EXHIBIT 10.5
Distribution Agreement
Xxxxxx Science Inc.
and
Toong Yeuan Enterprise Co., Ltd.
CONTENTS
CLAUSE
1. INTERPRETATION ......................................................1
2. APPOINTMENT .........................................................3
3. PURCHASE ORDERS AND DELIVERY ........................................3
4. PAYMENT AND PRICES ..................................................4
5. DUTIES OF THE DISTRIBUTOR ...........................................5
6. DUTIES OF THE COMPANY ...............................................8
7. TRADEMARKS ..........................................................9
8. WARRANTIES AND INDEMNITIES ..........................................10
9. DURATION ............................................................11
10. TERMINATION .........................................................11
11. EFFECT OF TERMINATION ...............................................12
12. NO PARTNERSHIP ......................................................13
13. ANNOUNCEMENT ........................................................13
14. CONFIDENTIAL INFORMATION ............................................13
15. ENTIRE AGREEMENT ....................................................14
16. WAIVER ..............................................................14
17. COSTS ...............................................................15
18. INVALIDITY ..........................................................15
19. NOTICES .............................................................15
20. COUNTERPARTS ........................................................16
21. GOVERNING LAW AND JURISDICTION ......................................17
22. EXCLUSION OF THIRD PARTY RIGHTS .....................................17
23. ASSIGNMENT ..........................................................17
THIS AGREEMENT (THE "AGREEMENT") is made on February 18, 2003.
BETWEEN the following parties (collectively the "PARTIES" and each a "PARTY"):
(1) XXXXXX SCIENCE INC., a corporation duly organized and validly existing
under the laws of the Republic of Korea and having its registered
address at 8th Fl. LG Palace Bldg., 000-0 Xxxxxxx-Xxxx, Xxxx-Xx, Xxxxx,
Xxxxx (the "COMPANY"); and
(2) TOONG YEUAN ENTERPRISE CO., LTD., a corporation duly organized and
validly existing under the laws of Taiwan and having its registered
address at 8F-1 Xx. 000, Xx Xxx Xxxx, Xxxx-Xxx Xxxx., Xxxxxx,
Xxxxxx (the "DISTRIBUTOR")
RECITALS
(A) WHEREAS the Company has developed and has the exclusive right to
manufacture and sell the Product in a number of countries, including
Taiwan.
(B) WHEREAS the Distributor desires to have the exclusive right of the
Product to discuss with brand owners for the development, marketing and
sale in Taiwan of foods and beverages containing the Product.
(C) WHEREAS the Company and the Distributor now desire to enter into an
agreement.
THE PARTIES AGREE AS FOLLOWS:
1. INTERPRETATION
1.1 In this agreement the following words, expressions, and abbreviations
shall have the following respective meanings unless the context
otherwise requires:
"BUSINESS DAY" means a day (excluding Saturdays) on which banks
generally are open in Taiwan and Seoul for the transaction of normal
banking business;
"COMPANY FORECAST" shall mean a six (6) month forecast of anticipated
monthly volume of the Product to be supplied by the Company to the
Distributor in the Territory during the relevant Forecast Period, which
forecast the Company shall provide the Distributor with pursuant to
Clause 3.1, based on the immediately preceding Distributor's Forecast
and the Company's available production volume.
"COMPANY FORECAST DATE" shall mean each of the following: 1 July and 1
January;
"CONFIDENTIAL INFORMATION" means all information in relation to the
business of the Company, the Distributor or any of their Group
Corporate Persons which is not publicity known and/or all information
from time to time designated by the Company or the Distributor as being
confidential;
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"DISTRIBUTOR FORECAST" shall mean a six (6) month forecast of
anticipated monthly volume of orders for the Product that the
Distributor shall place during the relevant Forecast Period, which
forecast the Distributor provide the Company with pursuant to Clause
3.1.
"DISTRIBUTOR FORECAST DATE" shall mean each of the following: 1 June
and 1 December;
"END PRODUCTS" means any food or beverage product containing the
Product;
"END-USER" means an entity or entities that develops or produces foods
and beverages using the Product.
"FORECAST" shall mean a Company Forecast or Distributor Forecast.
"FORECAST PERIOD" shall mean the period of six (6) calendar months
commencing on the date falling two calendar months after the relevant
Distributor Forecast Date.
"GROUP CORPORATE PERSON" means in relation to any Party its holding
companies, subsidiaries and subsidiary undertakings, and subsidiaries
and subsidiary undertakings of its parent companies;
"GUARANTEED QUANTITY" shall mean fifty (50) percent of the volume of a
Company Forecast for a given Forecast Period, provided that the Company
Forecast does not exceed the immediately preceding Distributor
Forecast.
