EXHIBIT 10.6
DISTRIBUTOR AGREEMENT
THIS DISTRIBUTOR AGREEMENT (the "Agreement") is made by and between
Electric City Corp., a Delaware corporation ("Company") and Electric City of
Illinois LLC ("Distributor") this 7th day of September, 1999.
RECITALS
A. The Company's Business. The Company is presently engaged in the
business of selling an energy efficiency device, which is referred to as an
"Energy Saver" which may be improved or otherwise changed from its present
composition (the "Products"). The Company may engage in the business of selling
other products or other devices other than the Products, which will be
considered Products if Distributor exercises its options pursuant to Section 7
hereof.
B. Representations. As an inducement to the Company to enter into this
Agreement, the Distributor has represented that it has or will have the
facilities, personnel, and financial capability to promote the sale and use of
Products. As an inducement to Distributor to enter into this Agreement the
Company has represented that it has the facilities, personnel and financial
capability to have the Products produced and supplied as needed pursuant to the
terms hereof.
C. The Distributor's Objectives. The Distributor desires to become a
distributor for the Company and to develop demand for and sell and distribute
Products solely for the use within the State of Illinois, including but not
limited to public and private entities, institutions, corporations, public
schools, park districts, corrections facilities, airports, government housing
authorities and other government agencies and facilities (the "Market").
D. The Company's Appointment. The Company appoints the Distributor as
an exclusive distributor of Products in the Market, subject to the terms and
conditions of this Agreement.
1. ESTABLISHMENT OF DISTRIBUTORSHIP
1.1 Grant and Acceptance. Company hereby appoints
Distributor as Company's exclusive distributor within
the Market and grants to Distributor the exclusive
right to sell and distribute Products within the
Market, and Distributor hereby accepts such
appointment and such grant, in accordance with the
terms and conditions of this Agreement. Distributor
acknowledges that customers of other distributors of
the Products may have sites, locations or operations
in the Market, which will use the Products.
Distributor will sell any and all Products required
by such customers in the Market to those customers.
Distributor also acknowledges that if its customers
have sites, locations or operations outside the
Market, in the market of another exclusive
distributor of the Products, those customers will be
required to purchase products from the applicable
exclusive distributor in that market; otherwise,
Distributor shall be free to sell to its customers in
any market which does not have another exclusive
distributor.
1.2 License. The Company hereby grants the Distributor
the right to do business and use the name "Electric
City of Illinois" or a similar variation thereof
(collectively the "Names") for use under this
Agreement. Distributor may file with the appropriate
state and local authorities assumed name certificates
as required. Copies of all documents relating to the
use of the Names shall be forwarded to the Company.
Upon termination of this Agreement Distributor shall
have no further right to the Names and said License
to use the Names shall terminate. Distributor shall
have no right to sublicense the Names or to do
business under any other names without the Company's
prior approval in writing. The parties acknowledge
that the terms herein consist of there terms for
Illinois. At the request of either party, a new
agreement reflecting the terms and conditions of this
Agreement, may be executed for each state or entity
representing each state.
1.3 Term. The term of this Agreement shall be ten (10)
years (the "Term") which shall commence on the date
upon which the Company delivers to Distributor the
last Sample, as defined hereinafter. If Distributor
complies with all of the terms of this Agreement, the
Agreement shall be renewable on an annual basis for
one (1) year terms for up to another ten (10) years
on the same terms and conditions as set forth herein.
All renewals of this Agreement shall be on the same
terms and conditions as are set forth herein.
1.4 Company's Obligation. Company shall sell and deliver
as provided in Section 2.3 of this Agreement to
Distributor on the price terms set forth in this
Agreement or as amended from time to time such
quantity of Products as Distributor from time to time
orders from Company. Company shall promote and
advertise the Products generally, at its own expense,
and shall furnish Distributor copies at all
advertisement and promotional materials.
1.5 The Distributor's Obligation. The Distributor, at its
own expense, shall promote the distribution, sales,
and use of Products in the Market.
