Exhibit 10.14
MARKETING AND DISTRIBUTION AGREEMENT
This Marketing and Distribution Agreement (the "Agreement") is dated as of
April 9, 2001 between Spectra Science Corporation ("Spectra") with an office at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ and Kleen-Tex Industries, Inc.
("Kleen-Tex") with an ▇▇▇▇▇▇ ▇▇ ▇▇-▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, Kleen-Tex produces mats, mops, and certain other dust control
products ("Mats") for the commercial textile services industry and other
commercial markets.
WHEREAS, Spectra has developed, manufactures and markets LaserCode(TM)
labels ("LaserCode") and associated LaserCode(TM) readers ("Readers") employing
optical based labeling technology proprietary to Spectra to produce
machine-readable label applications in garments and Mats; and
WHEREAS, Kleen-Tex wishes to obtain the right and license to apply the
LaserCode labels to Mats, to sell and distribute the same, and to cooperate with
Spectra in the promotion and marketing of LaserCode technology;
NOW, THEREFORE, for the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Grant of License. Subject to all of the terms and conditions set forth in
this Agreement, Spectra hereby grants Kleen-Tex, for the Term of this Agreement,
a license, exclusive on a worldwide basis with respect to identification of Mats
used for dust control purposes (the "Field"), to market, distribute, and sell
LaserCode labels separately to other manufacturers of mats or in combination
with and applied to Mats. Other than the license hereby granted, all
intellectual property rights with respect to LaserCode 1abels, Readers, or any
other LaserCode technology, including any improvements to the same, regardless
of by whom developed, shall remain the property of Spectra.
2. Minimum Purchase Obligations of Kleen-Tex. During each calendar year of the
Term, Kleen-Tex shall purchase from Spectra a minimum of [***] LaserCode labels
and [***] ink cartridges for application to a minimum of [***] square meters of
graphic and or other types of Mats for the purpose of mat identification.
3. Pricing and Payments; Shipments.
a. Purchases shall be made in units of [***] cartridges and [***] 1abels (a
"Unit") at a combined cost of [***] per Unit.
b. All prices are F.O.B. Spectra's manufacturing facility. Kleen-Tex shall
be responsible for freight charges.
c. Payment to Spectra shall be net thirty (30) days after date of shipment.
All payments are to be made in full, on the due date, in United States dollars,
to Spectra at the
[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.
address shown on the first page of this Agreement in immediately available
funds, with interest at the rate of one and one-half percent (1 1/2%) per month
on any overdue payments.
d. Shipment of LaserCode labels by Spectra to Kleen-Tex shall be made only
against written orders issued by Kleen-Tex ("Orders"). In the event of any
conflict between the terms of an Order and this Agreement, this Agreement shall
take precedence. The delivery date for LaserCode labels to be shipped under this
Agreement shall be specified by Kleen-Tex in each Order. Each Order shall
specify the exact number of Units to be delivered and shall specify a delivery
date which shall be at least 20 business days after the date of receipt by
Spectra of the Order.
e. If, in the sole judgment of Spectra, the financial condition of
Kleen-Tex at any time does not justify continuation of production or delivery on
the terms of payment specified herein, Spectra may require full or partial
payment on any Order in advance, and in addition, in the event that any
proceeding is brought by or against Kleen-Tex under any bankruptcy or insolvency
laws, the license hereunder shall terminate, and Spectra shall be entitled to
cancel any Orders then outstanding.
4. Certain Obligations of Spectra.
a. Spectra shall sell [***] Reader to Kleen-Tex for quality control
applications at one-half of Spectra's cost. Freight charges associated with
delivery of the same to Kleen-Tex shall be additional and shall be for
Kleen-Tex's account. Spectra shall provide at no additional charge a reasonable
amount of technical assistance as needed with respect to the Reader to Kleen-Tex
personnel by telephone and e-mail during normal business hours during the Term
of the Agreement.
b. Spectra shall sell Kleen-Tex a printing system for printing LaserCode
labels at Kleen-Tex's LaGrange, Georgia facility for a total price of [***],
which shall include a personal computer, printer, and software. Freight charges
associated with delivery of the same to Kleen-Tex shall be additional and shall
be for Kleen-Tex's account. Spectra shall provide at no additional charge a
reasonable amount of technical assistance as needed with respect to the printing
system to Kleen-Tex personnel by telephone and e-mail during normal business
hours during the Term of the Agreement.
c. Spectra shall sell Readers to Kleen-Tex at an agreed to price and volume
schedule at the time of purchase for direct use or OEM resale to Kleen-Tex
customers and its competitors.
Spectra shall recommend Kleen-Tex products for customer applications as in its
sole discretion it deems appropriate and feasible.
d. For the Term of the agreement, Kleen-Tex shall have the right to sell
LaserCode labels and Readers to other manufacturers and distributors of Mats.
e. Spectra shall provide brochures and sales materials for Clean '01 and
other promotions as needed, in such quantities and containing such content as
Spectra deems appropriate and feasible.
[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.
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▇. ▇▇▇▇▇-Tex Japan shall apply for a patent in Japan and a United States
patent with respect to the applied use of Spectra's proprietary LaserCode
technology to Mats, and Spectra agrees to provide technical assistance with
respect to such application. It is hereby acknowledged that Kleen-Tex Japan
shall own such patent but agrees to grant a royalty-free exclusive (including as
to Spectra) license to Kleen-Tex under such patent with respect to the Field
during the term of such patent, subject to the provisions of Section 7 hereof.