"PRODUCT" means EuChol-S series, cholesterol reducing substances
deriving mainly from natural plant sterol;
"TERRITORY" means Taiwan;
"TRADE XXXX" means EuChol-S, the trademark which is under application
for registration in the Territory;
"WORKING HOURS" means between [9:00 a.m.] and [5:30 p.m.] on any
Business Day; and
"YEAR" means successive periods of 12 calendar months, the first of
which shall commence on and from the date upon which this Agreement
shall be deemed to have commenced in accordance with the provisions of
Clause 9 and the second and subsequent of which shall commence on the
first and subsequent anniversaries thereof respectively.
1.2 The text of this Agreement written in the English language is the
authentic text and all disputes, differences, difficulties or
uncertainties in interpretation and/or construction shall be resolved
exclusively by reference to such English text.
1.3 In this Agreement unless otherwise specified, reference to:
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(a) recitals, clauses, paragraphs or schedules are to recitals,
clauses and paragraphs of and schedules to this Agreement. The
schedules form part of the operative provisions of this
Agreement and references to this Agreement shall, unless the
context otherwise requires, include references to the recitals
and the schedules;
(b) "WRITING" shall include typewriting, printing, lithography,
photography and other modes of representing words in a legible
form (other than writing on an electronic or visual display
screen) or other writing in non-transitory form; and
(c) words denoting the singular shall include the plural and vice
versa and words denoting any gender shall include all genders.
1.4 The index to and the headings in this Agreement are for information
only and are to be ignored in construing the same.
2. APPOINTMENT
2.1 Subject to the terms of this Agreement the Company appoints the
Distributor to be its sole and exclusive distributor of the Products in
the Territory for the purpose of making foods and beverages and the
Distributor accepts such appointment on and subject to such terms.
2.2 The Distributor shall import the Product for incorporation into food
and beverage products either by itself.
2.3 The Distributor shall only distribute the Product to End-Users whom
have been mutually agreed in writing between the Parties.
3. PURCHASE ORDERS & DELIVERY
3.1 On or before each Distributor Forecast Date, the Distributor shall
provide the Company with a Distributor Forecast for the relevant
Forecast Period, provided that the obligation to provide such
Distributor Forecast begins from the second year following the date of
this Agreement. On or before each Company Forecast Date, the Company
shall provide the Distributor with a Company Forecast for the relevant
Forecast Period, provided that the obligation to provide such Company
Forecast begins from the second year following the date of this
Agreement. Forecasts are intended to follow the Company to plan
production and to determine the Distributor's entitlement.
3.2 The Distributor shall place orders on a monthly basis based on the
Distributor Forecasts. When the Distributor doesn't have any order for
a certain month, the Distributor shall inform the Company of such
notice in writing and the Company shall send written acceptance to the
Distributor upon receipt of such notice. All purchase orders placed by
the Distributor shall be in writing and shall specify the quantity of
the Product ordered and the requested date for shipment and such other
information the Company may reasonably request for in order to fulfill
the order. The first purchase order shall be placed
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at least three (3) months prior to the requested date of shipment, and
purchase orders thereafter shall be placed at least two (2) months
prior to the requested date of shipment. In case, until the end of the
first three (3) months of a Forecast Period, the Distributor fails to
order half of the relevant Guaranteed Quantity for the Forecast Period
(i.e., twenty five (25) percent of the volume of the Company Forecast
for the Forecast Period), the Company may demand, via, inter alia,
sending a demand letter to the Distributor, that the Distributor makes
best efforts, such as intensive and efficient promotions and
advertisements, to meet the requirement of ordering at least the
Guaranteed Quantity for the Forecast Period.
3.3 Such purchase orders placed by the Distributor shall be subject to a
written acceptance by the Company. The Company shall have the right to
cancel any acceptance of orders or to refuse, suspend, or delay
shipment of any orders if the Distributor is in default of its payment
obligations or fails to comply with any obligation under this
Agreement. The exercise of such right by the Company shall not
constitute a breach of this Agreement by the Company.
3.4 The Company accepts the Distributor's purchase order; it shall send a
written acceptance within ten (10) days from the date of receipt of
this purchase order. The Company shall use reasonable efforts to
promptly fill and deliver all orders for the Product submitted by the
Distributor by the requested shipping date.
3.5 The Distributor shall conduct any incoming acceptance test and uniform
the results to the Company within either twenty-eight (28) days from
the date when the Distributor receives the Product ordered at its
facilities in Taiwan, or thirty-five (35) days from the date when the
Products arrive in a port of the Territory, whichever is earlier. Any
product not rejected by the Distributor in written format to the
Company within such period of time of incoming acceptance shall be
deemed accepted, and the Company shall not be liable for any defects
whatsoever of the Products after such period elapses.
