EX-10.8
[LOGO] COLGATE-PALMOLIVE COMPANY ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-7499
Telephone ▇▇▇-▇▇▇-▇▇▇▇
Cable Address PALMOLIVE
June 30, 1996
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President
Anchor Advanced Products, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Dear Bob:
We are pleased to enter into an agreement whereby Anchor Advanced Products,
Inc., a Delaware corporation with its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Anchor"), will supply finished toothbrushes to
Colgate-Palmolive Company, a Delaware Corporation with its principal office at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Colgate"). This letter and its
Exhibits will constitute our agreement (collectively, the "Agreement").
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the following
meanings:
(a) "Components" - Any or all packaging materials, raw materials and work
in process used in the manufacture of the Products.
(b) "Contract Year" - July 1 through June 30 of any year of the Term.
(c) "Finished Toothbrush" - a Toothbrush packaged in a blister, folding
carton, cellophane overwrap and/or other primary and/or secondary container
specified by Colgate.
(d) "International" - All delivery locations which are not included in the
definition of "US." International Products are differentiated by those sold in
"Emerging" and "Existing" markets as such are defined by Colgate.
(e) "Inventory" - The total quantity of Components purchased by Anchor for
use in the manufacture of the Products.
[*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
(f) [*]
(g) "Products" - Finished Toothbrushes, as defined above, having stock
numbers listed on Exhibits A, B, C, and D hereto, as modified from time to time
by Colgate consistent with the terms of this Agreement.
(h) "Toothbrush" - a Class I medical device for human oral care, comprised
of a handle and bristled head.
(i) "Unit" - one (1) Finished Toothbrush
(j) "US" - The delivery locations of Colgate, its subsidiaries and
affiliates, including Colgate Oral Pharmaceuticals, Inc., located in the United
States, Canada or Puerto Rico.
2. TERM
(a) The term of the Agreement will be for a period of three (3) years
commencing with July 1, 1996 and ending with June 30, 1999 (the "Term") unless
sooner terminated pursuant to the terms hereof.
(b) This Agreement may be renewed by Colgate on the same terms and
conditions as the Term for up to three (3) successive one (1)-year terms (the
"First," "Second" and "Third Option Terms," respectively) upon notice to Anchor
of at least sixty (60) days prior to the expiration of the Term or the preceding
Option Term.
3. VOLUME
(a) Estimated target volumes for the Term will be as follows:
[*]
(b) Colgate shall provide Anchor by the fifteenth day of each month during
the Term with a monthly rolling forecast of the anticipated quantity of each
stock number of Finished Toothbrushes Colgate intends to purchase for the
following six-month period.
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The quantities given for [*] of such six-month rolling forecast [*]. Quantities
beyond [*] are for planning purposes only. Anchor and Colgate will mutually
agree upon delivery dates.
(c) Colgate will purchase from Anchor [*]. Any adjustments in estimated
target volumes based upon Colgate's then current market shares for each Contract
Year will be confirmed by June 15 of the prior Contract Year. Any variations in
actual volume from the estimated target volumes above will result in an
adjustment to Anchor, based upon its unabsorbed overhead, consistent with the
schedule attached as Exhibit E. Variations in target volumes for Products not
included on Exhibit E will be subject to the mutual agreement of the parties,
taking into consideration the adjustments for volumes set forth on Exhibit E.
The estimated target volumes above and the prices specified herein will apply to
both US and International Products.
4. PRICES
[*]
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5. PAYMENT TERMS AND DELIVERY
(a) Payment of invoices for US Products will be net 15 days after the last
day of the previous month, based on the total Units of Products shipped, as
entered by Anchor customer service into the Colgate SAP system, provided
however, that payment terms for Colgate Canada will be net 30 days from date of
invoice, until Colgate Canada implements the SAP system. Payment terms for
International Products will be net 60 days from date of invoice.
(b) Payment for all Products will be forwarded to the following lock box:
Anchor Advanced Products, Inc.
PO Box 3700-96
Boston, MA 02241-0796
(c) Payment for Products made by wire transfer shall be sent in accordance
with the following instructions:
ABA #▇▇▇-▇▇▇-▇▇▇
Credit A/C #550-05283
(d) Delivery of US Products shall be made via trucks in accordance with
Colgate's orders for delivery, F.O.B. Morristown, Tennessee. Delivery of
International Products will be F.O.B. Morristown, Tennessee. Colgate will have
the right to designate a carrier. Risk of loss or damage shall remain with
Anchor until delivery of Products to the carrier. Anchor will cooperate with
Colgate in any claim for loss or damage in transit that Colgate makes against a
carrier. Colgate will designate a carrier for International Products.
