Exhibit 10.15
INTERNATIONAL DISTRIBUTION AGREEMENT
This International Distribution Agreement (the "Agreement") is made as
of this 16th day of January, 2001 by and between NEXT Fiber Products Inc., a
Delaware corporation having its principal offices at 0 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000 (together with its parent, subsidiary and sister entities,
"Manufacturer"), and B&F Composites, Inc., a Canadian corporation, having its
principal offices at 00 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx ("BFC"), NEX
Products Inc., a Canadian corporation, having its principal offices at 00
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx ("NEX") and Compact Industries Ltd.,
a Canadian corporation, having its principal offices at 00 Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx, Xxxxxx ("Compact") (together with the parent, subsidiary and
affiliated entities of BFC, NEX and Compact, collectively referred to herein as
the "Distributor").
1. Appointment of Distributor
1.1 The Distributor is appointed by Manufacturer as its distributor for
the products listed in Exhibit A (the "Products") attached hereto and made a
part hereof, as it may be amended from time to time by execution of a revised
Exhibit A by both parties, to purchasers whose principal place of business is
located exclusively in the territory and industry listed in Exhibit A (the
"Territory"), for a period of five (5) years from the date of the signing of
this Agreement. The grant set forth in this paragraph shall be exclusive as to
the Products listed as exclusive on Exhibit A within the corresponding
Territories listed on Exhibit A and shall be non-exclusive as to the Products
listed as non-exclusive on Exhibit A within the corresponding Territories listed
on Exhibit A each subject to the limitations specified in Exhibit A hereto.
1.2 Distributor may request in writing changes in the designs, drawings
and specifications, shipping instructions and shipment schedules of the
Products. As promptly as practicable after the receipt of such request,
Manufacturer will advise Distributor whether the changes are practicable and, if
so, what amendments to this Agreement or any Purchase Order or Release Order
(both as defined below) made pursuant to the terms of this Agreement may be
necessitated by the requested changes that Manufacturer deems, in its sole
discretion, to be commercially reasonable, including, but not limited to,
amendment of price, specifications and shipment schedule. If such proposed
amendments are accepted in writing by Distributor, Manufacturer, in its sole
discretion, may make such requested changes. Manufacturer may propose in writing
changes in the designs, drawings and specifications of the Products. The
proposed changes may be implemented by Manufacturer if such changes are accepted
in writing by Distributor in its sole discretion. Notwithstanding the foregoing,
Manufacturer reserves the right to make minor changes in details of design,
construction or arrangement of the Products which in its judgment, constitute an
improvement over such former design as may be shown or described in the
specifications set forth on Exhibits B and C hereto (the "Specs"). However,
Manufacturer may not make any changes in the details of the design, construction
or arrangement of the Products that would significantly affect the Specs without
Distributor's prior written approval, to be granted in Distributor's sole
discretion.
1.3 For purposes of this Agreement, the twelve (12) month period
following the date of this Agreement shall be referred to as "Year 1". Each
subsequent twelve (12) month period, beginning with the end of Year 1, shall be
referred to as a "Subsequent Year" and collectively as the "Subsequent Years".
1.4 Where the term "agent" is required by law in the Territory in place
of the term "Distributor", agent shall mean the agent appointed to represent
Manufacturer in the Territory for sales and service of Manufacturer's
manufactured goods. An agent is not authorized to act as a direct Manufacturer
operation or to conduct business in Manufacturer's name as a principal.
2. Distributor Obligations
Distributor agrees:
2.1 To pay Manufacturer's invoices, without off-set, deduction or
reduction for any reason, directly, to Manufacturer, in US currency, in
accordance with the payment terms set forth in this Agreement.
2.2 To order Products from Manufacturer by submitting written Purchase
Orders or Release Orders, as applicable, in accordance with the procedures set
forth in Sections 4.4 and 4.5 of this Agreement.
2.3 To use its best efforts to promote and sell the Products to the
maximum number of responsible customers in the Territory.
2.4 To purchase the agreed minimum volume of Products shown in Table 1
on Exhibit D hereto (the "Minimum Purchase Volume" or "Minimum Purchase
Volumes") in Year 1 and in the Subsequent Years. If Distributor fails to
purchase the Minimum Purchase Volume in Year 1 or in a Subsequent Year,
Manufacturer may, in its sole discretion (i) terminate the exclusivity granted
to Distributor pursuant to this Agreement, as set forth in Exhibit A, or (ii)
terminate this Agreement in its entirety, both in accordance with the provisions
set forth in Section 10.
