Exhibit 10.14
DISTRIBUTOR AGREEMENT
THIS DISTRIBUTOR AGREEMENT (this "AGREEMENT") is made and entered
effective the 1st day of January, 1997, by and between The York Group, Inc., a
Delaware corporation ("YORK") and __________________________, a
_______________________ corporation ("DISTRIBUTOR").
WHEREAS, York is the manufacturer and/or distributor of finished caskets
and of certain parts and components for caskets (finished caskets manufactured
by York or its affiliated and associated companies and bearing the York brand,
excluding cloth-covered caskets, are hereinafter referred to as the "PRODUCTS"
or "YORK-BRAND CASKETS"); and
WHEREAS, York desires to appoint Distributor as an Authorized York
Distributor of York-brand Caskets in the Territory (as hereinafter defined) to
Customers (as hereinafter defined), and Distributor desires to undertake and
assume such duties upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
CREATION OF DISTRIBUTORSHIP
SECTION 1.1 TERM. York hereby appoints Distributor as an Authorized York
Distributor for the Products in the Territory (as hereinafter defined), on the
terms and subject to the conditions set forth herein, for an initial term of
three years commencing on the date hereof (the "INITIAL TERM"), which shall
automatically renew for successive three year terms (the "RENEWAL TERMS") (the
Initial Term and all Renewal Terms are collectively referred to as the "TERM"),
subject to early termination as provided in ARTICLE VI hereof. Either party may
terminate this Agreement for any reason whatsoever as of the expiration of the
Initial Term or any Renewal Term, as the case may be, by giving written notice
to the other party at least six (6) months prior to the expiration of the
Initial Term or any Renewal Term.
SECTION 1.2 TERRITORY. (a) York hereby assigns to Distributor the
territory set forth on EXHIBIT A (the "TERRITORY"). York and Distributor agree
that during the Term, York will not assign any part of the Territory as the
territory of any other distributor of the Products, and Distributor will not
promote, sell, solicit, or take orders for the Products directly or indirectly
outside the Territory, in each case except (i) as expressly provided herein or
on EXHIBIT A; (ii) in connection with the terms of applicable York Programs (as
hereinafter defined); and (iii) as provided in SECTION 1.8 or SECTION 8.1. No
territorial assignment is made hereby with respect to anything other than the
Products.
(b) If any of the provisions of subparagraph (a) above are or shall be
prohibited under any lawful statute or regulation of any state, such terms of
subparagraph (a) shall not apply in such state and, in lieu thereof, the
provisions of this subparagraph (b) shall apply. In such event, York hereby
appoints Distributor as an Authorized York Distributor of York-brand Caskets to
Customers in the Territory as Distributor's primary area of responsibility.
Distributor hereby accepts such appointment and agrees to exercise its best
efforts to promote, sell and serve York-brand Caskets in the Territory and will
concentrate its efforts in that primary area of responsibility.
(c) Distributor's appointment hereunder is for distribution by
Distributor solely in the United States, and any sale or other transfer of
Products by Distributor outside the United States requires the prior written
consent of York.
SECTION 1.3 CUSTOMERS. York hereby appoints Distributor as a distributor
for the Products solely to firms or buying groups whose sole or primary business
is funeral service ("CUSTOMERS"), except as expressly provided otherwise in this
Agreement.
SECTION 1.4 MINIMUM PURCHASES. During the Term, York agrees to sell to
Distributor and Distributor agrees to purchase from York at least 80% of
Distributor's total requirements of finished caskets (excluding cloth-covered
caskets) which Distributor collectively purchases from (i)York and (ii) any
supplier other than York that is not an Affiliated Supplier (as hereinafter
defined). For purposes of this Agreement, "AFFILIATED SUPPLIER" shall mean an
entity (i) in which Distributor maintains a 17% or greater ownership interest,
and (ii) whose finished caskets are composed 100% of York-manufactured parts and
components, except for those parts and components which York does not
manufacture or does not sell at reasonably competitive prices and terms. For
purposes of this Section, the 100% requirement shall be defined in terms of
completed assembly kits, including, but not limited to, stampings, beds, locks,
hinges, support braces, fabric and hardware. Distributor shall provide to York
annually within 60 days after the expiration of each calendar year of the Term a
categorized report setting forth Distributor's total sales by funeral home of
each of the following: York-brand Caskets, Affiliated Supplier caskets, and
caskets obtained from any supplier other than York or Affiliated Suppliers. The
requirements in this Section are hereinafter referred to as "MINIMUM PURCHASE
REQUIREMENTS."
SECTION 1.5 MARKET SHARE GROWTH. Annually during the Term, Distributor
agrees to increase its market share of Products sold by the amount(s) set forth
on EXHIBIT B as the Target Non-National Account Market Share (the "MARKET SHARE
GROWTH REQUIREMENT"). The Market Share Growth Requirement is calculated in terms
of the number of Products sold to Customers in Territory or Sub-Areas (as herein
after defined) which are determined by York not to be National Accounts (as
hereinafter defined), divided by the number of caskets estimated to be used by
all Customers in the Territory or Sub-Areas, as appropriate, which are
determined by York not to be National Accounts. York and Distributor agree that
the estimates and projections of total deaths, casketed deaths, National Account
funerals and National Account casketed funerals represent reasonable estimates
or projections and are applied on an appropriately consistent basis for their
use in establishment of Market Share Growth Requirements; any dispute or
inconsistency with respect thereto shall be reasonably determined by York.