1.6 Distributor's Terms and Minimum Expectations. In
order to maintain the exclusive rights to sell,
lease, distribute and service Products in the Market,
the Distributor must use all commercially reasonably
efforts to purchase for sale to subdistributors the
following minimum quantities of the Products from the
Company:
On the commencement of the Term Distributor will issue to the Company
an irrevocable letter of credit ("LC") in the amount of Five Hundred Thousand
Dollars ($500,000), the form of which is attached hereto as Exhibit A and
incorporated herein by reference. The LC shall have a two (2) month term, and
shall be renewed for five (5) consecutive bimonthly periods. A minimum of a
$250,000.00 purchase order must be received by Company by the first of each
month for a total (12) month period. The Company may draw funds from the LC to
pay for Distributor's purchases, which are not paid according to the terms in
Section 2.7. Prices for the EnergySaver units are
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provided by the Company as Exhibit C. The Company will be entitled to draw
against the LC pursuant to the terms of the LC.
(A) 375 units in the first Product Year (1999)
(B) 750 units in the next succeeding Product Year; (2000)
(C) 937 units in the next succeeding Product Year; (2001)
(D) 1,171 units in the next succeeding Product Year; (2002)
(E) 1,463 units in the next succeeding Product Year; (2003)
(F) 1,828 units in the next succeeding Product Year; (2004)
(G) 2,285 units in the next succeeding Product Year; (2005)
(H) 2,856 unit each in the lat three years of
the initial Term of this Agreement and any
renewals thereof.
For purposes of this Agreement, a Product Year shall be the twelve (12)
month period following the commencement of the initial Term of this Agreement
and each twelve (12) months thereafter. Distributor's expected sales shall
include the purchase of the Samples as defined hereinafter.
Sales in excess of the expected sales which are actually made in a
Product Year may be applied to meet the expectations for the next Product Year.
Any such carry-over from one year to the next Product Year may not be considered
in determining whether there is a carry-over from that next Product Year. Thus,
by way of example and not limitation, if there was an expectation of 50 in year
one and 200 for year two and 60 units are sold in year one and 195 units are
sold in year two, the expectation for year two will have been met, but there
will be no carry-over to year three. If the Distributor shall fail to purchase
the minimum number of units in any year, the Distributor's exclusive rights to
sell and distribute the Product in the Market, may at Company's sole option, be
reevaluated.
Company agrees that Distributor shall not be liable or subject to
reevaluation for failure to meet expectations due to any occurrence beyond
Distributor's reasonable control, including, but not limited to, Acts of God,
fires, floods, wars, sabotage, accidents in shipping, labor disturbances,
weather conditions, governmental regulation, lack of Company performance, delay
by Company, failure of Company to honor warranties or otherwise materially
support the Products.
The aggregate units to be sold on an annual basis described above are
for the Illinois distributorship on an aggregate basis.
1.7 Relationship of Parties. The relationship between the Company
and the Distributor
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is that of vendor and vendee. This Agreement does not create
the relationship of principal and agent between the Company
and the Distributor for any purpose whatsoever. This Agreement
shall not be construed as constituting the Distributor and the
Company as partners, joint venturers, or as creating any other
form of legal association or arrangement which would impose
liability upon one party for the act or omission of the other
party. Neither party is granted any express or implied right
of authority by the other party to assume or to create any
obligation or responsibility on behalf of or in the name of
the other party, or to bind the other party in any manner or
thing whatsoever.
2. PURCHASE OF PRODUCTS
2.1 Orders. The Distributor shall order Products from the Company
on a purchase order form mutually acceptable to the Company
and Distributor and which is consistent with Exhibit B hereto,
and which incorporates the terms and provisions of this
Distributor Agreement. The Distributor shall not order or
purchase Products from any source other than the Company. All
orders shall be subject to acceptance and confirmation by the
Company. Distributor may cancel an order that is properly
cancelled by Distributor's customer, unless the Company has
commenced production which is in any way customized for that
customer. The Distributor shall annually provide the Company
with a non-binding forecast of orders for Products for the
succeeding 12-month period.
