MASTER DISTRIBUTION AND LICENSE AGREEMENT
-----------------------------------------
This Agreement is effective as of May 22, 2003,
by and between
Galaxy Nutritional Foods, Inc., a corporation organized and existing under
the laws of Delaware having its office at 0000 Xxxxxxxx Xxx, Xxxxxxx XX,
00000, X.X.X. (hereinafter "Galaxy") and Fromageries Bel S.A, a corporation
organized and existing under the laws of France having its main office at
00, Xxxxxxxxx Xxxxxxxxxxx 00000, Xxxxx, Xxxxxx (hereinafter "BEL"),
Whereas Galaxy has developed a range of healthy cheese and dairy related
and dairy alternative products and is the exclusive owner of certain
property rights, Know how (as hereinafter defined) and technology, relating
to the manufacture, marketing and sale of these products and has the right
to grant license and distribution rights therefor.
Whereas BEL has developed an international range of cheese and other dairy
products and desires to obtain an exclusive license from Galaxy (i) to
distribute and sell the Products (as hereinafter defined) in the Territory
(as hereinafter defined) and (ii) to manufacture the Products for sale in
the Territory upon the exercise of an option to so manufacture.
Whereas Galaxy has agreed to grant BEL the license for the use of certain
related confidential information, Know how and technology, all for use in
the sale, distribution and manufacturing of the Products in the Territory
under and subject to the terms contained herein.
Whereas Galaxy is willing to supply the Products to BEL and BEL is willing
to purchase the Products from Galaxy to the extent BEL is not manufacturing
such Products itself under the Manufacturing and License Agreement.
Whereas Galaxy is willing to appoint BEL its exclusive distributor of the
Products in the Territory (as hereinafter defined) and BEL desires to
market, distribute and sell directly or indirectly the Products in the
Territory.
Whereas Galaxy desires to grant to BEL and BEL desires to accept from
Galaxy an option to manufacture some or all of the Products for
distribution and sale in the Territory under the Manufacturing and License
Agreement.
Now, therefore, in consideration of premises herein contained, and such
other valuable consideration, the receipt and sufficiency of which is
acknowledged by the parties, the parties hereto agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1Products
The term "Products" means all of Galaxy's healthy cheese and dairy-related
and dairy alternative food products. A full listing of Galaxy's current
Products is provided in Exhibit 1 of this Agreement. The Products will also
include some or all of the healthy cheese and dairy-related and dairy
alternative food products developed by Galaxy after the execution of this
Agreement, including any products, if any, specifically developed or
adapted for BEL, as mutually agreed by the parties. The parties acknowledge
and agree that the Ultra Smoothie products made with Tropicana juices, and
other products made by Galaxy under licenses of any third party shall not
be included in Products. Galaxy reserves the right to change or modify any
of the Products, and to discontinue the manufacturing of any Product any
time BEL is not ordering on the basis of the Minimum Production Quantities
from Galaxy as discussed in Exhibit 4 of this Agreement.
1.2. Trademarks
The term "Trademarks" means the trademarks, brands names, service marks,
trade names, trade dress and logos and all registrations related thereto
owned by BEL under which the Products shall be marketed and distributed.
Galaxy's logo "Galaxy Nutritional Foods Smart Choice Cheese Product" (the
"Logo"), which represents the concept of "smart choice technology," is to
be used on a principal display panel for all Products sold pursuant to this
Agreement. This Logo shall also be used and displayed on each and every
package of the Products according to the scheme set forth in Exhibit 2
attached hereto.
1.3. Territory
The term "Territory" means
(i) European Union states consisting of Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, and the United Kingdom;
(ii)Other European countries consisting of Xxxxxxx, Xxxxxxx, Xxxxxx-
Xxxxxxxxxxx, Xxxxxxxx, Croatia, Republic of Cyprus, Czech Republic,
Estonia, Hungary, Iceland, Latvia, Liechtenstein, Lithuania, Macedonia,
Malta, Slovenia, Switzerland, Turkey, Ukraine, Yugoslavia, and Norway; and
(iii) Microstates and territories consisting of Andorra, Monaco, San
Marino, Vatican, and Channel Islands CGB,
and any such additional countries as may be agreed upon by both parties
from time to time, upon request of BEL. BEL will be invited to propose
additional territorial rights, which proposal may be granted in Galaxy's
reasonable discretion, however; at this time, Galaxy is not granting to BEL
a right of first refusal to sell Products in any country, state or
territory outside the territories noted in items (i), (ii) and (iii) above.
1.4. Affiliate
The term "Affiliate: of, or a Person "Affiliated" with, a specified Person,
is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, the Person specified. For the purpose of this definition, "control"
of a Person shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise. For
purposes of this definition, direct or indirect control of at least fifty
(50%) of the voting stock or other ownership interest of a Person or direct
or indirect power to direct or cause management to elect or appoint at
least fifty percent (50%) of the members of the corporate governing bodies
shall conclusively establish control. For purposes of this definition, the
term "Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof)..
1.5. Patents
The term "Patents and patent applications" means the patents, patent
applications, patent disclosures and inventions and all registrations
related thereto now or hereinafter owned by Galaxy or BEL relating to the
Products sold in the Territory.
1.6. Know How
The term "Know how" means all secret and confidential data and all
technical and manufacturing information, knowledge research, studies,
development, process, formulae, technology, formulations, sourcing of raw
materials, manufacturing information, quality insurance specifications, and
generally all intellectual and industrial property rights, including patent
applications and patents, the rights to which are owned by Galaxy, relating
to the registration, manufacturing, packaging, and sale of the Products and
all related documentation.
2. GRANT OF RIGHTS
Galaxy hereby grants to BEL, subject to the terms and conditions of this
Agreement, the exclusive right and license, with full right to grant
sublicenses to BEL's Affiliates, to use the Know-How and to market,
promote, distribute and sell the Products throughout the Territory.
Further, Galaxy hereby grants to BEL the right to appoint one or more sub-
distributors of the Products within the Territory, provided that such
persons or entities are disclosed to Galaxy in writing in advance.
This license does not authorize BEL to, and BEL shall not, directly or
indirectly, export to or to distribute or sell the Products in any part of
the world other than the Territory, unless specifically authorized by
Galaxy in writing.
During the term of this Agreement, BEL and its Affiliates shall not
distribute, market, sell or manufacture any Products in the same categories
as the Products, except to the extent BEL is already manufacturing,
distributing, marketing or selling such Products.
During the term of this Agreement, Galaxy shall not negotiate or take any
other steps towards the grant or the promise to grant any right to anyone
other than BEL through letter of intent, option agreement or agreement
concerning, within the Territory, (i) the distribution, selling or
manufacture of the Products or (ii) the use of the Know-How.
3. APPOINTMENT OF DISTRIBUTOR
3.1.Galaxy hereby appoints BEL and BEL hereby accepts such appointment as
Galaxy's sole and exclusive distributor of the Products in the Territory.
This sole and exclusive appointment means that Galaxy shall appoint no
other distributor or representative of the Products within the Territory
and that Galaxy shall not sell the Products directly into the Territory or
to anyone Galaxy reaonably believes will sell the Products into the
Territory.
3.2.BEL and its Affiliates shall use best efforts to promote, market,
distribute and sell the Products in the Territory, either directly, or
through its Affiliates, or with respect to countries where no BEL Affiliate
exists, through third party distributors, which third party distributors
are reasonably acceptable to Galaxy.
3.3.BEL shall use its best efforts to ensure that each of its Affiliates
and distributors that promotes, markets, distributes and sells the Products
in the Territories shall comply with those duties, obligations and
warranties stated in this Agreement applicable to BEL.
3.4.BEL shall use its best efforts to ensure that any agreement between
BEL and BEL's Affiliates, and/or distributors in connection with the
promotion, marketing, distribution and sale of Products in the Territories,
shall be fully consistent with the terms of this Agreement.
3.5.Nothing in this Agreement shall be construed as giving BEL and its
Affiliates, any right to use the Know how or any other information and
data received hereunder for purposes other than those of developing,
marketing, distributing, promoting and selling the Products in the
Territory except to the extent otherwise provided in Section 5 hereof.
3.6.BEL may communicate to its customers information commonly requested on
Product specifications and formulae / ingredient list to the extent
required by applicable law, agreements to which BEL or its Affiliates are
obligated or industry customs; provided in all instances that BEL fully
complies with the confidentiality obligations in Section 17.3.
3.7.Subject to Section 9.2 hereof, Galaxy shall sell to BEL, and BEL shall
purchase and accept only from Galaxy, at the prices and upon the terms and
conditions provided in this Agreement, such amount of the Products as BEL
may request from time to time.
3.8.Galaxy agrees not to sell, authorize or appoint others to sell the
Products in the Territory by any means (including, but not limited to, by
electronic commerce via the Internet) and agrees not to knowingly sell any
of the Products, directly or indirectly, to anyone other than to BEL or its
Affiliates or distributors for delivery or resale within the Territory,
including any sales to anyone outside the Territory for delivery or resale
within the Territory (including, but not limited to, electronic commerce
via the Internet). Notwithstanding the foregoing, Galaxy shall be permitted
to sell to its existing distributors within the Territory until such time
as those distributors may be transitioned to BEL through the mutual efforts
of Galaxy and BEL.
3.9.Galaxy agrees to immediately notify BEL if any of the Products require
special or other licenses to export and to update such information promptly
upon changes, additions or deletions to such requirements.
3.10. BEL agrees to immediately notify Galaxy if any of the Products
being sold by BEL require special labelling for lawful and safe use, sale
and consumption within the pertinent country or countries of the Territory
where the Product will be shipped, sold, used or consumed and to update
such information upon changes, additions or deletions to such requirements.
4. TERM
This Agreement shall become effective on the date first written above and
shall remain in effect for a period of ten (10) years (the "Initial Term"),
provided that neither party has given the other party written notice of its
intent to terminate this Agreement pursuant to Sections 5 or 17 of this
Agreement ("Termination Notice"). Subsequent to the expiration of the
Initial Term, this Agreement shall be renewed automatically for successive
renewal terms of three (3) years each, which renewal will terminate in the
event either party provides the other party with a Termination Notice.
