DISTRIBUTORSHIP
AGREEMENT
THIS DISTRIBUTORSHIP
AGREEMENT (this
“Agreement”) is made and entered into this 27 day of
February, 2009 (the “Effective Date”), by and between
Aura Systems, Inc., a corporation organized and existing under the
laws of Delaware with its principal offices in Los Angeles,
California (“Company”), and WePower LLC, a limited
liability company organized and existing under the laws of Delaware
with its principal offices in Los Angeles, California (the
“Distributor”).
RECITALS
A. Company has designed, invented and developed a
unique, integrated electromagnetic mobile power generation system
capable of delivering on-demand both AC and DC power for numerous
end-uses, including without limitation, industrial, commercial,
recreational and military applications as further described on
Exhibit A attached to this Agreement (the
“AuraGen”).
B. The
AuraGen is the subject of substantial proprietary information,
including but not limited to patents, trademarks, trade secrets,
know-how, and confidential information owned by the
Company.
C. Distributor
has acquired the rights to a patented vertical wind turbine that is
used to generate electricity using wind power.
D. Distributor
is engaged in the business of developing and marketing energy
solutions around the world, including without limitation wind
energy solutions.
F. The
Company wishes to appoint Distributor as its exclusive commercial
distributor for all applications in the Field of Use worldwide and
is willing to grant a limited right to Distributor to use, service
and manufacture the AuraGen in strict accordance with the terms and
conditions set forth herein and Distributor wishes to be so
appointed.
Accordingly, in consideration of
their mutual covenants and obligations contained herein, and the
mutual benefits to be derived herefrom, Company and Distributor
(collectively the “Parties”), intending to be legally
bound, do hereby covenant and agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Aura
Proprietary Rights. The term “Aura Proprietary Rights”
means all Aura Technology, Aura Trademarks, data, inventions,
information (including, without limitation, Confidential
Information of Company), processes, know-how, trade secrets,
sketches, prototypes, notebooks, papers, drawings, formulae
(including copies or extracts thereof) and similar intellectual
property rights which Company has or may hereafter develop and
which are necessary or useful for the development, manufacture, or
sale of the Products or any components of the Products. Further,
Aura Proprietary Rights shall include all analyses, specifications,
proposals, reports or other information, data or documents (whether
in raw, preliminary or final form) and all inventions, discoveries,
modifications and improvements, whether or not
OC
286,372,449v1 2-20-09
patentable,
which: (a) are concerned in some manner with, but not directed to
the Products or any components thereof; or (b) pertain to
processes, procedures, methods, and the like manufacturing,
assembling or servicing of the Products.
1.2 Aura
Technology. The term “Aura Technology” means all patent
rights concerning each and every patent, whether U.S. or foreign,
owned by or licensed to Company and any associated Aura Proprietary
Rights appurtenant thereto which are necessary, used or useful to
develop, manufacture, or sell the Products or any of the components
of the Products. Aura Technology shall further mean any future
modifications, enhancements or improvements to the technology
embodied in the patents owned or licensed by Company, the Products,
or the Aura Proprietary Rights. The term Aura Technology shall
include, without limitation, the following:
1.3 Aura
Trademarks. The term “Aura Trademarks” means all those
trademarks, service marks, designs, logos, slogans and trade names
belonging or licensed to Company, worldwide.
1.4 Confidential
Information. The term “Confidential Information” means
all know-how, formulations, recipes, specifications, catalogs,
books, price books, maintenance, parts and service manuals, data
sheets, sales, service and technical bulletins, customer lists,
sales and marketing programs, price lists, cost data, sales aids,
such as filmstrips and recordings, and all other publications and
information, whether or not reduced to writing, relating to the
formulation, manufacture, use, marketing and sale of the Products,
as well as any other information which may be divulged by one party
under this Agreement to the other in the course of its performance
of this Agreement, which is marked as Confidential or which is
disclosed under circumstances that reasonably place the recipient
on notice of the confidentiality of the information. Confidential
Information does not, however, include any information which the
recipient can establish (i) was publicly known and made generally
available in the public domain prior to the time of disclosure by
the discloser; (ii) becomes publicly known and made generally
available after disclosure by the discloser to recipient through no
fault or breach of recipient; (iii) is already in the possession of
recipient without restriction on use or disclosure at the time of
disclosure by discloser as shown by recipient’s files and
records prior to the time of the disclosure; (iv) is obtained by
recipient lawfully and without restriction on use or disclosure
from a third party without a breach of such third party’s
obligations of confidentiality; or (v) is independently developed
by recipient without use of or reference to discloser’s
Confidential Information, as shown by recipient’s files and
records.