3.6 The Company shall not be obliged to accept a request for delay once the
Company has accepted a purchase order. If the Company allows for a
request for delay, the Distributor shall pay for any storage,
insurance, or other costs incurred due to such delay. If the Company
accepts a purchase order from the Distributor, the Distributor shall
make the payments in accordance with Clause 4.1 below. If the Company
cannot comply with the Distributor's request for the promised shipment
schedule, the Company shall compensate the Distributor for reasonable
losses directly and solely caused by such delay.
4. PAYMENT AND PRICES
4.1 The Distributor shall make payments for the Product to the Company in
US Dollar by means of an irrevocable and revolving letter of credit in
US Dollar. Within ten (10) days after receiving the Company's
acceptance of a purchase order as provided in Clause 3.3 above, the
Distributor shall open an irrevocable and revolving letter of credit in
favor of the Company in such form and with such prime bank as is
satisfactory to the Company.
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Such letter of credit shall contain terms covering, inter alia, the
total price and additional charges and/or expenses to be borne by the
Distributor.
4.2 The Company shall ship the Product ordered by the Distributor hereunder
F.O.B. Busan or Incheon by commercial surface transportation.
4.3 The prices of the Products shall be determined in accordance with the
price lists to be issued from time to time by the Company. The Company
shall grant most favored status to the Distributor in terms of pricing
of the Products. The Company may change the price of the Product with
not less six (6) months notice to the Distributor.
4.4 The price of the Product agreed between the Parties shall be exclusive
of value added tax, excise duty and similar imposts. However, this does
not mean that the Distributor is exempt from value added tax, excise
duty and similar posts.
4.5 If an End-User in the Territory wishes to purchase the Product directly
from the Company, the Company may sell the Product to such End-User
only if the Distributor has referred the End-User to the Company. If an
End-User in the Territory imports the Product directly from the
Company, the Company shall remit payment difference or commission to
the Distributor within seven (7) days from the date when Company
receives payment.
5. DUTIES OF THE DISTRIBUTOR
5.1 The Distributor shall order at the least the relevant Guaranteed
Quantity for a Forecast Period until the last day of the Forecast
Period.
5.2 The Distributor shall at all times use all reasonable efforts to
advertise, promote, market and sell the Products in the Territory.
5.3 Before planning or commencing any major advertising or promotional
activity or the Products in the Territory, the Distributor shall
furnish to the Company a copy of such promotional materials for the
Company's review. The Distributor agrees to accept any changes
recommended by the Company, provided that such changes are reasonable
based on regulatory requirements and/or preservation of good will
associated with the Company's Trade Xxxx.
5.4 The Distributor shall inform the Company in writing every month of the
status of its business related with this Agreement and any other
information it acquires that is likely to be a significant interest,
use, or benefit to the Company, including but not limited to monthly
shipped volumes, sales prices at which the Products were sold to
End-Users, and new or continuing relationships with its customers
(including the details of all contracts entered into with its customers
in connection with the Product or foods or beverages containing the
Product).
5.5 The Distributor shall insure that the Product is sold or resold in
good condition.
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5.6 The Distributor shall not present the Product in a way that is
inconsistent with the reality, by spreading unjustified and exaggerated
opinions about the Product's quality, content, applications,
effectiveness, granted attestations, country of origin, availability,
etc.
5.7 The Distributor shall not make any settlement offers or accept claim in
connection with complaints regarding the Product sold in any way that
is inconsistent with the terms of this Agreement.
5.8 The Distributor shall not directly or indirectly import, distribute,
sell, advertise, market or promote the distribution in the Territory of
any product for use in food or beverages that would compete or
interfere with the sale of the Products.
5.9 The Distributor shall not directly or indirectly (i) establish any
branch, warehouse or distribution center outside the Territory for the
promotion, distribution, or sale of the Products, (ii) promote,
distribute, or sell the Products outside the Territory, (iii) advertise
or solicit customers outside the Territory if the Distributor knows,
suspects, or has reason to know or suspect that the Products will be
resold in or to any area outside the Territory.
5.10 In the event that the Distributor receives inquires from sources
outside the Territory, the Distributor shall redirect or transfer such
inquiries to the Company.
5.11 The Distributor shall at all times have under its control or in its
possession such stocks of the Products as shall be sufficient in all
respects to meet reasonably anticipated demands of the customers (both
actual and anticipated) for the Products in the Territory. The
Distributor shall be responsible for all government approvals and
authorizations for the distribution and sale of the products in the
Territory.
5.12 The Distributor shall be responsible for complying with any and all
necessary or proper laws, rules, regulations, decrees and other
applicable governmental or administrative procedures for the
distribution and sale of the Products in the Territory. The Distributor
shall be responsible for all government approvals and authorizations
for the distribution and sale of the Products in the Territory.
