EXHIBIT 20.1
AGREEMENT
This Agreement is entered into and made effective as of the date of the
last signature hereto by and between Evcon Industries, Inc. (hereinafter
referred to as "Evcon") and Fireplace Manufacturer's Inc. (hereinafter
referred to as "FMI").
BACKGROUND
FMI has special expertise in the design and manufacture of solid fuel
burning heaters commonly known as fireplaces and accessories herefor, and;
Evcon is a diversified marketer of comfort control equipment for
manufactured housing use with an established reputation and with an
established distribution and marketing system in the United States and
Canada, and;
FMI desires to expand its sales of fireplaces to the Manufactured
Housing Industry by taking advantage of the reputation, distribution, and
marketing system of Evcon, and;
Evcon desires to obtain fireplaces for distribution to manufacturers and
owners of manufactured homes and to be the sole distributor of FMI products
to the Manufactured Housing Industry, and;
FMI is willing to sell its fireplace products and accessories to Evcon
on an exclusive basis in the United States of America for resell to the
Manufactured Housing Industry and to refrain itself from selling the
aforesaid products to the Manufactured Housing Industry.
In view of the preceding Background, the parties agree as follows:
1. DEFINITIONS
1.1 "Manufactured Housing" means any structure, all or a substantial
part of which is built in a production facility, and does not
include conventional on-site construction.
1.2 "Manufactured Housing Industry" shall include manufacturers of
Manufactured Housing, distributors engaged principally in the sale
of equipment for installation in Manufactured Housing, service
centers engaged in the servicing of Manufactured Housing, and retail
establishments catering principally to the owners of Manufactured
Housing.
1.3 "Products" means FMI produced fireplaces and fireplace accessories
and repair parts therefor.
2. GRANT
2.1 FMI hereby grants to Evcon for the term of this Agreement the
exclusive right to sell the Products within the Territory to the
Manufactured Housing Industry.
3. TERM
3.1 This Agreement shall have an indefinite term which shall continue
until six (6) months after notice of intent to cancel is provided in
writing by one party to the other party (the "Term"). The form and
manner of such notice shall be as recited in paragraph 15.
4. NONCOMPETITION
4.1 FMI shall not during the Term sell the Products or products
competitive to the Products to the Manufactured Housing Industry.
4.2 In the event that either party cancels this Agreement for any reason
(except as recited in paragraph 7), the cancelling party shall not,
for a period of one (1) year subsequent to such cancellation, engage
in the sale or distribution to or manufacture for Evcon manufactured
housing dealers, Evcon manufactured housing distributors, or Evcon
manufactured housing OEM customers of the Products or of products
which are competitive with the Products.
5. TRADEMARK AND TRADE NAMES
5.1 The Products and literature related to the Products shall bear the
trademarks FMI and/or "Full View" and shall not bear any trademark
owned by Evcon. The literature related to the Products may use the
Evcon trade name to identify Evcon as the seller of the Products.
6. REQUIREMENTS, SHIPMENT, AND RETURN
6.1 FMI shall provide the Products in the quantity ordered by Evcon
F.O.B. at the FMI factory in Santa Ana, California within ten (10)
days of receipt of an order from Evcon, provided Evcon's payables
net of returns to FMI are current.
6.2 Evcon shall within thirty (30) days of the effective date of this
Agreement, provide to FMI a forecast of Product needs for the
following six (6) months based upon
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projected sales. Five (5) months subsequent to the effective date
of this Agreement and on each six (6) month anniversary thereafter,
Evcon shall provide to FMI updated forecasts of Product needs.
6.3 FMI shall issue full credit for all Products, parts, and/or
accessories returned to FMI by Evcon freight prepaid at the FMI
factory in Santa Ana, California in original condition and properly
packaged for resale.