1.5 Distributor
Trademarks. The term “Distributor Trademarks” means all
those trademarks, service marks, designs, logos, slogans and trade
names belonging or licensed to Distributor, worldwide.
1.6 Field
of Use. The term “Field of Use” means exclusively wind
turbines and any other form of energy or renewable energy device,
product, system or good involving wind.
1.7 Products.
The term “Products” means the Auragen, as well as any
future modifications, enhancements or improvements to the Auragen
and any New Products deemed included pursuant to Section 3.17
hereof.
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1.8
Purchase Order. The term “Purchase Order” means
a purchase order in the form of Exhibit B attached to this
Agreement or such other form as the parties may mutually agree to
in writing from time to time.
1.9 Specifications.
The term “Specifications” means the standard Product
manufacturer specifications as such Specifications may be modified
by the parties in writing from time to time and any New Product
Specifications deemed included pursuant to Section 3.16
hereof.
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1.10
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Territory.
The term
“Territory” means t~ie entire world.
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1.11 Valid
Claim. The term “Valid Claim~’ means a claim of a
patent or patent application in any country that (i) has not
expired; (ii) h~s not been disclaimed; (iii) has not been cancelled
or superseded, or if cancelled or superseded, has been reinstated;
and (iv) has not been revoked, held invalid, or otherwise declared
unenforceable or not allowable by a tribunal or patent authority of
competent jurisdiction over such claitn in such country from which
no further appeal has or may be taken.
ARTICLE 2.
APPOINTMEr4T AND SCOPE
2.1
Appointment of Distributor. On the terns and subject to the
conditions of this Agreement and for the term of this Agreement,
Company hereby appoints Distributor as the exclusive distributor of
the Products in or for the Field of Use in the Territory. As such,
Company shall not appoint additional sales represeilitatives,
agents or distributors for the promotion, sale, lease or license of
Products in or for the Field of Use in the Territory; and (b)
Company shall not, except as expressly permitted hereunder,
directly or indirectly, distribute, promote, market, solicit,
lease, license or sell the Products in or for the Field of Use or
in the Territory, except through Distributor. Notwithstanding any
restrictions contained herein, Distributor may sell the Products
within the Territory in such manner, on such terms, to such
customers and at such prices as Distributor may chOose. Distributor
hereby accepts such appointment. Company further appoints to
Distributor,~ and Distributor hereby accepts for the term of this
Agreement, to act as the exclusive installation and warranty
service provider for all Product in the Field of Use in the
Territory.
2.2
Independent Contractor Status. Distributor is an independent
purchaser and reseller of the Products and nothing contained in
this Agreement shall create the relationship of joint venture,
principal and agent, ,
or master and servant between
Company and Distributor. Distributor is not and shall not be
considered an agent~ or legal representative of Company for any
purpose, and neither Distributor nor any director, officer, agent
or employee of Distributor shall be, or be considered, an agent or
employee of Company. Distributor shall, at all times, hold itself
out as an independent contractor with respect to Company and shall
not represent itself as an agent, representative or employee of
Company, and shall prominently display in any advertising or
signage related to the Products that it is an Authorized
Independent Distributor of the Company. Distributor is not
authorized to, and agrees that it will not, make any warranties or
representations or assume or create any other obligation on
Company’s behalf except as expressly authorized herein or by
Company in writing. This Agreement is not for the benefit
of
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any third party
and shall not be deemed to give any right or remedy to any such
third party whether or not referred to herein.
2.3
Sub-Distributors. Distributor may appoint sub-distributors,
sub-agents or other persons (collectively
“Sub-distributors”) which it reasonably believes are
qualified in terms of capability and reputation to perform its
obligations under this Agreement provided however that:
(a) in
no event shall any Sub-distributor be appointed for a duration that
is longer than the initial expiration date set forth in Section 7.1
of this Agreement;
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(b)
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any such
Sub-distributor is subject to the terms of this
Agreement;
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(c) any
such Sub-distributor is approved in writing by Company provided
that such approval shall not be unreasonably withheld, conditioned
or delayed;
(d) nothing
contained in this Agreement shall be construed to create any
relationship whatsoever between Company and any
Sub-distributor;
(e) Company
shall have no obligation to such Sub-distributors under this
Agreement; and
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(f)
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all of
Company’s obligations under this Agreement shall be only to
Distributor.
