EXHIBIT 10.8
MARKETING AGREEMENT
This MARKETING AGREEMENT ("the Agreement") is made and entered into on this 8th
day of March, 2001 by and among:
Eugene Science Inc., a corporation incorporated under the laws of Korea, with
its registered office at 8th Fl., LG Palace Bldg. 165-8 Donggyo-Dong, Mapo-Gu,
Seoul, Korea ("Eugene Science"), and
Hokuyo Koeki Co., Ltd., a corporation incorporated under the laws of Japan, with
its principal office at Yebisu Garden Tower, 29th Fl., Ebisu 4-20-3, Shibuya-ku,
Tokyo 150-6029, Japan ("HK").
WHEREAS:
(A) Eugene Science develops, manufactures and sells, on an exclusive basis,
Ucole products, including Ucole-S (the "Product") which is a
cholesterol reducing substance derived mainly from natural plant
sterol;
(B) HK is engaged in the business of beverage bottling in Japan and has
vast experience, know-how and information in the beverage industry in
Japan;
(C) In view of its position in the beverage industry in Japan, including
its contacts, marketing expertise and organization, HK wishes to (i)
undertake the development of cholesterol reducing beverages in Japan
containing the Product, (ii) find a suitable Japanese beverages
manufacturing company, or brand owner, which is capable of successfully
marketing and selling such cholesterol reducing beverages in Japan, and
(iii) be the exclusive distributor in Japan of the Product for the
purpose of making beverages only;
(D) Eugene Science is willing to support HK's such endeavors;
(E) The parties now wish to formally record the terms and conditions which
shall govern their agreement for the purposes outlined in Recital (C)
above.
NOW, THEREFORE, IT IS AGREED AND DECLARED AS FOLLOWS:
Clause 1. SCOPE
The parties agree that the terms and conditions set forth in this Agreement and
the Mutual Confidentiality Agreement, which was executed on February 19, 2001
between the parties and is incorporated herein as reference, represent the
entire agreement between the parties in connection with the purposes described
in Clause 2 below, and shall supersede any and all prior representation,
agreements, statements and understanding relating thereto between the parties.
Clause 2. APPOINTMENT
Subject to the terms and conditions of this Agreement, Eugene Science hereby
grants and HK accepts the exclusive right, during the term of this Agreement,
to:
(a) undertake the development of cholesterol reducing beverages
containing the Product in Japan;
(b) find a suitable Japanese beverages manufacturing company, or
brand owner, which is capable of successfully marketing and
selling such cholesterol reducing beverages in Japan, and
(c) be the exclusive distributor in Japan of the Product for the
purpose of making beverages only.
Clause 3. DUTIES OF HK
3.1 HK shall during the term of this Agreement:
3.1.1 Use its best endeavors to develop cholesterol reducing
beverages containing the Product, find a suitable Japanese
beverages manufacturing company, or brand owner, which is
capable of successfully marketing and selling such beverages
in Japan, and promote the sale of the Products to customers
and potential customers throughout Japan and solicit orders
for the Product in Japan. Without prejudice to the generality
of the foregoing HK shall:
3.1.1.1 make its best efforts to develop cholesterol reducing
beverages containing the Product which beverages
should be suitable for the Japanese beverage market;
3.1.1.2 make its best efforts, together with its customers,
to have the beverages developed in accordance with
Clause 3.1.1.1 designated as Foods for Specified
Health Use ("FOSHU") by the Japanese Ministry of
Health & Welfare;
3.1.1.3 maintain close marketing relationships with customers
so that their relevant needs and future plans are
ascertained; and
3.1.1.4 not, during the term of this Agreement directly or
indirectly import, distribute, sell, advertise,
market, or promote the sale or distribution in Japan
of any product that is competitive with the Product
in the reasonable opinion of Eugene Science.
3.1.2 Diligently respond to routine service inquiries from customers
either by telephone, fax, email or in the field, including;
3.1.2.1 maintaining liaison with customers; and
3.1.2.2 assisting customers in the implementation of Eugene
Science's warranty for the Product.
3.1.3 Promptly draw to the attention of Eugene Science any new or
revised legislation, regulation or orders affecting the use or
sale of the Product in Japan when such legislation, etc. comes
to its attention.
3.1.4 Before entering into any significant contract with its
customers in connection with the Product or a beverage
containing the Product (including all contracts with the
potential contract price of 5,000,000 Japanese yen or more),
consult with Eugene Science of the terms and conditions of
such contract.