5.13 The Distributor shall make all reasonable efforts to develop
cholesterol reducing foods and beverages containing the Product which
food and beverages should be suitable for the Taiwanese food and
beverage market.
5.14 The Distributor shall maintain close marketing relationships with the
customers so that their relevant needs and future plans are
ascertained.
5.15 The Distributor shall diligently respond to routine service inquiries
from the customers either by telephone, fax, e-mail or in the field,
including:
(a) maintaining liaison with the customers; and
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(b) assisting the customers in the implementation of the Company's
warranty for the Product.
5.16 The Distributor shall promptly draw to the attention of the Company any
new or revised legislation, regulation or orders related to the food
and beverage sector in the Territory when such legislation, regulation
or orders comes to its attention.
5.17 Immediately after entering into any significant contract with the
customers in connection with the Product or foods or beverages
containing the Product (including, but not limited to, all contracts
with a potential volume of one (1) Metric Ton or more of the Product
for one (1) year), the Distributor shall inform the Company of the
terms and conditions of such contract.
5.18 The Distributor shall maintain and coordinate, at it own cost, such
technically competent sales, commercial and service staff to render
satisfactory service to the customers of the Product and/or foods and
beverages containing the Product.
5.19 In order to protect the Company's rights to the Product in its original
form, the Distributor shall not in any way modify, adapt or develop
quality, composition and/or designs of the Products supplied by the
Company to the Distributor under this Agreement, without prior written
consent of the Company. If so consented, the intellectual property
rights (including, but not limited to, copyrights, design rights,
rights in Trade Xxxx, know-how, and confidential information) in any
such modifications, adaptations, or developments shall be jointly owned
by the Company and the Distributor, with each Party having full rights
of exploitation thereof independently of the other party, but the
Distributor's such rights being limited to the Territory, and the
Distributor shall enter into such deeds and documents and do such
things as may be necessary to give full and proper effect to the
Company's rights under this Clause 5.19. The intellectual property
rights in any modifications, adaptations or developments of quality,
composition and/or designs of the Products made by the Distributor
without the Company's said prior written consent shall become the
exclusive property of the Company.
5.20 The Distributor shall pay to the Company all costs and/or expenses in
relation to all assistance, advice and information provided by the
Company under Clause 6.2 and 6.3 in US Dollar by wire transfer to the
bank account designated by the Company before the Company provides such
assistance, advice and information. If the Distributor fails to pay
such costs and/or expenses, the Company is not obliged to provide such
assistance, advice and information. The Company has the right to decide
the amount of all the costs and/or expenses for such assistance, advice
and providing information. In case relevant personnel of the Company go
on a business to the Territory, taking less than five (5) days
including travel time, for the purpose of provided assistance or
services to the Distributor and/or and End-User(s) in the Territory,
the Company shall bear all reasonable travel expenses for
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transportation, meals and lodging. On the other hand, in the event that
such business trip of Company's personnel, including travel time, takes
five (5) days or longer, the Distributor and the relevant End-User(s)
shall bear all reasonable travel expenses and/or costs incurred in
connection with such business trip, including expenses for
transportation, meals and lodging, with the matter of how to apportion
the expenses and/or costs between the Distributor and the End-User(s)
being determined through negotiation between them.
5.21 The Distributor shall make all responsible efforts to arrange all
End-Users to enter into agreements for the payment of royalty to the
Company and shall further make all reasonable efforts to require the
End-Users to uphold its obligation to pay royalty to the Company under
such agreement. If the End-User does not make any payment of the
royalty which it has agreed for the use of the Product to the Company
under such agreement, the Distributor shall not sell or distribute the
Product to the customer upon the written notice by the Company.
5.22 Recognizing its obligations to protect the reputation of the Company,
the Distributor undertakes that it shall not undertake any obligations
in respect of the performance of the Product in excess of the limits
specified by the Company in respect to the Product concerned.
6. DUTIES OF THE COMPANY
6.1 The Company shall supply the Products for use and/or resale in the
Territory only to the Distributor for the purpose of making foods and
beverages.
6.2 The Company undertakes to provide such information and support as may
reasonably be requested by the Distributor to assist the Distributor in
using or re-selling the Products and/or End Products in the Territory.
6.3 The Company shall supply the Distributor with non-confidential
technical information that the Company may have that is directly
applicable to the marketing of the Products, such information to be in
the English language, and shall if requested:
(a) provide technical assistance and advice to the Distributor in
relation to the Products and End Products;
(b) provide instruction at the Company's premises for such sales
and technical personnel of the Distributor as is reasonably
necessary;
(c) provide the services of such sales and technical personnel of
the Company for such period as is reasonably necessary; and
(d) provide the Distributor with information on the Company's
advertising and promotion methods and supply such quantities
of advertising and promotional material as the Distributor may
reasonable request from time to time.