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2.4 No
Modification. Neither Distributor or any Sub-Distributor shall in
any way modify or otherwise alter the design, form, fit, function
or any other aspect of the Products, components thereof, or the
Aura Technology unless it obtains Company’s prior written
consent, which may be withheld by Company in its sole discretion.
If Company agrees to such changes or improvements, the Parties
shall mutually agree on the scope, extent and manner of making such
changes or improvements. In addition, Distributor shall not use the
Aura Technology, or any part thereof, in any way inconsistent with
the provisions of this Agreement.
2.5
Additional Restrictions. Notwithstanding the rights
specifically granted in this Agreement, Company does not grant to
Distributor or any Sub-distributor any license or other right
relating to any of the following. Neither Distributor nor any
Sub-distributor may, without the prior written consent of the
Company, at any time directly or indirectly:
(a) market,
make, use, service, install, sell or otherwise distribute or
incorporate the Product or any components thereof in the products
or businesses of any source outside of the Field of Use;
(b) actively
advertise, promote or solicit customers for Product systems outside
the Field of Use or establish or maintain any offices, facilities
or depots related to the sale or delivery of Product for any
purpose outside of the Field of Use;
(c) make,
use, sell or otherwise dispose of Product systems that are
partially assembled, in knocked down form, or semi-knocked down
form;
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(d) prepare,
develop, make or have made, sell, or otherwise distribute any
derivative works based upon Product, the components thereof or the
Aura Technology;
(e) reproduce,
disclose or otherwise dispose of any Product, any components
thereof or the Aura Technology; or
(f) inspect,
study, analyze or reverse engineer the Product, any components
thereof or the Aura Technology.
2.6 Rights
Reserved. Notwithstanding anything to the contrary contained
herein, all rights not specifically granted under this Agreement
shall be reserved and remain with the respective owners. In no way
limiting the generality of the preceding sentence, Company shall
have the right to make, use, sell or distribute, or grant licenses
to other third parties to do the same for all applications and
markets of the Products throughout the world outside of the Field
of Use.
ARTICLE 3. TERMS
AND CONDITIONS OF SALE
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3.1
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Purchase
Orders. All purchases of Products under this Agreement
by
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Distributor (or any Sub-distributor,
to the extent permitted under Section 2.3) shall be evidenced by
individual Purchase Orders, which, as supplemented by the terms of
this Agreement, shall constitute the entire agreement between the
parties with respect to sales of the Products by Company to
Distributor. All Purchase Orders will be accompanied by a deposit
of ten percent (10%) of the aggregate Product Price specified in
the Purchaser Order. By placing a Purchase Order under this
Agreement, Distributor confirms its agreement with and acceptance
of all the provisions of this Article 3. Distributor shall place
all Purchase Orders for Product at least ninety (90) business days
prior to the requested delivery date (unless otherwise agreed to by
Company). If any term of a Purchase Order is inconsistent with this
Agreement, then this Agreement shall govern to the extent of any
such inconsistency. Orders may be placed by contacting Aura
Systems, Inc., 2330 Utah Avenue, El Segundo, California 90245;
telephone number 310-643-5300; facsimile number 310-643-7457; email
melvin© aurasystems.com attention Melvin
Gagerman, Chairman and CEO.
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3.2
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Acceptance.
Company shall acknowledge all purchase orders in writing
to
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Distributor. Company shall be deemed
to have accepted any such Purchase Order for which
Company does not notify Distributor
in writing within ten (10) business days after its receipt
that
Company cannot meet such Purchase
Order’s terms.
3.3
Forecasts. Each Contract Year during the term of this
Agreement, Distributor shall provide Company on a monthly basis
with a 120 day rolling forecast, of which the first 90 days shall
be a firm order by Distributor for delivery of the number of
Products specified therein pursuant to Purchase Orders delivered
pursuant to this Agreement. The last 30 days of the forecast shall
be used for purposes of facilitating Company’s manufacturing
plans, but are not legally binding on Distributor in any
manner.