2.5 To purchase the agreed Minimum Purchase Volume of Products in Year
1, subject to Section 4.1 of this Agreement, at the price of $0.55 per pound,
except for parts longer than sixteen (16) feet in which case the price will be
$0.65 per pound (the "Initial Price"), provided such Products conform to Specs
(the "Initial Purchase"). Distributor shall take shipment of the Initial
Purchase at such time during Year 1 as Manufacturer produces such Products, up
to and including such Minimum Purchase Volume. If Distributor fails to take
shipment of the Initial Purchase in Year 1, Distributor shall pay one hundred
percent (100%) of the value of the Minimum Purchase Volume required for Year 1
minus any payments already made by Distributor for Products taken in Year 1. The
value of the Minimum Purchase Volume is hereby agreed to be the Initial Price
multiplied by the Minimum Purchase Volume requirement for Year 1.
2.6 To notify Manufacturer of its prices for Products in the Territory,
as in effect from time to time, the parties acknowledging that Distributor shall
be free to establish its own pricing for Products sold.
2.7 To sell outside of the United States and Canada the minimum volumes
of Products set forth in Table 2 on Exhibit D, annexed hereto and made a part
hereof (the "Minimum Sale Volume" or "Minimum Sale Volumes"), in Year 1 and in
the Subsequent Years. If Distributor fails to sell the Minimum Sale Volume in
Year 1 or in a Subsequent Year, Manufacturer may, in its sole discretion (i)
terminate the exclusivity for the Soundwall products granted to Distributor
pursuant to this Agreement in the Territory, or any part thereof, outside of the
United States and Canada or (ii) terminate Distributor's distribution rights for
the Soundwall products granted to Distributor pursuant to this Agreement in the
Territory, or any part thereof, outside of the United States and Canada, both in
accordance with the provisions set forth in Section 10.
2.8 To (i) install or have its customers install the Products on the
premises of its customers, (ii) maintain a competent, trained and experienced
sales and service staff, sufficient to cover the Territory, including the market
and the installed base and (ii) provide timely response to each end user of
Products in the Territory with respect to required repairs or maintenance.
2.9 To (i) assist Manufacturer in obtaining any license or permit
required for Manufacturer to make the sales to Distributor contemplated
hereunder, (ii) comply with all applicable decrees, statutes, rules and
regulations of the United States and agencies thereof and of the countries in
the Territory, (iii) maintain the necessary records to comply with such decrees,
statutes, rules and regulations, (iv) to inform Manufacturer of changes in any
such decrees, statutes, rules and regulations and any regulatory approvals,
market needs and competitive activity, (v) not re-export any Products except in
compliance with such decrees, statutes, rules and regulations and with this
Agreement, (vi) obtain all approvals and licenses necessary to import the
Products into each country in the Territory in which Products are to be sold and
(vii) not sell, transfer or otherwise dispose of the Products in violation of
the export laws of the United States.
2.10 To translate and publish Product labeling and literature provided
by Manufacturer, including all user and technical manuals and advertising and
marketing information, and to provide Manufacturer with advance copies of all
such material for approval by Manufacturer.
2.11 Not to modify, in any manner or respect, any Product.
2.12 To store Products, when necessary, in a timely manner and in a
suitable facility.
2.13 To comply with all requirements regarding the protection of
intellectual property and proprietary information set forth in Sections 5 and 9
hereto.
2.14 To (i) inform Manufacturer immediately of any potential hazards,
(ii) report immediately incidents and complaints, and (iii) cooperate fully with
Manufacturer in connection with any Manufacturer investigation concerning
Product safety or quality.