EXHIBIT B shall be updated annually as described therein. "NATIONAL ACCOUNT"
shall mean a firm, cooperative buying group or professional association with a
volume of 5,000 or more funerals per calendar year, as reasonably determined by
York, or a firm, cooperative buying group or professional association with a
lesser volume which has been designated by York as eligible for the National
Account program.
SECTION 1.6 ANNUAL MINIMUM PURCHASE REQUIREMENT AND MARKET SHARE GROWTH
REQUIREMENTS. Within 60 days after receipt of sales reports required pursuant to
SECTION 1.4 and other sales data sufficient to calculate market share and market
share growth from Distributor, York shall review Distributor's results in terms
of Minimum Purchase Requirements and Market Share Growth Requirements. If during
the relevant year, any of the requirements have not been met, York may either
terminate the Agreement or modify the Distributor's requirements for the next
calendar year of the Term. If the Distributor does not agree with York's
decision and believes that causes beyond its control account for the shortfall
from the requirements, Distributor may request to have the matter submitted to
binding arbitration. In such event, the Distributor shall request the York
Distributors Association ("YDA") to designate a third party, who is a member of
the YDA and who does not have a direct interest in the matter submitted for
arbitration, to act as arbitrator; provided, however, that should York not
approve of
the YDA member so designated, then the YDA member and York shall choose a third
party arbitrator. The arbitrator so chosen shall (i) determine whether York may
terminate the Agreement or (ii) propose new requirements for the Distributor.
The requirements proposed by the arbitrator shall apply to this Agreement for
the calendar year with respect to which the determination is made. The costs and
expenses of such arbitration shall be allocated equally between the parties.
EXHIBIT B shall then be amended to reflect the revised requirements.
SECTION 1.7 INSUFFICIENT SUPPLY AND PRODUCTION. In the event York fails
to or cannot supply the number of Products required to meet Distributor's
purchases hereunder, York will endeavor to designate one or more associate
supplier (the "ASSOCIATE SUPPLIER") to provide caskets of comparable quality to
Distributor. York will endeavor to designate an Associate Supplier who is an
Affiliated Supplier, if such Affiliated Supplier provides products at
competitive prices and terms. Under such circumstances, purchases by Distributor
from the Associate Supplier shall be deemed to be purchases from York for
purposes of the Minimum Purchase Requirement. If York does not or cannot
designate an Associate Supplier, the Minimum Purchase Requirement will be
adjusted to the extent of the shortfall for the period in which York does not or
cannot deliver the Products. The terms of sale between Distributor and the
Associate Supplier shall be determined by Distributor and the Associate
Supplier, and York will have no responsibility or liability therefor.
SECTION 1.8 ANNUAL MINIMUM SUB-AREA MARKET SHARE. If in any sub-areas
within the Territory or any combination thereof as described in EXHIBIT B
("SUB-AREAS"), Distributor's market share with Customers who are not National
Accounts shall fall below the minimum market share as specified on EXHIBIT B
(the "MINIMUM NON-NATIONAL ACCOUNT MARKET SHARE"), York may at its sole
discretion assign any such Sub-Area to another distributor. Any such
reassignment by York shall not effect Distributor's rights under this Agreement
with respect to Distributor's remaining Sub-Areas within the Territory.
SECTION 1.9 MARKET SHARE INCENTIVE. So long as Distributor meets the
Minimum Purchase Requirements, if annual sales of York-brand Caskets in any
Sub-Area, excluding sales to National Accounts, exceed the Target Non-National
Account Market Share as set forth on EXHIBIT B, York shall pay a market
development allowance to Distributor of not less than one percent (1%) of all
sales for the relevant period based on the gross invoice price of the Product.
Distributor shall submit to York all sales data and information necessary to
determine Distributor's market development allowance within 60 days after the
expiration of each calendar year. Any such market development allowance shall be
paid by York to Distributor within 60 days of receipt and confirmation by York
of all necessary sales data and information.
ARTICLE II
PRICES, PAYMENT AND TERMS OF SALE
SECTION 2.1 PRICES. Prices charged to Distributor for Products will be
established by York. Prices may be adjusted at any time to include price
increases or decreases from time to time in York's sole discretion upon 30 days
prior notice to Distributor. All Products shipped after the date of any price
change will be invoiced at the new price. York will endeavor to have only one
general price increase for Products per calendar year during the Term; provided,
however, Distributor acknowledges that York may have general price increases on
a more frequent basis as a result of shortage of raw materials or other
supplies, or increase in the price thereof, labor disputes, strikes, boycotts,
acts of God or the elements, government regulations or other matters beyond
York's control.
SECTION 2.2 PAYMENT. The terms of payment for the Products shall be net
cash in 30 days from date of invoice, or 5% cash discount for payment postmarked
within 19 days from the date of York's
invoice. A charge of 1 1/2% per month, or the maximum nonusurious interest rate,
if lower, may be assessed on all overdue accounts. In addition, York, in its
sole discretion, may withhold shipment of Products from Distributor if it has
any overdue accounts.
