
modifications, adaptations or developments shall be jointly owned by
the Company and the Distributor, with each Party having full rights of
exploitation thereof independently of the other Party, but the
Distributor's such rights being limited to the Territory, and the
Distributor shall enter into such deeds and documents and do such
things as may be necessary to give full and proper effect to the
Company's rights under this Clause 7.3. The intellectual property
rights in any modifications, adaptations or developments of the Trade
Mark made by the Distributor without the Company's said prior written
consent shall become the exclusive property of the Company.
7.4 The Distributor shall not affix the Trade Mark to any product other
than the Product without the prior written consent of the Company.
7.5 The Distributor shall not use the Company's name, Trade Mark or other
trade marks by way of advertisement save to the extent that such name
and trade marks appear on literature issued by the Company and to the
extent that it discloses in a manner approved by the Company in writing
his capacity as a distributor for the Company.
8. WARRANTIES AND INDEMNITIES
8.1 The Company's warranty on the Products is limited to the following: the
Company will replace any Product at its own expense, save as to freight
as to which it shall pay fifty percent (50%) of the roundtrip cost for
all validated warranty claims, as to the Product found to be materially
defective. The Company's warranty is further subject to:
a) the Product not being used for any purpose other than the
normal purpose for its specifications.
b) the observance by the user of all operating instructions and
recommendations issued by the Company in relation thereto; and
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c) the Distributor's notification to the Company of the results
of incoming acceptance test within fifteen (15) days from the
date when the Distributor receives the Product ordered.
The Distributor shall promptly issue a report to the Company in respect
of each warranty claim brought to its attention.
8.2 In the event that any claim should be brought against the Distributor
that the Products infringe any patent or other protected propriety
right, owned by any third party, not being an employee, officer,
director or shareholder of the distributor, and not being a Group
Corporate Person of the Distributor or any employee, officer, director
or shareholder of such Group Corporate Person, which was valid at date
of acceptance by the Company of the Distributor's order for such
Product, the Company shall hold the Distributor harmless from any and
all damages which may be awarded against the Distributor by any court
of competent jurisdiction provided that:
(a) the Distributor notifies the company in writing within thirty
(30) days of learning of any such claim as aforesaid;
(b) the Distributor permits the company to conduct the defense to
any such claim as aforesaid and the negotiation of any
settlement thereof;
(c) the Distributor provides at the expense of the Company such
assistance as the Company may require in the defense or
settlement of such claim as aforesaid; and
(d) such indemnity and undertaking as aforesaid shall not apply if
the infringement relates to any use other than a use
authorized by the Company.
8.3 Neither the Company nor the Distributor shall be or be deemed to be in
breach of this Agreement or be liable for any failure to carry out or
delay in carrying out any of its obligations under this Agreement or
any contract entered into pursuant hereto if such failure or delay
arises directly or indirectly from any cause whatsoever beyond the
reasonable control of either the Company or the Distributor including
without limitation any strike, lockout, industrial dispute or act of
God.
9. DURATION
This Agreement shall be deemed to have commenced on and to have
continued in force from March 21st, 2002 (the "Effective Date") and,
subject to the provisions of Clause 10, shall continue in force for a
period of seven (7) years, from the Effective Date, unless terminated
by either Party according to the provisions of Clause 10. In addition,
if neither Party gives the other Party written notice to terminate this
Agreement at least six (6) months prior to the expiration of the term
of this Agreement, this Agreement shall be automatically renewed under
the same terms and conditions provided herein for a term that the
Parties
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11.3 The provisions of Clauses 1, 8 11, and 14 shall survive the expiration
or termination of this Agreement. The provisions of Clause 5.8 shall
extend beyond termination of this Agreement for a period of thirty six
(36 months) from the date of termination of this Agreement.
11.4 The Distributor shall return at its own expense to the Company all
documents of a secret or confidential nature relating to the Product or
to the implementation of this Agreement and all catalogues, sales
literature, technical pamphlets, samples, advertising or promotional
material relating to the Products which may have been supplied by the
Company.
11.5 The Distributor shall immediately cease to engage in the distribution
of the Product within the Territory, shall immediately give notice of
such fact in writing in a form previously agreed with the Company to
all of its agents, dealers, and customers, and shall cease to represent
itself in such capacity.
12. NO PARTNERSHIP
Nothing in this Agreement and no action taken by the Parties pursuant
to this Agreement shall constitute, or be deemed to constitute, the
Parties a partnership, association, joint venture or other co-operative
entity, unless the Company and the Distributor enter into a separate
partnership agreement.
13. ANNOUNCEMENT
None of the Parties shall disclose the terms and conditions of this
Agreement without prior agreement between both Parties, unless the
disclosure is required by the law or the rules of a regulatory body.