2.15 To notify Manufacturer of any special packaging requirements.
2.16 To (i) grant, and does hereby grant, to Manufacturer, a purchase
money security interest in the Products and all proceeds thereof, for the full
amount of the purchase price and any costs and charges incurred by Manufacturer
in connection therewith, (ii) sign any documents, including one or more
financing statements, and take any other action required by law to perfect the
security interest granted hereunder, (iii) if Distributor shall fail to perform
its obligations hereunder, assemble the collateral and deliver the collateral to
the possession of Manufacturer, at Manufacturer's principal office or location
designated by Manufacturer and (iv) appoint, and does hereby appoint,
Manufacturer as Distributor's attorney-in-fact, with full power of substitution,
to (a) comply with any reasonable request of Manufacturer hereunder, (b) do any
act which Distributor is obligated to do hereunder, (c) enforce all of
Distributor rights in the collateral granted to Manufacturer hereunder, (d)
collect the collateral, including the proceeds and (e) execute and file in
Distributor's name any financing statements and amendments thereto or
continuations thereof.
2.17 To take any and all actions, at its sole cost and expense, which
are necessary and appropriate or are requested by Manufacturer to effectuate a
product corrective action, including, without limitation, a product recall.
2.18 To maintain and carry liability insurance with insurance companies
rated B+ or better by "Best" rating services, including, but not limited to, (i)
employer's liability, (ii) comprehensive general liability, (iii) workers'
compensation insurance with at least statutory limits, (iv) property damage
liability, (v) product liability, (vi) completed operations liability, (vii)
contractual liability, and (viii) public liability, in amounts determined by
Distributor, but with a limit of not less than US$2,000,000 in general liability
coverage, naming Manufacturer as an additional insured as its interests may
appear. Distributor will, if requested by Manufacturer, furnish certificates of
insurance from its carrier evidencing the foregoing coverages, which shall
provide that such coverage shall not be materially changed without thirty (30)
day advance written notification to Manufacturer from the carrier.
2.19 To obtain a return goods authorization ("RGA") number from
Manufacturer prior to returning Product to Manufacturer, for any reason,
including a warranty return.
2.20 To notify Manufacturer promptly of any event which would permit a
termination of this Agreement under Section 10.1, 10.2 or 10.3 of this
Agreement.
2.21 To refrain from owning, operating, joining, controlling,
participating in, or being connected as a partner, stockholder or otherwise
with, any business or entity (other than the Manufacturer) which produces,
manufactures, markets or distributes thermoplastic or thermoset composites which
are based on the technology described in Exhibit E hereto, or produces,
manufactures, markets, or distributes any products in the markets described in
Exhibit F hereto, directly or indirectly through any person or entity
Distributor or its shareholders control, without the prior written consent of
Manufacturer, during the period beginning with the date hereof and ending on the
first anniversary of the expiration of this Agreement, or, if this Agreement is
terminated earlier, ending as follows: (i) if such earlier termination occurs
during Year 1, then on the fifth anniversary of such earlier termination, (ii)
if such earlier termination occurs during the first Subsequent Year, then on the
fourth anniversary of such earlier termination, (iii) if such earlier
termination occurs during the second Subsequent Year, then on the third
anniversary of such earlier termination, and (iv) if such earlier termination
occurs during the third or later Subsequent Year, then on the second anniversary
of such earlier termination. Distributor further acknowledges that Manufacturer
will operate in global markets with respect to the business of producing
thermoplastic and thermoset composites, so that a geographic limitation to this
provision would create substantial injury to Manufacturer. Distributor believes
that the period of time and the area herein specified are reasonable in view of
the nature of the business in which Distributor and Manufacturer are engaged,
the state of Manufacturer's business development and Distributor's knowledge of
Manufacturer's business. However if such period or such area should be adjudged
unreasonable in any judicial proceeding, then the period of time shall be
reduced by such number of months or such area shall be reduced by elimination of
such portion thereof, or both, as is deemed unreasonable, so that this covenant
may be enforced in such area and during such period of time as are adjudged to
be reasonable.
2.22 To work closely with Manufacturer to resolve any issues regarding
potential quality and delivery problems that may occur during Year 1. This would
include flexibility on an agreeable delivery schedule as well as an
understanding that Distributor will use its best efforts to sell or use any
off-spec material it receives from Manufacturer. Manufacturer anticipates that
this would entail selling the material at a discounted price, which will then
reduce the price paid to Manufacturer. Any off-spec material that cannot be sold
by Distributor will be returned to Manufacturer for a refund.