2.2 Shipment. The Company and the Distributor shall jointly
determine shipment dates. The Company shall use commercially
reasonable efforts to ship promptly all orders for Products
received from the Distributor. In addition to any other remedy
which this Agreement provides to Distributor against Company,
if Company fails to deliver or delays in delivering Products
as were ordered by Distributor within 45 days after their
required delivery date, and if as a result of such failure or
delay Distributor loses its customer's orders for those
Products, the number of units which Distributor ordered but
were not timely delivered to Distributor or to Distributor's
customer will be credited against Distributor's minimum
expectation as specified on Section 1.6 of this Agreement. The
Company may refuse to accept a purchase order on the grounds
that it cannot meet the delivery schedule therein, and if as a
result of such failure or delay Distributor loses its
customer's orders for those Products, the number of units
which Distributor ordered but were not timely delivered to
Distributor or to Distributor's customer will be credited
against Distributor's minimum. Distributor shall make
reasonable efforts to notify the Company of the proposed
delivery schedule before accepting a customer order and shall
give the Company written notice of any customer purchase
orders which imposes liability for late shipment and neither
the Distributor nor the Company shall have a liability for
consequential or liquidated damages pertaining to late
delivery unless Company specifically acknowledges and agrees
in writing to the same. The Distributor agrees that the
Company shall not be liable for its failure to perform due to
any occurrence beyond the Company's reasonable control,
including, but not limited to, acts of God, fires,
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floods, wars, sabotage, accidents in shipping beyond the
Company's control, labor strikes other than strikes against
the Company itself, weather conditions or foreign or domestic
government regulation or authority which directly affects
Company's ability to deliver Product.
2.3 Delivery. Other than "drop ship" deliveries, all deliveries
made pursuant to this Agreement shall be FOB the Company's
facilities located within the continental United States by a
carrier authorized by the Distributor.
2.4. Prices.
(A) Prices For Basic Units. The prices for Products in
the first Product Year are supplied by Company as
Exhibit C.
(B) Inflation Price Adjustment. The prices set forth in
Section 2.4(a) shall be subject to adjustment
annually on the first day of each Product Year
beginning in the calendar year 2000 and on the first
day of each succeeding Product Year for the remainder
of the Term and all renewals of this Agreement in
proportion to the increase or decrease in the
Consumer Price Index (CPI) as compared to the CPI as
it existed on the first day of the Term of this
Agreement. The Company also reserves the right to
increase or decrease the price per unit based on
Company wide changes in unit prices to all
distributors of the Company, provided however, that
any price changes, other than those based on the CPI,
shall be uniformly applied to all distributors of the
Products and shall reasonably applied to all
distributors of the Products and shall reasonably
reflect Company's costs of manufacturing the Products
and/or market demand for the Products, provided
further than any increase in price based upon market
demand shall not be so great as to deprive
Distributor of its normal and customary profit
margin. The Company agrees to exercise this right in
good faith, and consider all circumstances of the
Distributor and the Company. The CPI referred to
herein in issued by the Bureau of Labor Statistics of
the U.S. Department of Labor. Should the Bureau of
Labor Statistics discontinue publication of the CPI,
the parties shall accept comparable statistics on the
purchasing power of the consumer dollar as published
at the time of said discontinuation by responsible
periodical or recognized authority to be chosen by
the parties.
2.5. Resale Prices. The Distributor may resell Products at such
price, as the Distributor, in its sole discretion, shall
determine. While the Company has the right to suggest a range
of manufacturer's suggested retail prices for the Products,
the distributor is not obligated to set retail prices within
the Company's suggested range of retail prices.
2.6 Product Returns.
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(A) Non-defective Products. Unless the Company has first
authorized or permitted the return of any
non-defective Products and except as otherwise
permitted or required herein, the Company shall not
be obligated to accept the return from the
Distributor of any non-defective Products, nor to
make any exchanges therefor, nor to credit the
Distributor therefor. If Company does not give Annual
Notice pursuant to Section 3.1 hereof, Distributor
may, within 90 days of modification, improvement or
alteration, return the Products to the Company. The
Company shall not have any obligation with respect to
Products after 365 days following delivery to
Distributor, except as provided herein.
(B) Defective Products. In the event of any damages or
other defect in a Product which is discovered by
Distributor within 365 days of satisfactory
installation of a Product at Distributor's or a
subdistributor's customer, the Distributor shall
promptly report the same to the Company and
reasonably demonstrate the defect to the Company. If
the Distributor reasonably demonstrates that the
Company is responsible for such damage or defect, the
Company shall promptly deliver and install at the
Company's expense, additional or substitute Products
to the subdistributor's customer without additional
cost or charge to the Distributor or the customer for
material, labor, shipping, insurance or any other
charge.
2.7 Payment Terms. Distributor shall pay Company within thirty
(30) days of Distributor's or, as the case may be, the
end-user's receipt of Products.
2.8 Company Cooperation. The Company shall cooperate with the
Distributor in obtaining all necessary permits and approvals
to permit the use of the Products. The Company shall bear
responsibility for any permits needed to manufacture the
Products and Distributor shall bear responsibility for any
permits needed to distribute the Products.
