PRODUCT DEVELOPMENT AND MARKETING AGREEMENT
THIS PRODUCT DEVELOPMENT AND MARKETING AGREEMENT (this "Agreement") is made
and entered into as of the 25th day of September, 1996, by and between ▇▇▇▇▇▇
▇▇▇▇▇ INCORPORATED, a Nevada corporation ("▇▇▇▇▇▇ ▇▇▇▇▇"), and SYSTEM SALES
REPRESENTATIVES, INC., a Vermont corporation ("SSRI"), based on the following:
Premises
A. SSRI has established businesses through which it sells products and
provides services in the Electrical Industry (as defined in this Agreement).
▇. ▇▇▇▇▇▇ ▇▇▇▇▇ is the owner of certain technology that it believes will
permit it to develop and manufacture products ("Products") for sale through the
established businesses of SSRI to the Electrical Industry.
C. The parties desire to each provide resources and to cooperate in the
identification, design, development, and marketing of Products to the Electrical
Industry, on the terms and conditions set forth in this Agreement.
D. On completion of the development of Products, the parties desire that
SSRI act as the exclusive world-wide sales representative for the Products in
the Electrical Industry on the terms and conditions set forth in this Agreement.
Agreement
NOW, THEREFORE, based on the foregoing premises and for and in
consideration of the covenants and agreements hereinafter set forth, and the
mutual benefits to the parties to be derived therefrom, it is hereby agreed as
follows:
1. Definitions. The following terms shall have the meanings indicated
when used in this Agreement:
"Alpha Version" - The initial prototype of a Product suitable for
demonstration and initial testing of the potential capabilities and
functionalities of the Product to be evaluated internally by the parties
for design and function suggestions.
"Beta Version" - A prototype of the proposed Product designed to be
provided to third-parties for testing and evaluation of design and
functionality by potential users of the Product.
"Electrical Industry" - That industry comprised of (i) electrical
generators, transmission entities, and marketers of commercial electrical
energy; and (ii) industrial and commercial owners and users of electrical
transmission, distribution, and generation apparatus to the extent that the
marketing and sale of Products is targeted for use in such electrical
apparatus.
"Products" - Monitoring systems for application in electrical
transmission, distribution, and generation apparatus as they are
identified, designed, and developed by the parties under the terms of this
Agreement, which will include all unique products identified by the parties
and developed under the terms of this Agreement that are based on the
Technology and designed to be marketed to the Electrical Industry, all as
more specifically identified on Exhibit "A" attached hereto and
incorporated herein by this reference, as such exhibit may be modified from
time to time.
"SSRI" - System Sales Representatives, Inc., a Vermont corporation,
and any firm, partnership, corporation, limited liability company, or other
legal entity that directly or indirectly controls or is controlled by or is
under common control with System Sales Representatives, Inc., including its
corporate parent, ▇▇▇▇▇▇▇▇ International Corporation.
"Technology" - The knowledge, techniques, expertise, and skills owned
by LarsonoDavis, but only to the extent that they are currently owned by
LarsonoDavis, which will be incorporated into the design and development of
the Products, specifically including the patents and other technology
listed on Exhibit "B" attached hereto and incorporated herein by this
reference, as they exist as of the date of this Agreement and as they may
be developed, expanded, and refined during the course of this Agreement.
"Technology" shall not include knowledge, techniques, expertise, and skills
generally known or used by third parties.
2. Design and Feasibility Stage. The parties agree to undertake the
following efforts, which are collectively referred to as the "design and
feasibility stage." Each party will be responsible for its own costs incurred
by it in connection with meeting its obligations as set forth below. During the
design and feasibility stages, and for a period of 30 days following completion
of such stage, either party can terminate this Agreement at any time on 30 days
written notice to the other party.
2.1 Identification of Products. LarsonoDavis has initially targeted
the development of certain Products based on its Technology that it
believes have potential application in the Electrical Industry. SSRI has
experience and expertise in selling Products to the Electrical Industry and
in understanding the needs of such industry. The initial phase of the
Product development will be the joint identification of potential Products
with the highest expectations for success, based on the perceived demand in
the Electrical Industry for such Products, the technological feasibility of
such Products, the manufacturing costs and potential pricing of such
Products, and similar factors deemed critical by the parties, on a
cooperative basis by SSRI and ▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ shall provide
individuals skilled in engineering and the technical aspects of the
Technology, and SSRI shall provide individuals experienced and
knowledgeable about the Electrical Industry, potential competing products,
and marketing in such industry. The Product design team shall work
cooperatively to identify and provide the initial design criteria for
potential Products for marketing in the Electrical Industry. The parties
have agreed to undertake such initial Product identification and design on
the time schedule set forth on Exhibit "C" attached hereto and incorporated
herein by this reference, as may be amended from time to time by the mutual
consent of the parties.
