Exhibit 10.13
DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT is entered into as of the _____ day of September 2002 by and
between JT Water Management, LLC, a Limited liability corporation (hereinafter
referred to as "JTW") and AMERICAN SOIL TECHNOLOGIES, INC., a Nevada corporation
(hereinafter referred to as the "Distributor").
WITNESSETH
WHEREAS, JTW is a manufacturer of a certain liquid linear polymer product
commonly known as "EXTEND(TM)", (the "Product"), which product is manufactured
for use in soil applications involving the agriculture market, and
WHEREAS, Distributor is a distributor in North America in the soil and
water treatment business and also manufactures and sells soil amendments,
including soil amendments made with polymers, and
WHEREAS, JTW desires that Distributor distribute the Product, and other
Products developed by JTW to certain Markets, as that term is more particularly
described in Schedule A attached hereto (the "Markets"), within the geographic
areas described in Schedule B attached hereto (the "Territory"), all on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and subject to the following terms and conditions, the parties agree as
follows:
1. APPOINTMENT OF DISTRIBUTOR. JTW hereby appoints and designates
Distributor, effective as of the date hereof, as JTW's sole and exclusive
distributor of the Product to the Markets within the Territory.
2. RIGHT OF FIRST REFUSAL. For a period of six months from the date of this
Agreement JTW will not grant to any other distributor a Right of First Refusal
as to any new Agriculture related products developed or acquired by JTW other
than hydro seeding products. At the conclusion of the six month period and based
upon Distributor's performance in the sale of the product EXTEND(TM)", JTW may
grant Distributor a Right of First Refusal as to any new products developed or
acquired by JTW
3. PERFORMANCE BY JTW.
(a) JTW agrees to supply Product to Distributor.
(b) JTW shall not be liable for any failure on its part to fill any
order, or any delay in filling any order, if such failure or delay is due
to any cause beyond the control of JTW, such as strike, fire, flood, other
natural disaster, embargo, accident, or inability of JTW to obtain
materials, fuel or labor, or due to war, expropriation, confiscation,
priority or other ruling, instruction, order or interference by civil or
military authorities, whether legal or de facto, or due to transportation
delays or any other cause beyond the control of JTW.
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(c) JTW may from time to time in its sole discretion discontinue
production and sale of the Product without liability to Distributor. JTW
shall give Distributor at least ninety (90) days prior written notice of
such discontinuation and shall fill all orders reasonably placed by
Distributor prior to the expiration of such period of notice.
(d) If JTW discontinues production of Product and then decides to
produce such Product or a replacement Product, such Product or replacement
Product as the case may be shall be included in the term "Product" and
shall be subject to the terms and conditions of this Agreement.
(e) JTW agrees to supply Distributor, or Distributor's designee (which
designee must be approved in writing by JTW) as the case may be, with
Product or Products that accord with the certificates of analysis
accompanying such Product in a timely and commercially reasonable manner
and in all cases in accordance with the terms and conditions of purchase
orders submitted and accepted in accordance with Section 5 herein.
(f) TECHNICAL SUPPORT. JTW shall provide reasonable technical support
to ASTI for its efforts to sell Product during the term of this Agreement.
4. PERFORMANCE BY DISTRIBUTOR.
(a) Distributor shall promote the sale of the Product to the Markets
in the Territory. Distributor shall make regular calls on the Markets in
the Territory and shall advise the Markets both commercially and
technically. JTW agrees to support Distributor in its research and sales
efforts.
(b) Distributor shall provide to JTW annual written reports on
Distributor's efforts, and Distributor shall participate in quarterly
informational meetings with JTW representatives, regarding the activity of
any competitors and the Distributor's activity during the period.
(c) During each twelve month period extending from January 1 of one
calendar year through December 31 of the immediately following calendar
year (the "Twelve Month Period") that this Agreement is in effect,
Distributor shall purchase from JTW (or arrange for the purchase from JTW
by a designee approved by JTW pursuant to Section 2(e) above) no less than
a certain agreed upon aggregate minimum purchase quantity of the Product.