6.4 The Company shall not:
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(a) supply the Products to any user in the Territory for the
purpose of making End Products; nor
(b) itself use the Product in the Territory for the purpose of
making End Products; nor
(c) supply the Products to any buyer in the Territory for the
purpose of making End Products other than the Distributor nor
(d) supply the Product to any buyer outside the Territory for the
purpose of making End Products for sale in the Territory, with
the knowledge that such buyer intends to make and sell End
Products in the Territory; nor
(e) solicit orders from within the Territory for the purpose of
End Products; nor
(f) alter the quality or composition of the Products or the design
of the labels thereon, unless the Parties mutually agree to
make such alteration.
6.5 In the event that the Company receives an enquiry from a party within
the Territory for supply of the Product for the purpose of making End
Products, the Company shall refer such enquiry to the Distributor.
7. TRADE MARKS
7.1 The Company's intellectual property rights (including, but not limited
to, copyrights, design rights, rights in Trade Xxxx, know-how and
confidential information and any applications for or rights to register
for foregoing) in and associated with the Product are and shall remain
vested in the Company. The Distributor shall not under any
circumstances acquire any rights whatsoever in any copyright, patent,
trademark or other proprietary right of the Company, nor shall the
Distributor acquire any rights whatsoever in relation to the Product.
7.2 The Distributor shall immediately notify the Company in writing of any
instance within the Territory as shall come to its notice of any
infringement or intended or threatened infringement or wrongful use of
the Trade Xxxx or any intellectual property rights (including, without
limitation, copyrights, design rights, rights in trademarks, know-how
and confidential information) of the Company and of any instance of the
passing off of other goods as and for the Products and of any law which
may affect the importation, marketing, distribution and/or sale of the
Products. The Distributor shall at the Company's cost give the Company
such assistance as it may require in prosecuting and defending any
claim arising out of such infringement. The Company shall have full
control over any litigation or threatened litigation brought by a third
party in connection with alleged infringement of the third party's
intellectual property rights by the performance of any part of this
Agreement, and the Distributor shall make no admission or statement
prejudicial to the Company's interest in relation to such claim ,
litigation or threatened litigation.
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7.3 The Distributor shall not in any way modify, adapt or develop the
Company's Trade Xxxx without prior written consent of the Company. If
so consented, the intellectual property rights in any such
modifications, adaptations, or developments shall be jointly owned by
the Company and the Distributor, which each Party having full rights of
exploitation thereof independently of the other Party, but the
Distributor's such rights being limited to the Territory, and the
Distributor shall enter into such deeds and documents and do such
things as may be necessary to give full and proper effect to the
Company's rights under this Clause 7.3. The intellectual property
rights in any modifications, adaptations or developments of the Trade
Xxxx made by the Distributor without the Company's said prior written
consent shall become the exclusive property of the Company.
7.4 The Distributor shall not affix the Trade Xxxx to any product other
than the Product without the prior written consent of the Company.
7.5 The Distributor shall not use the Company's name, Trade Xxxx or other
trade marks by way of advertisement save to the extent that such name
and trade marks appear on literature issued by the Company in writing
his capacity as a distributor for the Company.
8. WARRANTIES AND INDEMNITIES
8.1 The Company's warranty on the Products is limited to the following: the
Company will replace any Product at its own expense, save as to freight
as to which it shall pay total of the roundtrip cost for all validated
warranty claims, as to the Product found to be materially defective.
The Company's warranty is further subject to:
(a) the Product not being used for any purpose other than the
normal purpose for its specifications;
(b) the observance by the user of all operating instructions and
recommendations issued by the Company in relation thereto; and
(c) the Distributor's notification to the Company of the results
of incoming acceptance test is described accordingly in clause
3.4.
(d) a copy of C.O.A shall be provided by the Company for each
batch production of the Product, otherwise, the Distributor
will not accept the shipment of the Product.
The Distributor shall promptly issue a report to the Company in respect
of each warranty claim brought to its attention.
8.2 In the event that any claim should be brought against the Distributor
that the Products infringe any patent or other protected proprietary
right, owned by any third party, not being an employee, officer,
director or shareholder of the Distributor, and not being a Group
Corporate Person of the Distributor or any employee, officer, director
or
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shareholder of such Group Corporate Person, which was valid at date of
acceptance by the Company of the Distributor's order for such Product,
the Company shall hold the Distributor harmless from any and all
damages which may be awarded against the Distributor by any court of
competent jurisdiction provided that:
(a) the Distributor notifies the Company in writing within thirty
(30) days of learning of any such claim as aforesaid;
(b) the Distributor permits the Company to conduct the defense to
any such claim as aforesaid and the negotiation of any
settlement thereof;
(c) the Distributor provides at the expense of the Company such
assistance as the Company may require in the defense or
settlement of such claim as aforesaid; and
(d) such indemnity and undertaking as aforesaid shall not apply if
the infringement relates to any use other than a use
authorized by the Company.