SECTION 2.3 ORDERS. All orders for the Products shall be placed with
York in the manner and by use of such forms and procedures as may be established
by York from time to time.
SECTION 2.4 ACCEPTANCE AND AVAILABILITY. All Distributor orders are
subject to acceptance by York. All accepted orders shall be processed, shipped
and filled at such locations as York may designate. Once an order is accepted by
York, York shall endeavor to ship all commercially reasonable orders within a
commercially reasonable time or such other time as agreed in writing between
York and Distributor. Distributor agrees not to cancel any orders by reason of
shipment of part thereof pursuant to any allocation method decided upon by York
from time to time as such order applies to the part thereof shipped by York.
York shall not be liable in any manner for loss or damage arising out of
rejection of any order, or any delay or default in shipment or delivery.
SECTION 2.5 DELIVERY AND RISK OF LOSS. All shipments of Products will be
F.O.B. point of manufacture. Distributor will pay all freight charges on the
Products delivered to Distributor. All carriers utilized for delivery of any of
the Products to Distributor, even if the carrier is selected by York, shall be
deemed the agents of Distributor and all risk of loss shall immediately pass to
Distributor upon delivery of the Products to carriers for shipment to
Distributor. If delivery is made on York-owned trucks, Distributor shall pay all
freight charges and York shall assume the risk of loss only with respect to any
actual damage to the Products occurring during transit. For payment terms, the
invoice date shall be the date of shipping.
SECTION 2.6 NO MODIFICATION. Distributor agrees that Distributor will
not modify or alter any Product or any packaging or literature relating to any
Product without the prior written approval of York; provided, however, that
Distributor may modify or alter Product interiors with respect to fabric and
decoration and may make routine repairs and touch-ups to Products so long as the
modification, alteration, repair or touch-up does not affect any York Xxxx (as
hereinafter defined). In the event Distributor modifies, alters, repairs or
touches-up the Product, packaging or literature in a manner not authorized by
this Section (the "UNAUTHORIZED MODIFICATION"), Distributor agrees to defend,
indemnify and hold York harmless from any claims and expenses whatsoever
resulting from the Unauthorized Modification. Other than for an inadvertent and
nonrepetitive Unauthorized Modification, York may view breach of this paragraph
as a material default and terminate this Agreement pursuant to SECTION 6.2.
SECTION 2.7 CREDIT AND SECURITY INTEREST. Distributor acknowledges and
agrees that York is not obligated to extend credit to Distributor or assist
Distributor in obtaining credit. In the event York sells the Products to
Distributor on credit, such credit shall be provided upon terms and at such
interest rates as determined in the discretion of York. Distributor agrees that
York may in its discretion apply, reapply or transfer any payments made by, or
credit due, Distributor against the oldest item of account or indebtedness owed
to York by Distributor. York may stop any unpaid shipment in transit without
notice to Distributor. Distributor hereby grants to York a security interest in
all Products sold to Distributor and all proceeds thereof for which the full
purchase price has not been paid until the full purchase price has been paid
therefor. Distributor agrees to do or cooperate in the doing of all acts
necessary to perfect and maintain such security interest.
SECTION 2.8 TAXES. All taxes (excluding York's income and franchise
taxes) and other charges of any such kind on the value or use of Products and on
other items including, without limitation, cartons, containers, equipment and
other property of York, which may be levied upon or assessed while such
Products or property is in the use or possession of Distributor shall be the
responsibility of and paid by Distributor, whether directly or through York.
SECTION 2.9 SHIPMENT LOCATION. York will ship the Products to
Distributor only at the address indicated on the order accepted by York.
ARTICLE III
OWNERSHIP, MANAGEMENT AND FINANCIAL
INFORMATION OF DISTRIBUTOR
SECTION 3.1 OWNERSHIP. Distributor and York agree that in order to
create an effective and stable distribution network, controlling ownership of
Distributor must be continuous and disclosed to York at all times. Distributor
agrees that all persons owning an interest in Distributor shall be disclosed to
York. Accordingly, Distributor, acknowledging that York is relying on this
representation, represents that Distributor is wholly-owned by the persons in
the percentages set forth opposite their respective names set forth in EXHIBIT
C.
SECTION 3.2 CHANGES IN OWNERSHIP. Distributor agrees to notify York of
any proposed change, directly or indirectly, in the ownership of any interest,
beneficial or otherwise, in Distributor. Upon receipt of notice of any proposed
change in ownership that would result in a change in control of Distributor
(whether in any single transition or series of related transactions), York shall
have 30 days within which to provide written notice of its acknowledgment of
such change. In the event York provides written notice of acknowledgment or
fails to provide notice of acknowledgment within such 30-day period, such
proposed change in ownership shall be deemed acknowledged by York, subject to
the rights of York as specified in SECTION 3.3 hereof. Upon a change in
ownership deemed acknowledged by York, if York does not exercise its rights
under SECTION 3.3, EXHIBIT C shall be amended to reflect the new ownership. If
within such 30-day period York sends to Distributor a notice of rejection of
acknowledgment, then any such change in ownership shall constitute a material
default under this Agreement and result in termination of this Agreement as set
forth in SECTION 6.2. For purposes of this Section, a person shall be deemed in
"control" if that person has the right to vote 25% or more of the voting
securities of Distributor or is entitled to receive 25% or more of the net
profits of Distributor or is otherwise able to direct or cause the direction of
the management or policies of Distributor. Notwithstanding any of the foregoing,
the owners of Distributor as set forth on EXHIBIT C shall be permitted to
transfer their interest in Distributor to their spouses and lineal descendants
without giving rise to the acknowledgment rights of York as previously set
forth.