7. RELEASE FROM CONTRACTUAL OBLIGATIONS
7.1 Force Majeure
7.1.1 Except as recited in paragraph 23, FMI shall be released
from its obligations under this Agreement in the event that
governmental regulations or other causes arising out of a
state of national emergency or war or causes beyond the
control of FMI including civil disobedience, labor strife,
fire, or natural disasters render performance by FMI
impossible. FMI's release of obligations pursuant to the
provisions of this paragraph shall be limited to a delay in
time for FMI to meet its obligations for a period not to
exceed two (2) months, and if FMI fails to meet such
obligations after such two (2) month period, Evcon shall
have the absolute right to terminate this Agreement upon
ten (10) days' notice in writing to FMI, which notice of
termination shall become effective unless FMI shall
completely meet all of its obligations under this Agreement
within said ten (10) day period and satisfy Evcon that all
of said obligations have been met.
7.2 Nonperformance by Evcon
7.2.1 Except as recited in paragraph 23, in the event of
unsatisfactory sales performance by Evcon, FMI may be
released from its obligations under this Agreement. For
quantifiable numbers to be set forth is futile, due to
unforseen variables. Suffice it to say that Evcon shall
expend sufficient energies and at "reasonable rates of
profit" to make this Agreement a growing endeavor in terms
of volume and profit.
7.3 Evcon shall be released from all obligations under this Agreement
(except for the duty to pay for acceptable Products not returned) in
the event of nonperformance by FMI.
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7.3.1 Nonperformance by FMI shall include, but not be limited to
any one of the following
7.3.1.1 Defects in design, manufacture, component
selection or otherwise which render significant
numbers of the Products unsafe or unsuitable
for any reason for installation in Manufactured
Housing and/or which serve to depreciate the
reputation and goodwill of Evcon and its trade
name in the Manufactured Housing Industry.
7.3.1.2 Failure to supply an adequate number of Products
to keep Evcon OEM customer(s) production lines
running if such failure occurs after Evcon shall
have supplied with reasonable lead time, a
sales forecast of requirements at least equal to
the said required number of Products.
7.3.1.3 FMI commits, in the good faith opinion of Evcon,
an act of fraud, deceit, dishonesty or any
criminal conduct.
7.3.1.4 FMI breaches any other obligations under the term
of this Agreement, which breach is not otherwise
cured within any time period provided for in this
Agreement.
8. ADVERTISING AND PROMOTION
8.1 Literature
8.1.1 Evcon shall produce such advertising materials at its cost
as it deems necessary to adequately promote and market the
Products in the Manufactured Housing Industry and shall
arrange and pay for all trade promotion activities including
but not limited to trade advertising and trade shows. FMI
shall design and provide all labels and literature packed
in or attached to the Products and shall design and provide
camera ready art work of Product photographs and advertising
materials to be produced by Evcon.
8.2 Samples
8.2.1 FMI shall provide at no charge to Evcon twelve (12)
demonstration samples of the products to be used for
engineering evaluation by Manufactured Housing manufacturer
customers, for trade show
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use and for other similar advertising and promotional
activities.
9. PRICE
9.1 The prices for each of the Products to Evcon shall not be increased
from the previously agreed upon prices through the end of the
calendar year. No later than three (3) months prior to the end of
the calendar year or any subsequent calendar year of this Agreement,
the parties shall agree upon a firm price to remain in effect as to
each fireplace, accessory, and part for the subsequent calendar
year. The maximum price increase which may be negotiated by the
parties at such time shall be equal to the price for the prior
twelve (12) month period multiplied by the factor (one (1) plus
the increase in the "Producer Price Index" (as published by the
United States federal government) for the prior twelve month
calendar period).
9.2 In the case of new models of the Product subsequently offered to
Evcon by FMI, the parties shall agree upon a reasonable price
therefor which shall remain firm through the end of the then
calendar year.
10. PAYMENT AND TERMS
10.1 The Products shall be paid for in United States dollars with payment
being made to FMI within thirty (30) days after the date of tender
of merchandise to the carrier for shipment F.O.B. Santa Ana,
California. Invoices received from the 1st through the 15th of the
month and paid on or before the 25th of that month (or on the next
following business day should the 25th fall on a weekend or holiday)
and invoices received from the 16th of the month through the end of
the month and paid on or before the 10th of the following month
(or on the next following business day should the 10th fall on a
weekend or holiday) shall be subject to a two percent (2%) discount
on the price shown on the invoice.