8.3 Neither the Company nor the Distributor shall be or be deemed to be in
breach of this Agreement or be liable for any failure to carry out or
delay in carrying out any of its obligations under this Agreement or
any contract entered into pursuant hereto if such failure or delay
arises directly or indirectly from any cause whatsoever beyond the
reasonable control of either the Company or the Distributor including
without limitation any strike, lockout, industrial dispute or act of
God.
9. DURATION
This Agreement shall be deemed to have commenced on and to have
continued in force from ______, 2003 (the "Effective Date") and,
subject to the provisions of Clause 10, shall continue in force for a
period of seven (7) years from the Effective Date, unless terminated by
either Party according to the provisions of Clause 10. In addition, if
neither Party gives the other Party written notice to terminate this
Agreement at least six (6) months prior to the expiration of the term
of this Agreement, this Agreement shall be automatically renewed under
the same terms and conditions provided herein for a term that the
Parties shall agree to before the expiration date of the original term
of this Agreement. In case the Parties fail to agree to such renewed
term before the expiration date of the original term of this Agreement,
the renewed term shall be six (6) months.
10. TERMINATION
10.1 In the event of a breach by the Company or the Distributor (the
"Breaching Party") of any of its obligations under this Agreement which
is not reasonably capable of being remedied or which being reasonably
capable of being remedied is not remedied before the expiry of thirty
(30) days from the date of service on the Breaching Party of a notice
in writing specifying the breach and requiring its remedy, the
non-breaching Party, either the Company or the Distributor as the case
may be, may by notice in writing expiring on such date as such notice
shall specify terminate this Agreement.
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10.2 Should any event occur as a result of either Party's (the "Affected
Party") business shall come or in the reasonable opinion of the other
Party, either the Company or the Distributor, as the case may be (the
"Unaffected Party"), shall be likely to come, under the direct,
indirect or de facto control or ownership (whether in whole or in part)
of any person, firm, corporation or government agency other than the
Affected Party and which in the opinion of the Unaffected Party is or
could be detrimental and/or prejudicial to the interests of the
Unaffected Party and/or any Group Corporate Person of the Unaffected
Party this Agreement may be terminated by the Unaffected Party by
giving to the Affected Party not less that thirty (30) days prior
notice in writing. The Affected Party shall forthwith give notice in
writing to the Unaffected Party of any change in the ownership and/or
control (whether in whole or in part) of or of the business of the
Affected Party.
10.3 If either Party (the "Insolvent Party") shall go into liquidation, save
for the purpose of an amalgamation or reconstruction approved by the
other Party, either the Company or the Distributor, as the case may be
(the "Solvent Party"), or shall enter into any composition with its
creditors or suffer any execution or distress to be levied on its goods
or if a receiver shall be appointed of the whole or any part of its
assets or property or if the Insolvent Party shall suffer any act or
thing have an analogous effect under the laws of Korea or Taiwan as the
case may be, the Solvent Party may, by notice in writing to the
Insolvent Party expiring on such date as such notice shall specify,
terminate this Agreement.
11. EFFECT OF TERMINATION
Upon expiration or termination of this Agreement:
11.1 The Parties shall have no further rights or obligations under this
Agreement, except that the rights and obligations of either Party that
have accrued shall not be affected thereby.
11.2 Notwithstanding the provision of Clause 11.1, the Company reserves the
right to refuse to fill the Distributor's orders regardless of receipt
and acceptance of such orders prior to the effective date of such
termination.
11.3 The provisions of Clauses 1, 8, 11, and 14 shall survive the expiration
or termination of this Agreement for a period of thirty-six (36) months
from the date of termination of this Agreement. The provisions of
Clause 5.8 shall extend beyond termination of this Agreement for a
period of thirty-six (36) months from the date of termination of this
Agreement.
11.4 The Distributor shall return at its own expense to the Company all
documents of a secret or confidential nature relating to the Product or
to the implementation of this Agreement and all catalogues, sales
literature, technical pamphlets, samples, advertising or promotional
material relating to the Products which may have been supplied by the
Company.
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11.5 The Distributor shall immediately cease to engage in the distribution
of the Product within the Territory, shall immediately give notice of
such fact in writing in a form previously agreed with the Company to
all of its agents, dealers and customers, and shall cease to represent
itself in such capacity.
11.6 In case the Company appoints a new distributor in the Territory because
this Agreement has been terminated under Clause 10 above, the Company
may request the Distributor to sell to the newly-appointed distributor
the remaining stock of the Product that the Distributor stores in good
condition. Upon such request by the Company, the Distributor shall
immediately sell the remaining stock of the Product to the
newly-appointed distributor at the same unit price as that at which the
Distributor purchased the Product from the Company.