14. CONFIDENTIAL INFORMATION
14.1 The Parties shall at all times:
(a) not use or disclose to any person Confidential
Information it has or acquires; and
(b) make every effort to prevent the use or disclosure of
Confidential Information by any person.
14.2 Clause 14.1 does not apply to:
(a) disclosure of Confidential Information to a director,
officer or employee of the Distributor who needs to
have the Confidential Information in order to carry
out his or her duties; or
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(b) use or disclosure of Confidential Information
required to be used or disclosed by law.
14.3 In the event Confidential Information needs to be disclosed to a
director, officer or employee of the Distributor who needs to have the
Confidential Information in order to carry out his or her duties, the
Distributor shall provide the Company with a list of the names,
department, positions or title of such persons to whom Confidential
Information was disclosed and shall get an approval of the Company
prior to such disclosure. The Distributor shall not disclose
Confidential Information to a director, officer or employee of the
Distributor not approved by the Company.
14.4 In the event that the use of disclosure of Confidential Information is
required to be used or disclosed by law, the Distributor shall notify
it to the Company prior to such use or disclosure.
15. ENTIRE AGREEMENT
15.1 This Agreement constitutes the entire agreement between the Parties and
their respective Group Corporate Persons relating to the subject matter
of this Agreement and supersedes and extinguishes any prior drafts,
agreements, undertakings, representations, warranties and arrangements
of any nature whatsoever, whether or not in writing, relating to or in
connection with the subject matters of this Agreement, including
without limitation the Marketing Agreement and the Memorandum of
Understanding. The Parties hereby agree that as between themselves, the
provisions of the Memorandum of Understanding are hereby superseded.
15.2 Each Party on behalf of itself and as agent on behalf of each of its
Group Corporate Persons acknowledges and agrees with the other
Party/parties (each such Party/parties acting on behalf of
itself/themselves and as agent on behalf of each of its/their
respective Group Corporate Persons) that:
(a) it has not nor has any of its Group Corporate Persons been
induced to enter this Agreement in reliance upon any warranty,
representation, statement, assurance, covenant, agreement,
undertaking, indemnity or commitment of any nature whatsoever
other than those expressly set out in this Agreement or, to
the extent that it has been, it has (in the absence of fraud)
no rights or remedies in relation thereto; and
(b) none of its respective Group Corporate Persons has given or
made any warranty, representation, statement, assurance,
covenant, agreement, undertaking, indemnity or commitment of
any nature whatsoever other than those expressly set out in
this Agreement or, to the extent that it has, the other
Party/parties (each such Party/parties acting on behalf of
itself/themselves and as agent on behalf of each of its/their
respective Group Corporate Persons) unconditionally and
irrevocably waives (in the absence of fraud) any claim which
any of them might otherwise have had in relation thereto.
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15.3 This Agreement may be varied only by a document signed by both of the
Parties.
16. WAIVER
16.1 A waiver of any term, provision or condition of, or consent granted
under, this Agreement shall be effective only if given in writing and
signed by the waiving or consenting Party and then only in the
instances and for the purpose for which it is given.
16.2 No failure or delay on the part of any Party in exercising any right,
power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
16.3 No breach of any provision of this Agreement shall be waived or
discharged except with the express written consent of the Parties.
16.4 The rights and remedies herein provided are cumulative with and not
exclusive of any rights or remedies provided by law.
17. COSTS
Save as expressly otherwise provided in this Agreement each of the
Parties shall bear its own legal accountancy and other costs, charges
and expenses connected with the negotiation, preparation and
implementation of this Agreement and any other agreement incidental to
or referred to in this Agreement.
18. INVALIDITY
18.1 Subject to Clause 18.2 if any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under the law of any
jurisdiction:
(a) the validity, legality and enforceability in that jurisdiction
of any other provisions; and
(b) the validity, legality and enforceability under the law of any
other jurisdiction of that or any other provisions shall not
be affected or impaired in any way.
18.2 In the event of any provision of this Agreement being or becoming
contrary to any of the laws of the Territory the Distributor shall
immediately notify the Company in writing and the Parties shall agree
whether this Agreement shall continue on the basis that the offending
provision be removed or amended in such manner as agreed between the
Parties or that this Agreement shall be terminated.