SECTION 3.3 RIGHT OF FIRST REFUSAL. Distributor agrees that in the event
any direct or indirect owner or beneficial owner of any interest in Distributor
shall sell, offer to sell, or transfer such interest, or Distributor shall sell,
offer to sell, dispose of or transfer all or any substantial part of its assets,
in each such case to any person other than Distributor, the persons specified in
EXHIBIT C or the respective spouses and/or lineal descendants of such persons,
York shall have the right of first refusal, which shall be an option to purchase
such interest or such assets at the price and on the same terms and conditions
as offered to or by such third party. In the event of any such proposed sale,
disposition or transfer, Distributor shall provide written notice to York
specifying the party to whom such interest or such assets are proposed to be
sold or transferred, the terms and conditions of the sale or transfer, including
the price thereof, and any other information about the sale, disposition and
transfer commercially reasonably required by York to assess the proposed sale or
transfer, and offering to sell or transfer such interest or such assets to York
on such terms and conditions. York shall have 60 days after its receipt of
Distributor's offer to accept or reject such offer. York shall have the right
reasonably to inspect the business, assets and financial records of Distributor
during such 60-day period. If York accepts the offer, the parties shall
expend commercially reasonable efforts to consummate the sale or transfer within
60 days after York's acceptance of the offer. York's right of first refusal
shall extend to any and all sales, offers to sell, purchase, or transfer, or
transfers other than transfers by will or the laws of descent and distribution,
of such interest or such assets made or attempted during the Term. In the event
York approves any sale or transfer of any interest in or all or any substantial
part of the assets of Distributor to any third party, such third party shall be
subject to the provisions of this Section. Any refusal by York to exercise its
right of first refusal shall not be deemed to be acknowledgment or approval of
any transfer of any interest(s) or all or any substantial part of the assets of
Distributor to any third party.
SECTION 3.4 MANAGEMENT. Distributor acknowledges that in order to create
an effective and stable distribution network, York has advised Distributor that
certain Key Executive Offices (as hereinafter defined) must be held continuously
by the corresponding persons set forth in EXHIBIT D. Distributor agrees that all
executive officers shall be disclosed to York. Distributor, acknowledging that
York is relying on this representation, represents that the persons with the
titles set forth opposite their respective names set forth in EXHIBIT D are the
executive officers of Distributor.
SECTION 3.5 CHANGES IN MANAGEMENT. Distributor agrees to notify York of
any proposed changes, directly or indirectly, in any of its executive officers.
Upon notice of any proposed change in the offices of chief executive officer,
president, principal financial officer, principal operating officer or principal
marketing officer (the "KEY EXECUTIVE OFFICES"), York shall have 30 days within
which it may provide written notice of its acknowledgment of such change. In the
event written notice of acknowledgment is provided by York or no written notice
is provided within such 30-day period, any proposed change in the Key Executive
Offices shall be deemed acknowledged by York. Upon a change in any Key Executive
Office of Distributor deemed acknowledged by York, EXHIBIT D shall be amended to
reflect the new executive officers of Distributor. If within such 30-day period
York sends to Distributor a notice of rejection of acknowledgment, then any such
change in a Key Executive Office shall constitute a material default under this
Agreement and result in termination of this Agreement as set forth in SECTION
6.2.
SECTION 3.6 FINANCIAL INFORMATION. Distributor agrees to maintain and
employ, in connection with its business pursuant to this Agreement, adequate net
working capital and ownership equity in amounts commercially reasonably
satisfactory to York and to maintain a line of credit with a bank or financial
institution or other method of financing commercially reasonably acceptable to
York necessary to perform Distributor's obligations pursuant to this Agreement.
Distributor will submit to York a summary of its line of credit or other
arrangement specifying the terms and conditions thereof, including, without
limitation, total dollar amount, compensating balance requirements, commitment
fees and limitations as to utilization, and any changes to the foregoing shall
be submitted by written notice as incurred. If York extends credit to
Distributor during the term of this Agreement, Distributor shall either (a)
submit to York full and complete financial and operations statements, audited or
unaudited, including, without limitation, balance sheets, income statements and
statements of cash flows, prepared in accordance with generally accepted
accounting principles within 90 days after the end of Distributor's fiscal year
or (b) in lieu thereof establish a letter of credit or similar financial
arrangement in an amount and form reasonably satisfactory to York.
ARTICLE IV
MARKS OF YORK
SECTION 4.1 OWNERSHIP OF MARKS. Distributor acknowledges York's
exclusive ownership of York's trademarks, trade names, servicemarks, copyrights,
patents, brand names, labels, symbols or other proprietary rights (collectively,
the "MARKS"), as well as the validity of the registrations thereof, if any.