5. MANUFACTURING LICENSE RIGHTS
Galaxy hereby grants to BEL an exclusive option upon the exercise of which
from time to time by BEL, BEL, in addition to its rights to promote,
market, distribute and sell the Products in the Territory pursuant to this
Agreement, shall be permitted to also manufacture one or more of the
Products as BEL may designate for promotion, marketing, distribution and/or
sale in the Territory, including Products improvements conceived, proposed
or developed by Galaxy. Said option shall be exclusive to BEL and may be
exercised by BEL an unlimited number of times at any time and from time to
time during the Initial Term and any subsequent renewal terms with respect
to any or all of the Products. Notwithstanding anything stated herein to
the contrary and as an exception to the term of the option stated herein
and as an exception to the Initial Term, within sixty (60) days of the
fourth anniversary of this Agreement, the parties shall elect, by each
notifying the other in writing of its selection, in its reasonable
discretion, to proceed in one of the following manners:
(i) the parties may mutually agree to continue operating under the
terms of this Agreement, including retaining BEL's option to manufacture
certain or all of the Products from time to time; provided that at that
time the parties develop and commit to certain performance metrics (the
"Performance Metrics") developed in good faith and in accordance with an
analysis by the parties of the relevant markets, to be updated by the
parties annually, with respect to any Products Galaxy manufactures for BEL
to distribute in the Territory, the failure of which to attain will permit
either party to terminate this Agreement but not BEL's option to
manufacture set forth above (such Performance Metrics to be developed by
the Designee (as defined in section 5) in the event the parties are unable
to agree);
(ii) the parties may mutually agree to terminate this Agreement in
accordance with the provisions of Section 17.1.1 below;
(iii) the parties may mutually agree to convert this Agreement into the
Manufacturing and License Agreement (defined below) with a corresponding
exercise by BEL of its option to manufacture whatever Products BEL
designates; provided that conversion of this Agreement into the
Manufacturing and License Agreement shall not foreclose BEL's ability to
designate in the future other Products it desires to manufacture; or
(iv) either BEL or Galaxy may elect to terminate this Agreement in the
event that either party in its sole discretion is not satisfied with the
performance of the other party or with the amount of sales or income from
the sales of the Products hereunder; provided, however, that if Galaxy
elects to terminate this Agreement, BEL shall be given the opportunity to
first exercise its option to designate which Products, if any, it wishes to
manufacture and distribute itself and if BEL elects to manufacture any of
the Products at this time it will enter into the Manufacturing and License
Agreement with Galaxy and shall have no further ability to designate other
Products in the future to so manufacture beyond those designated pursuant
to this clause (iv).
Furthermore, in addition to BEL's ability to exercise the option from time
to time during the term of this Agreement or at the fourth anniversary of
this Agreement as provided above, upon a change of control of Galaxy,
notice of which shall be given by Galaxy to BEL within one (1) month of
such change, BEL may exercise its option right and this Agreement will
automatically convert into and be controlled and governed by the terms of
the Manufacturing and License Agreement.
In the event that either party elects to terminate this Agreement by so
selecting to terminate under item (ii), (iii), or (iv) above, such
termination shall be effective one year from the date notice of such
termination is provided to the other party.
If BEL exercises such option to manufacture or have manufactured all or
some of the Products, Galaxy shall within sixty (60) days of the exercise
of such option, communicate and grant to BEL the right to use the Know-How
to manufacture the Products for sale and distribution in the Territory for
which the option is exercised, in conformity with the specifications and
the technical documentation communicated by Galaxy to BEL. The
Manufacturing and License Agreement will provide that Galaxy will undertake
to inform BEL about any change or modification of the Know-How. In
addition, during the term of the Manufacturing and License Agreement,
Galaxy shall disclose to BEL any modifications or improvements to the Know-
How made by Galaxy, namely to allow compliance with local regulations. In
addition, Galaxy will agree to reasonably accept any recommended changes
BEL recommends to the Know How.
The terms and conditions which shall govern such license of manufacturing
shall be set forth in a manufacturing and license agreement which the
parties hereto will undertake to negotiate in good faith during the period
between the execution of this Agreement and the exercise of the option
described in this Section 5 (the "Manufacturing and License Agreement"). If
BEL exercises such option with respect to some or all of the Products, and
enters into the Manufacturing and License Agreement with Galaxy, this
Agreement shall terminate. Notwithstanding this termination, however, it
is understood and expressly acknowledged by the parties that BEL's exercise
of its option to manufacture some or all of the Products shall not preclude
BEL's continued right to distribute those Products that BEL does not elect
to manufacture in a manner consistent with BEL's performance under and the
terms and conditions of this Agreement to the date of such election.
Subsequent to BEL's exercise of its option to manufacture any of the
Products, and in lieu of the applicable Minimum Production Obligation for
such Product or Products and associated payments therefor, BEL shall pay to
Galaxy a royalty of three to five percent (3% to 5%) (the "Royalty Rate")
of the Aggregate Net Sales (as hereinafter defined) by BEL of the Products
manufactured by BEL for distribution and sale in the Territory; provided
that aggregate annual royalties paid by BEL to Galaxy shall, in no event,
be less than certain minimum royalties (the "Annual Minimum Royalty"). The
Annual Minimum Royalty shall be allocated among each of the countries,
states or territories in the Territory (the "Per Country Allocation"). The
Royalty Rate applicable to each Product, the Annual Minimum Royalty and the
Per Country Allocations shall be set forth in the Manufacturing and License
Agreement or schedules thereto. The schedules to the Manufacturing and
License Agreement may or may not be subject to revision on an annual basis
by the parties as provided by the terms of the Manufacturing and License
Agreement.
To the exent BEL has failed, by an anniversary of this Agreement (a
"Royalty Payment Date"), to make royalty payments to Galaxy in an aggregate
amount for the applicable year equal to or in excess of the Annual Minimum
Royalty, BEL shall make a payment to Galaxy within 30 days of the Royalty
Payment Date (the "Late Payment Date") in an amount equal to the difference
between the Annual Minimum Royalty and the aggregate royalty payments made
by BEL to Galaxy for that year (the "Minimum Royalty Shortfall"). If BEL
fails to pay to Galaxy the Minimum Royalty Shortfall, if due, by the Late
Payment Date, BEL shall provide notice to Galaxy of which of the Per
Country Allocations BEL has paid and, with respect to those countries,
states or territories represented by unpaid Per Country Allocations, at
Galaxy's reasonable discretion, BEL may lose its exclusive right to use,
market and distribute the Product(s) in the countries, states or
territories represented by such unpaid Per Country Allocations and thereby
have such distribution rights on a non-exclusive basis and Galaxy shall
have the rights with respect to such countries, states or territories to
appoint another distributor or representative and to sell direct. BEL shall
lose such exclusive rights after receiving three months notice via
registered mail from Galaxy indicating Galaxy's exercise of its discretion
to have BEL surrender such exclusive rights. BEL shall retain its exclusive
distribution rights with respect to those countries, states and territories
for which it has complied with such Per Country Allocations.
BEL shall make written reports to Galaxy within sixty (60) days after the
last day of each calendar year. The reports shall state (i) a description
and calculation of the total aggregate sales, which shall include any and
all income, receipts, revenues or other consideration from the sale,
exchange or transfer of Products manufactured by BEL ("Aggregate Sales"),
less any discounts, returns, rebates, sales tax, excise tax, value added
tax, freight, insurance or other out-of-pocket expenses of Products paid
from or to be paid from Aggregate Sales of Products ("Aggregate Net Sales")
sold in the preceding year in the Territory, and (ii) all royalties
accrued, for the past year. Within fifteen (15) days of BEL's providing
such report to Galaxy, BEL shall remit to Galaxy in U.S. dollars the
royalties due under the Manufacturing and License Agreement at the Royalty
Rate on the Products included in such report. BEL shall keep sufficient
records of the sales of the Products to enable an independent certified
accountant, designated by Galaxy and reasonably acceptable to BEL, to audit
BEL's records of such sales at any reasonable time during normal business
hours. Any such audit shall be preceded by thirty (30) days written notice
from Galaxy to BEL. Such audit shall be conducted at Galaxy's sole expense
unless such audit reveals a discrepancy in favor of Galaxy of five per cent
(5%) or more in the Gross Royalty Payment due (without regard to offsets or
credits which may be claimed against such sum), in which case the expense
of such audit shall be borne by BEL. The term "Gross Royalty Payment" means
the Aggregate Net Sales multiplied by the Royalty Rate. BEL shall withhold
from such royalties and pay to the French tax authorities or any other
corresponding tax authority all withholding taxes required by law
applicable to royalties payable to Galaxy. BEL shall retain the ability
to purchase Products from Galaxy for resale whether or not BEL has elected
to manufacture that particular Product itself and, to the extent BEL
distributes or sells Products in the Territory which were manufactured by
Galaxy instead of BEL, BEL's payment to Galaxy for such products shall not
be governed by these royalty provisions but by the provisions set forth in
Section 9 hereof.
The royalty provisions provided above shall be set forth in the
Manufacturing and License Agreement and shall not be subject to change
except by the mutual agreement of the parties hereto.
The Manufacturing and License Agreement shall provide that the parties
shall provide each other with all reasonable cooperation which the other
party may request in connection with the performance of the Manufacturing
and License Agreement, including but not limited to the following :
(i) assistance, including the sharing of testing and other records in
order to enable the Products to be manufactured, distributed, used
or sold in the Territory;
(ii)the provision of technical consultation (in-person, telephonic,
and written, as requested during the term of the Manufacturing and
License Agreement) relating to the manufacture of the Products;
(iii) access to any improvements in or enhancements to the Galaxy
Know-How or which is developed or discovered by the parties during
the term of the Manufacturing and License Agreement; and
(iv) establishment of certain commercial relationships with third
parties in certain countries, states and territories in the Territory
as may be deemed by the parties to be desirable to manufacture,
promote, market, distribute and/or sell the Products in the
Territory.
Such cooperation will be acknowledged in the Manufacturing and License
Agreement to constitute a significant portion of the consideration being
delivered by each of the parties under the Manufacturing and License
Agreement.
The Manufacturing and License Agreement will contain customary
representations and warranties, including representations and warranties
pertaining to Galaxy's ownership of the Know-How and other intellectual
property rights concerning the manufacturing of the Products, as well the
lack of Galaxy's infringement on the rights of others or the infringement
of others upon the Know-How. The Manufacturing and License Agreement will
also provide that Galaxy will take all necessary and appropriate measures
to maintain and protect all portions of Galaxy's Know-How, including
registration, renewal, preservation and enforcement against any infringing
person.
The Manufacturing and License Agreement shall include a schedule of
Products which BEL has elected to manufacture. To the extent BEL is
permitted by the provisions of this Section 5 to make additional elections
from time to time to manufacture additional Products, such schedule shall
be amended to add these additional Products upon BEL's providing of written
notice to Galaxy notifying Galaxy that BEL is electing to add such products
to the schedule.
The parties hereby expressly acknowledge their intent to negotiate in good
faith the terms of the Manufacturing and License Agreement. In the event
that BEL and Galaxy cannot agree on a particular term or provision that is
required to appear in the Manufacturing and License Agreement, then BEL and
Galaxy shall resolve such dispute by referring the matter to a neutral
third party (the "Designee"). Within three months of the execution of this
Agreement, BEL and Galaxy shall mutually compile and rank a list of three
candidates from which such Designee may be selected. Upon the occurrence
of such a dispute, BEL and Galaxy shall contact the first person on such
list and negotiate with such person to retain them to settle such disputes
with all costs and fees incurred in connection with such retention to be
borne equally between BEL and Galaxy. If the first person on such list is
not available for whatever reason, BEL and Galaxy shall refer the matter to
the second person on the list and, if such second person is not available
for whatever reason, to the third xxxxx on the list. In the event that
none of the persons on the aforementioned list reach agreement to serve as
the Designee and the parties are unable to agree on another person, then
either party may commence proceedings under Section 17.10.2 of this
Agreement. By accepting the position, the Designee explicitly recognizes
such Designee is subject to a duty of good faith and shall resolve the
issue or dispute in a manner consistent with the terms of this Agreement.