6. MATERIALS
(a) Regarding suppliers currently providing Components for the Products,
Colgate and Anchor will maintain existing cooperative sourcing initiatives,
including but not limited to joint negotiations where appropriate, for all
Components, except staple wire. In the event that Colgate and Anchor disagree on
the acceptability of the purchase prices of such Components, the final decision
on the selection of a supplier will be made by Colgate.
(b) Colgate and Anchor will jointly approve all new suppliers and/or
Components based upon consideration of relevant factors, including but not
limited to total cost, service, quality, machinability and uniqueness of
aesthetics or finished Product performance. The benefit of such changes will
accrue in accordance with existing procedures. For example, any and all expenses
incurred by Anchor to evaluate, test and qualify new suppliers/Products will be
borne solely by Colgate, if the benefit is exclusively for Colgate. If the
benefit accrues to Colgate and
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Anchor, Anchor and Colgate will share any and all expenses equally. Anchor will
not make any Components or supplier substitutions without prior written approval
from Colgate. Anchor agrees to use reasonable efforts to evaluate and qualify
new suppliers or Components recommended by Colgate.
(c) [*]
(d) Colgate and Anchor agree to work cooperatively to maintain the lowest
feasible Inventory of Components. Anchor and Colgate will agree on a maximum
Inventory level for each Component, using sixty (60) days as a guideline, which
agreed upon inventory levels will not be exceeded without Colgate's prior
written approval.
(e) Colgate agrees to provide Anchor with written approval of mutually
agreed upon minimum order quantities for Components. Such minimum order
quantities shall in no event exceed mutually agreed upon maximum Inventory
levels.
(f) Colgate agrees to provide Anchor with not less than 90 days' written
notice of any Product deletions, and not less than 60 days' notice of changes in
Product specifications. Upon receipt of such notification, Anchor will take such
steps as are reasonably necessary to avoid or limit Component or Product
obsolescence due to Product deletions or changes in specifications. Anchor will
notify Colgate in writing of the cost impact on the individual Component price
and the unit price of the Product. Colgate will provide Anchor with written
instructions no later than ten (10) days after receipt of such notification.
(g) Colgate may, from time to time, notify Anchor of a decrease in volume
forecasts which have been previously designated as firm. In such event, Anchor
will use reasonable efforts to revise or cancel orders for Products or
Components.
(h) [*]
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[*]
(i) [*]
(j) [*]
7. QUALITY
(a) Quality standards and Product specifications for Finished Toothbrushes
are incorporated herein by reference and are attached as Exhibit F.
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(b) Anchor continues to be committed to the goal of meeting Colgate's
quality requirements, [*]. Starting January 1, 1997, ▇▇▇▇▇▇ agrees to use
reasonable efforts to meet a goal of [*]. Anchor's reasonable efforts will
include making reasonable capital expenditures, as Anchor determines, where the
results justify the investment.
(c) Anchor will comply with the quality standards and Product
specifications set forth on Exhibit F. Anchor will also comply with the Product
testing protocol set forth on Exhibit G, attached, commencing January 1, 1997.
In addition, effective January l, 1997, Anchor will comply with the requirements
of the ▇▇▇▇▇ Statement on Endrounding, attached as Exhibit H. All changes to
Exhibits F, G and H must be agreed upon by Colgate and Anchor. [*]
(d) Colgate will review standards, specifications and procedures with
Anchor during each Contract Year for the purpose of soliciting Anchor
recommendations for changes which may improve the quality, performance and/or
total cost of the Products, as well as support or improve Anchor operations.
(e) Anchor agrees that its manufacturing facility is and at all times will
be a registered Medical Device Establishment as required by the Federal Food,
Drug and Cosmetics Act, as amended, with respect to the Products.
8. SAMPLES
Anchor will supply to Colgate, free of charge and shipped at Anchor's expense, a
total of 200 cases of Products in each Contract Year, to be specified by Colgate
as needed. For all additional cases of sample Products requested by Colgate but
not entered into the SAP system by Anchor, Anchor will be provided with written,
pre-approved authorizations, classified as EMO's (experimental manufacturing
orders) or MSA's (miscellaneous sample authorizations). Anchor invoices for such
samples will include the Product unit price, Product case price and shipping
charges.