2.2 Development of Products. Subsequent to the completion of the
Product identification and design, ▇▇▇▇▇▇ ▇▇▇▇▇, with the input of the SSRI
design team, shall undertake the development of the identified Products,
including both hardware and software. ▇▇▇▇▇▇ ▇▇▇▇▇ shall provide the
technical support for such development while SSRI shall provide input on
the Product specifications plus compliance with all applicable industry
standards (for example, compliance with applicable standards of Underwriter
Laboratory, ANSI, IEC, and other industry groups). On completion of an
Alpha Version of the hardware and software, ▇▇▇▇▇▇ ▇▇▇▇▇ shall conduct
internal Product test programs and complete the additional development
effort to create a Beta Version suitable for testing by SSRI and potential
customers. SSRI shall identify leading customers of the Product in the
Electrical Industry and make suitable arrangements for beta site testing of
the Product by such customers and shall provide any necessary interface
between LarsonoDavis and such potential customers with respect to the
testing and feedback for Product refinement. The parties shall work
together, with ▇▇▇▇▇▇ ▇▇▇▇▇ providing technical expertise and SSRI
providing marketing input and feedback from potential users of the Product,
to refine the Product and incorporate the suggestions arising from the
testing of the Alpha and Beta Versions, all to the extent commercially
reasonable. The Product development is targeted by the parties to be
completed in the time frame set forth in Exhibit "C," as may be amended
from time to time by the mutual consent of the parties.
2.3 Marketing Plan and Market Analysis. At the time of delivery by
▇▇▇▇▇▇ ▇▇▇▇▇ of the Beta Version of any particular Product, SSRI shall
initiate a formal marketing plan and market analysis ("Marketing Plan and
Analysis") of the potential and markets for the Product, including pricing,
competition, Product introduction strategies, customary warranties and
technical support, size of potential market, production requirements, rate
of potential market penetration, sales minimums, marketing strategies,
advertising campaign, identification of trade shows targeted for
demonstrations, and advertising budget. The parties anticipate that the
Marketing Plan and Analysis will be completed in the time frame specified
on Exhibit "C," as may be amended from time to time by the mutual consent
of the parties.
2.4 Development of Production Plan. ▇▇▇▇▇▇ ▇▇▇▇▇, with the input of
SSRI, shall develop a production plan ("Production Plan") specifying the
production facilities required for manufacturing the Products, the
identification of any third-party manufacturers for components to be used
in the Products and/or the Products, the need for and size of the inventory
necessary for Product introduction and ongoing sales, the timing and size
of initial deliveries, the identification and quantification of necessary
quality controls, and the extent of field and in-house technical support.
The parties anticipate that the production design shall be completed on the
schedule set forth on Exhibit "C," as may be amended from time to time by
the mutual consent of the parties.
3. Manufacturing and Marketing Conventions. Subsequent to the completion
of the design and feasibility stage, the parties shall, based on the information
developed for and contained in the Marketing Plan and Analysis and Production
Plan, cooperate to agree to commercially reasonable manufacturing and marketing
conventions as set forth below. Until an agreement in writing on these matters
is reached or the parties agreed in writing that ▇▇▇▇▇▇ ▇▇▇▇▇ should commit to
the construction or furnishing of production facilities by entering into an
agreement with a third-party for the production of the Products, by commencing
construction of production facilities, by committing to purchase a material
amount of equipment (in excess of $10,000), or by otherwise making a material
commitment with respect to such production facilities, either party can
terminate this Agreement on 30 days written notice to the other party.
3.1 Pricing of Products. The parties agree to openly discuss fair
and equitable pricing of the Products based on the Marketing Plan and
Analysis, Production Plan, and such other information as may be available
to the parties concerning industry expectations, expected demand, costs of
manufacturing, and other factors influencing the pricing of the Products.