Within 45 calendar days of being retained by the parties, such Designee
shall review and investigate the positions of BEL and Galaxy concerning the
issue or issues in dispute and inform BEL and Galaxy of his/her resolution
of the dispute and such resolution shall be conclusively binding upon BEL
and Galaxy and become a part of the Manufacturing and Distribution
Agreement. The decision of the Designee shall be conclusive and shall be
binding on the parties; provided, however, that notwithstanding anything to
the contrary stated herein and notwithstanding the negotiations of the
parties or decisions of the Designee regarding the drafting of the
Manufacturing and License Agreement, the Manufacturing and License
Agreement shall include and incorporate those terms and provisions set
forth in Sections 1, 2, 3 (with the exception of Section 3.7), 4, 6, 7,
12.4, 13.8, 14.4, 14.5, 15, 16 and 17 hereof as well as the terms set forth
in this Section 5 regarding the Manufacturing and License Agreement and, to
the extent Bel has not elected to manufacture some of the Products but will
instead only continue to sell and distribute such Products, the remaining
provisions of this Agreement. Notwithstanding the foregoing, BEL shall
have the right to begin manufacturing Products immediately upon the
exercise of its option; and, until the Manufacturing and License Agreement
is completed and executed by the parties, BEL's manufacturing and
distribution of the Products shall be governed by the terms of this
Agreement which shall function and be construed for all purposes as the
Manufacturing and License Agreement and the applicable Royalty Rate for
each Product shall be four percent (4%).
The parties acknowledge the difficulty of ascertaining the amount of
damages to be incurred by BEL as a result of the violation of the
provisions of this Section 5 by Galaxy and therefore agree that any breach
of this Section 5 by Galaxy shall require Galaxy to pay to BEL as
liquidated damages (and not as a penalty) an amount calculated by
multiplying the highest historical Aggregate Net Sales during a calendar
year in the period of time commencing from the beginning of the Initial
Term and ending at the time of such breach by Galaxy of the Products in the
Territory by BEL by the number of years remaining in the initial term since
the time of such breach by Galaxy.
6. PROMOTIONAL MATERIALS AND MARKETING
6.1.BEL and its Affiliates or distributor in the Territory shall at all
times comply in all material respects with all legal requirements in force,
relating to the storage, distribution, marketing and sale of the Products.
6.2.BEL and its Affiliates or distributors shall promote, market,
distribute and sell the Products in a manner consistent with the claims and
consumer statement which shall be defined as part of the Annual Plan which
will be mutually designed and developed by the parties.
6.3.Annual Plan : By January 1 of each year during the term of this
Agreement, BEL shall develop and provide to Galaxy for its review an annual
business and marketing plan (the "Annual Plan") for the Products and their
distribution containing in reasonable detail the following information:
(a) market data evolution and consumer information
(b) sales objectives and the Performance Metrics;
(c) actions on key elements of the products mix;
(d) major marketing and sales activities programs;
(e) Sales and Marketing budget; and
(f) such other information as may be required pursuant to other
sections of this Agreement.
Using such Annual Plan, the strategy of the marketing of the Products shall
be mutually designed between the two parties and executed by BEL.
6.4.BEL and its Affiliates or distributors shall promote and distribute
the products according to the Products' profile and positioning in line
with the Annual Plan. BEL agrees to notify Galaxy within a reasonable time
of any major factors, which have an effect on the marketing of the
Products.
6.5.Galaxy shall immediately inform BEL of any inquiries received by
Galaxy concerning the purchase of the Products for use in the Territory.
6.6. BEL shall immediately inform Galaxy of any inquiries received by
BEL concerning the
purchase of the Products for use outside the Territory.
7. TRADEMARKS
7.1.The Products shall be marketed, distributed, promoted and sold in the
Territory by BEL under BEL's Trademarks to be specified in the Annual Plan
for each country, which Trademarks shall be the exclusive property of BEL.
The Logo shall be placed on each Product marketed, distributed, promoted
and sold in the Territory by BEL, which Logo shall be the exclusive
property of Galaxy.
7.2.Galaxy acknowledges, recognizes and agrees that BEL, or its successors
or assigns, shall remain the owners of the Trademarks, that Galaxy shall
not, by virtue of this Agreement or otherwise, acquire any rights in
respect of the Trademarks in relation to the Products or/and the goodwill
associated therewith and that all such rights and goodwill are, and shall
at all times remain, vested in and inure to the benefit of BEL and its
successors and/or assigns. BEL and its Affiliates will not alter, obscure,
remove, conceal or otherwise interfere with any markings, names, labels or
other indications of the source of origin of the Products which may be
placed by Galaxy on the Products. Positioning of these elements on the
pack will be discussed and agreed between both parties. BEL acknowledges,
recognizes and agrees that Galaxy, or its successors or assigns, shall
remain the owners of the Logo, that BEL shall not, by virtue of this
Agreement or otherwise, acquire any rights in respect of the Logo in
relation to the Products or/and the goodwill associated therewith and that
all such rights and goodwill are, and shall at all times remain, vested in
and inure to the benefit of Galaxy and its successors and/or assigns.
7.3.Galaxy shall not on its behalf or on behalf of any other party, in any
country or jurisdiction, register or attempt to register any of the
Trademarks or any other service xxxx, trademark, trade name, word or symbol
which is confusingly similar to any of the Trademarks without BEL's prior
written consent. BEL shall not on its behalf or on behalf of any other
party, in any country or jurisdiction, register or attempt to register the
Logo or any other service xxxx, trademark, trade name, word or symbol which
is confusingly similar to the Logo without Galaxy's prior written consent.
7.4.Galaxy shall not be responsible for any payment of damages to third
parties arising out of any action for infringement or alleged infringement
of such third party's trademark rights by the use of the Trademarks by BEL,
its Affiliates and/or distributors. BEL shall not be responsible for any
payment of damages to third parties arising out of any action for
infringement or alleged infringement of such third party's trademark rights
by the use of the Logo by Galaxy or BEL.
0.0.Xx the extent the Trademarks or Logo appear on packaging relating to
the Products, Galaxy shall cause the designation of "(R)" or "(TM)",
whichever is appropriate, or such other customary symbol or legend which
identifies correctly the status of the Trademarks and Logo to be placed
adjacent to such Trademarks and Logo in connection with each use or
display of the Trademarks and Logo on the Products.
7.6.Galaxy will fully cooperate with BEL, at BEL's expense, in efforts to
maintain and enforce BEL's rights in the Trademarks; provided that, in the
event the threat to such maintenance and enforcement is the responsibility
or fault of Galaxy then Galaxy shall pay expenses incurred in connection
with such maintenance and enforcement efforts. Galaxy will not do or
permit to be done any action or thing which will in any way impair BEL's
rights in and to the Trademarks. Galaxy will not contest or assist any
other party in contesting the validity of BEL's ownership of any of the
Trademarks. BEL will fully cooperate with Galaxy, at Galaxy's expense, in
efforts to maintain and enforce Galaxy's rights in the Logo; provided that,
in the event the threat to such maintenance and enforcement is the
responsibility or fault of BEL then BEL shall pay expenses incurred in
connection with such maintenance and enforcement efforts. BEL will not do
or permit to be done any action or thing which will in any way impair
Galaxy's rights in and to the Logo. BEL will not contest or assist any
other party in contesting the validity of Galaxy's ownership of the Logo.
8. SUPPLY OF THE PRODUCTS
8.1.Galaxy shall supply the Products directly to BEL and its Affiliates
and/or third party distributors, for resale in the Territory, manufactured
in accordance with the specifications to be defined together within the
Annual Plan and according to Galaxy's general business practices or, with
respect to new products developed by Galaxy for sale by BEL, in accordance
with specifications to which the parties shall mutually agree in good faith
and attach to this Agreement as a supplemental exhibit.
8.2.Unless and until BEL exercises its option to manufacture the Products,
BEL and its Affiliates undertake to purchase all their requirements of the
Products for resale in the Territory, exclusively from Galaxy under the
terms of its Agreement. In the case of BEL manufacturing the products, BEL
will no longer have this obligation and will be free to buy basic new
material and packaging material on its own.
8.3.The Products will be supplied by Galaxy to BEL and Affiliates packed
and labeled at BEL specifications as reasonably agreed with Galaxy.
9. PRICE AND TERMS OF PAYMENT
9.1.The Products will be supplied by Galaxy to BEL at prices which will be
agreed in writing by the parties determined by reference to and in
accordance with the pricing formula set forth on Exhibit 3. The price for
any Product may be revised annually and may vary by country. The purchase
prices shall be expressed in U.S. dollars.
9.2.BEL shall purchase the Products from Galaxy on the basis of the
Minimum Production Quantities specified in the attached Exhibit 4. Galaxy
agrees to use its best efforts to provide sufficient supply of the Products
to fill all of BEL's orders that have been accepted by Galaxy in accordance
with the procedures set forth in Section 10 and 11 hereof.
9.3.BEL may resell the Products in the Territory at such prices as BEL may
in its sole discretion determine; provided that while BEL retains sole
discretion in its decisions regarding resale pricing, BEL will inform and
discuss with Galaxy such decisions.
9.4. All payment will be made by US dollars denominated irrevocable
letters of credit from a bank reasonably acceptable to Galaxy. Letters
of credit may be drawn upon by Galaxy upon delivery of goods to common
carrier FOB US Port of shipment, provided that Galaxy provides proof of
such delivery or certifies that such delivery was made to the bank upon
which the letter of credit is being drawn. All fees incurred in
connection with the issuance of the letters of credit shall be paid by
Galaxy.
10. FORECASTS AND ORDERS
10.1. BEL and its Affiliates shall provide to Galaxy, within 10 days of
the beginning of each calendar year concerning a twelve month plus
extension for 1st Quarter of the next calendar year, a non-binding forecast
of their requirements for the Products, for each country in the Territory
by quarter, such forecast to be updated quarterly when significant changes
occur.
10.2. BEL shall furnish to Galaxy, within 30 days of the beginning of
each quarter, a three month forecast, for the following calendar quarter
corresponding to its anticipated requirements for the Product for each
country of the Territory.
10.3. BEL shall provide Galaxy with firm purchase orders for the
Products required at least sixty (60) days prior to the required
delivery date. All orders shall be subject to written confirmation by
Galaxy. All purchase orders submitted by BEL and accepted by Galaxy
for Products are and shall be subject to this Agreement and shall be
deemed to incorporate the terms and conditions of this Agreement,
whether or not so specified in such purchase orders. Galaxy's
acceptances of orders shall be evidenced by Galaxy signing and
returning the acknowledgment copy of the order within two (2) days
after receipt of the order, together with a pro-forma invoice for the
Products covered by that order. All orders shall contain the
information necessary for Galaxy to fulfill the order, which
information shall include the following:
(I) A reference to this Agreement and BEL's purchase order
number;
(II)A description and quantity of each of the Products
required;
(III) The address to which Products are to be directed
and the address to which Galaxy's invoice is to be sent; and
(IV)The requested delivery date.