Distributor has not paid and will not pay any fee to York in connection with
this Agreement, the Marks, or otherwise. Nothing contained in this Agreement or
otherwise shall be construed as an assignment of the Marks to Distributor.
Distributor shall use the Marks in such a manner so as best to preserve York's
interests in the Marks, and Distributor shall not acquire any right or interest,
legal, equitable or otherwise, in the Marks by any such use or by any means
other than by specific written assignment of such rights or interests by York.
Any good will or other benefits derived from the use of the Marks by Distributor
shall inure solely to the benefit of York.
SECTION 4.2 USE OF MARKS. Distributor will sell the Products under the
Marks and will not alter, conceal or remove any markings or labels affixed to
the Product by York. Distributor will not sell any caskets under any Xxxx of
York which are not Products of York. All use of and reference to the Marks shall
conform with proper trademark, servicemark, copyright and patent practice and
with such instructions and policies as York shall provide from time to time.
Without in any manner limiting the foregoing, Distributor will not use any Xxxx
of York in connection with a casket assembled from an assembly kit purchased
from York without York's written authorization. Distributor will immediately
cease all use of the Marks upon the earlier of the expiration or termination of
this Agreement or receipt of written request to do so from York. Distributor
shall not, at any time during or after the Term, register or use any xxxx that
is similar to a Xxxx by itself or in combination with any other words, symbols
or designs without the express written authorization of York.
ARTICLE V
OBLIGATIONS OF DISTRIBUTOR AND YORK
SECTION 5.1 OBLIGATIONS OF DISTRIBUTOR. Distributor shall at all times during
the Term perform as follows, and Distributor agrees that any failure to so
perform shall constitute a material default under this Agreement:
(a) Prepare all Products according to then current instructions from
York before delivery to Distributor's Customers and to National Accounts and
maintain adequate service and product preparation facilities for the Products;
(b) Cooperate fully with York in fulfilling York's service and warranty
obligations;
(c) Use its good faith best efforts actively and aggressively to sell
and promote the sale of the Products;
(d) Use its good faith best efforts actively and aggressively to support
Programs established by York or any York subsidiary, association or foundation,
including, without limitation, The York Children's Foundation;
(e) Periodically work with York in analyzing growth opportunities and
developing marketing, sales and service strategies for the Products;
(f) Investigate and report to York any service and warranty claims or
any lawsuit, claim, or other complaint that may arise in connection with the
Products sold by Distributor;
(g) Abide by the policies set forth by York from time to time for
Distributor to follow certain procedures when returning Products to a
manufacturing facility;
(h) Maintain at least $2,000,000 liability insurance coverage which
addresses the risks
associated with its distribution business, which names York as an additional
insured, and supply to York at least once each calendar year a certification by
the insurer evidencing such insurance and agreeing that such insurance will not
be canceled without 30 days prior written notice to York;
(i) Submit sales data sufficient for York to calculate market share and
market share growth in the Territory and in Sub-Areas within that Territory;
(j) Utilize York-provided or specified information systems as
commercially reasonable; and
(k) Follow good business practices and comply with all laws and
regulations applicable in the Territory, including those dealing with the sale
and distribution of the Products purchased or sold pursuant to this Agreement.
SECTION 5.2 OBLIGATIONS OF YORK. York shall at all times during the Term
perform as follows, and York agrees that any failure to so perform shall
constitute a material default under this Agreement:
(a) Assist Distributor in marketing and promoting the sale of the
Products;
(b) Maintain a written warranty policy with respect to Products;
(c) Provide Distributor with marketing, sales and promotional materials
and such sales and marketing assistance and support as Distributor may
commercially reasonably request at a commercially reasonable cost to
Distributor;
(d) Inspect all Products before shipment to Distributor and accept
Products with material defects for either repair or replacement in accordance
with its written warranty policy;
(e) Use commercially reasonable efforts to develop new products and to
provide such new products to Distributor;
(f) Periodically work with Distributor in analyzing growth opportunities
and developing marketing, sales and service strategies for the Products
utilizing external market data and sales and market data provided by the
Distributor;
(g) Provide Distributor with access to preneed insurance programs to the
extent otherwise provided by York and for which Distributor is eligible;
(h) Permit Distributor to participate in Programs established by York or
any York association or foundation, including without limitation, the York
Children's Foundation, to the extent Distributor meets eligibility criteria for
support and such programs are continued by York; and
(i) Provide access to sales and marketing support, tools and systems,
logistics support, tools and systems and accounting support, tools and systems,
each on a basis commercially reasonable to York and to Distributor.
SECTION 5.3 YORK PROGRAMS. York and Distributor recognize that York may,
from time to time, in its sole discretion, establish programs designed to
promote the effective distribution of Products. These programs may include,
without limitation, marketing, promotional, pre-need sales, and incentive
programs, and certain programs and standards for National Accounts and other key
accounts (the programs and the standards are collectively referred to as
"PROGRAMS"), for which Distributor may be
eligible to participate. Distributor hereby agrees to fully comply and observe
all terms, conditions and requirements of any and all Programs, as modified by
York from time to time, in which Distributor elects to participate and for which
Distributor is eligible to participate. Distributor further agrees that with
respect to any and all Programs for which Distributor either is not eligible or
elects not to participate, York may designate, in its sole discretion, another
distributor to participate in such Program within Distributor's Territory. If
Distributor elects to participate in a Program and continues to meet the
eligibility requirements for such Program as established by York from time to
time, York will not remove Distributor from participation in such Program unless
required by a Customer or a circumstance of similar significance arises making
it advisable, in York's sole opinion, to remove Distributor from participation.