3. PRODUCTS AND WARRANTY
3.1 Product Improvements by the Company. At the Company's sole
discretion, and at any time, the Company may give the
Distributor at least 90 days advance notice ("Annual Notice")
of any modification, improvement or alteration of Products
("New Products") and development of new models of Products
(collectively with "New Products", "Improved Products").
Except for the Improved Products for which the Distributor
receives the Annual Notice, the Company shall sell Improved
Products to Distributor only with the consent of the
Distributor. Any Improved Products shall be subject to the
provisions of this Agreement. Old Products will remain
available unless
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Improved Products perform at the same or better levels and are
offered at reasonably similar prices or at prices increases,
which reasonably reflect improvements in performance.
3.2 Product Improvements by the Distributor. The Distributor shall
disclose to the Company any modifications to Products
requested by end-users or other proposals for Product
improvement from end-users or the Distributor, but shall have
no right to make modifications without Distributor's consent.
3.3 Warranty. Company shall at all times make reasonable efforts
to maintain quality control and to deliver Products to
Distributor which, when received by Distributor, or, as the
case may be, the end-user, are properly and adequately
packaged and contained, fully assembled (except for
miscellaneous components which may be shipped separately to
prevent damage in transit), fully functional and otherwise in
conformance with the warranties set forth herein. Company
warrants that the Products will be designed, manufactured,
constructed, assembled and packaged in a workmanlike manner
and that such Products shall be fully functional and fit for
their intended purposes. Company further warrants that the
Products sold hereunder shall be free from defects in design,
materials and workmanship for a period of twenty-four (24)
months after delivery to Distributor's end-user. The Company
shall not be liable for defective Products, except as provided
in this Agreement. The Distributor at all times shall comply
with all requirements of the Xxxxxxxx-Xxxx Warranty-Federal
Trade Commission Improvement Act and similar federal and state
laws and regulations.
3.4 Warranty Work. If, within the twenty-four (24) month warranty
period set forth above, Company received from Distributor or
any of Distributor's end-user's a notice which may be oral
notice confirmed in writing) that any of the Products sold
hereunder do not meet the Warranties specified above, Company
shall thereupon correct each such defect by providing the
necessary repairs, and/or replacement parts, or if necessary,
Products. Company shall promptly respond to any timely notice
of defect. Unless otherwise expressly agreed to in writing by
Distributor or Distributor's and-user, Company shall bear the
reasonable expense of all labor, materials and shipping
expended or used in connection with the correction of any
defects in the Products occasioned by the non-conformance of
the Product with Company's warranty as set forth herein.
Company shall be entitled to dispute whether a Product is
defective. In the event that Company is unable or unwilling to
promptly perform any warranty work without reasonable cause
and following full and fair opportunity to do so, or in the
event of the necessity for emergency repairs of a defective
Product for which there is no reasonable possibility of
performance by Company, Distributor may perform such warranty
work or hire a third party to perform such warranty work and
the reasonable cost thereof shall be paid by Company.
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3.5 Service of Products in Territory. Within thirty (30) days
after the execution of this Agreement, the Company and the
Distributor shall mutually agree upon a reasonable schedule of
charges for after market parts and services provided by the
Company or the Distributor so that such charges do not
adversely affect the marketability of the Products.
3.6. Non-Disclosure of Confidential Information. None of the
parties hereto nor their associated or affiliated or
affiliated companies shall during the term of this Agreement
or thereafter disclose any confidential information obtained
or acquired by them in connection with the Products and the
business of the other, including, without limitation, trade
secrets, business techniques, technical information, customer
and potential customer lists, marketing data and information,
prices, improvements to the Products in various stages of
development, processes, or other confidential information
relating to the Products or the business of the Distributor,
except that either party shall be permitted to disclose (x)
all or portions of such confidential information on a strictly
need-to-know basis to the extent required by an order of a
court of competent jurisdiction or by the order or demand of a
regulatory body having jurisdiction over one or both parties
and (y) any of such confidential information that is the sole
property of the party making the disclosure and does not
include any information owned by the other party. The
Distributor shall not disclose this agreement except upon
consent of Company. Confidential information shall not include
information which:
(A) Is or becomes generally available to the party who
desires to disclose such information (or its
associated or affiliated companies) (a "Disclosing
Party") other than as a result of a breach of this
Agreement or some other unlawful means;
(B) Becomes available to the Disclosing Party on a
non-confidential basis from a third party who is
under no confidentiality or nondisclosure obligation
with respect to such information; or
(C) Was known to the Disclosing Party on a
non-confidential basis prior to the disclosure
thereof to such disclosing Party by a party to this
Agreement.