Galaxy's General Terms and Conditions of Sale, as published from time
to time by Galaxy (the "Terms and Conditions"), shall apply to Galaxy's
sale of Products to BEL under this Agreement. The current effective
version of the Terms and Conditions is attached hereto as Exhibit 5. Where
in conflict, this Agreement shall control over the Terms and Conditions.
Notwithstanding the foregoing, the terms and conditions of this Agreement
shall take precedence over and govern in the event of conflict between the
terms and conditions of this Agreement, the terms and conditions of any
other documents and forms of the parties, including, without limitation,
BEL's quotation request and purchase order forms, Galaxy's quotation form,
and any confirmation, acknowledgment or other similar document. Any
provision or data in any order, any subordinate document such as shipping
releases, or any other document originated by either party, or contained in
any documents or forms attached to or referenced in any of the above
documents, which modifies, supplements or conflicts with the terms of this
Agreement shall not be binding unless expressly agreed to in writing by the
parties that such writing supercedes this Agreement.
10.4Quantities of the Products to be shipped to BEL shall be confirmed to
BEL within two (2) days after the receipt by Galaxy of a purchase order for
same from BEL and shall be shipped to BEL within sixty (60) days after
receipt by Galaxy of a purchase order for same from BEL.
11. SHIPMENTS
11.1. Galaxy shall cause all shipments of the Products to be delivered
to BEL and its Affiliates or distributors (incoterms 2000) FOB, US port of
shipment. Shipments shall be invoiced at any time after delivery is made.
11.2. Shipments of the Products shall be deemed accepted by BEL upon
final release by BEL's quality control representatives at or before FOB,
point of shipment. Final release shall be provided by BEL and its
Affiliates, within 30 days after tender of delivery of the Products
ordered, or BEL shall be deemed to have given unqualified acceptance of
such Products and to have waived all of its claims of any kind with respect
to said Products, except with respect to latent defects. In case of
Products with latent defects, BEL shall provide written notice to Galaxy of
such defects within 30 (thirty) days of the date it discovered or with
reasonable diligence should have discovered such latent defects.
11.3. Any rejection of a shipment or question as to the quality of the
Products delivered shall be supported by written notification or
explanation. In such case, and provided BEL demonstrates that said Products
have been properly handled and stored after tender of delivery, Galaxy
shall assume all costs for return of the defective goods and supply of
replacement goods, or other corrective action as may be agreed between
Galaxy and BEL, it being understood that Galaxy's responsibilities
hereunder shall be limited to replacement of said defective goods. Galaxy
may demand at its own cost separate storage, inspection and dispatch of
rejected goods. If Galaxy disputes the written notification from BEL, the
parties shall submit samples of the rejected goods to a mutually acceptable
independent laboratory for analysis. The decision of the independent
laboratory in the matter shall be final. The party found to be in error
shall bear the cost of any such analysis.
11.4. Risk of loss and title shall pass to BEL at the time of delivery
of the Products to BEL's designated location or carrier at the U.S. port of
shipment.
12. LABELLING AND PACKAGING
12.1. BEL and its Affiliates or distributors, shall be responsible for
providing to Galaxy sufficient information for Galaxy to determine, produce
and maintain the content of all labeling for the Products, including
package inserts and promotional material throughout the Territory. BEL
warrants that any statement or other information provided by BEL to Galaxy
concerning the Products contained therein shall be in line with the
approved legal requirements of the Products in each country, state or
territory of the Territory and shall keep Galaxy free and harmless from any
connected claim, damage, liability, loss and/or expense arising therefrom
to the extent such damage arises as a consequence of such statement
provided by BEL to Galaxy not being in conformity with such legal
requirements.
12.2Galaxy will package the Products according to the packaging
specifications, including labeling and insertion of package inserts
and promotional material provided and directed by BEL and agreed to
by Galaxy (within reasonable existing capabilities of Galaxy
manufacturing processes) and will be responsible for any failures of
the Products to be so packaged.
12.3. All packaging, insert sheet, labels, advertising and other
materials relevant to the Products, shall bear the notice "Distributed
under license of Galaxy USA", such notice to be approved by both
parties before first printing and use thereof, such approval not to be
unreasonably withheld.
12.4. BEL shall be responsible at its cost and expense for complying
with all regulatory and governmental requirements applicable in the
Territory to the distribution of the Products; provided, however, that
until BEL exercises its option to manufacture the Products, BEL shall
not be responsible for any cost or expense related to or concerning
the quality of the Products or any other aspects related to and solely
under the purview of the manufacturing of the Products.
13 QUALITY CONTROL
Galaxy acknowledges that the Trademarks indicate to the public that the
Products offered for sale or sold bearing the Trademarks are of a
commercially consistent quality and standard, and that BEL's use of the
Trademarks pursuant to this Agreement must be in a manner that does not
have a detrimental impact on BEL's reputation or the goodwill associated
with BEL's business and the Trademarks. Galaxy agrees that it shall
maintain a high standard of quality (at least as high as Galaxy presently
maintains) with respect to the manufacture of the Products and packaging
for the Products, as well as in all depictions, marketing and advertising
of the Products. Galaxy shall comply with all applicable legal and
regulatory requirements for the manufacturing of the Products and the
conduct of its business and performance of its obligations hereunder. BEL
acknowledges that the Logo indicates to the public that the Products
offered for sale or sold bearing the Logo are of a commercially consistent
quality and standard, and that Galaxy's use of the Logo pursuant to this
Agreement must be in a manner that does not have a detrimental impact on
Galaxy's reputation or the goodwill associated with Galaxy's business and
the Logo. BEL agrees that it shall maintain at least as high a standard of
quality as BEL presently maintains with respect to the promotion,
marketing, distribution and sale of Products in the Territory. BEL shall
comply with all applicable legal and regulatory requirements for the
promotion, marketing, distribution and sale of Products and the conduct of
its business and performance of its obligations hereunder.
13.1Galaxy shall permit BEL's quality control representatives, at
reasonable times and on reasonable notice, to inspect those areas of
Galaxy's production facility at which Galaxy shall be manufacturing
and packing the Products for shipment to BEL. Galaxy shall be
permitted to visit/review annually BEL's distribution facilities at
reasonable times and upon reasonable notice.
13.2Galaxy shall manufacture, or have manufactured, the Products according
to Good Manufacturing Practices and requirements applicable to the
industry. Galaxy shall at any time be free to determine the
manufacturer and the place of manufacture of the Products,. Prior to
BEL manufacturing, Galaxy cannot be restricted to manufacturing
Products outside the Territory.
13.3Galaxy shall provide to BEL all test procedures for the Products,
necessary for BEL to verify the quality of the Products it purchases
pursuant to this Agreement.
13.4BEL shall not make alterations or permit alterations to be made to the
Products.
13.5Galaxy shall maintain at its principal place of business reserve
samples for each lot according to applicable legal requirements, until
the expiration date of the Product sold to BEL. Records should be
kept for three years following production date.
13.6In the event of a recall of any Products required by a governmental
agency or authority of competent jurisdiction or if recall of the
Products is jointly deemed advisable by Galaxy and BEL, such recall
shall be promptly implemented and administered by BEL and its
Affiliates, in strict consultation with Galaxy in a manner which is
appropriate and reasonable under the circumstances and in conformity
with accepted trade practices. The cost of any such recall shall be
borne by Galaxy to the extent Galaxy's negligence and/or fault caused
the recall to be necessary. Galaxy will have no obligation to pay
costs of recalls of Products caused by consequences of negligence
and/or faults committed by third parties occurring after such Products
are sold by BEL and BEL shall have no obligation to pay costs of
recalls of Products caused by consequences of negligence and/or faults
of Galaxy. In no circumstance shall BEL have any obligation to pay
costs of any recalls of Products not manufactured by BEL. In no
circumstance shall Galaxy have any obligation to pay costs of any
recalls of Products not manufactured by Galaxy. The provisions and
obligations of this section shall survive any expiration of
termination of this Agreement.
13.7 Galaxy agrees that it will not permit any lien, security interest,
pledge, assignment to a creditor, assignment obligation or other
encumbrance or restriction of any kind to be imposed or placed on any
of its rights under this Agreement and/or in and to the Products or
permit execution against its rights hereunder of any judgment against
Galaxy, or grant any power to any third party to do so, and shall not
enter into any agreement which is otherwise inconsistent with Galaxy's
obligations under this Agreement, without BEL's prior written consent.
13.8 In the event that BEL exercises its option to manufacture certain
or all of the Products, Galaxy agrees to assist BEL by providing
access to any necessary document or dossier in Galaxy's ownership or
possession to enable BEL to make application to any food regulatory
authority or governmental agency for BEL to be appointed as
Manufacturer of the Products under any marketing authorization held by
BEL or to continue any actual registration or to start up an
application for marketing of the Products.
14. REPRESENTATIONS AND WARRANTIES
14.1Galaxy warrants to BEL that each Product sold to BEL shall, at the
time of delivery by Galaxy, conform to the specifications then in effect
and shall meet all such specifications throughout the approved shelf-life
in the Territory. Galaxy covenants to provide true and accurate copies of
such specifications (including any revisions thereto) to BEL as soon as
practicable.
14.2Galaxy further warrants to BEL that, in the event any of the Products
do not meet the specifications (subject to verification by the procedure
provided in Section 11.2. upon delivery)Galaxy shall either replace the non-
conforming Products or give BEL a credit against future purchases for the
purchase price of such non conforming goods, at BEL's option.
14.3Galaxy represents that it has General Product Liability Insurance in
force, in respect of direct liability arising from a defect in Galaxy's
manufacture of Products to its agreed specifications up to a limit of not
less than One Million US Dollars (US$1,000,000) combined single limit each
occurrence and Two Million US Dollars (US$2,000,000) in the aggregate and
umbrella coverage in an amount equal to Ten Million US Dollars
(US$10,000,000). Galaxy represents that such insurance provides coverage
of all normal risks incident to Galaxy's business and its respective
properties and assets and are in character and amount at least equivalent
to that carried by persons engaged in similar businesses and subject to the
same or similar perils or hazards. The certificates of insurance listing
the above-referenced coverage and a copy of the General Product Liability
Insurance shall be provided to BEL prior to Galaxy's commencement of duties
pursuant to this Agreement, but in no event more than 30 days after
execution of this Agreement, and Galaxy shall require each carrier to give
BEL no less than 30 days' notice of any prospective cancellation,
restriction, limitation or modification of coverage or limits.