The parties agree to work together in good faith to agree on the price, and
changes thereto, to SSRI of the Products, although it is anticipated that
the Products will be sold to SSRI by ▇▇▇▇▇▇ ▇▇▇▇▇ at a discount of
approximately 25% from the anticipated sales price to customers in the
Electrical Industry. The price of the Products to SSRI can only be changed
on 60 days written notice to SSRI by ▇▇▇▇▇▇ ▇▇▇▇▇ and may not be changed
more than once in any 12 month period. If a change in the price to SSRI at
any time during the term of this Agreement would result in less than a 25%
discount to SSRI, SSRI shall have the right, at any time during the 60 day
period following the written notice to SSRI of the price change, to
terminate this Agreement by delivering written notice of its intent to do
so to ▇▇▇▇▇▇ ▇▇▇▇▇ during such period. Any such termination shall take
effect 30 days after the written notice from SSRI to ▇▇▇▇▇▇ ▇▇▇▇▇.
3.2 Procedure for Orders. Products shall be ordered by completing an
order form agreed to by the parties and containing such terms and
conditions as may be commercially reasonable in the Electrical Industry.
The order form may be amended from time to time on agreement of the
parties. Orders placed with ▇▇▇▇▇▇ ▇▇▇▇▇ on the order forms can only be
accepted by LarsonoDavis and shall not be binding absent such acceptance.
Product orders must specifically set forth information with respect to the
identity of the Products desired, shipping instructions, and requested
delivery dates. To the extent commercially reasonably, orders shall be
filled by ▇▇▇▇▇▇ ▇▇▇▇▇ in compliance with the information provided.
3.3 Cancellation Charges. The parties shall agree on a cancellation
policy that contains a minimum period for such cancellation to be effective
and provides for an appropriate charge for all untimely cancellations. The
cancellation policy may differ depending on the size and materiality of the
order, the uniqueness of the Products ordered, the production planning time
requirement, and other factors the parties deem reasonable.
3.4 Manner of Payment. All orders shall be placed directly by SSRI.
Payment for orders shall be due from SSRI within 30 days of shipment of the
Product. In the event that any amount has not been paid to ▇▇▇▇▇▇ ▇▇▇▇▇
within 90 days of shipment, the unpaid portion of the obligation shall
thereafter bear interest at a rate of 1-1/2% per month.
3.5 Sales Minimums. Based on the Marketing Plan and Analysis and the
Production Plan, the parties shall agree on minimum sales amounts for each
Product in the geographical areas of the world. Such sales minimums may
provide for an initial introduction period with increasing amounts to be
met during subsequent time periods. The minimum sales amounts shall be set
forth on Exhibit "D" attached hereto and incorporated herein by this
reference which shall be attached to this Agreement and become a part
thereof. SSRI's exclusive rights to market and sell the Products shall
remain in effect so long as the minimums set forth on Exhibit "D" for the
identified geographical markets are met or exceeded. To the extent that
such sales minimums are not met for a particular geographic market,
LarsonoDavis shall have the right to terminate SSRI's exclusive rights to
such geographical market by providing 30 days written notice to SSRI of its
failure to meet the minimum sales requirements. Subsequent to the
termination SSRI's exclusive rights in any geographical market, ▇▇▇▇▇▇
▇▇▇▇▇ shall have the right to directly, or indirectly through sales
representatives or distributors, sell Products into such geographical
market; provided that, such failure was not the result of ▇▇▇▇▇▇ ▇▇▇▇▇ not
delivering Products or meeting production schedules.
3.6 Warranty of Products. Based on the Marketing Plan and Analysis
and the Production Plan, the parties shall establish the terms and
conditions of the warranties to be provided to the end user of the Products
by ▇▇▇▇▇▇ ▇▇▇▇▇ and the terms and conditions of any support and maintenance
program to be offered to end users of the Products by ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ will provide all services required by the warranty and support
agreements in a commercially reasonable manner. ▇▇▇▇▇▇ ▇▇▇▇▇ shall also
make available an employee to sit on boards or committees in which SSRI is
a member that establish or recommend standards in the Electrical Industry.