3.1.5 Inform Eugene Science in writing of any new or continuing
relationships with its customers, including the details of all
contracts entered into with its customers in connection with
the Product or a beverage containing the Product every three
months.
3.1.6 Maintain and coordinate, at its own cost, such technically
competent sales, commercial and service staff to render
satisfactory service to customers of the Product.
3.2 Recognizing its obligations to protect the reputation of Eugene
Science, HK undertakes that it shall not undertake any obligations in
respect of the performance of the Product in excess of the limits
specified by Eugene Science in respect of the Product concerned.
Clause 4. SUPPORT OBLIGATIONS OF EUGENE SCIENCE
During the term of the Agreement, Eugene Science shall:
4.1 Continue to develop the Product to meet the requirements of the
Japanese market.
4.2 Supply to HK with all reasonable technical data in reproducible form,
if available, in catalogues, sales literature, advertising material
relating to the Product.
4.3 Make potential customers within Japan aware of the support available
from HK and of Eugene Science's support ol HK.
Clause 5. DELIVERIES BY HK
5.1 Throughout the term of this Agreement HK shall maintain a sufficient
stock of the Product at all times to fill orders promptly.
5.2 HK shall store such stock in its authorized warehouse and all
deliveries will be dealt with through that storage facility.
Clause 6. PRICE
6.1 HK shall pay the prices agreed or to be agreed. The parties hereto
further agree that the said prices shall be reviewed every six months
after the said price have been agreed between the parties.
6.2 Eugene Science undertakes that it will give not less than six months'
notice of any changes to its prices for the Product.
6.3 All payment is to he made in the Japanese currency within 45 days after
the date of each invoice, and all exchange, interest, banking,
collection or other charges are to be borne by HK.
Clause 7. DIRECT SALES AND FOREIGN ORDERS
Eugene Science agrees not to solicit sales of the Product for use within Japan
during the term of this Agreement. However, nothing in this Agreement is
intended to operate nor shall it be construed as operating to prevent Eugene
Science from selling its products bearing the brand Cholzero to customers in
Japan, should it receive direct orders from any customers in Japan, who intends
to resell or actually resells such products to customers in Japan, regardless of
whether Eugene Science has prior knowledge of such fact.
Clause 8. PROPRIETARY RIGHTS
8.1 The due and proper performance of its obligations and the exercise of
its rights hereunder by HK shall not be deemed to be a breach of
copyright or infringement of patent trademark or other proprietary
right owned by Eugene Science.
8.2 HK shall not under any circumstances acquire any rights whatsoever in
any copyright, patent, trademark or other proprietary right of Eugene
Science nor shall HK acquire any rights whatsoever in relation to the
Product.
Clause 9. WARRANTY
9.1 Eugene Science's warranty on the Products is limited to the following:
Eugene Science will replace any product at its own expense, save as to
freight as to which it shall pay 50% of the roundtrip cost for all
validated warranty claims, as to the Product found to be materially
defective.
9.2 The warranty contained in Clause 9.1 above is subject to:
9.2.1 the Product not being used for any purpose other than the
normal purpose for its specifications.
9.2.2 the observance by the user of all operating instructions and
recommendations issued by Eugene Science in relation thereto.
9.2.3 prompt written notice being given to Eugene Science, within 30
days following discovery of such defect.
9.3 HK shall promptly issue a report to Eugene Science in respect of each
warranty brought to its attention.
Clause 10. PATENT INDEMNITY
10.1 In the event that any claim should be brought against HK that the
Products infringe any patent or other protected proprietary right,
owned by any third party, not being an employee, officer or shareholder
of HK and not being an affiliate of HK or any employee, officer, or
shareholder of such affiliate, which was valid at the date of
acceptance by Eugene Science of HK's order for such Product, Eugene
Science shall hold HK harmless from any and all damages which may be
awarded against HK by any court of competent jurisdiction provided
that:
10.1.1 H K notifies Eugene Science in writing within 30 days of
learning of any such claim as aforesaid.
10.1.2 HK permits Eugene Science to conduct the defense to any such
claim as aforesaid and the negotiation of any settlement
thereof.
10.1.3 HK provides at the expense of Eugene Science such assistance
as Eugene Science may require in the defense or settlement of
such claim as aforesaid.