14.4Galaxy hereby represents and warrants that (a) Galaxy is a corporation
duly organized, validly existing and in good standing under the laws of
Florida, with full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby, (b)
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby by Galaxy have been
duly and validly authorized and no further corporate authorization is
required on the part of Galaxy to consummate the transactions contemplated
hereby, (c) this Agreement and all other documents executed and delivered
by Galaxy pursuant to this Agreement constitute the legal, valid and
binding obligation of Galaxy, enforceable against Galaxy in accordance with
their respective terms, (d) the individuals executing this Agreement on
behalf of Galaxy have been duly authorized and empowered to execute this
Agreement for the purpose of binding Galaxy to this Agreement, (e) Galaxy's
performance of this Agreement does not require any third party consents or
governmental approvals, filings, registrations or permits that have not
already been obtained and will be maintained during the Initial Term and
the execution, delivery and performance of this Agreement by Galaxy does
not and will not violate any contract or other arrangement between Galaxy
and any third party, or any applicable law or regulation and (f) the
Products are and will be merchantable and fit for their intended purposes
and do not infringe any third party intellectual property or other
proprietary right, comply with all laws and regulations applicable within
the Territory and all Product registrations and approvals necessary for the
Products to be sold within the Territory have been obtained and will be
maintained in effect by Galaxy during the Initial Term.
14.5BEL hereby represents and warrants that (a) BEL is a corporation duly
organized, validly existing and in good standing under the laws of
[France], with full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby, (b)
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby by BEL have been duly
and validly authorized and no further corporate authorization is required
on the part of BEL to consummate the transactions contemplated hereby, (c)
this Agreement and all other documents executed and delivered by BEL
pursuant to this Agreement constitute the legal, valid and binding
obligation of BEL, enforceable against BEL in accordance with their
respective terms, (d) the individuals executing this Agreement on behalf of
BEL have been duly authorized and empowered to execute this Agreement for
the purpose of binding BEL to this Agreement, (e) BEL's performance of this
Agreement does not require any third party consents or governmental
approvals, filings, registrations or permits that have not already been
obtained and will be maintained during the term, and (f) the execution,
delivery and performance of this Agreement by BEL does not and will not
violate any contract or other arrangement between BEL and any third party,
or any applicable law or regulation.
14.6BEL represents that it has General Product Liability Insurance in
force in the Territory, in respect of direct liability arising from BEL's
manufacture, handling, sale or distribution of Products to its agreed
specifications up to a limit of not less than One Million US Dollars
(US$1,000,000) combined single limit each occurrence and Two Million US
Dollars (US$2,000,000) in the aggregate. BEL represents that such
insurance provides coverage of all normal risks incident to BEL's business
and its respective properties and assets and are in character and amount at
least equivalent to that carried by persons engaged in similar businesses
and subject to the same or similar perils or hazards. The certificates of
insurance listing the required coverage and a copy of the Comprehensive
General Liability Insurance shall be provided to Galaxy prior to BEL's
commencement of duties pursuant to this Agreement, but in no event more
than 30 days after execution of this Agreement, and BEL shall require each
carrier to give Galaxy no less than 30 days' notice of any prospective
cancellation, restriction, limitation or modification of coverage or
limits.
15. INDEMNITY
15.1Notwithstanding provisions of Section 11.2., Galaxy agrees to defend,
indemnify and hold BEL and its Affiliates or distributors, harmless from
and against any and all losses, damages, liabilities, costs and expenses
(including reasonable attorney's fees) that are related in any way to (i)
failure of any Products supplied hereunder to conform to the applicable
specifications as provided at Section 14.1. excluding any losses, damages,
liabilities, costs and expenses resulting from any such non-compliance that
shall result from any Products which shall be altered, changed, packed or
otherwise treated by BEL, its Affiliates and/or distributors other than in
accordance with Galaxy's instruction and specifications in a manner that
causes the loss, damage, liability, cost or expense ; (ii) the manufacture
of the Products by Galaxy ; (iii) the correct use by BEL and/or Affiliates
of the Know-How ; (iv) any breach by Galaxy of any of its obligations or
warranties under this Agreement; or (v) any damages to third parties
arising out of any action for infringement or alleged infringement of such
third party's trademark rights by the use of the Logo by BEL, its
Affiliates and/or distributors.
15.2BEL agrees to defend, indemnify and hold Galaxy harmless from and
against any and all losses, damages, liabilities, costs and expenses
(including reasonable attorney's fees) that are related in any way to (i)
failure by BEL or its Affiliates or distributors to comply with applicable
rules and regulations of the Territory regarding the promotion, marketing,
distribution or selling of the Products in the Territory; (ii) the storage,
transfer, or sale (including without limitation the distribution, promotion
and marketing) or the manunufacture of the Products by BEL or its
Affiliates; (iii) any breach by BEL or its Affiliates or distributors of
any of the obligations or warranties under this Agreement; or (iv) any
damages to third parties arising out of any action for infringement or
alleged infringement of such third party's trademark rights by the use of
the Trademarks by BEL, its Affiliates and/or distributors.
15.3BEL shall be responsible towards its customers for handling all
matters concerning the Products. If such Products expire as a result of
BEL's gross negligence or wrongful acts, BEL shall be responsible for any
expired Product whether stored by BEL and/or its Affiliates or distributors
or returned by wholesalers, retailers, to whom said Products have been sold
by BEL or its Affiliates or distributors.
15.4The parties agree that, in case of commencement of any action, suit,
proceeding or investigation or threat thereof for which indemnification is
requested to either party, then (a) said party shall promptly inform in
writing the other, (b) the parties shall fully cooperate in the defense of
said action, suit or proceeding and (c) either party shall not accept any
settlement without the other party's consent (which shall not be
unreasonably withheld).
15.5Notwithstanding any other provision of this Agreement, and without
prejudice to the general rules established by mandatory laws of the various
countries of the Territory on each party's liabilities towards third
parties (as described at Sections 15.1 and 15.2. here above), in no event
shall damages to be paid by one party to the other extend to indirect,
special, incidental or consequential damages (including without limitation
loss of profits or revenues), regardless of whether such damages were
foreseeable or not.
15.6The remedies set forth herein are the exclusive remedies of the
parties as to the stated subject matter.
15.7The provisions and obligations of this Section 15 shall survive any
expiration or termination of this Agreement.
15.8 BEL agrees to maintain General Product Liability Insurance in amount
and type maintained by comparable distributors (and to the extent BEL
manufactures Products, comparable manufacturers) of similar Products in
similar circumstances during the term of this Agreement.
15.9The representations, warranties and covenants provided in Section 14
and Section 15 hereof, shall survive for four (4) years after the
termination of this Agreement for any reason.
16.BEL's OBLIGATIONS
BEL shall be obliged to :
16.1. Adhere to the terms and conditions of the Manufacturing and
License Agreement .
16.2. Ensure that, except where Galaxy fails to provide sufficient
supply of the Products to meet BEL's needs, the distributed Products
are and will continue to be produced directly by Galaxy and/or, if BEL
exercises its option to manufacture the Products, ensure that the
quality of such products meets the standards to be set and agreed upon
in the final Manufacturing and License Agreement.
16.3. Ensure that the distribution or, to the extent BEL exercises its
option to manufacture the Products, manufacture of the Products does
not infringe or violate any existing intellectual property rights of
any third party. To the extent that the Products incorporate any third
party Know-How that BEL is aware of or has been made aware of by
Galaxy, the Products, to the extent manufactured by BEL, shall mention
the licensor of such Know-How and list the specifications thereof in
sufficient detail as would be necessary for any subsequent licensee of
the specifications to be able to obtain a license for such Know-How
from the applicable licensor.
16.4. Refrain from sub-licensing the distribution or manufacturing of
the Products, except to its Affiliates and distributors. Nothing
contained herein shall limit the right of BEL to appoint sales and
marketing agents and distributors in respect of the distribution of the
Products, provided that BEL retains control over the actual
distribution / manufacture processes of the Products and that all such
agents and distributors agree to be bound by the terms and conditions
of the Agreement applicable to them.
17. GENERAL PROVISIONS
17.1. Termination
17.1.1. Notwithstanding any other provision of this Agreement, this
Agreement may be terminated by either party, if:
A. The other party commits a material breach of any of its material
obligations under this Agreement, which shall not have been remedied within
thirty (30) days from the party's giving of written notice of such breach.
B. The other party becomes insolvent, makes an assignment for the benefit
of its creditors, or is placed in receivership, liquidation, or bankruptcy
; or
C. The other party has suffered an event of "force majeure", as defined
in Section 17.4.1 hereof, which has prevented such party's performance of
its obligations under this Agreement for a continuous period of six (6)
months or longer.
Termination under A. and C. above may apply to a part (i.e. one or more of
the countries, states or territories of the Territory) or the whole of the
Territory, depending on the country, state or territory to which the breach
or the "force majeure" events refer as mutually determined by the parties
which determination shall be made in accordance with the dispute resolution
mechanism set forth in Section 17.10.2 in the event the parties cannot
agree. In the event that either Galaxy or BEL terminates this Agreement
under A, B or C, BEL will have the ability at the time of such termination
to elect to convert the Agreement to the Manufacturing and License
Agreement and begin manufacturing in accordance with the provisions of
Section 5 hereof.
17.1.2. In accordance with Section 5 hereof, upon a change of control of
Galaxy, notice of which shall be given by Galaxy to BEL within one (1)
month of such change of control, BEL shall have the option to elect to
begin manufacturing and to automatically convert this Agreement into and be
controlled and governed by the terms of the Manufacturing and License
Agreement once executed by the parties.
17.1.3. BEL may terminate the Agreement at any time when a change of the
current management team of Galaxy occurs and such new management team is,
in BEL's opinion, not of a quality that is comparable to that of the
current management team; provided that BEL will have the ability at the
time of such termination to elect to convert the Agreement to the
Manufacturing and License Agreement and begin manufacturing in accordance
with the provisions of Section 5 hereof.
17.1.4. The right of either party to terminate this Agreement, as
provided in Section 17.1.2., shall not be affected in any way by its waiver
of, or failure to take action with respect to, any other default or by the
granting of any time or other indulgence.
17.1.5. Termination or expiration of this Agreement for any reason shall
not relieve either party of any liability or obligations which accrued
under this Agreement prior to such termination or expiration.
17.2. Consequences of Termination or Expiration
17.2.1. Upon termination or expiration of this Agreement for any reason :
A. BEL shall promptly cease distributing, selling and promoting the
Products, provided that BEL shall have the right to dispose of its
inventory of the Products
B. Any work in progress and/or outstanding orders for the Products at the
time of termination or expiration shall be completed by Galaxy in
accordance with the terms of this Agreement and all such Products, along
with any remaining stocks of products in Galaxy's possession shall be
delivered and invoiced to and paid for by BEL at the then current prices
and in accordance with the terms of this Agreement ;
C. In case of termination of the Agreement, the costs and disposal of
any/all packaging will be the responsibility of the party who initiated the
termination, so long as Galaxy has not purchased packaging in excess of
the forecast provided by BEL in which event such costs shall be the
responsibility of Galaxy regardless of who initiated the termination.