4. Appointment of SSRI. On agreement by the parties to the manufacturing
and marketing conventions pursuant to Section 3 and subject to all of the terms
of this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇ appoints SSRI as its sole and exclusive world-
wide (the "Territory") representative in the Electrical Industry to market and
sell the Products identified on Exhibit "A." The Products included on Exhibit
"A" shall be updated by the mutual consent of the parties in writing from time
to time during the term of this Agreement. SSRI accepts this appointment and
agrees to use its commercially reasonable efforts to promote the image, product
identification, and sale of the Products in the Electrical Industry. SSRI shall
not offer for sale in any geographical market in which it has the exclusive
rights to market the Products other products that compete with the Products
subsequent to the date that is six months after the market introduction (first
commercial sales subsequent to the refinement of the Beta Version testing) of
any Product. ▇▇▇▇▇▇ ▇▇▇▇▇ represents and confirms that it will not, directly or
indirectly, sell, offer to sell, or permit the sale of, Products to the
Electrical Industry, directly or through distributors other than SSRI, except to
the extent that SSRI is no longer the exclusive distributor in all or a portion
of the Territory. SSRI acknowledges that ▇▇▇▇▇▇ ▇▇▇▇▇ has existing products and
is and will continue to develop additional products outside of the terms of this
Agreement that are not specifically designed for use in the Electrical Industry
but which may have applications in such industry. Nothing in this Agreement
shall restrict ▇▇▇▇▇▇ ▇▇▇▇▇' right to market such products, directly or
indirectly, in any industry, including the Electrical Industry or to market the
Products developed under this Agreement outside of the Electrical Industry. As
new Products are identified, designed, and developed pursuant to the terms of
this Agreement and identified as such in writing by SSRI and ▇▇▇▇▇▇ ▇▇▇▇▇, they
shall be added to Exhibit "A" and become subject to the terms and conditions of
this Agreement.
5. Marketing Responsibilities. SSRI shall use its commercially
reasonable efforts to solicit orders for sales of the Products by advertising,
making symposium presentations, mailings, sponsoring booths at trade shows,
arranging for trade journal articles, and such other methods as may be
appropriate to the marketing of the Products in the Electrical Industry, in
accordance with the Marketing Plan and Analysis as it may be updated from time
to time. SSRI shall from time to time, but not less often than semi-annually
provide LarsonoDavis with a written update to its Marketing Plan and Analysis
and review any changes thereto with LarsonoDavis. In the course of marketing
the Products, SSRI shall actively seek out new applications for the Products in
the Electrical Industry and shall provide commercially reasonable follow-up of
sales leads obtained from any source. SSRI shall be responsible for all
expenses for marketing and sales efforts for the Products within the Electrical
Industry, except that ▇▇▇▇▇▇ ▇▇▇▇▇ shall provide, at its cost, Product brochures
and application notes. SSRI's marketing efforts shall include, without
limitation, advertising, mailing of marketing materials, participating in trade
shows, conducting surveys, and conducting demonstrations of the Products, in
accordance with the Marketing Plan and Analysis as it may be updated from time
to time. SSRI shall not make any claims or warranties with respect to the
Products, except as authorized in writing by LarsonoDavis. ▇▇▇▇▇▇ ▇▇▇▇▇ shall
provide in a timely manner and in good faith, any technical data and assistance
reasonably required by SSRI in performing its marketing functions. ▇▇▇▇▇▇ ▇▇▇▇▇
shall provide SSRI with literature, technical specifications, engineering
materials, and such other information as may be needed to design a marketing
program and solicit sales of the Products. ▇▇▇▇▇▇ ▇▇▇▇▇ shall promptly refer any
inquiries, requests, and/or orders for the Products in the Electrical Industry
to SSRI and SSRI will promptly notify LarsonoDavis of any inquiries, requests,
and/or orders for the Products related to other markets. SSRI may pursue such
sales to other markets unless ▇▇▇▇▇▇ ▇▇▇▇▇, within ten days, notifies SSRI that
for SSRI to do so would conflict with other marketing or distribution rights
with respect to LarsonoDavis' products then in effect.