11. WARRANTY - PARTS AVAILABILITY - SERVICE DOCUMENTATION
11.1 The Products sold pursuant to this Agreement shall be subject to a
consumer Limited Warranty containing the terms and conditions
recited in Attachment "A." Evcon will arrange for service under the
consumer warranty through certain of its Authorized Service Centers.
No terms or conditions may be added to the recited terms and
conditions in Attachment "A" without written approval of Evcon.
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11.2 All parts, labor, transportation, and other charges directly
allocable to claims made under the consumer Limited Warranty shall
be reimbursed by FMI to Evcon within thirty (30) days of the
receipt by it of appliable debit memos issued by Evcon.
11.3 For a period of fifteen (15) years from the date of sale of a
Product by FMI to Evcon pursuant to this Agreement, FMI shall make
available for purchase by Evcon sufficient quantities of
repair parts so as to facilitate servicing of the Products.
11.4 FMI shall design, produce, and supply to Evcon, sufficient
quantities of service documentary materials as are reasonably
required by Evcon and its authorized service centers to provide
warranty service.
12. CODES AND STANDARDS
12.1 FMI hereby certifies that all Products, including all accessories
and parts related thereto, supplied by FMI comply with all
federal, state, and local laws, regulations, codes, and standards.
As applicable, third party laboratory certificates or listings
acceptable to the U.S. Department of Housing and Urban Development
evidencing compliance with the aforesaid shall be provided to the
Manufactured Housing Division of Evcon prior to delivery of any
Product.
13. CONFIDENTIALITY
13.1 For a period of two (2) years after receipt, Evcon and FMI shall
treat as confidential any and all information disclosed or
transmitted from one party to the other pursuant to or in connection
with this Agreement and will not divulge any such information to
third parties without the prior written consent of the other party.
Evcon and FMI shall take all reasonable precautions to assure that
they and any of their employees receiving information disclosed by
the other party pursuant to this Agreement will maintain the
confidentiality thereof.
13.2 It is agreed, however, that such information:
13.2.1 which was in the possession of any party prior to receipt of
the information from the other party pursuant to this
Agreement;
13.2.2 which is or lawfully becomes part of the public knowledge or
literature; or
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13.2.3 which otherwise lawfully shall become available to any party
from sources other than the other party
shall not be subject to the provisions of this paragraph.
14. USE OF EVCON TRADEMARKS
14.1 FMI acknowledges that Evcon is the owner of the Xxxxxxx -Registered
Trademark- Evcon logo and Evcon trademarks and agrees not to use
them or any logo and trademarks which may be confusingly similar.
14.2 Evcon acknowledges that FMI is the owner of the trademarks "FMI" and
"Full-View" and agrees not to use the aforesaid trademarks or any
trademarks which may be confusingly similar to the aforesaid
trademarks anywhere in the world, except as may be permitted
pursuant to this Agreement.
15. NOTICES
15.1 Except as may be provided elsewhere in this Agreement, any notice or
other communication required to be made or given to either party
shall be deemed duly given and received if hand delivered; by Fax to
the number below, which receipt must be confirmed by phone, or sent
certified, express mail, return receipt requested to the noticed
party at the address set forth below:
Evcon Industries, Inc.
X.X. Xxx 00000
Xxxxxxx, Xxxxxx 00000-0000
Attn: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Fireplace Manufacturer's Inc.
0000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: President
Fax No.: (000) 000-0000
Confirmation No.: (000) 000-0000
or to such address as either of the parties may hereafter
furnish to the other as provided in this paragraph. Any notice given
pursuant to this paragraph shall be effective as of delivery, if hand
delivered; as of the date of delivery shown on the return receipt if
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delivery is by certified, express mail, or as of the date received
if by Fax.
16. APPLICABLE LAW
16.1 This Agreement shall be construed and enforced in accordance with
the laws of the State of Kansas, with the proper form for
enforcement being any court with proper jurisdiction over the
subject matter and parties.
17. INDEPENDENT CONTRACTOR - NO AGENCY
17.1 Neither party is the agent of the other party but each party is
instead an independent contractor. No party shall take any action
nor incur any obligation on behalf of the other nor do anything or
make any representation to any person or third party or parties or
take any action or refrain from taking any action which would or
might imply the existence of agency or the existence of the ability
of either party to control the action or conduct of the other party.