17.3. Confidentiality
17.3.1. BEL will hold, and will use its reasonable efforts to cause its
Affiliates, and their respective representatives to hold, in strict
confidence from any person (other than any such Affiliate or
representative), unless (i) compelled to disclose by judicial or
administrative process or by other requirements of law, (ii) disclosed in
connection with obtaining the necessary approvals of this Agreement and the
transactions contemplated hereby from customers or governmental or
regulatory authorities, or (iii) disclosed in an action or proceeding
brought by a party hereto in pursuit of its rights or in the exercise of
its remedies hereunder, all documents and information concerning Galaxy or
any of its Affiliates furnished to BEL by Galaxy or its representatives in
connection with this Agreement or the transactions contemplated hereby,
except to the extent that such documents or information can be shown to
have been (a) previously known by BEL, (b) in the public domain (either
prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired
by BEL from another source if such source is not under an obligation to
another party hereto to keep such documents and information confidential.
In the event this Agreement is terminated, upon the request of Galaxy, BEL
will, and will cause its Affiliates and their respective Representatives
to, promptly (and in no event later than five Business Days after such
request) redeliver or cause to be redelivered all copies of documents and
information furnished by Galaxy in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all
notes, memoranda, summaries, analyses, compilations and other writings
related thereto or based thereon prepared by Galaxy.
17.3.2. Galaxy will hold, and will use its reasonable efforts to cause
its Affiliates, and their respective representatives to hold, in strict
confidence from any person (other than any such Affiliate or
representative), unless (i) compelled to disclose by judicial or
administrative process or by other requirements of law, (ii) disclosed in
connection with obtaining the necessary approvals of this Agreement and the
transactions contemplated hereby from customers or governmental or
regulatory authorities, or (iii) disclosed in an action or proceeding
brought by a party hereto in pursuit of its rights or in the exercise of
its remedies hereunder, all documents and information concerning BEL or any
of its Affiliates furnished to Galaxy by BEL or its representatives in
connection with this Agreement or the transactions contemplated hereby,
except to the extent that such documents or information can be shown to
have been (a) previously known by Galaxy, (b) in the public domain (either
prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired
by Galaxy from another source if such source is not under an obligation to
another party hereto to keep such documents and information confidential.
In the event this Agreement is terminated, upon the request of BEL, Galaxy
will, and will cause its Affiliates and their respective Representatives
to, promptly (and in no event later than five Business Days after such
request) redeliver or cause to be redelivered all copies of documents and
information furnished by BEL in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all
notes, memoranda, summaries, analyses, compilations and other writings
related thereto or based thereon prepared by BEL.
17.3.3. Except to the extent that disclosure may be required by law, or
except to the extent otherwise agreed by the parties in writing, the
parties agree not to disclose the terms of this Agreement to any third
parties.
17.4. "Force majeure"
17.4.1.The performance by either party of any covenant or obligation on
its part to be performed under this Agreement shall be excused by floods,
strikes or other labour disturbances, riots, fire, accidents, war, acts of
terrorism, embargoes, delays of carriers, inability to obtain materials
from normal sources, failure of power or of natural sources of supply,
acts, injunctions, or restraints of government (whether or not now
threatened), or any cause preventing such performance whether similar or
dissimilar to the foregoing beyond the reasonable control of the party
bound by such covenants or obligations ("force majeure") ; provided,
however, that the party affected shall not have procured such force
majeure, shall have used reasonable diligence to avoid such force majeure
or ameliorate its effects, and shall continue to take all commercially
reasonable actions within its power to comply as fully as possible with the
terms of this Agreement, subject to the ability of the party to terminate
the Agreement pursuant to Section 17.1.1 hereof.
17.4.2 Inability to supply
17.4.2.1. If for any reason (including "force majeure" as defined in
Section 17.4.) Galaxy foresees an inability to supply, directly or
indirectly, with its requirements for the Products, then Galaxy shall
promptly notify BEL. BEL and Galaxy shall meet at either party's request as
soon as possible to attempt to resolve the problem of supply.
17.4.2.2. In the event that Galaxy is unable to supply BEL, directly or
indirectly, with sufficient quantities of the Products to meet any order
of BEL that corresponds to BEL's previous forecasts as accepted by Galaxy,
Galaxy shall exert commercially reasonable efforts to obtain another source
of supply from an Affiliate or third party to meet BEL's requirements. If
Galaxy fails to obtain such other source of supply, BEL may use its own
efforts to locate a source that is satisfactory to BEL in its sole
discretion, and Galaxy shall have no further liability to BEL with respect
to the particular order. Notwithstanding anything stated herein to the
contrary, Galaxy shall use its best efforts to satisfy any order BEL
submits that is accepted by Galaxy.
17.4.2.3. In the event, and for such time, that BEL, notwithstanding the
provisions of Sections 17.4.2.1.and 17.4.2.2. is unable to supply or
arrange for the supply of BEL's requirements for the Products, then Galaxy
or Galaxy's nominee will allocate its production of the Products between
BEL and Galaxy's other customers for the Products (including Galaxy) in the
same ratio as all the various parties' respective utilization of Galaxy"s
output of the products in the 12 (twelve) months preceding the shortage of
supply.
17.5. Assignment
This Agreement shall not be assigned by either party without the written
consent of the other party, provided, however, that either party may assign
this Agreement to an Affiliate without the other party's consent by giving
the other party at least sixty (60) days advance notice in writing. In the
event Galaxy assigns its rights and responsibilities under this Agreement
to an Affiliate then, prior to such assignment, Galaxy shall execute and
provide to BEL a guaranty in both form and substance reasonably acceptable
to BEL pursuant to the terms of which Galaxy shall agree to guaranty the
performance by Affiliate of Galaxy's responsibilities and obligations under
this Agreement. In the event BEL assigns its rights and responsibilities
under this Agreement to an Affiliate then, prior to such assignment, BEL
shall execute and provide to Galaxy a guaranty in both form and substance
reasonably acceptable to Galaxy pursuant to the terms of which BEL shall
agree to guaranty the performance by Affiliate of BEL's responsibilities
and obligations under this Agreement. Violation of the provisions of this
Section 17.5 shall render such assignment null and void and of no legal
effect.
17.6.Non-waiver and other remedies
The failure of either party to insist upon the strict and punctual
performance of every provision of this Agreement shall not constitute
waiver of nor estoppel against asserting the right to require such
performance, nor shall a waiver and estoppel in one instance constitute a
waiver or estoppel with respect to any other breach, whether of a similar
nature or otherwise.
17.7. Unenforceable terms
If a court of competent jurisdiction adjudges any provision of this
Agreement to be invalid or unenforceable, the remaining provisions shall
not be affected thereby, and the parties shall in good faith attempt to
amend this Agreement to eliminate such invalidity or unenforceability,
without thereby affecting the intent of the parties as expressed herein.
17.8. Notice
17.8.1. All notices or other communications which shall or may be given
pursuant to this Agreement shall be effective upon receipt and shall
be in writing and delivered personally or by registered or certified
mail, or telefax, addressed as follows :
If to GALAXY NUTRITIONAL INC
0000 Xxxxxxxx Xxx
XXXXXXX XX. 00000
XXX
If to FROMAGERIES BEL SA
0, xxx x'Xxxxx
00000 XXXXX
Xxxxxx
With a copy to: Xxxxxxxxx Xxxxxxx, P.A.
(except for purchase 0000 Xxxxxxxx Xxxxxx
orders and shipping Xxxxx, Xxxxxxx 00000
releases) Facsimile No.: 305-579-0717
Attn: Xxxxxx Xxxxxxxx, Esq
17.8.2. Either party may change its address for purposes of this Section
by giving written notice of such change to the other party.
17.9. Agency and representation
The legal relationship between the parties shall not be construed such that
either party is deemed a partner or agent of the other party, nor will it
confer upon either party the right or power to bind the other party in any
contract or to the performance of any obligations with the other as an
independent contractor.
17.10 Governing law dispute resolution
17.10.1. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, and the parties
consent to the jurisdiction of the state or federal court situated
in Manhattan County, New York.
17.10.2. If the parties should have a material dispute arising out of or
relating to this Agreement or the parties' respective rights and
duties hereunder, then the parties will resolve such dispute in the
following manner: (i) any party may at any time deliver to the
other a written dispute notice setting forth a brief description of
the issue for which such notice initiates the dispute resolution
mechanism contemplated by this Section, (ii) during the thirty (30)
day period following the delivery of the notice described above,
appropriate representatives of the various parties will meet and
seek to resolve the disputed issue through negotiation, (iii) if
representatives of the parties are unable to resolve the disputed
issue through negotiation, then within ten (10) days after the
period described above, the parties will refer the issue (to the
exclusion of a court of law) to final and binding arbitration in
Orlando, Florida, if initiated by BEL and Paris, France, if
initiated by Galaxy, in accordance with the then existing rules of
conciliation and arbitration (the "Rules") of the International
Chamber of Commerce (the "Chamber"), and judgment upon the award
rendered by the arbitrators may be entered in any court having
jurisdiction thereof; provided, however, that the law applicable to
any controversy shall be the law of the State of New York,
regardless of principles of conflicts of laws. In any arbitration
pursuant to this Agreement, (i) discovery shall be allowed and
governed by the New York Rules of Civil Procedure and (ii) the award
or decision shall be rendered by a majority of the members of a
Board of Arbitration consisting of three (3) members, one of whom
shall be appointed by each party and the third of whom shall be the
chairman of the panel and be appointed by mutual agreement of said
two party-appointed arbitrators. In the event of failure of said
two arbitrators to agree within thirty (30) days after the
commencement of the arbitration proceeding upon the appointment of
the third arbitrator, the third arbitrator shall be appointed by the
Chamber in accordance with the Rules. In the event that either
party shall fail to appoint an arbitrator within ten (10) days after
the commencement of the arbitration proceedings, such arbitrator and
the third arbitrator shall be appointed by the Chamber in accordance
with the Rules. Nothing set forth above shall be interpreted to
prevent the parties from agreeing in writing to submit any dispute
to a single arbitrator in lieu of a three (3) member Board of
Arbitration. Upon the completion of the selection of the Board of
Arbitration (or if the parties agree otherwise in writing, a single
arbitrator), an award or decision shall be rendered within no more
than thirty (30) days. Notwithstanding the foregoing, the request
by either party for preliminary or permanent injunctive relief,
whether prohibitive or mandatory, shall not be subject to
arbitration and may be adjudicated by the courts of the State of New
York or the U.S. District Court located in New York, New York, by
the courts located wherever the party or entity asking for
injunctive relief is located, or by the courts located where the
action which gave rise to the claim occurred.
17.11. Amendments
No amendment, addition or deletion to this Agreement shall be effective
unless in writing and executed by both parties.
17.12. Headings
The section headings throughout this Agreement are for convenience and
reference only, and the words contained in them shall in no way be held to
explain, modify, amplify, or aid in the interpretation, constriction, or
meaning of the provisions of this Agreement.
17.13. Withholding tax
With respect to withholding taxes applicable to any payment to be made by
BEL to Galaxy in application of article of the bilateral treaty signed
between France and USA on ..., as amended on ..., the parties agree to
comply with the requirements set forth in Form (and any subsequent
amendment thereof) in due time in order to avoid double taxation. BEL
shall withhold such taxes from any payments made to Galaxy.
17.14. Language
All communications made or given pursuant to this Agreement shall be in the
English language. This English version of this Agreement shall be
controlling and take precedence over any translation hereof.