ARTICLE VI
TERMINATION
SECTION 6.1 TERMINATION FOR NONPAYMENT. If Distributor materially
defaults in the payment of any amounts due hereunder and fails to cure such
default within 15 days after receiving written notice specifying such default,
then York may immediately terminate this Agreement by written notice to
Distributor.
SECTION 6.2 TERMINATION FOR CAUSE. If either party materially defaults
in its performance of this Agreement, except for nonpayment of amounts due to
York, and fails to cure such default within 30 days after receipt of written
notice specifying such default, then the other party may terminate this
Agreement by written notice to the other party; PROVIDED, HOWEVER, that if the
default is of a nature that cannot reasonably be cured within 30 days and the
defaulting party commences substantially to cure the default within 30 days
after receipt of such written notice, the defaulting party shall have 60 days
after the receipt of such written notice to cure the default before the other
party may terminate this Agreement.
SECTION 6.3 TERMINATION FOR INSOLVENCY. If either party (a) voluntarily
suspends transaction of business; (b) becomes insolvent or unable to pay any
indebtedness as it matures; (c) commences a voluntary case in bankruptcy or a
voluntary petition seeking reorganization or to effect a plan or other
arrangement with creditors; (d) makes an assignment for the benefit of
creditors; (e) applies for or consents to the appointment of a receiver or
trustee for it or for any substantial portion of its property; (f) makes an
assignment to an agent authorized to liquidate any substantial part of its
assets; (g) has an involuntary case commenced against it with any court or other
authority seeking liquidation, reorganization or creditor's arrangement; (h) by
an order of any court or other authority, has appointed any receiver or trustee
for it or for any substantial portion of its property; or (i) has a writ or
warrant of attachment or any similar process issued by any court or other
authority against any substantial portion of its property and such involuntary
petition seeking liquidation, reorganization or a creditor's arrangement or such
order appointing a receiver or trustee is not vacated or stayed, or such writ,
warrant of attachment or similar process is not vacated, released or bonded off,
within 30 days after its entry or levy, then the other party may terminate this
Agreement immediately by written notice to the other party.
SECTION 6.4 NO WAIVER OF TERMINATION RIGHT. No delay on the part of
either party to declare this Agreement terminated shall constitute a waiver or
estoppel of such right, and no waiver by either party of any default under or
breach of this Agreement shall be deemed a waiver of such party's right to
declare this Agreement terminated as to subsequent defaults by the other party.
The termination of this Agreement by either party pursuant to this Article shall
not be deemed to limit any other rights or remedies such party may have as a
result of the other party's default hereunder or breach hereof.
SECTION 6.5 OBLIGATIONS UPON TERMINATION. Upon termination of this
Agreement for any
reason:
(a) Distributor shall within ten (10) days remove all references to York
and the Marks from Distributor's place or name of business, listings,
letterheads, catalogs, advertising and other literature, and shall not
thereafter use any trademark, trade name, servicemark, brand name, label or
symbol which gives or may give the impression that the relationship between the
parties under this Agreement still exists, or do any other act tending to impair
or damage the Marks. Distributor will immediately cease to use, and promptly
will release and deliver to York all advertisements, signage, displays or other
advertising materials bearing references to the Products or York in
Distributor's possession or control.
(b) Distributor shall within ten (10) days pay to York all amounts due
to York.
(c ) All orders for the Products which have not been shipped or
delivered, at the option of either party, may be canceled without liability upon
the effective date of termination. If York elects to fill Distributor's orders,
York shall do so only to the extent consistent with Distributor's history of
purchases for a like period, and York may require advance payment for such
orders.
(d) York shall have the option for ten (10) days after the effective
date of the termination to purchase, and Distributor agrees to sell to York if
such option is exercised, all or any part of Distributor's inventory of salable
Products at Distributor's laid in cost plus commercially reasonable handling
costs incurred by Distributor on such repurchase. At the direction of York,
Distributor shall ship, at York's expense, such Products F.O.B. Distributor's
facility or permit such Products to be picked up at Distributor's facility.
(e) Distributor agrees and acknowledges that any goodwill associated
with York and the Products is the exclusive property of York. Distributor agrees
that it will not act in any manner detrimental to the sale and distribution of
the Products or to the reputation or goodwill of York or the Products.
ARTICLE VII
LIABILITY AND RELATED MATTERS
SECTION 7.1 LIMITATION ON LIABILITY. THE EXCLUSIVE MEASURE OF DAMAGES
RECOVERABLE BY EITHER PARTY FROM THE OTHER PARTY UNDER THIS AGREEMENT, WHETHER
ARISING BY NEGLIGENCE, INTENDED CONDUCT OR OTHERWISE, SHALL NOT INCLUDE ANY
AMOUNTS FOR INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OF
ANY PARTY, INCLUDING THIRD PARTIES, EVEN IF SUCH DAMAGES ARE FORESEEABLE.