5. Exclusivity. During the Term, Kleen-Tex shall be the worldwide exclusive
distributor of labels for Mats employing LaserCode technology[, and Spectra
shall be Kleen-Tex's exclusive supplier of optic automatic identification
technology for Mats.] It is understood that Kleen-Tex applies printed labels and
radio frequency chips to mats upon customer request.
6. Marketing.
a. The parties shall participate jointly in preparing and releasing a
marketing announcement, the content of which shall be subject to the approval of
both parties, with respect to their collaborative efforts to market LaserCode
technology.
▇. ▇▇▇▇▇-Tex's exclusive marketing rights are conditioned upon Kleen-Tex's
best efforts to promote and market the LaserCode technology in connection with
the Mats. "Best efforts" for the purpose of this agreement is defined to mean
mention of the avalability of LaserCode labels in trade publications, operation
of a pilot demonstration unit in Kleen-Tex facilities and inclusion of this
pilot unit in plant tours for customers as well as promotion of the system in
training seminars and at trade shows.
c. The Mats on which LaserCode labels have been applied shall be marketed
on a joint logo basis in the trade press of Kleen-Tex with specific reference to
Spectra and LaserCode(TM). KleenTex shall furnish to Spectra, prior to
dissemination of any labels, product literature, or marketing material,
representative copies of the same showing proper use or display of the Spectra
name and trademark(s). Kleen-Tex shall make such changes as Spectra requests to
ensure proper use of Spectra's name and trademark(s) and to avoid any statement
that is, in Spectra's business judgment, inaccurate, objectionable or
misleading. Kleen-Tex shall not have the right to use Spectra's name or
trademarks except in connection with marketing and selling Mats containing the
LaserCode technology.
7. Term and Termination.
a. Term of this agreement will be five (5) years with automatic roll over
for additional five (5) years unless terminated according to one of the
following provisions.
b. Spectra may, at its discretion, terminate this Agreement or the
exclusivity provision hereof, upon thirty (30) days' written notice to
Kleen-Tex, in the event that (i) Kleen-Tex fails to meet its [***] label minimum
annual purchase requirement for the preceding calendar year or (ii) Kleen-Tex
fails to use best efforts to promote and market the LaserCode technology in
connection with the Mats.
[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.
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c. Either party may terminate this Agreement immediately upon written
notice to the other of termination, in the event (i) the other party has
breached any material provision of this Agreement and has failed to cure such
breach within sixty (60) days after receipt of written notice of the breach or
(ii) the other party is the subject of a bankruptcy or insolvency proceeding.
d. In the event of any termination, the non-breaching party shall have all
remedies available to it at law and equity.
e. Upon termination, all rights in the LaserCode granted hereunder shall
revert to Spectra.
8. Warranties; Limitations on Liability.
a. Spectra represents and warrants to Kleen-Tex that it either owns the
LaserCode technology or has obtained and currently holds all rights necessary to
grant the licenses and rights granted to Kleen-Tex hereunder.
b. SPECTRA MAKES NO OTHER WARRANTY, WHETHER EXPRESS OR IMPLIED, AND
SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. Kleen-Tex is provided the opportunity under this Agreement
to test and evaluate the LaserCode technology and is responsible for determining
the suitability of the same for its business purposes.
▇. ▇▇▇▇▇-Tex's sole remedy against Spectra for breach of the foregoing
warranty shall be the refund of any amounts already paid by Kleen-Tex to Spectra
under this Agreement. IN NO EVENT SHALL KLEEN-TEX BE ENTITLED TO ANY SPECIAL,
INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) OR
DAMAGES EXCEEDING THE AMOUNTS THERETOFORE PAID BY KLEEN-TEX TO SPECTRA UNDER
THIS AGREEMENT.
9. General.
a. This Agreement shall constitute the entire agreement between the parties
and shall supersede all other prior agreements, oral or written, and all other
communications between the parties relating to the subject matter hereof:
b. This Agreement shall not be amended except by a writing of subsequent
date hereto, executed by duly authorized representatives of the parties hereto.
c. This Agreement shall not be assigned by either party without the written
consent of the other party, which consent shall not be unreasonably withheld.
d. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid and unenforceable provisions
were omitted.
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e. Neither party shall be liable for failure to perform any obligation
under this Agreement where such failure is due to fire, flood, labor dispute,
war, insurrection, civil unrest, governmental acts, or natural calamities, if
such causes are beyond the reasonable control of such party; provided, however,
that any delay in performance exceeding sixty (60) days shall be grounds for
termination by the non-defaulting party.
f. This Agreement is made pursuant to and shall be governed by the laws of
the State of Delaware, without regard to its rules regarding conflict of laws.
The parties agree that the courts of the State of Delaware, and the Federal
courts located therein, shall have exclusive jurisdiction over all matters
arising from this Agreement.
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IN WITNESS WHEREOF, the parties hereby execute this Agreement through the
representatives listed below:
ACCEPTED AND AGREED TO BY:
Spectra Science Corporation Kleen-Tex Industries, Inc.
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By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President & CEO President
Date Signed: Date Signed: 4/18/01
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