4. DURATION AND TERMINATION
4.1 Duration. Unless earlier terminated otherwise provided
therein, this Agreement, subject to the commencement date
established in Section 1.3, shall be effective immediately.
Distributor shall submit written reports to the Company each
quarter during the first year of the Term, commencing ninety
(90) days after execution of this Agreement, describing its
efforts, the potential customers it has approached and the
status of its efforts.
4.2 Termination for Cause. Either party may terminate this
Agreement upon 30 days
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prior written notice to the other upon the occurrence of any
of the following events: (A) the Distributor's failure to make
full and prompt payment to the Company of all sums due and
owing to it; (b) either party's default in the performance of
any of the material, terms, conditions, obligations,
undertakings, covenants or liabilities set forth herein and
such default is not cured within a commercially reasonable
time after the defaulting party has been notified of the
default by the other party and (c) as otherwise expressly
provided herein. In the event either party (a) becomes
adjudicated insolvent, (b) discontinues its business, (c) has
voluntary of involuntary bankruptcy proceedings instituted
against it, or (d) makes an assignment for the benefit of
creditors, the other party shall be entitled to terminate this
Agreement effective immediately upon written notice.
4.3 Accrued Obligations. In the event that either Distributor or
Company fails to comply with the terms of this Agreement, both
Distributor and Company acknowledge and agree that in addition
to any claim for damages either party may have arising from
the default of the other, they shall have the right to seek
equitable relief by way of a temporary restraining order,
preliminary injunction, permanent injunction and such other
equitable relief as may be appropriate. In the event a party
seeks the equitable relief of a temporary restraining order,
preliminary injunction, permanent injunction, mandatory
injunction or specific performance both parties acknowledge
that they shall not be required to demonstrate the absence of
an adequate remedy at law, and neither party shall be required
to post bond as a precondition to obtaining a temporary
restraining order or preliminary injunction. The termination
of this Agreement shall not relieve either party hereto from
obligations which have occurred pursuant to the provisions of
this Agreement prior to its termination, nor shall it release
either party hereto from any obligations which have been
incurred as a result of operations conducted under this
Agreement.
4.4 Repurchase of Products. Upon the expiration or termination of
this Agreement, pursuant to Section 4.1 or 4.2 hereof, the
Company may, at its option to be exercised within 30 days of
the date of the termination of this Agreement, and in its sole
discretion, repurchase any Products in the possession of the
Distributor at the net invoice price paid by the Distributor
to the Company less any applicable special allowances,
discounts, shipping or allowances for cooperative advertising.
If Company terminates the Agreement without cause and for
reasons other than Distributor's failure to meet its minimum
expectations; it shall repurchase from Distributor any
unopened Product, and shall bear all shipping, handling and
related costs notwithstanding any other remedies to which
Distributor may be entitled. On demand and tender of the
repurchase price, the Distributor shall be obligated to
deliver such Products to the Company. The Company reserves the
right to reject any Products that are not factory sealed and
in new and unused condition. Repurchased Products shall be
shipped at the Company's expense, and the Company may offset
any indebtedness of the Distributor to the Company against the
repurchase price of such Products. Following expiration or
termination of this Agreement, the Distributor may continue to
sell any Products in the Market which are in its inventory
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and which the Company has not repurchased.
5. REPRESENTATIONS AND WARRANTIES AND OTHER MATTERS
5.1 Representations and Warranties of Company.
(A) The Company represents that, to the best of its
knowledge, Products are in compliance with all laws,
and that the Products will not be hazardous or
dangerous when used for their intended purpose.
Products do not cause harmful emissions or other
environmental hazards and Products do not violate or
infringe any patents, copyrights, trademarks or other
rights of nay third party(ies). Company further
represents and warrants that its Products will
perform as advertised and promoted by the Company,
and will be approved or certified by Underwriters
Laboratory.