SECTION 7.2 WARRANTY. YORK'S WARRANTIES, INCLUDING, WITHOUT LIMITATION,
WARRANTIES WITH RESPECT TO THE DESIGN, MATERIALS, WORKMANSHIP, MERCHANTABILITY,
FITNESS FOR PURPOSE AND PERFORMANCE OF ITS PRODUCTS, SHALL BE LIMITED
EXCLUSIVELY TO THOSE SPECIFICALLY EXPRESSED IN WRITING FROM TIME TO TIME BY
YORK. ANY SUCH WARRANTY SHALL RUN DIRECTLY FROM YORK TO THE ULTIMATE CONSUMER OF
THE PRODUCTS AND SHALL NOT BE ENLARGED, DIMINISHED OR OTHERWISE ALTERED OR
AMENDED IN ANY MANNER BY DISTRIBUTOR. DISTRIBUTOR SHALL MAKE NO REPRESENTATION
REGARDING YORK'S WARRANTY, IF ANY, COVERING THE PRODUCTS BUT SHALL REFER ITS
CUSTOMERS TO YORK'S PRINTED WARRANTY STANDARD IN EFFECT AT THAT TIME, IF ANY. AS
BETWEEN YORK AND DISTRIBUTOR, EXCEPT AS EXPRESSLY PROVIDED HEREIN, YORK
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR BY OPERATION OF
LAW OR OTHERWISE, CONTAINED IN OR DERIVED FROM THIS AGREEMENT, ANY OF THE
EXHIBITS ATTACHED HERETO OR IN ANY OTHER MATERIALS, BROCHURES, PRESENTATIONS OR
OTHER DOCUMENTS OR COMMUNICATIONS WHETHER ORAL OR WRITTEN, INCLUDING, WITHOUT
LIMITATION, IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VIII
GENERAL
SECTION 8.1 DISTRIBUTION BY YORK; ASSIGNMENT OF ACCOUNTS. Distributor
understands and acknowledges that, notwithstanding the assignment of the
Territory or Sub-Area to Distributor, York may own or operate any distribution
business selling Products in the Territory or Sub-Area, or otherwise sell or
distribute Products in the Territory or Sub-Area, as follows: (a) as necessary
or appropriate in connection with the acquisition of a business by York or its
subsidiaries; (b) in the event the Minimum Non-National Account Market Share is
not met; (c) in connection with York Programs; and (d) to address Product
shortages or delivery problems. For a Territory, Sub-Area or portion thereof
which is not exclusive, York may assign Customers or accounts to Distributor or
other distributors as it shall reasonably determine from time to time in
accordance with the procedures and/or criteria set forth on EXHIBIT B.
SECTION 8.2 CONFIDENTIAL INFORMATION. The parties acknowledge that
during the Term and thereafter, either party may disclose to the other party
from time to time certain of its business product pricing, financial, marketing,
technical and other proprietary and sensitive information. Both parties shall
use commercially reasonable efforts to keep confidential any and all information
concerning customers, trade secrets, methods, processes or procedures and any
other confidential, financial and business information (the "CONFIDENTIAL
INFORMATION") of the other party with the same standard of care as it uses for
its own Confidential Information. Neither party shall disclose the other party's
Confidential Information to any third party without the prior written consent of
the other party, except that both parties agree that the other party may
disclose the first party's Confidential Information to the other party's
auditors, to governmental authorities having jurisdiction over the other party,
or as otherwise required by applicable law. Confidential Information of either
party shall not include information which (a) is in the public domain, (b) is
previously known or independently developed by the receiving party, (c) is
acquired by the receiving party from any third party having a right to disclose
such information or (d) the receiving party is obligated to produce under a
court or governmental order. The obligations of the parties under this Section
shall survive termination of this Agreement.
SECTION 8.3 INJUNCTIVE RELIEF. The parties acknowledge that a breach by
either party of this Agreement will give rise to irreparable injury to the other
party, inadequately compensable in damages. Accordingly, the parties hereby
consent to the obtaining by the other party of injunctive relief against the
breach or threatened breach of the undertakings of the parties contained in this
Agreement. The parties further agree that such an order so enjoining a party may
be issued pending final determination thereof without the requirement to post
bond. The obligations of the parties under this Section shall survive the
termination of this Agreement.
SECTION 8.4 WAIVER. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
SECTION 8.5 RELATIONSHIP OF THE PARTIES.
(a) This Agreement shall not be construed to make one party or any of
its directors, officers, stockholders or employees an agent, partner, joint
venturer, employee, franchisee or any other legal representative of the other
party, and no party has a fiduciary duty or other similar relationship to the
other. Neither party nor its representatives shall have any right or authority
whatsoever to incur any liability or obligation (express or implied) or
otherwise act in any manner, in the name or on behalf of the other party, or to
make any promises, warranty or representation binding on the other party with
respect to its products or services except as specifically permitted herein.
Distributor expressly agrees to market the Products as an independent contractor
or vendor buying and selling for its own account and not as an agent, partner or
joint venturer of York.