12. NO PARTNERSHIP
Nothing in this Agreement and no action taken by the Parties pursuant
to this Agreement shall constitute, or be deemed to constitute, the
Parties a partnership, association, joint venture or other co-operative
entity, unless the Company and the Distributor enter into a separate
partnership agreement.
13. ANNOUNCEMENT
None of the parties shall disclose the terms and conditions of this
Agreement without prior agreement between both Parties, unless the
disclosure is required by the law or the rules of a regulatory body.
14. CONFIDENTIAL INFORMATION
14.1 The Parties shall at all times:
(a) not use or disclose to any person Confidential Information it
has or acquires; and
(b) make every effort to prevent the use or disclosure of
Confidential Information by any person.
14.2 Clause 14.1 does not apply to:
(a) disclosure of Confidential Information to a director, officer
or employee of the Distributor who needs to have the
Confidential Information in order to carry out his or her
duties; or
(b) use or disclose of Confidential Information required to be
used or disclosed by law.
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14.3 In the event Confidential Information needs to be disclosed to a
director, officer or employee of the Distributor who needs to have the
Confidential Information in order to carry out his or her duties, the
Distributor shall provide the Company with a list of the names,
department, positions or title of such persons to whom Confidential
Information was disclosed, and shall get an approval of the Company
prior to such disclosure. The Distributor shall not disclose
Confidential Information to a director, officer or employee of the
Distributor not approved by the Company.
14.4 In the event that the use or disclosure of Confidential Information is
required to be used or disclosed by law, the Distributor shall notify
it to the Company prior to such use or disclosure.
15. ENTIRE AGREEMENT
15.1 This Agreement constitutes the entire agreement between the Parties and
their respective Group Corporate Persons relating to the subject matter
of this Agreement and supersedes and extinguishes any prior drafts,
agreements, undertakings, representations, warranties and arrangements
of any nature whatsoever, whether or not in writing, relating to or in
connection with the subject matters of this Agreement. Notwithstanding
the above, the Parties hereby agree that as between themselves, the
provisions of the Mutual Confidentiality Agreement on 8 October 2002
are not superseded.
15.2 Each Party on behalf of itself and as agent on behalf of each of its
Group Corporate Persons acknowledges and agrees with the other
Party/parties (each such Party/parties acting on behalf of
itself/themselves and as agent on behalf of each of its/their
respective Group Corporate Persons) that:
(a) it has not nor has any of its Group Corporate Persons been
induced to enter this Agreement in reliance upon any warranty,
representation, statement, assurance, covenant, agreement,
undertaking, indemnity or commitment of any nature whatsoever
other than those expressly set out in this Agreement or, to
the extent that it has been, it has (in the absence of fraud)
no rights or remedies in relation thereto; and
(b) none of its respective Group Corporate Persons has given or
made any warranty, representation, statement, assurance,
covenant, agreement, undertaking, indemnity or commitment of
any nature whatsoever other than those expressly set out in
this Agreement or, to the extent that it has, the other
Party/parties (each such Party/parties acting on behalf of
itself/themselves and as agent on behalf of each of its/their
respective Group Corporate Persons) unconditionally and
irrevocably waives (in the absence of fraud) any claim which
any of them might otherwise have had in relation thereto.
15.3 This Agreement may be varied only by a document signed by both of the
Parties.
16. WAIVER
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16.1 A waiver of any term, provision or condition of, or consent granted
under, this Agreement shall be effective only if given in writing and
signed by the waiving or consenting Party and then only in the instance
and for the purpose for which it is given.
16.2 No failure or delay on the part of any Party in exercising any right,
power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
16.3 No breach of any provision of the Agreement shall be waived or
discharged except with the express written consent of the Parties.
16.4 The rights and remedies herein provided are cumulative with and not
exclusive of any rights or remedies provided by law.
17. COSTS
Save as expressly otherwise provided in this Agreement each of the
Parties shall bear its own legal, accountancy and other costs, charges
and expenses connected with the negotiation, preparation and
implementation of this Agreement and any other agreement incidental to
or referred to in this Agreement.
18. INVALIDITY
18.1 Subject to Clause 18.2 if any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under the law of any
jurisdiction:
(a) the validity, legality and enforceability is that jurisdiction
of any other provisions; and
(b) the validity, legality and enforceability under the law of any
other jurisdiction of that or any other provisions
shall not be affected or impaired in any way.
18.2 In the event of any provision of this Agreement being or becoming
contrary to any of the laws of the Territory the Distributor shall
immediately notify the Company in writing and the Parties shall agree
whether this Agreement shall continue on the basis that the offending
provision be removed or amended in such manner as agreed between the
Parties or that this Agreement shall be terminated.