3.4 Prices.
(a) Prices charged to Distributor for Products purchased under this
Agreement are set forth on Exhibit D (collectively, the
“Product Prices”). From time to time, Company may
change the prices for such Products provided that Company provide
Distributor
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written notice
of any increase at least ninety (90) days prior to such changes
taking effect. Price changes will not affect orders placed by
Distributor and accepted by Company before such changes were
communicated to Distributor. Company shall exercise commercially
reasonable efforts to minimize any cost increases. All Product
Prices are for delivery F.O.B. Origin, Company’s designated
facilities, freight collect. Title and risk of loss shall pass to
Distributor at the time the ordered Products are identified and
made available to Distributor for loading and carriage at
Company’s designated facility. Distributor alone shall be
responsible for causing the Products to be loaded and delivered to
the delivery destination and shall be solely responsible for all
freight, customs duties, insurance or other shipping costs. For
purposes of this Agreement, the term “F.O.B.” shall
have the meaning given in INCOTERMS 2000 as published by the
International Chamber of Commerce, Paris, France. The Product
Prices shall also include any New Product Prices deemed included
pursuant to Section 3.16 hereof.
3.5 Payment.
Unless otherwise agreed by the parties in writing, Distributor
shall cause payment to be received by Company for Products no later
than thirty (30) days following the date of shipment, as evidenced
by the appropriate receiving documentation. Company shall invoice
Distributor for all amounts due and such invoices shall reference
the Purchase Order number and be sent to the “Bill to”
address specified on the Purchase Order. Company’s packing
list must reference the Purchase Order number and be sent to the
applicable “Ship to” address on the Purchase Order. In
no way shall any payment due under this Agreement by Distributor to
Company be contingent upon Distributor’s collection of
payment from Distributor’s customers.
3.6 Delivery.
Company will promptly ship the Products upon receipt of
Distributor’s Purchase Order and will use commercially
reasonable efforts to meet or exceed the delivery dates specified
in the Purchase Order. Notwithstanding the foregoing, (i) in no
event will the Company be required to deliver a shipment of
Products sooner than ninety (90) days from the date of receipt of a
Purchase Order therefor, and (ii) in the event the Products covered
by a Purchase Order were not included in a sales forecast received
by the Company from the Distributor, then the Company and the
Distributor will work together in good faith to identify a
reasonable and mutually acceptable delivery date for the Products,
which in no event will be required to be sooner than thirty (30)
days after receipt of such Purchase Order.
3.7
Partial Shipments; Failure to Deliver . Company reserves the
right to make partial shipments of any order for one hundred (100)
Product units or more and shall not be liable for any failure to
ship complete orders. Each partial shipment shall contain no less
than fifty (50) Product units, unless mutually agreed otherwise by
the Parties. Distributor will be invoiced separately for each
partial shipment and will pay each invoice when due, without regard
to subsequent deliveries. Company shall attempt to allocate its
available inventory to Distributor in reasonable priority to all
other customers of Company. Notwithstanding the foregoing or
anything to the contrary herein, the failure of Company to supply
Products pursuant to the terms of Purchase Orders submitted to
Company in compliance with the provisions of this Agreement shall
be considered a breach of this Agreement and a failure by Company
to perform any of its material obligations under this Agreement
pursuant to Section 7.2 (a) hereof. In addition,
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Distributor shall continue to have
any other rights or remedies that it may have as a result of such
failure to supply Products.
3.8 Inspection.
Upon receipt of any Product delivery, Distributor shall have
fifteen (15) days to inspect such Product for quantity shortages as
well as readily apparent damage and specification discrepancies. If
such shortages, damage or discrepancy is found, Distributor has the
right to reject such Product during such fifteen (15) day period.
Product not rejected during such period shall be deemed accepted by
Distributor and Company shall not thereafter be liable for any such
shortages, discrepancy or damage in such shipment. Rejected Product
(or any shortages in Product quantity) shall be replaced with
conforming Product within ten (10) calendar days after
Distributor’s notice of rejection and/or shortage.
Distributor shall have the right to inspect and test such
replacement Product within fifteen (15) days of
delivery.