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9. KEY PERFORMANCE INDICATORS ("KPIs")
[*]
10. INVESTMENT FUND
Colgate and Anchor will continue the Investment Fund in accordance with current
procedures. Anchor's and Colgate's capital investments will be returned before
savings are shared. Thereafter, Investment Fund savings from Colgate-initiated
material specification changes (not resulting in permanent process changes) will
be [*] Colgate's. All reasonable, actual expenses incurred by Anchor to
evaluate, test, qualify and approve such material specification changes will be
the responsibility of Colgate. Investment Fund savings resulting in permanent
process changes will be shared by Colgate and Anchor equally.
11. EQUIPMENT MAINTENANCE
(a) Colgate and Anchor acknowledge that the molds, bristling setups and
related equipment used in the manufacture of the Products described in Exhibits
A, B, C and D are the sole and exclusive property of Colgate (collectively the
"Colgate Owned Equipment"). For the convenience of Anchor and at no further
expense to Colgate, Anchor will have the right to locate the Colgate Owned
Equipment at the premises of Anchor at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Except as provided in the preceding
sentence, and except for the sole purpose of performing maintenance, none of the
Colgate Owned
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Equipment will be relocated by Anchor without the prior written approval of
Colgate. It is understood that Colgate will have the right to remove the Colgate
Owned Equipment from the premises of Anchor at any time, in its sole discretion,
upon reasonable notice to Anchor, except if such removal will substantially
impede Anchor's performance under this Agreement and Anchor so notifies Colgate.
Upon such notification, Anchor and Colgate agree to develop and execute an
equipment removal plan which will meet the objectives of Colgate and maintain
Anchor's ability to satisfy Colgate's forecasted requirements or change such
requirements of Anchor pursuant to this Agreement. Upon any such removal,
Colgate will pay Anchor its reasonable, actual costs of disassembly and freight
to a location of Colgate's choice. At its sole option, Colgate may within two
(2) years after the termination or expiration of this Agreement request that
Anchor destroy the Colgate Owned Equipment and provide notification of such
destruction. After such two (2) year period, if Colgate has not relocated the
Colgate Owned Equipment, Colgate will be deemed to have abandoned the Colgate
Owned Equipment.
(b) The Colgate Owned Equipment will be maintained, and regular preventive
maintenance will be performed, according to the Colgate Equipment Maintenance
Protocol, which is attached as Exhibit I.
(c) Anchor agrees to conduct day-to-day preventative and operational
maintenance, so that all express conditions relating to preventative and
operational maintenance required by manufacturers' written warranties, if any,
given with the Colgate Owned Equipment are fulfilled so that such warranties
will remain in effect for their stated term; provided that, Anchor has received
a copy of such warranty and that any extraordinary maintenance will be provided
by Anchor at Colgate's expense with Colgate's prior consent, which consent will
not be unreasonably withheld or delayed. Anchor will ▇▇▇▇ ▇▇▇▇▇▇▇ monthly
(payable net 30 days) for maintenance performed at Colgate's cost pursuant to
this Paragraph 11 (c) .
(d) Anchor acknowledges that the Equipment will be used solely for the
benefit of Colgate to produce Products on behalf of Colgate.
(e) Identification tags supplied by Colgate containing information relating
to the ownership of the Colgate Owned Equipment will be affixed by Anchor. Such
tags will not be removed by Anchor without prior written approval of Colgate.
(f) Anchor agrees that it will not impair the right, title and interest of
Colgate in and to the Colgate Owned Equipment, nor will it allow any lien or
encumbrance to be levied upon the Colgate Owned Equipment. During the term of
this Agreement, and until the Colgate Owned Equipment is removed upon Colgate's
instruction or
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abandoned, Colgate will carry and maintain at its cost all-risk property
insurance covering the Colgate Owned Equipment at full replacement cost.
(g) Colgate will have the right, at reasonable times during normal business
hours and upon reasonable notice, to inspect the Colgate Owned Equipment to
ensure that it is being maintained in accordance with Equipment Maintenance
Protocol, and utilized in a manner consistent with the interests of Colgate.
(h) Anchor will not alter or modify the Colgate Owned Equipment without the
prior consent of Colgate. Any such alterations or modification will become the
property of Colgate.
12. CONFIDENTIALITY AND SECURITY
(a) Confidentiality.