The annual aggregate minimum purchase quantity for the Product for the
Twelve Month Period beginning as of January 1, 2003 is set forth on
Schedule C attached hereto. The annual aggregate minimum purchase quantity
shall be renegotiated in good faith annually taking into account without
limitation the previous years sales, market conditions, discontinued
Product, the efficacy and time to market of any substitute or replacement
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Product, and any price changes; in no event shall the annual aggregate
minimum purchase quantity ever be less than the quantity indicated on
Schedule C attached hereto or less than ninety percent (90%) of the actual
aggregate quantity of the Product purchased by Distributor during the
immediately preceding Twelve Month Period. The annual aggregate minimum
purchase quantity for a given Twelve Month Period must be agreed upon no
later than July 30th of such Twelve Month Period. The annual aggregate
minimum purchase quantity for the Product for such Twelve Month Period
shall be the greater of the quantity indicated on Schedule C attached
hereto or ninety percent (90%) of the actual aggregate purchase quantity of
the Product purchased by Distributor during the immediately preceding
Twelve Month Period. If production and sale of a Product is discontinued by
JTW and if JTW and Distributor are unable to agree upon a substitute for
the discontinued Product, then the annual aggregate minimum purchase
quantity for the Product for the Twelve Month Period in which such
discontinuance takes place shall be reduced by an amount of Product equal
to the percentage of such annual aggregate minimum purchase quantity which
is equal to (i) the actual amount of the discontinued Product purchased by
Distributor during the immediately preceding Twelve Month Period divided by
(ii) the actual aggregate quantity of the Product purchased by Distributor
during the immediately preceding Twelve Month Period.
(d) Distributor shall obtain and maintain at its own expense during
the term of this Agreement, and any renewal or extension thereof, any
license or registration required under the applicable law for it and JTW to
be able to sell and distribute the Product pursuant to this Agreement. JTW
agrees to cooperate as needed in the course of Distributor's efforts to
obtain and maintain such licenses and registrations. Further, Distributor
shall keep JTW apprised of all requirements imposed by any state within the
Territory.
(e) While this Agreement is in effect the Distributor shall not market
or sell to the Markets in the Territory any Product that compete with the
Product without JTW's prior written consent.
5. PRICE. Prices to be charged by JTW and paid by Distributor for the
Product shall be "Free on Board (FOB)" Distributor's warehouse. Prices charged
by JTW shall be according to the agreed upon price structure attached as
Schedule D to this Agreement (the "Price List"), which prices shall be subject
to amendment by JTW from time to time, but only if JTW experiences a material
change in the cost of raw materials, or other supply, and then only upon ninety
(90) days' prior written notice to Distributor.
6. PURCHASE ORDERS. All purchase orders submitted by Distributor must be
accepted by JTW to bind JTW. Any terms proposed by Distributor in a purchase
order that are additional or different than those set forth in this Agreement
are hereby rejected unless expressly assented to in writing by JTW.
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7. SHIPMENT. The Product shall be shipped Free on Board (FOB) Distributor's
warehouse. The minimum quantity that must be ordered in a given shipment is
_________gallons of Product unless otherwise agreed to prior by both parties.
Unless Distributor is notified otherwise by JTW, the Product will be shipped
within seven (7) business days of receipt of an order.
8. PAYMENT. Distributor shall pay JTW in full for the Product within forty
five (45) days of receipt of each shipment of such Product, unless otherwise
mutually agreed in writing by the parties hereto. All invoices are payable at
JTW's Parker, Colorado address in lawful money of the United States.
9. TAXES. In the event that JTW may be required to pay any federal,
provincial, state or municipal taxes, tolls, excises or charges, other than
income taxes or other charges as may be personal to JTW, upon the sale or
transportation of the Product sold hereunder, Distributor shall reimburse JTW
for the same immediately upon a timely and written demand therefore being made
by JTW.
10. MARKETING. Distributor shall develop and fund a marketing plan
acceptable to JTW for the Product and shall use commercially reasonable efforts
to actively market the Product. Such efforts shall include, without limitation,
advertising, direct mail, trade show participation, and the distribution of
product samples.