3.9 Distributor
Product Warranty. Distributor accepts the published standard
warranty of Company as in effect from time to time with respect to
the Product. Subject to the limiting provisions of such standard
warranty, Company represents, warrants and covenants
that:
(a) notwithstanding mechanical
limitations such as, without limitation, the existence of
insufficient torque, the Products furnished hereunder shall meet
the quality, operating conditions and performance levels designated
by the manufacturer’s published ratings and specifications;
(b) to the extent provided in Company’s published standard
warranty, the Products shall be free from defects in workmanship
and material (c) Company has good and marketable title to (and has
all rights, title and interest necessary to sell to Distributor)
the Products to be furnished hereunder and there are (and shall be)
no liens, claims or encumbrances of any kind whatsoever against the
Products, except for required governmental licenses or permits
which may need to be obtained in connection with the sale of the
Products; and (d) Distributor may exercise its rights under this
Agreement free and clear of any obligation of the Company to any
third party, except for required governmental licenses or permits
which may need to be obtained in connection with the sale of the
Products.
3.10 End User
Warranty. At all times during the term of this Agreement, Company
shall warrant the Products to Distributor’s customers in
accordance with the terms of the warranty attached hereto as
Exhibit —
(“End User Warranty”),
as such End User Warranty may be modified from time to time by the
Company, and any such changes shall become effective immediately
upon Company forwarding such changes in writing to Distributor.Any
changes made by Company to such End User Warranty will not apply to
Products sold to Distributor pursuant to orders plac~d by
Distributor and accepted by Company before such changes were
communicated to Distril~utor.A copy of the End User Warranty shall
be included as part of the packaging included with the Product and
Distributor shall distribute each Product with all warranty cards,
a copy oi~ the End User Warranty and all other packaging materials
intact.
3.11 Distribu r
Warranty Repair or Replacement. Company, at its own expense and
option, shall promp ly either repair or replace any defective
Product during such period as Company’s warranty p rsuant to
Section 3.9 above remains in full force and effect for that
Product, provided that )istributor has notified Company and, upon
inspection by Company, Company has found the Product to be
defective. In the event Distributor arranges for a Product to be
repaired or servic ~d by a person or entity other than by a service
facility approved by
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Company, such
action shall be solely at the expense of Distributor and shall
effectively terminate any Company warranty for such
Product.
3.12 Product
Returns. All returns of non-defective Products shall be subject
to Company’s standard return policy for commercial and
industrial products attached hereto as Exhibit”
“.Company shall have no warranty obligations whatsoever
including the replacement of any Product pursuant to this Article 3
unless all of the provisions of Company’s Return Policy then
in effect have been met by Distributor.
3.13 Exclusive
Remedy. THE REPAIR OR REPLACEMENT OF ANY NONCONFORMING
OR DEFECTIVE PRODUCT, SHALL CONSTITUTE
THE
SOLE AND EXCLUSIVE REMEDY OF DISTRIBUTOR (AND
SHALL
CONSTITUTE FULFILLMENT OF ALL
OBLIGATIONS OF COMPANY
HEREUNDER) FOR THE BREACH OF SUCH
WARRANTY BY COMPANY OR
ANY LIABILITY (INCLUDING WITHOUT
LIMITATION ANY LIABILITY
FOR NEGLIGENCE) OF COMPANY WITH
RESPECT TO THE PRODUCTS
AND SERVICES COVERED BY THIS
AGREEMENT AND ALL OTHER
PERFORMANCE BY COMPANY UNDER THIS
AGREEMENT.
THE PARTIES AGREE THAT COMPANY
EXTENDS LIMITED EXPRESS
WARRANTIES SOLELY TO ORIGINAL
END-USERS OF THE PRODUCTS
AND NOT TO DISTRIBUTOR. COMPANY
MAKES NO EXPRESS OR
IMPLIED WARRANTIES OF ANY KIND TO
DISTRIBUTOR WITH RESPECT
TO THE AURA TECHNOLOGY OR THE USE
THEREOF, INCLUDING
WITHOUT LIMITATION
THE PRODUCTS AND ANY
COMPONENTS
THEREOF INCORPORATING THE AURA
TECHNOLOGY OR
MANUFACTURED BY THE USE THEREOF.