(i) Colgate and Anchor agree that each will not disclose to any third
party other than its attorneys or agents or utilize for its own
benefit or that of any third party, proprietary and confidential
information obtained from the other party and designated in
writing as confidential (including formulae, ingredients,
marketing information, manufacturing processes, samples for
testing and storage, records and charts) unless the parties
subsequently enter into contractual arrangements providing for
the use of such information. The term "confidential information"
as used herein will include this Agreement, including all
Exhibits, and all forecasts related hereto, provided that the
provisions of this Paragraph 12(a) shall not apply to any
information:
(l) that is now public knowledge or which hereafter becomes
public knowledge through no fault of the recipient thereof;
or
(2) that is properly provided to the recipient thereof without
restriction by an independent third party; or
(3) that the recipient can show was already lawfully in its
possession at the time of receipt from the disclosing party
hereto; or
(4) that is developed by the recipient thereof in the course of
work by employees of such party or related companies
independent of the other party's confidential information;
or
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(5) that is required to be disclosed by court order or by
governmental subpoena or regulation, including, without
limitation, regulations of the Securities and Exchange
Commission; provided, however, that (A) the recipient shall
give prompt written notice of such requirement to the
disclosing party, (B) the recipient shall furnish only that
portion of the confidential information which it is advised
by counsel it is legally required to disclose (the recipient
will consult with the disclosing party regarding the nature
and wording of such disclosure but will not be bound by the
opinion of the disclosing party), and (C) the recipient
shall exercise its best efforts to obtain assurance that
confidential treatment will be afforded such confidential
information as is disclosed, except that in the case of a
public offering, ▇▇▇▇▇▇'s obligation to obtain assurance of
confidential treatment shall be limited to seeking such
treatment as might be granted under Rule 406 of the
Securities Act of 1933, as amended; or
(6) that constitutes this Agreement and its Exhibits that is
shown to a party or parties referred to in Section 18(c),
below; provided that Anchor discloses to Colgate in writing
(subject to a written agreement with terms reasonably
acceptable to Colgate not to disclose such identities or use
such information other than for its determination under this
Paragraph 12(a)(i)(6)) at least two (2) business days prior
to disclosure of such information to such party or parties
the identity of such party or parties and Colgate does not
inform Anchor within two (2) business days after receiving
such notice that such party's or parties' business is
materially or directly competitive with any of Colgate's
businesses; and provided further that Anchor makes such
disclosure subject to a confidentiality and non-disclosure
agreement with such party or parties; or
(7) that is a synopsis or redacted copy of this Agreement
comprised of a description of or terms relating to: (a) the
Term; (b) the Products; (c) the materials cost passthrough;
(d) the labor cost passthrough;
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(e) the reduced volume impact provisions; (f) the shared
savings provisions; (g) the alternative supplier
provisions; and (h) the parties.
(ii) The obligations of confidentiality and non-disclosure under this
Paragraph 12(a) shall survive for three and one-half (3 1/2)
years from the date of transmission of the confidential
information or the termination of this Agreement, whichever is
later.
(iii) Any and all confidential information in tangible form passed to
one party hereto hereunder shall, on request at the termination
of this Agreement, be immediately returnable to the other party,
but one copy of all such confidential information may be retained
by the receiving party's attorneys to provide a record of
disclosure hereunder.
(iv) Each party hereto shall restrict access to the disclosed
confidential information to the minimum number of its employees
and agents reasonably necessary for proper evaluation and/or use
thereof in the performance of this Agreement.
(b) Security.
(i) As may be requested by Colgate in writing, production and storage
areas for Colgate Products designated by Colgate as "New
Products" or "Classified" will be secured by Anchor by physical
segregation by screening or other similar methods, as approved by
Colgate. Security arrangements will be designated by Anchor,
subject to prior written approval by Colgate not to be
unreasonably withheld. Colgate will reimburse Anchor for the
actual cost of implementing new approved security methods and
arrangements upon the submission of documentation to Colgate.
(ii) Anchor operating personnel will be trained in confidential
procedures reasonably approved by Colgate and access by Anchor
personnel will be restricted to operating personnel dedicated to
working on Colgate production and to appropriate Anchor
management personnel.
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13. REJECTION AND RETURN
Colgate will have the right to inspect the Product within thirty days after
delivery to determine whether it conforms to the specifications. If any of the
Products supplied hereunder (i) do not conform to the specifications, or (ii)
are defective in material or workmanship ("Defective Products"), then Colgate
will notify Anchor within thirty (30) days after delivery, and, if deemed by
Colgate to be rejectable hereunder, return them to Anchor, at Anchor's expense,
and as the exclusive remedy for such non-conforming Products receive either a
credit or refund of the purchase price paid, or replacement products, all in
accordance with Colgate's direction set forth in the foregoing notice, provided
that Anchor is able to verify the Defective Products.