10.1.4 such indemnity and undertaking as aforesaid shall not apply if
the infringement relates to any use other than a use
authorized by Eugene Science.
Clause 11. CAPACITY OF THE PARTIES
11.1 The relationship hereby established between Eugene Science and HK is
solely that of seller and buyer. Except as specifically authorized
under the terms of this Agreement, HK is not authorized to bind or
commit or make representations on behalf Eugene Science for any purpose
whatsoever, and HK shall make this clear to customers and potential
customers.
11.2 This Agreement is not intended nor shall it be constructed as
establishing any form of partnership between the parties.
Clause 12. ASSIGNMENT
The obligations and duties of HK hereunder are personal to HK and shall not be
subcontracted to any third party without the prior written consent of Eugene
Science nor shall HK assign this Agreement or any part thereof to any third
party without the prior written consent of Eugene Science.
Clause 13. CONFIDENTIALITY
Any information which may during the term of this Agreement he divulged by
either party to the other on the express written basis that such information is
confidential shall be so regarded and be protected whether in storage or in use.
Furthermore, any such information shall not be used by the party receiving same
otherwise than for the express purpose for which it is divulged and shall not
further be divulged except to such of the said party's own servants and agents
as may have a "need to know" for the purposes of this Agreement.
Clause 14. DURATION AND TERMINATION
14.1 This agreement shall commence on the date of signature hereof and shall
continue for 1 year. This Agreement may be extended for 1 year terms by
mutual agreement, to be made between the parties not less than 30 days
prior to the end of each term, upon satisfactory performance of the
parties' obligations hereunder.
14.2 Notwithstanding the provision of Clause 14.1. either party may
terminate this Agreement by giving to the other not less than 60 days
written notice if the other party fails to satisfactorily perform this
Agreement.
14.3 Any termination in accordance with Clause 14.2 above shall not affect
the obligations of the parties to fulfill the terms of orders placed
and accepted prior to the effective date of such termination.
14.4 If either party should (i) enter into any liquidation, bankruptcy or
receivership whether compulsorily or voluntarily, (ii) enter into any
agreement with creditors compounding debts, (iii) suffer the imposition
of a receiver in respect of the whole or a material part of its assets,
or (iv) otherwise become insolvent, then the other party may, by notice
in writing, forthwith terminate this Agreement.
14.5 If either party has been in material breach of any of the terms and
conditions of this Agreement for 30 days or more, then the other party
may. by notice in writing. forthwith terminate this Agreement.
14.6 Upon termination of this Agreement:
14.6.1 Neither party shall he liable to the oilier party for any
expenses, costs, or any other types of liabilities incurred by
such party in connection with the performance of this
Agreement;
14.6.2 HK shall return at its own expense to Eugene Science any
catalogues, sales literature, technical pamphlets and
advertising material relating to the Product which may have
been supplied by Eugene Science; and
14.6.3 HK shall immediately cease to trade the Products and shall
cease to represent itself in such capacity.
Clause 15. NOTICES
Any notice required to he given hereunder shall be sufficiently given if
forwarded by the following methods: registered mail to the registered office of
Eugene Science or the principal office of HK as the case may be and shall be
deemed to have been given at the time the registered mail was sent at a post
office.
Clause 16. WAIVER
Failure by either party at any time to enforce any of the provisions of this
Agreement shall not constitute a waiver by such party of such provision nor in
any way affect the validity of this Agreement.
Clause 17. AMENDMENT
This Agreement may not be amended except by an instrument in writing signed by
both parties and made subsequent to the date of this Agreement and which is
expressly stated to amend this Agreement.
Clause 18. HEADINGS
The clause headings of this Agreement are for reference purposes only and shall
not be deemed to affect the interpretation of any of the provisions of this
Agreement,
Clause 19. LAW
This Agreement shall be subject to and interpreted in accordance with the laws
of the Republic of Korea.
Clause 20. ARBITRATION
All disputes arising out of or in connection with this Agreement shall be
finally settled under the Rules of Arbitration of the Korean Commercial
Arbitration Board by one or more arbitrators appointed in accordance with the
said Rules.
IN WITNESS WHEREOF, the parties have caused this Agreement to he signed on their
behalf by duly authorized officers of the parties.
Eugene Science Inc.
/S/ SEUNG-KWON NOH (Title)
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President & CEO
Hokuyo Koeki Co., Ltd.
/S/ T. TABAHASHI (Title)
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Senior Managing Director &. Representative Director