11. LABELING. Any Product packaged or repackaged by either Distributor or
JTW shall be labeled in accordance with all applicable laws. JTW shall have the
right to monitor such labeling to make sure that its trademarks are being
properly used and protected. JTW shall keep Distributor informed of its labeling
policies and any changes to those policies as may be made from time to time.
12. QUALITY; REMEDIES FOR NONCONFORMING PRODUCT. JTW warrants only that the
Product sold hereunder shall be in compliance with the specifications agreed
upon from time to time by the parties hereto and set forth in the certificate of
analysis (the "C of A") accompanying each order of the Product. JTW makes no
other warranty of any kind, express or implied, and makes NO WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. A C of A shall accompany
each shipment of Product to Distributor. Distributor covenants that it shall
fully comply with all label directions for the handling, storage, possession,
resale or use of the Product sold hereunder and Distributor agrees that it shall
indemnify and hold JTW harmless from all claims (including, without limitation,
attorneys' fees) of personal injury or property damage resulting from any
negligence, gross negligence, recklessness or willful misconduct on the part of
Distributor or from any failure of Distributor to comply with the terms of this
covenant. Claims on account of weight, loss of or damage to Product shall be
waived unless made in writing within ten (10) days from the date of delivery to
Distributor and prior to the mixing, blending, converting or other destruction
of the identity of the goods.
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Upon written notice of nonconformity of any Product, JTW shall have the
right to cure said nonconformity within a commercially reasonable time even
though the time for delivery has expired. DISTRIBUTOR'S REMEDIES FOR BREACH OF
WARRANTY BY JTW SHALL BE LIMITED TO OBTAINING CONFORMING PRODUCT FROM JTW OR THE
CREDITING OF DISTRIBUTOR'S ACCOUNT WITH JTW FOR ANY AMOUNTS DISTRIBUTOR MAY
ALREADY HAVE PAID FOR NONCONFORMING PRODUCT. JTW shall determine at its sole
discretion which remedy it shall provide in a given situation. JTW warrants (i)
that JTW's performance pursuant to this Agreement does not violate any agreement
between JTW and any third party and (ii) that to JTW's knowledge, without JTW
making any investigation into such matter, the Product does not infringe any
outstanding patent rights of a third party in the Territory. To the extent
Distributor resells any of the Product in other than an original unopened
container (including without limitation containers opened solely for purposes of
sampling such Product to make sure that they meet the agreed-upon specifications
for such Product), JTW shall not be liable for claims of patent infringement
based upon the use of such Product or the manufacture, sale or use of any
material containing such Product.
13. CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. During the term of this Agreement and
thereafter, each party receiving Confidential Information (as hereinafter
defined) (such party being referred to as a "receiving party") agrees that
neither it nor any of its employees, representatives, agents or consultants
will either disclose or use, either for itself or for the benefit of any
third party, any Confidential Information relating in any way to the party
disclosing such Confidential Information (such party being referred to as a
"disclosing party") or the disclosing party's Product, business or affairs,
except for disclosure or use that is appropriate and in the ordinary course
of carrying out its duties under this Agreement. "Confidential Information"
shall mean any oral, written or graphic information not generally available
to the public, which information shall include, without limitation,
information relating to the terms of this Agreement, the disclosing party's
Product, processes, techniques, technology, formulae, research data,
manufacturing methods, know-how, show how, trade secrets, customers and
suppliers, information relating to sales and profits, other financial data,
and the terms and conditions of the other party's dealings with them;
provided, however, that "Confidential Information" shall not include the
following: information known generally to the public (other than
information known generally to the public as a result of a violation by the
receiving party of the provisions of this Section); information acquired by
the receiving party outside of its affiliation (before or after the date
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hereof) with the disclosing party; and information developed independent of
the Confidential Information. A receiving party shall have the right to
disclose Confidential Information pursuant to the order of a court of
competent jurisdiction, in which case the receiving party shall give
written notice of the order to the disclosing party at least thirty (30)
days' prior to the date of compliance with such order or information whose
disclosure by the receiving party is required by law or court order (unless
the receiving party has less that thirty (30) days' notice itself, in which
case the receiving party shall give the disclosing party as much notice as
is practicable under the circumstances). Confidential Information received
from one party by the other may be disclosed to the other's affiliates,
upon agreement of such affiliate to abide by the nondisclosure and nonuse
obligations set forth in this Section 14.