14. [*]
15. INDEMNIFICATION
(a) Anchor agrees to indemnify and hold Colgate, its subsidiaries and
affiliates, officers, directors, employees and agents harmless from and against
any and all losses, liabilities, damages, actions or claims (including, without
limitation, amounts paid in settlement and reasonable costs of investigation and
reasonable attorneys' fees, resulting from third-party claims for (i) a breach
of its representations under Paragraph 19, below, (ii) bodily injury and
property damage arising out of or resulting from the failure of the Products to
meet the specifications, including the cost of any Product recall because of
such failure, determined to be necessary by Colgate in its sole reasonable
judgment in accordance with customary commercial practices, (iii) loss, injury
or damage incurred by third parties or by Colgate personnel or damage to such
persons' property while on the premises of Anchor, (iv) any act or omission by
Anchor with respect to the Product, (v) any claim that the Products, or the use
or sale of Products, as delivered to Colgate, infringes any patents or other
proprietary rights of a third party, including without limitation, trade
secrets, trademarks and copyrights, and (vi) breach of its representations under
Paragraph l9, below. It is understood that
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such indemnification by Anchor applies only if any such claim(s) does not arise
out of Colgate's act, omission or wrongful conduct or Anchor's compliance with
Colgate specifications or requirements in connection with Products or their
manufacture.
(b) Colgate agrees to indemnify and hold Anchor, its subsidiaries and
affiliates, officers, directors, employees and agents harmless from and against
any and all losses, liabilities, damages, actions or claims (including, without
limitation, amounts paid in settlement and reasonable costs of investigation and
reasonable attorneys' fees, resulting from third-party claims for (i) damage to
property or person which may be asserted against Colgate or Anchor due to
specifications, including, without limitation, graphics, provided by, or
requirements of Colgate, (ii) trademark and patent infringement or infringement
of other intellectual property of others by specifications provided by or
requirements of Colgate, (iii) matters in connection with a warranty made or
given by Colgate to a third party; and (iv) breach of its representations under
Paragraph 19, below.
(c) The party seeking indemnification ("Indemnitee") shall notify the
indemnifying party ("Indemnitor") within ten (10) business days of receipt of a
claim, demand, suit or action. The Indemnitor shall have the right to provide
counsel of its own choosing and the Indemnitee shall cooperate in providing any
information and assistance reasonably required in defending against the
claim(s). The Indemnitor shall have the sole right and discretion to settle,
compromise, or otherwise dispose of the claim; provided, however, that, at its
own expense, the Indemnitee shall have the right to participate in, but not
control, the defense against the claim and all negotiations for settlement,
compromise, or other disposal of the claim, provided, however, that neither
party shall agree to any settlement of a claim without the consent of the other
party, which consent shall not be unreasonably withheld, and any such settlement
shall contain an unconditional release of the Indemnitee.
(d) Except as expressly provided in Paragraphs 15(a) and (b), above, in no
event will Colgate or Anchor be liable to the other for indirect, special,
incidental, punitive or consequential damages or loss of savings or profits,
under any legal theory, absent a finding of willful misconduct. This limitation
cannot be waived or amended by any person, except pursuant to Paragraph 22(a),
below, and will be effective even if Colgate, Anchor or either of their
respective representatives has been advised of, or might have anticipated, the
possibility of such damages.
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16. INSURANCE
Anchor will, for the Term of this Agreement and any Option Term, have in full
force and effect at its expense comprehensive general liability insurance
including product liability/completed operations, contractual liability and
property damage, naming Colgate as an additional insured thereon (other than
with respect to Anchor's property), said insurance policies having minimum
limits of not less than five million dollars (55,000,000) and all risk property
insurance covering the full value of Anchor's building, machinery, equipment and
work-in-process. Anchor will additionally, for the Term of this Agreement, carry
and maintain in full force and effect workers' compensation insurance to the
statutory limits required by the State of Tennessee and employers' liability,
insurance in limits not less than one million dollars ($1,000,000). Anchor will
furnish Colgate with certificates of said comprehensive general liability,
products liability, contractual liability and property damage insurance naming
Colgate as an additional insured thereon as herein provided, and will provide to
Colgate thirty (30) days' notice prior to written notice of cancellation or
material changes in said insurance policies.