ALL EXPRESS OR IMPLIED
WARRANTIES, INCLUDING WITHOUT
LIMITATION THE EXPRESS OR
IMPLIED WARRANTY (I) THAT THE
AURA TECHNOLOGY OR THE USE
THEREOF, INCLUDING WITHOUT
LIMITATION THE PRODUCTS AND
ANY COMPONENTS THEREOF
INCORPORATING THE AURA
TECHNOLOGY OR MANUFACTURED BY THE
USE THEREOF WILL BE
FREE FROM CLAIMS OF PATENT
INFRINGEMENT, INTERFERENCE, OR
UNLAWFUL USE OF PROPRIETARY
INFORMATION OF ANY THIRD
PARTY, OR (II) OF THE ACCURACY,
RELIABILITY, TECHNOLOGICAL OR
COMMERCIAL VALUE,
COMPREHENSIVENESS OR MARKETABILITY OF
THE AURA TECHNOLOGY, THE
PRODUCTS, OR THE COMPONENTS
THEREOF OR ITS SUITABILITY OR
FITNESS FOR ANY PURPOSE
WHATSOEVER ARE HEREBY DISCLAIMED
AND EXCLUDED.
DISTRIBUTOR FURTHER ACKNOWLEDGES
THAT THERE ARE NO
WARRANTIES IMPLIED BY CUSTOM OR
USAGE IN THE TRADE
BETWEEN DISTRIBUTOR AND COMPANY
THAT HAVE BECOME A PART
OF THIS TRANSACTION. ANY ACTION
FOR A BREACH OF ANY OF
COMPANY’S OBLIGATIONS UNDER
THIS AGREEMENT OR OTHERWISE
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4Añ..4 ‘~
‘~ñ t~1 ñ~/illñ
MUST BE
COMMENCED WITHIN ONE
(1) YEAR AFTER THE CAUSE OF
ACTION HAS
ACCRUED.
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3.14
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No
Assurances . Distributor acknowledges
that:
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(a) Wind
speeds are extremely variable and in wind conditions insufficient
to provide torque levels equal to or exceeding the minimum torque
guideline requirements of the Products established by the
manufacturer, such Products may be unable to produce power levels
equal to their maximum rating;
(b) Company
has made no representations to Distributor and Distributor has
received no assurances, that: (i) its business relationship will
continue with Company beyond the stated term of this Agreement or
its earlier termination in accordance with this Agreement; (ii) any
investment by Distributor in the promotion of the Products will be
recovered or recouped; or (iii) Distributor shall obtain any
anticipated amount of profits by virtue of this Agreement;
and
(c) Other
than the licenses granted herein, DISTRIBUTOR shall not have or
acquire, by virtue of this Agreement or the transactions
contemplated hereunder, any proprietary rights in the Products, the
Company’s intellectual and industrial property or in any
goodwill related thereto, whether or not created by its
efforts.
THE PARTIES ACKNOWLEDGE THAT THIS
SECTION AND
RELATED SUBSECTIONS HAVE BEEN
INCLUDED AS A
MATERIAL INDUCEMENT FOR COMPANY TO
ENTER INTO THIS
AGREEMENT AND THAT COMPANY WOULD NOT
HAVE
ENTERED INTO THIS AGREEMENT BUT FOR
THE
ACKNOWLEDGMENTS, AGREEMENTS AND
LIMITATIONS OF
LIABILITY AS SET FORTH
HEREIN.
3.15 Indemnity By
Company. Distributor will promptly notify Company if any third
party claim is brought or threatened against Distributor or a
Sub-Distributor that arises out of a breach of the representations
and warranties set forth in this Agreement or from any product
liability claims that may be brought against Distributor arising
out of or related to the Products. Company will indemnify, defend
and hold Distributor and its Sub-Distributors including their
employees, agents and affiliates, harmless from and against any and
all damages, losses, liabilities and expenses (including reasonable
attorneys’ fees) that they may suffer or incur in connection
with any such actual or threatened claim or any breach of
representation, warranty, covenant or agreement on the part of
Company under this Agreement. The Company’s indemnification
obligations do not apply: (i) to the extent that the Products are
modified by Distributor or any customer after shipment by Company
without Company’s consent or direction and the claim arises
from such modifications, (ii) to the extent that the Products are
combined or used with other products, processes or materials in a
manner contrary to their intended use and the claim arises from
such combination, or (iii) where Distributor or a customer
continues the activity that gave rise to the claim after being
notified by Company of commercially reasonable actions which would
have avoided the claim or (iv) to any negligent or willful act or
omission or
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violation of
any contractual arrangement of Company’s affiliates,
officers, directors, agents or employees, in connection with its
performance relating to this Agreement.