(b) REMEDIES. Each party hereto acknowledges and agrees that the
disclosing party would suffer irreparable injury in the event of a breach
by the receiving party of any of the provisions of this Section 14 and that
the disclosing party shall be entitled to an injunction entered by any
court of competent jurisdiction, restraining it from any breach or
threatened breach thereof. Nothing herein shall be construed, however, as
prohibiting the disclosing party from pursuing any other remedies at law or
in equity, which it may have for any such breach or threatened breach of
any provision of this Section, including the recovery of damages from the
receiving party.
14. TERM. The term of this Agreement shall be three (3) years from the date
first above written, unless either party shall earlier terminate this Agreement
pursuant to Section 14 hereof. At the end of the first three (3) year term this
agreement shall continue for further terms of three (3) years each unless
terminated by either party at the end of such three (3) year term. This
Agreement may also be amended and renewed upon mutual written agreement of the
parties.
15. TERMINATION.
(a) TERMINATION BY EITHER PARTY. Either party may terminate this
Agreement at any time, without waiving any legal rights or remedies it may
otherwise have, effective immediately upon written notice, upon the
occurrence of any of the following:
(i) the other party fails to cure a material breach of or default
in any of its obligations to be performed hereunder (other than a
breach of or default on a payment obligation) within twenty (20) days
of written notice of such breach or default; or
(ii) the other party fails to cure a breach of or default in any
of its payment obligations to be performed hereunder within five (5)
days of written notice of such breach or default; or
(iii) the other party breaches or defaults in any of its
obligations to be performed under Section 12 hereof.
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(b) TERMINATION BY JTW. JTW may terminate this Agreement at any time,
without waiving any legal rights or remedies it may otherwise have,
effective immediately upon receipt of written notice, upon the occurrence
of any of the following:
(i) Distributor declares, or is petitioned into, bankruptcy or
insolvency or makes a general assignment for the benefit of its
creditors; or
(ii) Distributor sells all or substantially all of its assets or
capital stock to, or is merged into, another person or entity or if
more than fifty percent (50%) of its stock is sold or otherwise
transferred; or
(iii) Distributor fails to purchase within a given Twelve Month
Period the annual aggregate minimum purchase quantity agreed upon
pursuant to Section 3(c) hereof and such failure is not either the
result of JTW's failure to supply such quantity to Distributor or the
result of matters beyond the reasonable control of Distributor;
(iv) Distributor and JTW fail to agree upon the annual aggregate
minimum purchase quantity pursuant to the terms of Section 3(d)
hereof; or
(v) Distributor breaches any of the terms and provisions of the
Trademark License Agreement.
(c) GENERALLY. Any termination shall not affect any monies owing or
obligations incurred by either of the parties prior to the effective date
of the termination. The provisions of Sections 8, 11, 12, 14(c), 15, 16,
17, 18, 19, 20 and 21 shall survive expiration or termination, for any
reason, of this Agreement.
16. LIMITATION OF LIABILITY. JTW WILL NOT BE LIABLE TO DISTRIBUTOR OR ITS
AFFILIATES FOR ANY CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES, WHETHER
FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF DISTRIBUTOR OR ITS AFFILIATES
OR ITS CLIENTS OR CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF
GOODWILL, PROFITS, USE OF MONEY OR USE OF PRODUCT OR IMPAIRMENT OF OTHER
ASSETS), ARISING OUT OF BREACH OF EXPRESS OR IMPLIED WARRANTY, BREACH OF
CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE
IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, EXCEPT IN THE CASE OF
PERSONAL INJURY OR PROPERTY DAMAGE WHERE AND TO THE EXTENT THAT APPLICABLE LAW
REQUIRES SUCH LIABILITY.