17. ACCOUNTING AND ADMINISTRATION
Anchor will be provided with written approval, which includes but is not limited
to approval by e-mail, prior to commitment of funds for any and all items to be
invoiced to Colgate (other than Products as defined in this Agreement). All
invoices for artwork and/or artwork related changes will be submitted no later
than forty-five (45) days after work has been completed and will be accompanied
by copies of supplier invoices. All invoices for other Anchor services will
include copies of the Colgate spending authorizations and substantiation of
services rendered. Anchor will provide, no later than 15 days after the end of
every calendar quarter, a report on total number of Units of Products (excluding
samples) supplied to Colgate.
18. TERMINATION UPON CERTAIN EVENTS
(a) This Agreement may be terminated by Colgate or Anchor immediately upon
written notice to the other if one or more of the following events occurs:
(i) The other party ceases operations or there in instituted against
it as debtor any proceeding (voluntary or involuntary) in
bankruptcy or for dissolution, liquidation, reorganization,
arrangement or the appointment of a receiver, trustee or judicial
administrator (or the equivalent thereof), or any other
proceeding for the relief of debtors, if, in the case of an
involuntary proceeding, the same will not have been dismissed,
stayed or bonded within ninety (90) days after its institution;
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(ii) The other party makes an assignment for the benefit of, or
arrangement with, its creditors or admits in writing its
inability to pay its debts as they become due;
(iii) If the other party commits a material default in any of the
material terms or obligations of this Agreement (which will not
include failure of Anchor to meet specifications) the
non-defaulting party shall give the defaulting party notice
specifying with particularity the default and the circumstances
surrounding the default. If the defaulting party shall fail to
cure, or, other than with respect to a default in the timely
payment of the purchase price for Products, to take substantial
steps toward curing and diligently proceed to cure the noticed
default within twenty (20) days after receipt of such notice (ten
(10) business days if such default is for the nonpayment of the
purchase price of Products) or, in any event, if the defaulting
party fails to cure such default, other than with respect to a
default in the timely payment of the purchase price for Products,
within sixty (60) days after such notice, the non-defaulting
party shall have the right to terminate this Agreement by giving
the defaulting party further notice at least ten (10) days prior
to the effective date of termination set forth in such further
notice.
(iv) The other party purports to assign its rights and obligations
hereunder in violation of Paragraph 21 hereof.
(b) [*]
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[*]
(c) Upon receiving actual notice of any change or contemplated change in
the beneficial ownership of more than twenty-five (25%) percent of Anchor's
outstanding voting shares, or prior to undertaking a sale of all or
substantially all of its assets (other than changes in ownership resulting from
transfers of such capital stock, or sale of such assets, to, between or among
shareholders of Anchor who are shareholders on the date hereof, or to, between
or among shareholders of Anchor who are shareholders on the date hereof, or to,
between or among persons controlled by, controlling or under common control with
such shareholders), Anchor will promptly notify Colgate in writing of the
identity of the party or parties or potential party or parties to, and other
relevant particulars of, such change of ownership or sale or contemplated change
or sale, as the case may be (subject to a written agreement with terms
reasonably acceptable to Colgate not to disclose such identities or use such
information other than for its determination under this Paragraph 18(c)). If
such change of ownership or sale is made or contemplated to be made to a party
or parties whose business is materially or directly competitive with any of
Colgate's businesses, Colgate must give notice within fifteen (15) business days
after it receives the notice from Anchor if Colgate determines that it will
exercise its right, hereby given, to terminate this Agreement prospectively not
less than ninety (90) days nor more than one hundred eighty (180) days after the
date such change is effected to such party or parties identified by Colgate as
being a material or direct competitor. A public offering of Anchor capital stock
will not be cause of notice by Anchor and will not give rise to any right of
Colgate under this Section 18(c).
(d) Termination of this Agreement as provided above will not relieve either
party of any obligation accruing prior to the effective date of such
termination.
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(e) Colgate's or Anchor's failure to terminate under a provision of
Paragraph 18 of this Agreement will not be deemed a waiver of its respective
rights to terminate in respect thereof or otherwise limit its respective rights
to enforce the obligations of the other party.
19. REPRESENTATIONS
(a) Anchor and Colgate each represents and warrants as follows:
(i) No Conflict. Neither this Agreement nor compliance with the
Agreement's terms and provisions will (i) violate any United
States law, statute, rule or regulation, or any order of any
court or governmental instrumentality, (ii) conflict with, result
in any breach of, constitute a default under, or result in any
lien upon any of its property or assets pursuant to the terms of
any indenture, mortgage, deed of trust, license, franchise,
permit, agreement, patent or other instrument to which it is a
party or by which any of its property or assets is subject, or
(iii) violate its Certificate of Incorporation or By-Laws.
