EXHIBIT 10.25
EXCLUSIVE SELLING RIGHTS AGREEMENT
THIS AGREEMENT is made on the ninth day of January, 1996.
The Undersigned:
1. The private company with limited liability "DESA EUROPE B.V.", with its
registered offices in Rotterdam, hereinafter referred to as "Desa", duly
represented by its director, Xx.
X. X. Xxxxxxx;
and:
2. The company organized under foreign (Australian) laws "XXXXXX INTERNATIONAL
PTY. LTD.", with its registered offices in Saint Marys (South Australia),
hereinafter referred to as "Xxxxxx", duly represented by its director, Xx. X.X.
Xxxxxx;
WHEREAS
1. Xxxxxx produces portable evaporative coolers in different models and under
different brand names, hereinafter referred to as "the Products";
2. Xxxxxx is owner of the exclusive rights, in particular intellectual property
rights and/or models and/or drawings thereto or thereof, and has had these
rights, where possible, filed or registered;
3. Pursuant to verbal Agreements with Xxxxxx, Xxxx has had the sole agency of
the product on sections of the European market for a number of years;
4. Partly in view of the large increase and continuing increase in the trade
volume, both parties wish to record in writing, and where necessary to
supplement, the terms under which Desa will distribute the Products in future.
5. This written Agreement supersedes and replaces the previous verbal agreement.
NOW THEREFORE it is agreed as follows
1. Appointment of Distributor
1.1 Xxxxxx appoints Desa its exclusive distributor of the Products in the
Territories defined in Clause 1.2 for a period of three years, with effect from
the date of signing of this Agreement ("Term").
Annually, by the 30th November Xxxxxx and Desa will discuss and agree minimum
order quantities which should be based on past sales and future sales potential;
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These quantities will not present a binding obligation to purchase, but failure
to do so, or sell in the various territories in accordance with the agreed
quantities, will be considered as a Breach of Contract under this Agreement.
Territory
1.2 The Territory is The Netherlands, Belgium, Luxembourg, Germany, Austria,
Denmark and Greece. In addition, Desa may sell, on a non-exclusive basis, in the
C.I.S. and in France and Italy.
1.3 If Xxxxxx should xxxxx Xxxx the exclusive distribution for countries other
than the aforementioned, Xxxxxx shall confirm this to Desa in writing.
1.4 This Agreement supersedes and replaces absolutely any previous verbal
agreement between the parties. The parties acknowledge that their relationship
in relation to the distribution of the Products is exclusively governed by this
Agreement.
2. Renewal of the Term
Upon expiry of the Term, the Term will be automatically renewed on the same
terms as this Agreement, each time for a period of three years subject to the
termination or non-renewal of this Agreement in accordance with Clause 3.
3. Termination
3.1 This Agreement will not be renewed if either party for any reason gives the
other one year's notice prior to the end of the existing Term. The non-renewal
must be made by means of written notice addressed to the other party and sent by
registered mail.
3.2 A party may terminate this Agreement with immediate effect by giving notice
to the other party if;
3.2.1 that other party breaches any provision of this Agreement and fails to
remedy the breach within thirty (30) days after receiving notice requiring it to
do so;
3.2.2 that other party breaches a material provision of this Agreement where
that breach is not capable of remedy; or
3.2.3 any event referred to in Clause 3.3 happens to that other party.
3.3 Each party must notify the other party immediately if;
3.3.1 the party disposes of the whole or part of its assets, operations or
business other than in the ordinary course of business;
3.3.2 that party ceases to carry on business; or
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3.3.3 that party ceases to be able to pay its debts as they become due.
4. Legal Relation's and Trade Marks
4.1 Desa acts in its own name and at its own expense. Desa is entitled to
describe itself as Xxxxxx'x distributor for the Products, but must not hold
itself out as Xxxxxx'x agent for sales of the Products or as being entitled to
bind Xxxxxx in any way.
4.2 Desa is nevertheless entitled to use the trade name, the trade marks,
labels, copyrights, logos and other insignia ("Trade Marks") of Xxxxxx, that are
listed in Item A of the Schedule (and any other trade marks that Xxxxxx agrees
in writing to add to Item A of the Schedule) to promote the sale of the
Products.