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19. NOTICES
19.1 Any notice, demand or other communication given or made under or in
connection with the matters contemplated by this Agreement shall be in
writing and shall be delivered personally or sent by fax or air mail if
posted to or from another country:
In the case of the Company to:
Address: 8th FL., LG Palace Bldg., 000-0 Xxxxxxx-Xxxx, Xxxx-Xx,
Xxxxx 000-000, Xxxxx
Fax: x00-0-000-0000
Attention: Kyungmoon Park, Ph. D.
In the case of the Distributor to:
Address: 8th FL., 000 Xx Xxx Xxxx, Xxxxxx 000, Xxxxxx R.O.C.
Fax: x000-0-0000-0000
Attention: Mr. Xxxxx Xxxx
and shall be deemed to have been duly given or made as follows:
(a) if personally delivered, upon delivery at the address of the
relevant Party;
(b) if sent be air mail, four business Days after the date of
posting; and
(c) if sent by fax, when dispatched;
provided that if, in accordance with the above provision, any such
notice, demand or other communication would otherwise be deemed to be
given or made outside Working Hours, such notice, demand or other
communication shall be deemed to be given or made at the start of
Working Hours on the next Business Day.
19.2 A Party may notify the other Party to this Agreement of a change to its
name, relevant addressee, address or fax number for the purposes of
Clause 19.1 provided that such notification shall be effective only
after:
(a) the date specified in the notification as the date on which
the change is to take place; or
(b) if no date is specified or the date specified is less than
five Business Days after the date on which notice is given,
the date falling five Business Days after notice of any such
change has been given.
20. COUNTERPARTS
This Agreement may be executed in any number of counterparts which
together shall constitute one agreement. Any Party may enter into this
Agreement by executing a counterpart and this Agreement shall not take
effect until it has been executed by all Parties.
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21. GOVERNING LAW AND JURISDICTION
21.1 This Agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this Agreement
or its formation) shall be governed by and constructed in accordance
with the laws of the Republic of Korea.
21.2 The Parties agree to settle amicably any disputes, which may arise out
of or in connection with this Agreement. In the event that they are
unable to reach amicable agreement, then the Parties shall settle such
dispute through arbitration pursuant to Clause 21.3.
21.3 Either Party may submit a dispute to arbitration at any time following
the elapse of one (1) month from the date of such dispute arising. In
the event that the Company initiates the arbitration, it shall be held
in Taipei, Taiwan and shall be conducted in the Chinese language in
accordance with [the Taiwan Arbitration Law]. If the Distributor
initiates the arbitration, it shall be held in Seoul, the Republic of
Korea and shall be conducted in the Korean language in accordance with
the Arbitration Rules of the Korean Commercial Arbitration Board.
22. EXCLUSION OF THIRD PARTY RIGHTS
The Contracts (Right of Third Parties) Act 1999 shall not apply to this
Agreement and no person other than the Parties to this Agreement shall
have any rights under it, nor shall it be enforceable under that Act by
any person other than the Parties to it.
23. ASSIGNMENT
The obligation and duties of the Parties hereunder are personal to the
Parties and their lawful successors in title and shall not be
subcontracted to any third party without the prior written consent of
the other Party, nor shall either Party assign this Agreement or any
part thereof to any third party without the prior written consent of
the other Party.
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IN WITNESS whereof this Agreement has been executed on the date first above
written.
SIGNED
By XXXXX XXXX as
--------------------------------------
Authorized representative for TOONG YEUAN
ENTERPRISE CO., LTD in the presence of:
/S/ XXXXXX XXX
-----------------------------------------
Signature of witness /S/ XXXXX XXXX
-----------------------------------
By executing this agreement the
XXXXXX XXX signatory warrants that the
----------------------------------------- signatory is duly authorized
Name of witness (block letters) to execute this agreement on behalf
of TOONG YEUAN ENTERPRICE CO., LTD.
XX. 0. 000 XX XXX XX. XXXXXX, XXXXXX
Address of witness
BUSINESS DEVELOPMENT MANAGER
Occupation of witness
SIGNED
By XXXXX XXXX NOH as
--------------------------------------
Authorized representative for TOONG YEUAN
ENTERPRISE CO., LTD in the presence of:
/S/ KYUNGMOON PARK
-----------------------------------------
Signature of witness /S/ XXXXX XXXX NOH
-----------------------------------
By executing this agreement the
KYUNGMOON PARK signatory warrants that the
----------------------------------------- signatory is duly authorized
Name of witness (block letters) to execute this agreement on behalf
of XXXXXX SCIENCE INC.
XXXXXX SCIENCE, INC.
Address of witness
V.P. OF XXXXXX SCIENCE
Occupation of witness
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