(ii) Approval. Except as expressly required by this Agreement, no
order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by,
any governmental or public body or authority, or any subdivision
thereof, or any other person or entity, is required to authorize,
or is required in connection with (i) the execution, delivery and
performance by it of this Agreement or (ii) the legality,
validity, binding effect or enforceability against it of this
Agreement.
(iii) Legal Compliance. It will comply with all federal, state and
local laws, including, without limitation, the Food, Drug and
Cosmetics Act (the "Act"), rules, executive orders and
regulations applicable to the performance of its obligations
under this Agreement, including, without limitation, the
regulations of the Food and Drug Administration applicable to
Products. The parties acknowledge that the Act requires that no
Product is or will be at the time of delivery adulterated or
misbranded within the meaning of the Act.
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(b) Title. Anchor represents and warrants that it will convey good title to
the Products delivered under this Agreement free from, and clear of, any liens
or encumbrances at point of delivery, subject to full payment for such Products.
(c) Colgate's exclusive remedies for breach of Anchor's warranties and
representations in Paragraph 19 with respect to Products shall be as set forth
in Paragraph 13, above, and with respect to third parties, in Paragraph 15(a),
above. Anchor's representations and warranties given in this Agreement are given
only to Colgate and Anchor shall have no obligation for any warranty given by
Colgate with respect to Products. In no event shall Anchor be liable for the
Device Master Record to the extent that Colgate is responsible for the design,
specification or development of Products or for good manufacturing practices to
the extent that they are subject to the direction or control of Colgate.
20. FORCE MAJEURE
(a) Except with respect to the obligation to pay money to a party
hereunder, neither party will be liable for delay or failure in the performance
of this Agreement if such delay or failure arises solely from any one or more of
the following matters: (i) fires, floods, explosions or other catastrophes; (ii)
strikes; (iii) freight embargoes; or (iv) any other similar causes, beyond the
reasonable control of the party concerned; provided that the party claiming the
benefit of this Paragraph 20 gives notice and reasonably full particulars of
such reason to the other party promptly after occurrence of the event relied
upon, and exercises reasonable and persistent diligence to cure such cause and
resume performance. The time for performance by such party shall be so excused
only for as long as is necessary, but not in any event for a period exceeding
three (3) months. After three (3) months, the other party may at any time
thereafter, provided such performance is still excused, terminate this Agreement
immediately upon written notice to the excused party without further liability
hereunder. It is understood and agreed that the settlement of strikes or
lockouts shall be entirely within the discretion of the party having the
difficulty and that the requirement that any reason shall be remedied with all
reasonable dispatch shall not require the settlement of strikes or lockouts by
acceding to demands when such course is inadvisable in the discretion of the
party having the difficulty. When the event operating to excuse performance by
either party shall cease, this Agreement shall continue in full force and effect
until its expiration or earlier termination as provided herein.
(b) In the event of a force majeure, Colgate and Anchor agree to
communicate and cooperate in seeking to avoid or minimize potential interruption
of supply and jointly to develop mutually acceptable contingency plans in the
spirit of this Agreement.
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(c) In the event of a force majeure resulting in a partial inability of
Anchor to supply Products to its customers, including supplying the Product to
Colgate, Anchor shall fairly allocate supplies of the Products to Colgate in
proportion to the percent of Colgate business relative to Anchor's total
toothbrush business in a manner not inconsistent with that afforded its best
customers.
21. ASSIGNABILITY
This Agreement is personal to the parties and may not be assigned or transferred
by either party without prior written agreement of the other party; provided,
however, that either party may upon notice assign or transfer the Agreement in
part or in total to any of its subsidiaries or affiliated companies, provided
that the parties, their successors and permitted assignees hereto will remain
liable for performance of all terms and conditions of this Agreement. A transfer
of the capital stock or substantially all of the assets of Anchor or a public
offering and resulting sale of stock shall not be deemed a transfer or
assignment by Anchor for purposes of this Section 21, however, Colgate will have
the right to terminate this Agreement as set forth in Section 18(c) above
22. MISCELLANEOUS
(a) Amendments. This Agreement may be amended or modified only by a written
instrument executed by each party hereto expressly stating that it is an
amendment to the terms of this Agreement. Without limiting the generality of the
foregoing, all sales and purchases of Products contemplated by this Agreement
shall be made solely pursuant to the terms of this Agreement without
consideration of any different or additional terms of any purchase order or
sales acknowledgment or other form of either party and any such additional or
different terms are hereby objected to.