5. Price
5.1 Desa may independently determine its price for the resale of the Products,
on the understanding that it must act each time in accordance with proper
business practices.
5.2 The prices for all products to be supplied by Xxxxxx to Desa under this
Agreement will be at those levels agreed by the parties as follows;
5.2.1 At the end of the month of September of each year during the Term in
consultation with Desa, Xxxxxx will discuss its prices for all products to be
supplied under this Agreement for the following twelve (12) month period;
5.2.2 Those prices will be fixed for the following (12) month period.
6. Exclusiveness and Territory
6.1 Xxxxxx undertakes to only offer Desa the Products for resale in the
Territory during the Term.
6.2 Xxxxxx undertakes that it shall not deliver the Product to other
distributors or end users in the Territory during the Term.
6.3 Xxxxxx shall only actively promote the Product in the Territory by agreement
with Desa.
6.4 Desa must not sell the Products to any person outside of the Territory or to
any person it knows or suspects is likely to resell the Products outside of the
Territory.
7. Intellectual Property and Infringement
7.1 Desa acknowledges that while to the best of Xxxxxx'x knowledge the Products
and the Trade Marks will not infringe the rights of any third party, Xxxxxx does
not warrant or guarantee to Desa that the Products or the Trade Marks will not
infringe the rights of any third party, Xxxxxx does not warrant or guarantee to
Desa that the Products or the Trade Marks will not infringe the rights of any
third party.
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7.2 Desa acknowledges that Xxxxxx has, where it considers it appropriate, sought
or obtained registration for Xxxxxx'x intellectual property rights in connection
with the Products and the Trade Marks, but does not warrant that all of its
intellectual property in connection with the Products and the Trade Marks is
registered or has been sought to be registered.
7.3 Desa undertakes to immediately notify Xxxxxx of any infringement of the
intellectual property rights of Xxxxxx in connection with the Products or the
Trade Marks, such as patent, trade name, trademark, designs or otherwise, in the
Territory.
7.4 Xxxxxx shall in consultation with Desa if Xxxxxx considers it appropriate in
its absolute discretion, to take such measures and action (and Desa acknowledges
that Xxxxxx is not obliged to take such measures and action) against
infringement or threatened infringement of intellectual property in connection
with the Products or the Trade Marks. Desa must give reasonable assistance to
Xxxxxx in relation to such action.
7.5 All intellectual property rights in connection with the Products and the
Trade Marks are the exclusive and absolute property of Xxxxxx and Desa
acknowledges that it will not acquire any interest in such rights under this
Agreement.
8. Subdistribution
Desa may appoint sub-sales representatives and/or distributors, agents or other
middlemen without the prior written consent of Xxxxxx.
9. Non Competition
Desa must not be concerned or interested, either directly or indirectly, in the
manufacture, distribution or retail sale in the Territory of evaporative coolers
or of any such products which compete or are substitutable for the Products
during the Term.
10. Instructions and Assistance
10.1 Xxxxxx shall provide Desa with sufficient technical and other information
about the Products.
10.2 Xxxxxx shall provide Desa at no cost with all documents, information,
samples and advertising material, reasonably required by Desa for the marketing
and sale of the Products, without charging any transport costs, unless otherwise
agreed.
10.3 Upon termination of this Agreement Desa must return all documents,
advertising material and samples made available to it free of charge to Xxxxxx
and all other materials that utilize the Trade Marks.
10,.4 Desa must not make any modifications or additions to the Products or their
packaging or labeling without specific Xxxxxx authority.
11. Sales Effort
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11.1 Desa must use its best endeavors to promote the sale of the Products in the
Territory and to promote the interests of Xxxxxx with all due care and in
accordance with proper business practices, and it must in particular;
11.1.1 Actively work the Territory, to visit customers at regular intervals and
to try to canvass new customers;
11.1.2 Provide Xxxxxx with all information about the progress of the sales of
the Products, the market position in the territory, technical developments and
prices of the Products;
11.1.3 Keep a stock which enables it to immediately meet the needs of its
customers. For this purpose, it shall order in advance sufficient quantities of
the Products from Xxxxxx in accordance with clause 11.2.