(b) Distributor acknowledges and agrees that any amount spent by
Distributor in the performance of this Agreement, including, without limitation,
the establishment and maintenance of existing and/or additional sales,
management, warehouse, administrative or other personnel, warehouse space,
advertising and promotion costs, or any other expenditure or lost opportunities
related to the performance of this Agreement, shall be spent or incurred by
Distributor with the knowledge that this Agreement may be terminated as herein
provided, and Distributor shall not make any claim against York, nor shall York
be liable to Distributor, with respect to Distributor's investment, nor for any
amounts spent or costs incurred as aforesaid in anticipation of the continuance
of this Agreement.
SECTION 8.6 FORCE MAJEURE. (a) York shall not incur liability to
Distributor or be deemed in default under this Agreement on account of delays or
inability to ship Products or other failures to perform its obligations
hereunder occasioned by force majeure, labor disputes, strikes, boycotts,
shortages, acts of God or the elements, government regulations or other matters
beyond York's control.
(b) Distributor shall not incur liability to York or be deemed in
default in performing its obligations under this Agreement, if such default is
occasioned by force majeure, labor disputes, strikes, boycotts, shortages, acts
of God or the elements, government regulations or other matters beyond
Distributor's control, provided that during the pendency of such force majeure
event York may take such actions as it deems necessary or appropriate with
regard to Products and Customers in the Territory and in no event will this
force majeure provision apply to any payment obligation of Distributor or
obligations under ARTICLE II.
SECTION 8.7 ENTIRE AGREEMENT. This Agreement, including any Exhibits
hereto, contains the entire understanding among the parties hereto with respect
to the subject matter hereof, and supersedes all prior and contemporaneous
agreements and understandings, inducements or conditions, express or implied,
oral or written, except as herein contained. The express terms hereof control
and supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof. This Agreement may not be modified or amended
other than by an agreement in writing signed by both parties.
SECTION 8.8 BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be
binding upon the parties named herein and to their respective successors and
assigns. Distributor acknowledges that York has a vital interest in the
identity, control and management of the entities that are authorized to sell the
Products. Neither this Agreement nor any of the rights, interests or obligations
hereunder of Distributor may be assigned by Distributor, without the prior
written consent of York, and any such attempted assignment shall be null and
void. A change of control, direct or indirect, of Distributor shall constitute
an assignment for purpose of this Agreement.
SECTION 8.9 SEVERABILITY. If any provision of this Agreement shall be
determined to be contrary to law and unenforceable by any court of law, the
remaining provisions shall be severable and
enforceable in accordance with their terms.
SECTION 8.10 COUNTERPARTS. 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 instrument.
SECTION 8.11 HEADINGS. The Agreement headings herein are for convenience
only and shall not be deemed to affect in any way the language of the provisions
to which they refer.
SECTION 8.12 NOTICES. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
delivered if sent by telecopy, prepaid courier, express mail or personal
delivery or three days after mailing, registered or certified mail, postage
prepaid, return receipt requested, to the following addresses and telecopier
numbers:
If to York:
The York Group, Inc.
0000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
If to Distributor:
In addition, notice by mail shall be by air mail if posted outside of the
continental United States. Any party may alter the address to which
communications are to be sent by giving notice of such change of address in
conformity with the provisions of this Section.
SECTION 8.13 CONTROLLING LAW. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the State of Texas, without regard
to its principles of conflicts of law. Xxxxxx County, Texas shall be the proper
place of venue for all actions relating to this Agreement.
SECTION 8.14 NUMBER OF DAYS. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; PROVIDED, HOWEVER, that if the final day of any time
period or a specified date of a calendar month falls on a Saturday, Sunday or
holiday, then the final day or the specified date of the month shall be deemed
to be the next day which is not a Saturday, Sunday or such holiday.
SECTION 8.15 NO THIRD PARTY BENEFICIARIES. The parties agree that this
Agreement is for the benefit of the parties hereto only and is not intended to
confer any legal rights or benefits on any third party, and that there are no
third party beneficiaries to this Agreement or any part or specific provision of
this Agreement.
SECTION 8.16. ATTORNEYS' FEES. The prevailing party in any legal
proceedings brought by or
against the other party to enforce any provision of this Agreement shall be
entitled to recover against the non-prevailing party the reasonable attorneys'
fees, court costs and other expenses incurred by the prevailing party.
SECTION 8.17. SURVIVAL. The provisions of Sections 2.2, 2.6, 2.7, 4.1,
6.5, 8.2, 8.3, 8.9, 8.12 and 8.13 shall survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
one or more counterparts the day and year first above written.
THE YORK GROUP, INC.
By:_________________________________
Xxxx X. Xxxxxxx
President and Chief Executive
Officer
Date:_______________________________
[DISTRIBUTOR]
By:_________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
EXHIBITS:
A - Territory
B - Market Share Growth Requirements;
Sub Areas; Minimum Non-National Account Market Share
C - Ownership of Distributor
D - Management of Distributor
EXHIBIT A
TERRITORY
[TO COME]
EXHIBIT B
[TO COME]
EXHIBIT C
OWNERSHIP
PERCENTAGE
NAME ADDRESS OWNERSHIP
---- ------- ---------
___%
___%
___%
EXHIBIT D
MANAGEMENT
NAME ADDRESS TITLE
---- ------- -----