6. Manufacturing of Products. Subsequent to the agreement of the parties
on the Manufacturing and Marketing Conventions, LarsonoDavis shall, at its cost,
make arrangements for production facilities for the Products in accordance with
the Production Plan. ▇▇▇▇▇▇ ▇▇▇▇▇ shall use commercially reasonable efforts to
manufacture the Products in a timely manner and to maintain an appropriate level
of inventory to meet the sales efforts of SSRI. SSRI shall provide ▇▇▇▇▇▇ ▇▇▇▇▇
on an ongoing basis with estimates of its future requirements and information
concerning its marketing efforts and the potential impact of such efforts on
production requirements. ▇▇▇▇▇▇ ▇▇▇▇▇ shall provide SSRI on an ongoing basis
with estimates of its production capacity and timing and the potential impact of
the production efforts of ▇▇▇▇▇▇ ▇▇▇▇▇ on the marketing of SSRI and the
fulfillment of orders in accordance with the terms included in such orders.
▇▇▇▇▇▇ ▇▇▇▇▇ shall manufacture, package, and ship the Products in accordance
with good business practices. ▇▇▇▇▇▇ ▇▇▇▇▇ shall provide adequate installation
and operation instructions with all Products. Deliveries of Products shall be
made in accordance with the directions of SSRI, to the extent commercially
reasonable. All shipments shall be free on board at ▇▇▇▇▇▇ ▇▇▇▇▇' manufacturing
facilities. All costs of shipping, export or import licenses, tariffs, duties,
and transfer taxes required to deliver the Products shall be paid by the
customer.
7. Trade Secrets.
(a) Information disclosed by one party to the other party in
connection with Product development, marketing, and sales as contemplated
by this Agreement, including the names and locations of customers,
marketing plans, or other business information, and any proprietary
technical information, shall be held confidential by the party to whom such
information is disclosed. Each party agrees not to disclose any such
information to any person, firm, or entity without the prior written
consent of the other party. This section 13 shall not apply to (i)
information that at the time of disclosure to a party hereto was already in
the possession of the recipient; (ii) information that is or becomes
published or otherwise made generally available to the public, other than
by a breach of this Agreement; and (iii) information that is obtained by a
party hereto from a third party, other than a representative or affiliate
of the other party hereto, without obligation of confidentiality by any
party in the chain of disclosure.
(b) System Sales Representatives, Inc., agrees to obtain the written
agreement of any other entity included in the definition of "SSRI" which
has access to the confidential information of LarsonoDavis to be bound by
the provisions of this section.
(c) It is also agreed that monetary damages for any breach of the
provisions of this section 13 are inadequate and, without prejudice to the
other rights and remedies otherwise available to it, each party, or any
successor to the business of any such party, shall be entitled to seek and
obtain temporary or injunctive relief for any breach or threatened breach
of any of the provisions of section 13 of this Agreement without the
necessity of posting a bond.
(d) The terms of this section 13 shall apply during the term of this
Agreement, any renewal thereof, and for three years after termination or
expiration of this Agreement.
8. Non-Solicitation. The parties agree that during the term of this
Agreement, any renewal thereof, and for one year after termination or expiration
of this Agreement, the parties will not, directly or indirectly, solicit for
employment, service or consulting arrangement, or hire any employee of the other
party; provided, however, that the foregoing provision will not prevent the
parties from employing any such person who contacts them on his or her own
initiative without any direct or indirect solicitation by the party in question.
9. Ownership of Technology. SSRI acknowledges that the Technology is
owned by ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ acknowledges that technology owned or
developed by SSRI may be incorporated into or used by the Products. The parties
agree that nothing in this Agreement, including any developments, advances, or
refinements as a result of the work undertaken pursuant to this Agreement, shall
give SSRI any ownership or claim to ownership in the Technology or ▇▇▇▇▇▇ ▇▇▇▇▇
any ownership or claim to ownership in SSRI's technology. To the extent that a
Product incorporates the Technology and technology owned by SSRI, neither party
can manufacture or market such Product subsequent to the term of this Agreement
without the joint agreement of both parties.
10. Term of Agreement and Termination.
(a) Subject to the specific provisions of sections 2 and 3 permitting
the parties to terminate this Agreement on 30 days written notice under
certain circumstances, the initial term of this Agreement shall be for ten
years, commencing upon the date first written above, and may be renewed for
renewal terms of five years each only on the written consent of the parties
thereto, unless sooner terminated by either party as provided herein.