(b) Right to Names. Nothing contained in this Agreement will be construed
as conferring any right to use in advertising, public or other promotional
activities any name, trade name, trademark or other designation (including any
contraction, abbreviation or simulation of any of the foregoing), or, except as
otherwise specifically provided herein patents or other patent rights of either
party to the other.
(c) Counterparts and Headlines. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same agreement. The headings of sections
and paragraphs of this Agreement have been inserted for convenience only, and do
not constitute or modify any of the terms or provisions hereof.
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(d) Severability. If any provision(s) of this Agreement is held to be
invalid, the validity of the remaining provisions will not be affected.
(e) Independent Contractors. The status of each of the parties under this
Agreement will be that of independent contractor. Neither party will have the
right to enter into any agreements on behalf of the other nor will it represent
to any person, firm or corporation that it has such right or authority.
23. Arbitration. (a) Subject to sub-paragraphs (b) and (c) below, any
controversy or claim arising out of or relating to the Agreement or the breach,
termination or invalidity thereof (except as to disputes with respect to
indebtedness arising out of the sale of Products), will be settled by
arbitration before three (3) arbitrators in accordance with the rules of the
American Arbitration Association ("AAA") then in effect, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction. Within fifteen (15) days after the commencement of arbitration,
each party shall select one person to act as arbitrator, and the two selected
shall select the third arbitrator within ten (10) days of their appointment. If
the arbitrators selected by the parties are unable or fail to agree upon the
third arbitrator, the third arbitrator shall be selected by the American
Arbitration Association. At least one of the arbitrators selected will be an
attorney actively engaged in the practice of law for at least ten (10) years and
familiar with procurement agreements. Any such arbitration will be conducted in
New York, N.Y. The arbitrators shall apply New York law, regardless of its
choice of law principles. The reasonable expenses of the arbitration shall be
borne equally by the parties. Each party shall bear the cost of its counsel and
other experts.
(b) The arbitrators will have no authority to make any ruling, finding or
award that does not conform to the terms and conditions of this Agreement.
(c) Either party, before or during any arbitration, may apply to a court
having jurisdiction for a temporary restraining order or preliminary injunction
where such relief is necessary to protect its interests pending completion of
the arbitration proceedings. Arbitration will not be required for actions for
recovery of specific property.
(d) Neither party nor the arbitrators may disclose the existence or results
of any arbitration hereunder without the prior written consent of both parties.
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(e) Prior to initiation of arbitration or any other form of legal or
equitable proceeding, the aggrieved party will give the other party written
notice in accordance with Section 24. describing the claim and amount as to
which it intends to initiate action.
24. Notices
Any communication to be given pursuant to this Agreement will be presumed to
have been made when delivered to the addressee in person, or, if mailed, when
deposited in the mail, by first class, registered or certified mail, return
receipt requested and postage prepaid, or, if faxed, when faxed by means
confirming receipt addressed as follows:
If to Anchor: Anchor Advanced Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Piliero ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax (▇▇▇) ▇▇▇-▇▇▇▇
If to Colgate, to the following address, to the attention of Director-Materials
Sourcing:
Colgate-Palmolive Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10023
Fax (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Division General Counsel,
Colgate US
Colgate-Palmolive Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10023
Fax (▇▇▇) ▇▇▇-▇▇▇▇
25. GOVERNING LAW
This Agreement will be interpreted in accordance with the laws of the State of
New York as applied to contracts to be performed entirely in the State of New
York.
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26. ENTIRE AGREEMENT
The Exhibits to this Agreement are an integral part hereof and are hereby
incorporated by reference. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and THERE ARE NO
AGREEMENTS, UNDERSTANDINGS, REPRESENTATIVES OR WARRANTIES (INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE), EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT. This
Agreement supersedes all previous communications, representations,
understandings and agreements.
Please sign below to indicate your acceptance of this Agreement together with
its Exhibits.
COLGATE-PALMOLIVE COMPANY
By /s/
-----------------------
Date 7/12/96
---------------------
ANCHOR ADVANCED PRODUCTS, INC.
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Tit1e Exec. Vice Pres.
-----------------
Date 7/10/96
-----------------
[*] Exhibits A (57 pages), B (39 pages), C (20 pages), D (42 pages), E (1 page),
F (30 pages), G (2 pages), H (1 page) & I (1 page) have been omitted in their
entirety.
23