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17. NOTICES. Any notice to be given hereunder shall be in writing and
delivered personally, sent by telecopier, sent by reputable courier service, or
sent by certified or registered mail, postage prepaid, return receipt requested,
addressed to the party concerned at the following address:
If to JTW:
JTW, LLC
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn.: President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to Distributor:
AMERICAN SOIL TECHNOLOGIES, INC.
000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn.: President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Either party may change its address for purposes of this Agreement by
notice given in compliance with this Section. All such notices, requests,
demands and communications shall be deemed to have been given on the date of
delivery if personally delivered, sent by telecopier or sent by reputable
courier service; or on the third business day following the mailing thereof if
sent by certified or registered mail, postage prepaid, return receipt requested.
18. Amendments; WAIVER. No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver is agreed to in
writing and signed by a duly authorized representative of Distributor and by a
duly authorized representative of JTW. No waiver by either party of any breach
by the other party of any provision of this Agreement shall be deemed a waiver
of any other breach.
19. GOVERNING LAW. This Agreement shall not be governed by the provisions
of the 1980 U.N. Convention on Contracts for the International Sale of Goods;
rather, this Agreement shall be governed by and construed in accordance with the
internal substantive laws and judicial decisions of the State of Colorado,
including its provisions of the Uniform Commercial Code.
20. JURISDICTION AND VENUE. Except as provided by Section 12(b) hereof
relating to injunctive relief, each party hereto consents to the exclusive
jurisdiction of either the Courts of the State of Colorado or the applicable
United States District Court convened in the State of Colorado for purposes of
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any action brought under or as the result of a breach of this Agreement, and
they each waive any objection thereto. The parties hereto each further consent
and agree that the venue of any action brought under or as a result of a breach
of this Agreement shall be proper in either of the above-named courts and they
each waive any objection thereto.
21. MISCELLANEOUS. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes and replaces
all other understandings and agreements, whether oral or in writing, if there be
any, previously entered into by the parties with respect to such matter. Both
parties agree to perform under this Agreement solely as independent contractors
and shall not hold themselves out as employees or agents of the other. This
Agreement shall not be assigned in whole or in part by Distributor to a
successor, subsidiary or third party without the prior written consent of JTW,
which consent shall not be unreasonably withheld. If any court or regulatory
agency or body determine, in a form and manner which render such determination
enforceable against either of the parties, that any provision of this Agreement
is void, invalid, unenforceable, or illegal, such determination shall not affect
any other provision of this Agreement, and this Agreement shall, if reasonable,
be construed and performed as if such void, invalid, unenforceable, or illegal
provision has never been contained herein. This Agreement may be executed in
counterparts, all of which shall constitute one and the same instrument.
22. SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permitted under
the laws and public policies of each jurisdiction in which enforcement is
sought. Accordingly, if a particular section, subsection or other provision of
this Agreement shall be adjudicated to be invalid or unenforceable, such
adjudication shall apply only with respect to the operation of that section,
subsection or other provision in the particular jurisdiction in which such
adjudication is made, and all other sections, subsections and other portions
shall continue in force and effect.
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IN WITNESS WHEREOF, each party has caused this Agreement to be executed by
its duly authorized representatives as of the day and year first above written.
AMERICAN SOIL TECHNOLOGIES, INC. JTW, LLC
By:____________________________ By:___________________________
Xxxx X. Xxxxx Xxxxxx X. Xxxxxxxxx
President CEO
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SCHEDULE A
MARKETS
The Markets to which Distributor is granted a right to sell and distribute
Product within the Territory pursuant to this Agreement are as follows:
1. Agriculture market and related water transportation utilizing earth
canals.
2. Other markets as agreed upon by both parties.
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SCHEDULE B
TERRITORY
The Territory includes:
The states of New Mexico, Colorado, Wyoming, Montana (does not include canal
sealing product), Idaho, Iowa, Washington, Oregon, California, Nevada, Arizona,
Kansas, Texas, North Dakota, South Dakota, Nebraska and Oklahoma. Additional
geographical territories may be added as mutually agreed between the parties.
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