Exhibit 2.
DISTRIBUTION
CONTRACT
Alpha Pro Tech, Inc., as
“Supplier” and VWR International Inc., as
“Distributor” hereby enter into this Distribution
Contract (Agreement) effective January 1, 2006; and, for good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, agree as follows:
1.
Grant of Distributorship
Supplier hereby grants to
Distributor the Exclusive right to sell and distribute under the
Critical Cover trade name, and the non-exclusive right to sell and
distribute Supplier branded products, for all mutually agreed to
products manufactured by Supplier (the “Products”)
throughout the Territory. Distributor accepts such
grant for the term and on the conditions stated in this Agreement.
The term “Territory” shall mean all domestic and
international clean room and industrial markets supported by
Distributor.
2.
Term and Renewal
The initial term of this Agreement
shall be for three (3) years, beginning January 1, 2006 and ending
December 31, 2008. Thereafter, this Agreement shall be
automatically renewed for additional and successive terms of one
(1) year each, unless and until terminated as provided in Section 6
of this Agreement or by either party upon written notice given to
the other party one hundred and eighty (180)days prior to the end
of the initial or a renewal term.
3.
Supplier Duties
a.
Take out and maintain product
liability insurance with endorsements for product and completed
operations blanket (and broad form vendors liability) on all
Products with insurers satisfactory to Distributor with minimum
limits of $1,000,000/ $3,000,000 for bodily injury and $300,000 for
property damage and immediately furnish to Distributor a
certificate of insurance issued by the carrier evidencing the
foregoing endorsements, coverage’s and limits and that such
insurance shall not be Cancelled without at least thirty (30) days
prior written notice to Distributor. Such policy of insurance shall
name Distributor as an additional insured there under.
b.
Notify Distributor immediately in
writing should Supplier become aware of any defect or condition
which may render any of the Products in violation of the Food, Drug
and Cosmetic Act, (or similar laws within the Territory) or in any
way alters the specifications and quality of the Products.
Notify Distributor of any Products affected by
holds or recalls, and reimburse
Distributor for the full price paid for any Products returned to
Distributor by a customer, or to Supplier by Distributor, due to a
recall or other manufacturing defect, plus all taxes,
transportation and other costs and expenses incurred by Distributor
in the return thereof.
4.
Patents and Trademarks
Supplier agrees to repurchase from
Distributor, at a price equivalent to the full purchase price paid
by Distributor (including freight, duty, tax, etc.), any quantity
of products in Distributor’s inventory which products
Distributor reasonably believes it should not or cannot sell, based
on a reasonable opinion of Distributor’s counsel that future
sales by Distributor may result in patent or trademark
infringement, by Supplier of a third party’s patent or
trademark, or because of a decision, whether interlocutory or
final, rendered in any patent or trademark infringement action
concerning an infringement by Supplier of a third party’s
patents or trademarks.
5.
Product Warranties
Supplier specifically warrants to
Distributor that the Products:
a.
Are in compliance with Supplier’s specifications.
b.
Are not adulterated or misbranded
within the meaning of the Federal Food, Drug and Cosmetic Act, as
amended, and the regulations issued there under (the
“Act”), or any comparable state, municipal or local law
or regulation applicable state, municipal or local law, ordinance,
regulation or order with in the “Territory”.
c.
Supplier authorizes Distributor to
pass through all warranties to Distributor’s
customers.
d.
Supplier shall promptly replace, at
no cost to Distributor, any Product which, is defective or
non-conforming, with a non-defective or conforming Product (as
applicable) or, credit Distributor’s account for all amounts
paid with respect to the defective or non-conforming Product.
Supplier shall pay all taxes, transportation, duties and other
reasonable and agreed upon expenses incurred in the replacement of
any defective or non-conforming Product.
6.
Termination
Either party shall have the right to
terminate this Agreement on written notice if the other (a) commits
or suffers any act of bankruptcy or insolvency, or (b) fails to
cure any material breach in the provisions of this Agreement within
thirty (30) days after written notice of such breach, or (c)
declares an event or events of force majeure that last in the
aggregate more than 180 days.
7.
Procedures on Termination
a.
Windup
On the termination of this
Agreement, for whatever reason, Supplier shall continue to honor
Distributor’s orders for products up to the effective date of
termination and for a period of sixty (60) days
thereafter.
b.
Repurchase of Inventory
Within thirty (30) days after
termination of this Agreement, upon written request from
Distributor:
i.
Supplier shall repurchase Distributor’s inventory of the
Level 2 Products, (Supplier Brand), within 90 days of receipt of
such notice at Distributor’s acquisition cost thereof, less a
15% restocking fee. Distributor shall ship such Level 2
Products to the location designated by Supplier on CIF
terms.
ii.
Distributor shall purchase Supplier’s entire inventory of
level 1 (Exclusive Distributor Critical Cover Private Label) and
level 3(Exclusive, Unique market branding as defined by
Distributor) finished goods, work in process and raw materials for
level 1 & 3 products.
c.
Product Service
Supplier shall continue to perform
service on Products as called for in its manufacturer’s
warranty or as otherwise required by applicable law.
8.
Force Majeure
The obligations of either party to
perform under this Agreement shal