(B) The Company will make available to Distributor
comprehensive technical support for the first Product
Year. Distributor will have direct access to (a) the
Company's engineering consultants and (b) the patent
holder's technicians. Company's representatives will
make themselves available three days per month in the
first Product Year to consult with and train
Distributor. All costs and expenses associated with
the services provided to Distributor hereunder,
including travel, lodging, engineering consultants'
fees and employee time will be paid by Distributor.
(C) Company will timely furnish all of Distributor's
requirements for Products within the Market, provided
it is given adequate notice of Distributor's
requirements and a full and fair opportunity to
fulfill the same.
5.2 Representations and Warranties of Distributor.
(A) Distributor shall be entirely responsible for
learning, understanding and training about the
Products, the costs of advertising and promoting the
Products in the Market through the Term of this
Agreement. Distributor shall not issue, print or
disseminate any information about the Products in the
first Product Year without the express written
consent of the Company.
(B) Distributor will not engage the services of any
engineering or consulting firm without the express
written consent of the Company.
5.3 Indemnification. Company and Distributor agree to indemnify,
defend and hold each other harmless from any and all suits,
claims, obligations, liabilities, damages, losses and the like
(including attorneys' fees and costs) relating to or arising
out of: (A) any breach of any material representations,
warranties, covenants, obligations, agreements or duties in
connection with this Agreement; (b) any negligence or fault;
(c) any violation by either of them of the patent, copyright,
trademark or other
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intellectual property rights of third parties. In addition,
Company agrees to indemnify, defend and hold harmless
Distributor from and against all suits, claims, obligations,
liabilities, damages, losses and the like (including
attorneys' fees and costs) arising out of or related to
Company's manufacture or design of the Products, provided that
Distributor is not at fault in connection with the same, and
Distributor agrees to indemnify, defend and hold harmless
Company from and against all suits, claims, obligations,
liabilities, damages, losses and the like (including a
attorneys' fees and costs) arising out of or related to
Distributor's sales, marketing practices or unauthorized
Product alteration (provided that Company is not at fault in
connection with same).
5.4 Product Liability Insurance. Company will carry a reasonable
amount of product liability insurance through a reasonably
acceptable products liability insurance company and will name
the Distributor as an additional insured under that policy.
Company will make reasonable efforts to procure a policy,
which is non-cancelable, except upon thirty (30) days, advance
notice to the Distributor.
5.5 No License. The Distributor acknowledges and agrees the except
as provided by Section 1.2 of this Agreement, this Agreement
will not be construed as granting by implication, estopped or
otherwise any license or other right of use with respect to
any present or future patent, copyright, trademark, trade name
or other proprietary right owned by or licensed to the Company
or any of its affiliates.
5.6 No Action to Invalidate. During the Term of this Agreement and
for three years thereafter, the Distributor (on behalf of
itself and each of its affiliates) agrees not to commence, or
provide any information to or otherwise assist any person or
entity in connection with, any suit, action or proceeding
contesting the ownership, validity or enforceability of any
patent, copyright, trademark, trade name or other propriety
right owned by or licensed to the Company, whether currently
existing or hereinafter invented, developed or acquired unless
required to by court order. The Distributor agrees to inform
the Company promptly and cooperate with the Company in the
event the Distributor obtains knowledge of any such suit,
action or proceeding which has been initiated or is
contemplated by any other person or entity.
5.7 Nonsolicitation.
(A) During the Term of this Agreement and for a period of
twelve (12) months thereafter, the Distributor (on
behalf of itself, each of its affiliates and each of
their respective representatives) agrees that it will
not directly or indirectly solicit or hire any
executive, managerial or technical employee of the
Company or any of its affiliates.
(B) Distributor further agrees that it will not interfere
with or otherwise disrupt the business relations
between the Company or nay of its affiliates and any
of their current or prospective customers, suppliers
or distributors, during the
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Term of the Agreement and for a period of eighteen
(18) months thereafter, nor will Distributor solicit
any customer or potential customer of Company to
purchase a competitive product during that period.
5.8. Nonpublic Information. The Distributor acknowledges that is it
aware that the securities laws prohibit any person who has
material, non-public information concerning the Company or the
matters which are the subject of this Agreement from
purchasing or selling securities of the Company (or options,
warrants and rights relating thereto) and from communicating
such information to any other person under circumstances in
which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
6. INTERPRETATION AND ENFORCEMENT
6.1 Assignment. No assignment of this Agreement or any right
accruing hereunder shall be made by the Distributor in whole
or in part, without the prior written consent of the Company,
which consent shall not be unreasonably withheld. As a
condition to obtaining such consent, the Assignee of
Distributor's interest hereunder shall first agree in writing
in form and substance satisfactory to the Company, that is
shall assume and be liable for the performance of all
obligations imposes by this Agreement on Distributor, whether
such obligations have then accrued are owing, or are yet to be
performed, and shall demonstrate that is has the economic, and
with approval of the assignment, the legal capability to
perform all of the obligations of Distributor hereunder.