18. MISCELLANEOUS REGULATORY PROVISIONS
18.1Anti-Boycott and Embargo Regulations Compliance
Each of BEL and Galaxy acknowledges that it is familiar with the various
U.S. anti-boycott and embargo regulations of the U.S. Department of
Commerce and the U.S. Department of the Treasury. Each of BEL and Galaxy
agrees to comply with the terms therefor, as applicable, and to supply no
information to any person or entity about the other or the other's
personnel's race, religion, sex or national origin, business relationships
with boycotted countries or blacklisted persons, or associations with
charitable or fraternal organizations.
18.2Foreign Corrupt Practices Act Compliance
Galaxy has apprised BEL of the anti-bribery provisions of the U.S. Foreign
Corrupt Practices Act, as amended 15 U.S.C. 78 dd et seq., ("FCPA" or the
<< Act >>). BEL has reviewed with Galaxy the requirements of the FCPA, the
transactions prohibited under the Act, and the penalties for violation
thereof. BEL acknowledges such appraisal and the receipt of a copy of the
FCPA. The FCPA makes it illegal to corruptly make, offer or agree to offer
anything of value, either directly or through an intermediary, to any
foreign official, foreign political party or official thereof, or foreign
candidate for governmental office in order to obtain, retain or direct
business to any business enterprise or person, or to obtain an improper
advantage. Each of BEL and Galaxy represents that it understands the
purposes, prohibitions and penalties stated in the FCPA. Each of BEL and
Galaxy and their Affiliates and/or distributors represents and warrants
that it has not committed any violation of the FCPA, and shall not commit
any act that would place any of the parties to this Agreement in jeopardy
under the FCPA. Violations of the FCPA by any party to this Agreement
and/or their Affiliates will not be suggested, encouraged or condoned.
18.3Export Administration Regulations Compliance
In conformity with the requirements of U.S. Export Administration
Regulations ("EAR") and other applicable laws and regulations of the U.S.
Government concerning exports and foreign activities, each of BEL and
Galaxy hereby agrees and gives assurance to the other that it shall not
knowingly export or re-export any commodity or otherwise disclose, directly
or indirectly, any data or information received from the other which is
not otherwise available to the general public, nor permit said data or
information to be disclosed re-exported to, or used in the following
countries: Cuba, Iran, Iraq, Libya, North Korea, the Sudan, and Syria, and
any Taliban controlled areas of Afghanistan, or other countries, persons
or entities, for any end-uses, including those related, directly or
indirectly, to nuclear, chemical or biological weapons or missiles, for
which export restrictions would apply or may be designated from time to
time under applicable U.S. law and regulation. Each of BEL and Galaxy
represents and warrants that it understands the purposes, prohibitions and
penalties of these laws and regulations. Neither BEL nor Galaxy shall
commit any act that would place any party to this Agreement in jeopardy
under these laws and regulations.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate by their duly authorized officers or representatives as of the
day and year first written above.
GALAXY NUTRITIONAL FOODS, INC FROMAGERIES BEL SA
/s/ Xxxxxxxxxxx X. New /s/ Xxxxxx X. Xxxxxxxxx
---------------------- -----------------------
Name : Xxxxxxxxxxx X. New Name : Xxxxxx X. Xxxxxxxxx
Title : Chief Executive Title : Director of Finance
Officer
/s/ Xxxx de Poncins
-------------------
Name : Xxxx de Poncins
Title : Head of Strategy & Development
Exhibit 1
Galaxy's Current Products
Formagg(R)
Grand Design
Galaxy Nutritional Foods(R)
Xxxxxxx'x(R)& Design
Lite Bakery(R)
The Lite Bakery(R)& Design
Lite "n" Less(R)& Design
Pizza and Dessert that Doesn't Hurt(R)
Soy Singles(R)
Soyco(R)
Soyco(R)& Design
Soymage(R)
Veggie Nature's Alternative to Milk(TM)
Veggy Singles(R)
Wholesome Valley(R)
Exhibit 2
Galaxy's Logo
Exhibit 3
Pricing Schedule
Prices will be determined by the following:
"Cost" is defined as: Cost of Goods Sold, an allocation of research and
development, General and Administrative Expenses, and Freight to US Port of
shipment.
"Cost of Goods Sold" is determined using the following formula:
opening inventory
+ additions during the year*
----------------------------
= goods available for sale
- year- end inventory
----------------------
= cost of goods sold
*Additions during the year includes costs for raw materials and parts,
costs of labor (including both direct labor costs for production workers
and indirect costs for employees who perform general factory functions),
cost of materials and supplies used in the manufacturing process such as
hardware, lubricants, abrasives, etc., and cost of overhead, which includes
rent, utilities, insurance, depreciation, taxes, and maintenance for the
production facility, as well as the cost of supervisory personnel.
"General and Administrative Expense" is defined as expenses incurred in the
general administration of Galaxy, including salaries for executives and
administrative staff, expenses for rent and utilities, travel expenses,
costs of writing and filing reports, costs of accounting and administering
funds, insurance and advertising.
The price of any Product shall be determined as follows:
Price = (M)x(Cost)
M = margin multiplier shall be set on a country-by-country basis with a
target of 1.10 (except that during the first 24 months of this Agreement
Galaxy may agree to an amount less than 1.10 but in no event less than
1.00). At no time during this Agreement will the margin multiplier be set
below 1.00.
Exhibit 4
Minimum Production Quantities for Purchase
The following lists the 16 most purchased Products and the respective
minimum quantities for purchase. During the first 24 months of this
Agreement, Galaxy may accept orders for any Product in quantities less than
such minimum quantity for that Product provided that Galaxy shall have no
obligation to accept any such order if, as determined by Galaxy, the cost
of producing such order exceeds the price for that order.
Minimum shipping container is 20ft POD.
Top 16 SKU's and their respective minimum run/one shift quantities:
1. 66722 Veggie Ched Slice 12 units/8oz. - 3500 cases.
2. 66717 Veggie Yel Am Slice 12/8oz. - 3500 cases
3. 66718 Veggie Pep Xxxx Slice 12/8oz. - 3500 cases
4. 66721 Veggie Swiss Slice 12/8oz. - 3500 cases
5. 66720 Veggie Mozz Slice 12/8oz. - 3500 cases
6. 66719 Veggie Prov Slice 12/8oz. - 3500 cases
7. 66771 Veggie Ched Shred 12/8.5oz. - 2400 cases
8. 66770 Veggie Mozz Shred 12/8.5oz. - 2400 cases
9. 66773 Veggie Parm/Mozz/Xxxxxx Shred 12/6.5oz. - 2400 cases
10. 66774 Veggie MJ/Ched Shred 12/8.5oz. - 2400 cases
11. 66779 Veggie Cream Cheese 12/8oz. - 1350 cases
12. 66723 Veggie Butter 12/8oz. - 1350 cases
13. 66785 Veggie Pep Xxxx Chunk 12/8oz. - 1840 cases
14. 66737 Veggie Ched Chunk 12/8oz. - 1840 cases
15. 66754 Veggie Mozz Chunk 12/8oz. - 1840 cases
16. 66753 Veggie Parm Topping 12/8oz. - 640 cases
The Minimum Production Quantities for all other Products (on SKU basis)
shall be as determined by Galaxy from time to time.
Exhibit 5
GALAXY NUTRITIONAL FOODS
GENERAL TERMS AND CONDITIONS OF SALE
1. TERMS EXCLUSIVE: This document, together with the quotation
and documents specified therein, constitutes the complete, exclusive and
final agreement of the Buyer identified herein ("Buyer") and Galaxy
Nutritional Foods, Inc. ("Seller") and may not be added to, modified,
superseded or altered except by written agreement or modification signed by
Seller's president, vice president or home office sales manager,
notwithstanding any other additional or modifying terms or conditions which
may now or in the future appear on Buyer's acknowledgment or other forms
(all of which are objected to by Seller without future notification), and
notwithstanding any shipments, tenders of delivery, acceptance of payments,
or other similar acts of Seller. Notification of objection to additional
(or different) terms is given hereby. Buyer's acceptance of any
performance by Seller shall be taken as Buyer's acceptance of these terms
and conditions.
NO PERSON (EXCEPT AN OFFICER OF SELLER) IS AUTHORIZED TO BIND
SELLER TO ANY ORDER EXCEPT ACCORDING TO THE TERMS AND CONDITIONS ON BOTH
SIDES HEREOF.
2. DELIVERY: Unless otherwise specified herein, delivery of
the Products specified herein ("Products") will be F.O.B. U.S.A. port of
shipment. Buyer shall be responsible for obtaining all necessary licenses,
permits and/or approvals from the appropriate authorities or governmental
agencies for Buyer to purchase and receive and for Seller to deliver the
Products. Any delivery date specified herein is approximate only.
Acceptance of shipment by a common carrier, designated shipper or licensed
public truckman, [allocation of Products to Buyer at premises other than
Seller's,] delivery to Buyer's representative or designee (if Seller's
trucks and drivers effect such delivery), or mailing of an invoice by
Seller to Buyer, whichever of the foregoing first occurs, shall constitute
tender of delivery. Upon tender of delivery, title shall pass to Buyer,
subject to Seller's right of stoppage in transit and to any interest of
Seller reserved to secure Buyer's payment or performance. In the instance
of Products held subject to Buyer's instructions or Products for which
Buyer has failed to supply shipping instructions, Seller may invoice Buyer
for the Products and Buyer agrees to make payment at the maturity of the
invoice so rendered. Products invoiced and held at any location, for
whatever reason, shall be at Buyer's risk and Seller may charge for (but is
not obligated to carry) insurance and storage at prevailing rates. Buyer
will accept and pay for partial deliveries in accordance with contract
prices and terms. If Buyer has expressed an intention not to accept
delivery in accordance with any order, no tender of the Products shall be
necessary but Seller may, at its option, give notice in writing to Buyer
that Seller is ready and willing to deliver and such notice shall
constitute a valid tender of delivery.
3. PRICES: Unless otherwise specified herein, prices do not
include applicable taxes, excises, duties, quotation fees or other
governmental impositions which Seller may be required to pay or collect
under any existing or future law, and any such additional charge shall be
paid by and/or for the account of Buyer.
4. PAYMENT, SECURITY INTEREST: If the terms of payment include
any discount for prompt payment, such discount terms shall be strictly
enforced by Seller. If there is no specific contrary agreement upon terms
of payment stated herein, payment shall be due and payable within 30 days
of the date of the invoice. Any payment not made to Seller when due shall
be subject to interest at an annual rate of the greater of 18% or the
highest amount allowed by law on the unpaid balance until paid. Buyer
shall have no right to offset any amount whatsoever against any payment or
other obligation which Buyer may owe to Seller under the terms hereof.
Seller reserves a security interest in the Products to secure Buyer's
payment of the purchase price and any other charges owed by Buyer, and
Buyer agrees that Seller may (but is not obligated to) take such action as
Seller deems advisable to evidence and perfect such interest and that Buyer
will cooperate with Seller in the taking of such actions including, without
limitation, the signing by Buyer of financing statements.
