), a German-based company engaged in the development, manufacturing and sales of high pressure air and industrial gas compressor packages. Under the terms of the Exclusive Distribution Agreement, we were appointed the exclusive distributor of L&Ws complete product line in North America and South America, including the Caribbean (the
). Pursuant to an intercompany assignment, Brownies High Pressure Compressor Services, Inc., our newly-formed wholly-owned subsidiary (
), is party to the agreement. Through BHP we expect to conduct business and build the brand name L&W Americas/LWA, establishing sales, distribution and service centers for high pressure air and industrial gas systems in the dive, fire, CNG, military, scientific, recreational and aerospace industr ies. Our goal will be to build a network of jobbers, dealers, installers and high-pressure compressor distributors throughout the Territory by leveraging our know-how, brand awareness, complimentary products and creating sustainable distribution and core product OEM integration relationships.
Under the terms of the agreement, we were granted a non-exclusive, non-transferrable and irrevocable right to use certain of L&Ws trademarks in connection with the marketing, use, sale and service of the products in the Territory. We are obligated to actively promote the sales of the products in the Territory, with such promotional efforts to include, but not be limited to, advertising the products in appropriate trade publications within the Territory, participating in appropriate trade shows and directly soliciting orders from customers for the products. We are obligated to provide L&W with certain quarterly and annual reports and forecasts. We are free to establish our own pricing for the products, and are subject to certain annual minimum purchases.
The agreement is for an initial term of five years, and will automatically renew for one additional five year term unless terminated by either party upon one year written notice prior to the expiration of the then current term. Either party may terminate the agreement without cause upon one year prior written notice to the other party. In addition, L&W may terminate the agreement for cause upon 120 days prior notice to us, subject to certain cure periods.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BROWNIES MARINE GROUP, INC.
Date: August 9, 2017
/s/ Robert Carmichael
Robert Carmichael, Chief Executive Officer
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