(b) In the event that either party shall, during the initial or
renewal terms of this Agreement, commit a material breach of this
Agreement, the other party may, after 60 days written notice of said breach
and if said breach is not fully remedied during said 60 day period,
immediately terminate this Agreement upon the expiration of said 60 day
notice period. Notwithstanding the foregoing, if the breaching party
promptly commences and diligently pursues a cure of the breach following
receipt of such notice but such breach cannot be cured within said 60 day
period despite its good faith efforts, said period shall be extended for
such additional time as may reasonably be required to effect a cure (but in
no event longer than an additional 30 days).
(c) In the event that, at any time during the term or any renewal
term hereof, either party terminates its business, or any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceedings, or
other proceedings for the relief of debtors, are instituted by or against
such party, and, if instituted against such party, are allowed against such
party or are not consented or dismissed, stayed, or otherwise nullified
within 30 days after such institution, the other party may, upon written
notice to such party, terminate this Agreement effective immediately.
(d) In the event that no Beta Version of a Product is developed,
delivered, installed, refined, and ready to be manufactured by June 30,
1998, this Agreement may be terminated by either party hereto upon 30 days
written notice to the other party hereto (unless otherwise agreed in a
writing by the parties). Such notice must be given not later than August
1, 1998.
(e) Neither party shall be liable to the other for compensation,
reimbursement, lost profits, incidental, or consequential damages, or
damages of any other kind or character because of termination of this
Agreement pursuant to the aforesaid termination provisions (or because of
its non-renewal.) Termination or expiration of this Agreement shall be
without prejudice to any claims by either party against the other existing
on the date of termination or expiration.
(f) The provisions of sections 7, 8, 9, 10, 12 and 13 shall survive
termination of this Agreement for any reason.
11. Insurance. LarsonoDavis shall obtain and maintain, at its own
expense, such Product liability insurance as is generally carried in ▇▇▇▇▇▇
▇▇▇▇▇' industry, which insurance shall name SSRI as an additional insured. Such
insurance shall provide adequate protections for SSRI and LarsonoDavis against
any such claims or suits in amounts to be agreed to by the parties. ▇▇▇▇▇▇
▇▇▇▇▇ shall have such insurance in place at the time of delivery of any Beta
Version to third parties and submit to SSRI a fully paid policy or certificate
of insurance naming SSRI as an insured party and providing that the insurer
shall not terminate or materially modify such insurance without written notice
to SSRI at least 30 days in advance thereof.
12. Indemnification.
(a) ▇▇▇▇▇▇ ▇▇▇▇▇ acknowledges that SSRI is an independent
representative without any authority or control over the production or
quality of Products or the conduct of ▇▇▇▇▇▇ ▇▇▇▇▇' employees. Therefore,
LarsonoDavis hereby indemnifies and holds SSRI harmless from, and against
all liability, claims, losses, costs, expenses, or damages however caused
by reason of any Products manufactured or designed by LarsonoDavis (whether
or not defective) or any act or omission of ▇▇▇▇▇▇ ▇▇▇▇▇, including, but
not limited to, any injury (whether to body, property, personal, or
business character or reputation) sustained by any person or to any person
or to property, and for infringement of any patent rights or other rights
of third parties, and for any violation of municipal, state, federal laws,
or regulations governing the Products or their sale, which may result from
the solicitation of orders for delivery, or the distribution of Products in
the Territory. Notwithstanding the foregoing, ▇▇▇▇▇▇ ▇▇▇▇▇ shall have no
obligation to indemnify or hold SSRI harmless for any liability, claims,
losses, costs, expenses, or damages caused by any act or omission of SSRI.
For purposes of this indemnity, if SSRI receives any notice in writing of
any claim against it for which indemnification will be sought hereunder,
SSRI shall notify ▇▇▇▇▇▇ ▇▇▇▇▇ in writing within 45 days after SSRI
receives any such notice. ▇▇▇▇▇▇ ▇▇▇▇▇ shall have the right but not the
obligation of contesting, defending, litigating, or settling any matter in
respect of which indemnification is claimed, and all expenses (including,
without limitation, attorneys' fees) incurred in connection therewith shall
be paid by ▇▇▇▇▇▇ ▇▇▇▇▇. In the event ▇▇▇▇▇▇ ▇▇▇▇▇ declines to contest,
defend, litigate, or settle any such claim, ▇▇▇▇▇▇ ▇▇▇▇▇ shall immediately
notify SSRI, and ▇▇▇▇▇▇ ▇▇▇▇▇ shall then be liable for, shall indemnify
SSRI against, and shall pay all defense costs and expenses, including
reasonable attorneys' fees incurred by SSRI in defending, litigating, or
settling any such claim. In the event LarsonoDavis does contest, defend,
litigate, or settle such claim, SRI shall nevertheless have the right to
retain personal counsel in any such contest, defense, litigation, or
settlement and, unless ▇▇▇▇▇▇ ▇▇▇▇▇ shall fail vigorously to prosecute or
defend such matter, as the case may be, ▇▇▇▇▇▇ ▇▇▇▇▇ shall not be liable
for any expense or legal fees incurred by SSRI in any such participation.