5. CASUALTY AND AVAILABILITY OF SUPPLIES: Delivery of the
Products is contingent upon Seller's ability to obtain the supplies, raw
materials and services through its regular and usual sources of supply. If
by reason of any contingency beyond Seller's control, including (but not
limited to) war, governmental requests, restrictions or regulations, fire,
flood, casualty, accident, or other acts of God, strikes or other
difficulties with employees, delay or inability to obtain labor, material
and service through Seller's usual sources, failure or refusal of any
carrier to transport materials, delay in transport thereof, or any other
similar occurrence, Seller is not able to meet anticipated deliveries,
Seller shall not be liable therefor and may, in its discretion without
prior notice to Buyer, postpone the delivery date(s) under this document
for a time which is reasonable under all the circumstances. In the event
that Buyer defers shipment for more than 15 days, in addition to all other
rights of Seller hereunder, Buyer shall be responsible for storage charges.
6. INSPECTIONS, ACCEPTANCE, AND RETURNS: Each delivery shall
be inspected by Buyer for observable damage and/or non-conformity at the
time of delivery. Failure to so inspect shall constitute a waiver of
Buyer's rights of inspection and shall constitute an unqualified acceptance
of the Products. If, after such inspection, Buyer attempts to reject any
Products, Buyer shall fully specify all claimed damage or non-conformity in
a notice of rejection sent to Seller within ten days of Buyer's receipt of
the Products. Buyer's failure to so specify shall constitute an
unqualified acceptance of the Products and a waiver of that damage or non-
conformity. No Products shall be returned to Seller without Seller's prior
written agreement and any Products returned by Buyer shall be returned in
the same condition as when delivery was effected by Seller. Seller
reserves the right to assess a return or restocking charge for Products
returned for reasons other than damage or non-conformity.
7. LIMITED WARRANTY, WARRANTY DISCLAIMERS AND LIMITATIONS OF
REMEDIES AND LIABILITIES: Seller warrants that the Products manufactured
by Seller will be free from defects for the period ending on the applicable
expiration date. Any Products determined by Seller to be defective at time
of delivery will be replaced, at Seller's option at Seller's U.S.A. port of
shipment, shipment prepaid by Buyer, provided Buyer has acted in accordance
with Paragraph 6 hereof. No item shall be deemed defective if such item
conforms to approval samples, test runs, or previously accepted items or
otherwise reasonably accommodates Buyer's intended purpose. Seller does
not warrant against defects caused by erosion, corrosion, misuse or
improper use or handling or storage, use of the Products not in compliance
with instructions, or any alteration, in the judgment of Seller, adversely
affects the Products.
Except as set forth above, Seller makes NO OTHER WARRANTIES
concerning the Products whatsoever. SELLER DISCLAIMS AND EXCLUDES ALL
OTHER EXPRESS WARRANTIES AND ALL IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE concerning the Products. Buyer acknowledges and agrees
that Seller's obligation described in this Paragraph 6 is the sole remedy
bargained for by Buyer IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES.
In no event will Seller's liability exceed the paid purchase price of the
Products. Seller's obligations described in this Paragraph shall be
BUYER'S SOLE AND EXCLUSIVE REMEDY AGAINST SELLER FOR ANY LIABILITY WITH
RESPECT TO THE PRODUCTS WHETHER ANY CLAIM FOR RECOVERY IS BASED UPON OR
ARISES OUT OF THEORIES OF CONTRACT, NEGLIGENCE, TORT (INCLUDING STRICT
LIABILITY) OR OTHERWISE. Buyer agrees that NO OTHER REMEDY SHALL BE
AVAILABLE to Buyer and that IN NO EVENT SHALL SELLER BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES, including without limitation loss of
income, loss of time, loss of sales, cost or replacement items, claims
asserted by Buyer's customers, injury to personal property, or injury to
any person, whether or not occasioned by Seller's negligence. No
accommodation by Seller to Buyer, whether by attempt, effort or promise to
repair or replace, and whether for sales policy or otherwise shall
establish any additional liability of Seller or any contract term
inconsistent with the terms herein.
A suit based on any cause of action must be commenced within one year
from the date of delivery.
8. CANCELLATION: Seller may cancel or terminate all or part of
the contract arising from or evidenced by this document immediately upon
the happening of any of the following: Buyer's material delinquency of any
of its obligations hereunder or with respect to any other order or
transaction with Seller; the insolvency of Buyer; the appointment of a
receiver under Title 11 U.S.C., as amended (the "Bankruptcy Code"), or the
commencement of a case under any chapter of the Bankruptcy Code for, by or
against Buyer; Buyer's suspension or termination of business or assignment
for the benefit of creditors; or any event, whether or not similar to the
foregoing, which in Seller's good faith belief materially impairs the
prospect of payment or performance by Buyer hereunder. Seller's rights to
cancel or terminate set forth herein may be exercised by Seller without
liability.
10. STATUTORY COMPLIANCE: Seller continues to attempt to comply
with all applicable laws, standards and specifications. However, Seller is
not responsible for compliance with any laws, standards or specifications
applicable to the Products, their delivery, use, handling, labeling,
transportation or disposal, whether of general or particular application,
unless Buyer has furnished specific written notice thereof prior to
Seller's entry of Buyer's order and the President of Seller acknowledges in
writing receipt and acceptance as a part of the order such law, standard or
specification.
11. PERMISSIBLE VARIATIONS: Seller has the right, without
giving notice to Buyer, prior to the delivery of Products to Buyer to make
any changes in the composition of the Products which, in the opinion of
Seller, does not affect the general characteristics or properties of the
Products. In addition, Seller may make any change or variation in the
Products which is within governmental or industry standards or
specifications applicable at the time of manufacture without giving notice
to Buyer. Buyer will accept any Products which may incorporate any changes
in the composition or specifications, and any increase in price resulting
from such change will be paid by Buyer.
12. REPRESENTATIONS BY AGENT OR REPRESENTATIVE: The terms of
this document shall govern the liability and obligations of Seller in
regard to the sale of Products, whether the sale was procured directly by
Seller or indirectly through an authorized sales representative. No agent,
employee or representative of Seller has any authority to bind Seller to
any additional or contrary affirmation or representation concerning the
Products sold under this document. Unless an affirmation or representation
is specifically included within this document or is in writing signed by an
officer of Seller, it shall not be enforceable by Buyer or by any person
claiming by or through Buyer.
13. TERMINATION: Buyer may terminate the sales contract, in
whole or in part, for Buyer's convenience upon written notice to Seller, in
which event Seller shall be entitled to reasonable termination charges
consisting of a percentage of the contract price reflecting the percentage
of the work performed prior to receipt of Buyer's notice of termination
plus actual costs resulting from termination (including, but not limited
to, unrecoverable fixed overhead such as termination and reassignment
expenses).
14. OWNERSHIP: The specifications, drawings, manufacturing
data and other information between Buyer and Seller in connection with the
contract are the property of the originating party and are disclosed in
confidence in the condition that they are not to be reproduced, copied, or
used for any purpose detrimental to the interest of the other.
15. INSURANCE: Seller's standard Insurance Statement shall
apply, which Seller shall furnish to Buyer upon request.
16. MISCELLANEOUS: All sales are subject to approval by
Seller's credit department. Orders entered on Seller's books cannot be
countermanded nor deliveries deferred except with Seller's written consent
and upon terms that will indemnify Seller against all loss. The contract
arising hereunder will be governed by the local laws of the State of
Florida. If any of the provisions hereof shall be held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired thereby.
No right or interest in the contract arising from this document
shall be assigned by Buyer and no delegation of any obligation owed by
Buyer shall be made without the prior written permission of Seller.
The individual rights and remedies of Seller reserved herein
shall be cumulative and additional to any other or further remedies
provided in law or equity. Waiver by Seller of performance or inaction
with respect to Buyer's breach of any provision hereof, or failure of
Seller to enforce any provision hereof which may establish a defense or
limitation of liability, shall not be deemed a waiver of future compliance
therewith or a course of performance modifying such provision, and such
provision shall remain in full force and effect as written.
As used herein, "Buyer" and "Seller" include the respective
heirs, executors, personal representatives, successors and permitted
assigns of each.
Where these General Terms and Conditions of Sale conflict with that
certain Master Distribution and License Agreement (the << Distribution
Agreement >>, dated May 22, 2003, by and among Buyer and Seller, the terms
of the Distribution Agreement shall take precedence and control.
IN ALL CASES CLERICAL ERRORS ARE SUBJECT TO CORRECTION.
Form # _____________
Rev. Date __________
Special Terms and Conditions of International Sales
For sales where the Buyer is in a country other than the United
States of America, the following shall apply in addition to (and shall take
precedence where in direct conflict with) the GENERAL TERMS AND CONDITIONS
OF SALE of Galaxy Nutritional Foods, Inc. ("Seller"). Where these Special
Terms and Conditions of International Sales conflict with that certain
Master Distribution and License Agreement (the <>,
dated May 22, 2003, by and among Buyer and Seller, the terms of the
Distribution Agreement shall take precedence and control.
1. Shipment: Delivery will be FOB US Port of Shipment (INCO
Terms 2000). All shipments hereunder will be made in the Seller's standard
shipping packages to Buyer at Buyer's address as set forth in this
Agreement. Unless otherwise instructed in writing by Buyer, Seller will
select the carrier(s). Title and risk of loss to the Products purchased
under this Agreement shall pass to Buyer upon delivery thereof to the first
carrier.
2. Taxes and Duties: Buyer shall bear all applicable federal,
state, municipal and other government taxes (such as sales, value added,
use, or similar taxes); all customs duties, and similar charges (any agent
appointed for the purpose of importation of the Products shall be the agent
of Buyer not Seller); and all personal property taxes assessable on or with
respect to the Products.
3. Customs Clearance: Buyer shall perform the functions necessary
to clear the Products through all non-United States customs and similar
controls, and it shall arrange for the transportation of the Products from
the Port of Entry to the Buyer.
4. Acceptance: Buyer shall inspect all Products promptly upon
receipt thereof at the shipping destination and may reject any Products
which fail in any significant respect to meet its specifications prevailing
on the date of delivery. Products not rejected by written notification to
Seller within 30 days of receipt shall be deemed to have been accepted.
Upon Seller's request, rejected Products shall be returned freight prepaid
to Seller's place of manufacture and shall be shipped within 10 days of
Seller's request. After receipt by Seller of properly rejected Products,
Seller shall, at its option replace properly rejected Products. Seller
will prepay transportation charges back to Buyer and shall reimburse Buyer
for any reasonable costs of transportation incurred by Buyer in connection
with the return to Seller of properly rejected Products. Otherwise, Buyer
shall pay transportation charges in both directions.
5. Payment: All payments for Products ordered hereunder shall be
made within 30 days of the date of Seller's invoice to Buyer, in U.S.
Dollars. All exchange, interest, banking, collection or other charges
shall be at the sole expense of Buyer. Otherwise, payment terms in the
Terms and Conditions of Sale of Seller apply.