Company may assign its interest in this agreement to any
person or entity which has authority to fulfill Company's
obligations hereunder and which has the economic ability to
perform its obligations hereunder. Upon the assignment of a
party's interest and rights in this Agreement the assigning
party shall be relieved of all further obligations imposed by
this Agreement.
6.2 Nonwaiver of Rights. Failure of either party to enforce any of
the provisions of this Agreement or any rights with respect
thereto or failure to exercise any election provided for
herein shall in no way be a waiver of such provisions, rights
or elections or in any way affect the validity of this
Agreement. The failure of either party to exercise any of said
provisions, rights or elections shall not preclude or
prejudice such party from later enforcing or exercising the
same or any other provisions, rights or elections which is may
have under this Agreement.
6.3 Invalid Provisions. If any terms, provision, covenant, or
condition of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the
remainder of the provisions shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
6.4 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed, or sent by facsimile
transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so
delivered personally,
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telegraphed, telexed or sent by facsimile transmission or, if
mailed, two (2) business days after the date of deposit in the
United States mail, by certified mail return receipt
requested, as follows:
If to the Distributor to:
Electric City of Illinois L.L.C.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
Attn: Xxx Xxxxxx
With a copy to:
Xxxxxx X. XxXxxxxx
000 X. Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No. (000) 000-0000
If to Company to:
Electric City Corp.
0000 Xxxxxxxx Xx.
Xxx Xxxxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, President
With a copy to:
Kwaitt & Xxxxx, Ltd.
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
6.5 Entire Agreement. This Agreement, together with all exhibits attached
hereto which are hereby incorporated by reference, supersedes any and
all other agreements, either oral or written, between the parties
hereto with respect to the subject matter hereof and contains of the
covenants and agreements between the parties with respect to said
matter. This Agreement may not be altered, amended or modified, except
by written instrument signed by the parties hereto.
6.6 Sample Products. Company will, during the Term of this Agreement (and
any renewal term), provide Distributor, at Distributor's cost pursuant
to the terms of this Agreement, with five (5) sample units (the
"Sample" or "Samples") for use by Distributor in promoting sales.
Distributor shall use the Samples for purposes of permitting potential
customers to use the Products in the field. The Samples purchased by
Distributor hereunder shall count toward the minimum expectations under
this Agreement.
6.7 Time of the Essence. Time is of the essence of this Agreement.
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6.8 Force Majeure. Neither party to this Agreement shall be liable to the
other party, nor shall be subject to injunctive relief by the other
party if that party's performance of its duties or obligations under
this Agreement is the consequence of Force Majeure as defined in
Section 2.2 hereunder.
6.9 Governing Law. This Agreement is to be construed according to the laws
of the State of Illinois.
7. NEW PRODUCTS
7.1 Right of Option. Should Company introduce other products or
devices as contemplated by recital paragraph "A", Distributor
shall have the option of becoming Company's exclusive
distributor of such other Products or devices within the
Market.
7.2 Exercise of Option. Distributor shall exercise its option to
become exclusive Distributor of other Products or devices by
serving written notification on Company of its election to
become exclusive distributor within thirty (30) days upon
which Company informed Distributor in writing of Company's
intention to introduce other Products or devices. If
Distributor does not exercise its option as herein provided,
Company may distribute the other Products or devices within
the Market itself or through other distributors.
7.3 Other Agreements. The terms pursuant to which such other
Products or devices shall be sold by Company to Distributor
shall be determined by a separate agreement, but such
agreement shall be essentially on the same terms and
conditions as herein provided, understanding that such terms
as price, quotas, and length of the term of the agreement
shall be reasonably adjusted to reflect the nature of the
other Product or device which is the subject of the agreement.
In witness whereof the parties have executed this Agreement as
of the date first abovementioned.
Electric City Corp. Electric City of Illinois L.L.C.
By: /s/Xxxxxx Xxxxxx By: Xxx Xxxxx
------------------- -------------------------------
President
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