11.2 By no later than 15th December of each year of the Term Desa order
quantities from Xxxxxx seventy percent (70%) of its budgeted requirements for
the Products up until the end of the following European summer.
11.3 Xxxxxx agrees to hold in Europe at its cost twenty percent (20%) of Desa
order quantities for the Products up until the 30th June for the purpose of
supplying these Products to Desa if ordered by Desa.
12. Warranty
12.1 Desa has undertaken to assume responsibility for all warranty costs in
return for a previously granted price reduction of 2%.
12.2 In the event of an epidemic failure, defined as a serious manufacturing
fault of more than 3%, Xxxxxx is obliged to bear all costs involved in the
repair and/or replacement, expressly including the labor costs involved, and to
reimburse said costs to Desa.
13. Liability
13.1 Xxxxxx undertakes to deliver the product which, in terms of form and
contents, conforms to the sample models supplied. These samples must fully
conform to the technical requirements (alternatively, the technical test
requirements per country) which are set for the product and the accompanying
specifications. Desa must keep Xxxxxx informed of all labeling, marketing,
technical and any other applicable legal requirements in relating to the supply
and sale of the Products in the Territory.
13.2 Xxxxxx undertakes to indemnify Desa against all claims made against the
latter due to a defect to or in the goods pursuant to the "Wet op de
aansprakelijkheid voor gebrekkige produkten" (Act relating to liability for
defective products) (product liability).
14. Product Modifications
If Xxxxxx is considering making modifications to the Products, excluding minor
points, it will
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use its best endeavors to inform Desa not later than twelve months before
delivery of the modified Products.
15. Option Right
15.1 If Xxxxxx is considering bringing replacement or new products onto the
market in the Territory, it will use its best endeavors to inform Desa thereof
in advance stating the probably price per quantity and offer Desa the option to
distribute those replacement or new products in accordance with this Agreement.
Desa is entitled to take a period of three months to consider this offer.
15.2 If Desa rejects the offer, Xxxxxx is free to approach third parties.
However Xxxxxx may not make this third party a more favorable offer without
allowing Desa to jointly compete for this offer.
15.2 If Desa rejects the offer, Xxxxxx is free to approach third parties.
However Xxxxxx may not make this third party a more favorable offer without
allowing Desa to jointly compete for this offer.
16. Confidential Information
16.1 For the purposes of this Agreement Confidential Information means all
information treated by Xxxxxx as confidential and includes all information in
relation to the Products, Xxxxxx, Xxxxxx'x business methods and products and
this Agreement.
16.2 Desa may use Confidential Information only for the purposes of performing
under this Agreement and may only disclose the Confidential Information if
strictly necessary for Desa to be able to perform under this Agreement or if
required by law.
16.3 On the termination or expiry of this Agreement Desa must immediately return
all Confidential Information (and copies or any other form of record of the
Confidential Information) to Xxxxxx. Desa must not use or disclose the
Confidential Information for any purpose after the termination or expiry of this
Agreement for a period of one year.
17. Force Majeure
No party is liable for any failure to perform or delay in performing its
obligations under this Agreement if that failure or delay is due to anything
beyond that party's reasonable control.
18. End of Agreement
If this Agreement is ended by Xxxxxx they shall buy back from Desa all products,
reserve parts and suchlike in good saleable condition at the price originally
invoiced.
19. Choice of Law
Both parties expressly declare that this Agreement shall be governed and
construed in accordance with the laws of The Netherlands.
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20. Assignment
Desa must not assign or otherwise deal with this Agreement or any right under
this Agreement without the proper written consent of Xxxxxx.
21. Consent and Approvals
Any reference in this Agreement to the grant of a consent or approval means,
unless stated otherwise, a consent or approval to be granted in the relevant
person's absolute discretion.
This Agreement consists of eight pages.
EXECUTED as an Agreement
THE COMMON SEAL of )
DESA EUROPE B.V. )
was affixed in the presence of: )
Director
Secretary
THE COMMON SEAL of )
XXXXXX INTERNATIONAL PTY. LTD. )
was affixed in the presence of: )
Director
Secretary
SCHEDULE
Item A - Trade Marks (Clause 4.2)
CONVAIR
COOLMASTER
SEELAIR