3.16 Indemnity
by Distributor. Distributor agrees to indemnify, defend and hold
Company, including its employees, agents and affiliates, harmless
from and against any and all payments, damages, demands, claims,
losses, expenses, costs, obligations and liabilities (including
reasonable attorney’s fees and costs), which arise out of,
result from or are related to:
(i) any breach by Distributor or any
Sub-Distributor of any provision contained in this Agreement,
including without limitation any obligation, representation,
warranty or covenant herein; (ii) any occupational injury or
illness sustained by any employee or agent of Distributor or
Sub-Distributor to the extent claims are made against, or held to
be payable by Company; (iii) any applicable sales or other taxes
due from or on behalf of Distributor or Sub-Distributor regardless
of whether such taxes must be collected by Company on behalf of the
taxing authority and regardless of whether Distributor shall
challenge the assessment or amount of such taxes or (iv) any
negligent or willful act or omission or violation of any
contractual arrangement of Distributor or any of
Distributor’s affiliates, Sub-Distributors, officers,
directors, agents or employees of each, in connection with its or
their performance relating to this Agreement.
3.17 Insurance.
Both parties will each have and maintain in full force and effect
during the term of this Agreement (including any post-termination
period for which indemnification obligations continue), all product
liability and other insurance reasonably necessary to cover such
party’s anticipated indemnification obligation and other risk
of loss for which it may be liable under this Agreement. All such
insurance coverages shall be occurrence based and not claims made.
Such policy or policies will (a) have aggregate limits of liability
of not less than $5,000,000 with respect to any incident or
occurrence and of not less than $10,000,000 in the aggregate; (b)
name both Company and Distributor as insured parties; and (c)
provide that such policy may not be canceled except upon not Less
than 30 days’ written notice to both Company and Distributor.
Each party will provide such evidence of the effectiveness of such
insurance to the other party as may be reasonably
requested.
3.18 Capacity.
Subject to this Article 3, during the term of this Agreement prior
to any Non-Exclusive Period (as that term is hereinafter defined),
Distributor shall purchase all Product that it requires for any
application within the Field of Use solely from Company. Company
shall supply the Product pursuant to a Purchase Order(s) at the
Product Price for up to __________________
(____)
units of Product per calendar year
(“Maximum Capacity”). If Distributor notifies Company
at any time that the total cumulative amount of Product Purchaser
intends to order may exceed the Maximum Capacity during any
calendar year, Company shall determine and notify Purchaser of (a)
whether its manufacturing facility is capable of accommodating
additional capacity (or can be adapted to accommodate additional
capacity). If either Company or Distributor determines that Company
is incapable of such adaptation and accommodation, in
Company’s or Distributor’s sole discretion, Distributor
may purchase any or all amounts of Product above the Maximum
Capacity from a third party provider.
3.19
Manufacturing Rights. In the event that Company is incapable
or unable to supply Products in sufficient quantities to fulfill
any given Purchase Order submitted to it by
Distributor, and which has been
accepted by Company pursuant to Section 3.2 above, Company will,
upon Distributor’s written request, execute a Technology
Transfer License Agreement in
10
OC
286.3
72.149v1 220 09 03/03/09
the form
attached hereto as Exhibit” ” (the “
Manufacturing Agreement” ) with respect to such
Purchase Orderprovided however that if within ninety (90)
calendar days of receipt of such
notice Company is able to cure such
inability, Company shall be under no obligation to execute such
Manufacturing Agreement. Upon execution of said Manufacturing
Agreement by Company
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(a)
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in the event that
any provisions of this Agreement are found to be inconsistent with
those of the Manufacturing Agreement, the provisions of the
Manufacturing Agreement shall
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take precedence and supersede such
inconsistent term(s) herein.
3.20 Company as Supplier. Company
agrees that throughout the term of this Agreement, it
will neither appoint any sales force
specifically for the purpose of pursuing sale opportunities for the
Products within the Field of Use in the Territory nor will Company
otherwise direct any sales personnel to actively pursue such
opportunities. Notwithstanding the foregoing, the
Company
shall have the right to sell, license, lease and
otherwise dispose of Products within the Field of Use in the
Territory to third-party-manufacturers of wind technology within
the Field of Use in the Territory (a
“Third-Party-Manufacturer”) at any time while this
Agreement remains in effect provided however that:
(i) Company shall promptly notify Distributor of any such
Third-Party-Manufacturer opportunities that Company wishes to
pursue; (ii) Distributor shall have ten (10) business days from
th