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19. NOTICES
19.1 Any notice, demand or other communication given or made under or in
connection with the matters contemplated by this Agreement shall be in
writing and shall be delivered personally or sent by fax or air mail if
posted to or from another country:
In the case of the Company to:
Address: 8th Fl., LG Palace Bldg., 165-8 Donggyo-Dong, Mapo-Gu
Seoul, Korea
Fax: +82-2-358-6096
Attention: Kyun-Mayo Park
In the case of the Distributor to:
Address: 29th Floor, Yebisu Garden Place Tower
4-20-3, Ebisu-Shibuya-Ku
Fax: 813-5475-0516
Attention: Christopher Craney
and shall be deemed to have been duly given or made as follows:
(a) if personally delivered, upon delivery at the address of the
relevant Party;
(b) if sent by air mail, four Business Days after the date of
posting; and
(c) if sent by fax, when dispatched;
Provided that if, in accordance with the above provision, any such
notice, demand or other communication would otherwise be deemed to be
given or made outside Working Hours, such notice, demand or other
communication shall be deemed to be given or made at the start of
Working Hours on the next Business Day.
19.2 A Party may notify the other Party to this Agreement of a change to its
name, relevant addressee, address or fax number for the purposes of
Clause 19.1 provided that such notification shall be effective only
after:
(a) the date specified in the notification as the date on which
the change is to take place; or
(b) if no date is specified or the date specified is less than
five Business Days after the date on which notice is given,
the date falling five Business Days after notice of any such
change has been given.
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20. COUNTERPARTS
The Agreement may be executed in any number of counterparts which
together shall constitute one agreement. Any Party may enter into this
Agreement by executing a counterpart and this Agreement shall not take
effect until it has been executed by all Parties.
21. GOVERNING LAW AND JURISDICTION
21.1 This Agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this Agreement
or its formation) shall be governed by and construed in accordance with
the laws of the State of New York in the U.S.A.
21.2 The Parties agree to settle amicably any disputes, which may arise out
of or in connection with this Agreement. IN the event that they are
unable to reach amicable agreement, then the Parties shall settle such
dispute through arbitration pursuant to Clause 21.3.
21.3 Either Party may submit a dispute to arbitration at any time following
the elapse of one (1) month from the date of such dispute arising. In
the event that the Company initiates the arbitration, it shall be held
in Tokyo, Japan and shall be conducted in the Japanese language in
accordance with the rules of the Japan Commercial Arbitration
Association. If the Distributor initiates the arbitration, it shall be
held in Seoul, Korea and shall be conducted in the Korean language in
accordance with the rules of the Korean Arbitration Board.
22. EXCLUSION OF THIRD PARTY RIGHTS
The Contracts (Rights of Third Parties) Act 1999 shall not apply to
this Agreement and no person other than the Parties to this Agreement
shall have any rights under it, nor shall it be enforceable under that
Act by any person other than the Parties to it.
23. ASSIGNMENT
The obligation and duties of the Parties hereunder are personal to the
Parties and their lawful successors in title and shall not be
subcontracted to any third party without the prior written consent of
the other Party, nor shall either Party assign this Agreement or any
part thereof to any third party without the prior written consent of
the other Party.
IN WITNESS whereof this Agreement has been executed on the date first above
written.
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SIGNED by /s/ KOICHI MURAMATSU as
---------------------------
Authorized representative for HOKUYO
KOEKI CO., LTD. in the presence of:
/S/ T. TAKAHASHI
- -------------------------------------
Signature of witness
T. TAKAHASHI
- -------------------------------------
Name of witness (block letters)
29TH FLOOR, YEBISU GARDEN PLACE TOWER
4-20-3, EBISU-SHIBUYA-KU
- ------------------------------------- /S/ K. MURAMATSU
Address of witness ___________________________________
By executing this agreement the
signatory warrants that the
EXECUTIVE MANAGING DIRECTOR signatory is duly authorized to
- --------------------------- execute this agreement on behalf of
Occupation of witness HOKUYO HOEKI CO., LTD.
SIGNED by /S/ SEUNG-KWON NOH as
---------------------------
Authorized representative for HOKUYO
KOEKI CO., LTD. in the presence of:
/S/ KYUNGMOON PARK
- -------------------------------------
Signature of witness
KYUNGMOON PARK
- -------------------------------------
Name of witness (block letters)
EUGENE SCIENCE, SEOUL, KOREA
- ------------------------------------- /S/ SEUNG-KWON NOH
Address of witness ___________________________________
By executing this agreement the
signatory warrants that the
VICE PRESIDENT signatory is duly authorized to
- ------------------------------------- execute this agreement on behalf of
Occupation of witness EUGENE SCIENCE INC.
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PAGE IS INTENTIONALLY BLANK
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SCHEDULE 1
SUB-DISTRIBUTOR(S)
NAME: MEIJI SEIKA KAISHA, LTD.
ADDRESS: 4-16 KYOBASHI 2-CHOME, CHUO-KU, TOKYO 104-8002, JAPAN
20