18. ENTIRE AGREEMENT - AMENDMENT
18.1 This Agreement is intended to be the sole and complete statement of
the rights and obligations of the parties hereto relating to the
subject matter hereof and supersedes all previous understandings,
letters of intent, agreements, negotiations, and proposals as to
the subject matter.
18.2 No provision of this Agreement shall be deemed waived, amended, or
modified by either party unless such waiver, amendment, or
modification shall be in writing and signed by a person authorized
by the party against whom the waiver, amendment, or modification is
sought to be enforced.
19. SUCCESSORS AND ASSIGNS
19.1 This Agreement shall be binding upon the parties and their
respective successors and assigns. FMI shall have no right without
Evcon's prior written consent to assign any rights or obligations
hereunder.
20. HOLD HARMLESS/INDEMNITY
20.1 FMI agrees to indemnify and hold harmless Evcon and its affiliates
including its and their directors, officers, and employees harmless
from ANY AND ALL claims or litigation for loss or damage (whether
actual, punitive, or exemplary) and expenses (including but not
limited to
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investigative expenses and attorneys' fees and court costs) in
connection with any damage or injury to persons or property whether
actual or alleged and/or from any and all claims for infringement of
the intellectual or industrial property rights of others whether
actual or alleged arising out of or in connecting with the design,
manufacture and/or sale of the Products by FMI or Evcon. This
paragraph shall not apply to claims or litigation arising solely
from the negligent or other wrongful conduct of Evcon or of Evcon's
officers, employees, agents, and/or servants.
20.2 If any person or entity not a party to this agreement shall assert
any claim against FMI which might also give rise to a claim against
Evcon, Evcon shall have the right to participate in the defense
thereof and to be represented, at the expense of FMI, by advisory
counsel to be selected by Evcon. FMI agrees not to compromise or
settle such claim without the consent of Evcon (which consent shall
not be unreasonably withheld). FMI shall include Evcon on any
release whether a claim is settled with or without Evcon's
knowledge. Upon Evcon's request, FMI shall provide Evcon with any
information known by FJ4I which would be relevant to Evcon's defense
of any claim described above.
21. INSURANCE
21.1 FMI agrees to secure and maintain current at all times during the
term of this Agreement a comprehensive general liability insurance
policy, with coverages including products liability, with annual
personal injury limits in the amount of $1,000,000 per occurrence
and $5,000,000 in the aggregate and annual property damage limits
in the amount of $500,000 per occurrence and $1,000,000 in the
aggregate, issued by an insurance company licensed in the United
States acceptable to Evcon and which may not be cancelled without
thirty (30) days prior notice to Evcon. FMI agrees to have Evcon
named in said policy as an additional named insured pursuant to a
broad form vendors endorsement ard to submit a certificate to Evcon
from the insurer reflecting the requirements of this paragraph within
ten (10) days of the date of this Agreement.
22. REPURCHASE
22.1 In the event FMI terminates this Agreement under the provisions of
paragraphs 3.1, 7.1, 7.2 or 7.3, FMI agrees to repurchase within 30
days after termination and upon receipt of request by Evcon, Evcon's
currently existing inventory of Products, including repair parts,
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at the time of termination. This repurchase will be at Evcon's
landed cost less any monies due or about to be due FMI. FMI will
be responsible for all freight charges, but not for loading,
handling, etc. at Evcon's place of business. All inventory must be
new, unused, undamaged, in its original carton, and which is in
current production by FMI.
23. SEVERABILITY
23.1 In the event that any provision of this Agreement is held invalid or
unenforceable, that provision shall be severed and all remaining
provisions shall continue unimpaired and in full force and effect.
24. SURVIVAL
24.1 The duties of FMI pursuant to paragraphs 6.3 (Return of Products),
11 (Warranty and Parts Availability), 13 (Confidentiality), 14
(Use of Evcon Trademarks), 20 (Hold Harmless/Indemnity), and 21
(Repurchase) shall survive any termination or cancellation of this
Agreement.
In execution hereof, the parties sign as follows:
EVCON INDUSTRIES, INC.
By: /s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx
Date: 9/1/93
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FIREPLACE MANUFACTURER'S INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Date:
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