LarsonoDavis shall have the exclusive right, in its discretion exercised in
good faith and upon the advice of counsel, to settle any such matter,
either before or after the initiation of litigation, at such time and upon
such terms as it deems fair and reasonable; provided that, SSRI's consent
shall be required for any entry of judgment or any settlement (i) which
does not result in or include as an unconditional term thereof the giving
by the claimant to SSRI of a release from all liability as to such matter
or (ii) which results in any adverse consequences to SSRI.
(b) SSRI hereby indemnifies and holds ▇▇▇▇▇▇ ▇▇▇▇▇ harmless from and
against all liability, claims, losses, costs, expenses, or damages incurred
or suffered by ▇▇▇▇▇▇ ▇▇▇▇▇ by reason of the assertion of any claim or the
institution of any litigation against ▇▇▇▇▇▇ ▇▇▇▇▇, which is based upon any
breach by SSRI of this Agreement. Notwithstanding the foregoing, SSRI
shall have no obligation to indemnify or hold ▇▇▇▇▇▇ ▇▇▇▇▇ harmless for any
liability, claims, losses, costs, expenses, or damages caused by any act or
omission of ▇▇▇▇▇▇ ▇▇▇▇▇. For purposes of this indemnity, if ▇▇▇▇▇▇ ▇▇▇▇▇
receives any notice in writing of any claim against it for which
indemnification will be sought hereunder, ▇▇▇▇▇▇ ▇▇▇▇▇ shall notify SSRI in
writing within 45 days after ▇▇▇▇▇▇ ▇▇▇▇▇ receives any such notice. SSRI
shall have the right but not the obligation of contesting, defending,
litigating, or settling any matter in respect of which indemnification is
claimed, and all expenses (including, without limitation, attorneys' fees)
incurred in connection therewith shall be paid by SSRI. In the event SSRI
declines to contest, defend, litigate, or settle any such claim, SSRI shall
immediately notify ▇▇▇▇▇▇ ▇▇▇▇▇, and SSRI shall then be liable for, shall
indemnify ▇▇▇▇▇▇ ▇▇▇▇▇ against, and shall pay all defense costs and
expenses, including reasonable attorneys' fees incurred by ▇▇▇▇▇▇ ▇▇▇▇▇ in
defending, litigating, or settling any such claim. In the event SSRI does
contest, defend, litigate, or settle such claim, LarsonoDavis shall
nevertheless have the right to retain personal counsel in any such contest,
defense, litigation, or settlement and, unless SSRI shall fail vigorously
to prosecute or defend such matter, as the case may be, SSRI shall not be
liable for any expense or legal fees incurred by ▇▇▇▇▇▇ ▇▇▇▇▇ in any such
participation. SSRI shall have the exclusive right, in its discretion
exercised in good faith and upon the advice of counsel, to settle any such
matter, either before or after the initiation of litigation, at such time
and upon such terms as it deems fair and reasonable; provided that, ▇▇▇▇▇▇
▇▇▇▇▇' consent shall be required for any entry of judgment or any
settlement (i) which does not result in or include as an unconditional term
thereof the giving by the claimant to ▇▇▇▇▇▇ ▇▇▇▇▇ of a release from all
liability as to such matter or (ii) which results in any adverse
consequences to ▇▇▇▇▇▇ ▇▇▇▇▇.
13. Arbitration.
(a) Any disputes arising under this Agreement shall, if not resolved
between the parties within 60 days after written notice of any alleged
violation or breach of this Agreement has occurred, be submitted to final
and binding arbitration under the Commercial Arbitration Rules of the
American Arbitration Association. The Arbitrator shall be selected by
mutual agreement of the parties within 30 days after a demand for
arbitration is filed with the American Arbitration Association. If the
parties fail to select an Arbitrator, an Arbitrator shall be selected by
the Regional Administrator of the American Arbitration Association, or by
his delegate. The Arbitrator shall have the authority to resolve all
issues in dispute with respect to this Agreement, including the
Arbitrator's own jurisdiction. All expenses of arbitration shall be borne
equally.
(b) Arbitration proceedings shall be conducted in Dover, Delaware,
unless the parties otherwise mutually agree in writing. This agreement to
arbitrate may be specifically enforced in any court of competent
jurisdiction. Judgment upon the award rendered by the Arbitrator may be
entered in any court having jurisdiction thereof.
(c) THE UNDERSIGNED ACKNOWLEDGE THAT THIS AGREEMENT CONTAINS AN
AGREEMENT TO ARBITRATE. AFTER SIGNING THIS AGREEMENT, WE UNDERSTAND THAT
WE WILL NOT BE ABLE TO BRING A LAWSUIT CONCERNING ANY DISPUTE THAT MIGHT
ARISE WHICH IS COVERED BY THE ARBITRATION AGREEMENT, UNLESS IT INVOLVES A
QUESTION OF CONSTITUTIONAL OR CIVIL RIGHTS. INSTEAD, WE AGREE TO SUBMIT
ANY SUCH DISPUTE TO AN IMPARTIAL ARBITRATOR.
14. Relationship. Nothing in this Agreement shall be construed to
constitute either party as the agent of the other, nor shall either party have
any authority to bind the other in any respect, it being intended that each
shall remain an independent contractor responsible only for its own actions.
15. Notices. All notices, demands, requests, or other communications
required or authorized hereunder shall be deemed given sufficiently if in
writing and if personally delivered; if sent by facsimile transmission,
confirmed with a written copy thereof sent by overnight express delivery; if
sent by registered mail or certified mail, return receipt requested and postage
prepaid; or if sent by overnight express delivery:
If to ▇▇▇▇▇▇ ▇▇▇▇▇, to: ▇▇▇▇▇▇ ▇▇▇▇▇ Laboratories
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.C.
Eighth Floor, Bank ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
If to SSRI, to: System Sales Representatives, Inc.
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
P. O. Box ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ Technical Services, Inc.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
P. O. Box 403
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Downs ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PC
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. Box 99
St. Johnsbury, Vermont 05819-0099
or such other addresses and facsimile numbers as shall be furnished in writing
by any party in the manner for giving notices hereunder, and any such notice,
demand, request, or other communication shall be deemed to have been given as of
the date so delivered or sent by facsimile transmission, three days after the
date so mailed, or one day after the date so sent by overnight delivery.
16. Miscellaneous. This Agreement: (i) may be executed in any number of
counterparts, each of which, when executed by both parties to this Agreement,
shall be deemed to be an original, and all of which counterparts together shall
constitute one and the same instrument; (ii) shall be governed by and construed
under the laws of Delaware applicable to contracts made, accepted, and performed
wholly within Delaware, without application of principles on conflicts of law;
(iii) constitutes the entire agreement of the parties with respect to its
subject matters, superseding all prior oral and written communications,
proposals, negotiations, representations, understandings, courses of dealing,
agreements, contracts, and the like between the parties in such respect; (iv)
may be amended, modified, or terminated, and any right under this Agreement may
be waived in whole or in part, only by a writing signed by both parties; (v)
contains headings only for convenience, which headings do not form part, and
shall not be used in construction, of this Agreement; (vi) shall bind and inure
to the benefit of the parties and their respective legal representatives,
successors, and assigns, except that this Agreement may not be assigned except
with the prior written consent of the other party hereto; (vii) is not intended
to inure to the benefit of any third party beneficiary; and (viii) may be
enforced only in courts located within the state of Delaware, and the parties
hereby agree that such courts shall have venue and exclusive subject matter and
personal jurisdiction, and consent to service of process by registered mail,
return receipt requested, or by any other manner provided by law.
IN WITNESS WHEREOF, the parties have hereunto set their respective hands
and seals as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇ INCORPORATED
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice-President
SSRI:
SYSTEM SALES REPRESENTATIVES, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President