2.23 If the Territory, as set forth on Exhibit A, has been amended to
prohibit Distributor from distributing the Products in certain parts of the
world, to (i) not solicit or accept orders from any prospective purchaser with
its principal place of business located outside the Territory, (ii) to
immediately refer any order or prospective purchaser whose principal place of
business is located outside the Territory to Manufacturer, (iii) not to deliver
or tender (or cause to be delivered or tendered) any Product outside the
Territory and (iv) not to sell any Products to a purchaser if Distributor has
reason to believe that such purchaser intends to remove the Products from the
Territory. If the Territory, as set forth on Exhibit A, has been amended to
prohibit Distributor from distributing the Products in certain parts of the
European Union to refrain from (i) establishing or maintaining any branch,
warehouse or distribution facility for the Products within the European Union
outside of the revised Territory (ii) engaging in any advertising or promotional
activities relating to the Products directed primarily to customers outside the
revised Territory within the European Union, or (iii) soliciting orders from any
prospective purchaser with its principal place of business located outside the
revised Territory within the European Union. If the Territory, as set forth on
Exhibit A, has been amended to prohibit Distributor from distributing the
Products in certain parts of the European Union, with respect to the receipt of
any order from a prospective purchaser whose principal place of business is
located outside the European Union and outside the revised Territory, to
immediately refer that order to Manufacturer and not to accept any such orders.
3. Manufacturer Obligations
Subject to the terms and conditions of this Agreement, Manufacturer
agrees:
3.1 To use commercially reasonable efforts to provide Products complying
substantially with the Specs, without defects in workmanship or materials.
3.2 To provide Distributor with such marketing and technical assistance
as Manufacturer may, in its discretion, consider necessary to assist Distributor
with the promotion of the Products.
3.3 To inform Distributor of any changes in prices of Products at least
thirty (30) days prior to the effective date of any such change.
3.4 To inform Distributor as soon as practicable of any significant
change in the specifications for any Product sold to Distributor.
3.5 To use commercially reasonable efforts to ensure that Manufacturer
has adequate manufacturing capacity to satisfy Distributor's annual Minimum
Purchase Volume requirements.
3.6 To pay Distributor a rebate for every pound of Product purchased
from Manufacturer over Distributor's Minimum Purchase Volume requirements in
accordance with the rebate formula set forth in Table 3 on Exhibit D hereto.
3.7 To use the basis weights and weight tolerances, and lengths and
length tolerances as referenced in the Specs.
4. Pricing and Delivery; Distributor's Right of First Refusal
4.1 All prices are net, net FCA, Manufacturer's manufacturing facility.
The purchase price for the Products in Year 1 will be the Initial Price (as
defined in Section 2.5). The Initial Price will remain in effect during Year 1,
unless the price of plastic (fractional melt recycled HDPE) increases by more
than thirty percent (30%), or a material substitution is adopted to reduce
material costs by greater than thirty percent (30%). At the commencement of each
Subsequent Year, the parties will negotiate the purchase price of the Products
(the "Renewal Price"). The parties hereby agree that if the Manufacturer's
venture is suffering financial losses due to the manufacturing, marketing or
sale of the Products, the pricing structure outlined in this Section 4.1 will be
renegotiated. Without derogating from the foregoing, the parties hereby agree
that Manufacturer may revise the Initial Price or the Renewal Prices in the
following instances: (i) in the event any changes in the Products are
necessitated by actual operating conditions different from those used as the
basis of the Initial Price or the Renewal Prices, (ii) in the event of any
changes in the Products requested by Distributor, or (iii) if production rates
on the Soundwall tongue and groove board or other Products falls to slower than
three (3) feet per minute average per shift.
4.2 Distributor shall accept and pay in full for the Products net thirty
(30) days from the date such Products are shipped. All amounts shall be paid in
U.S. dollars by check or wire transfer to such bank or account as Manufacturer
may from time to time designate in writing. Whenever any amount hereunder is due
on a day which is not a day on which banks in Boston, Massachusetts, USA are
open for business (a "Business Day"), such amount shall be paid on the next
succeeding Business Day. Amounts hereunder shall be considered to be paid as of
the day on which funds are received by Manufacturer's bank. In the event that
Distributor fails to meet its payment obligations under this Section 4.2 or
pursuant to any other provision under this Agreement, Manufacturer (i) shall be
released from its obligation to perform under this Agreement during the period
of Distributor's failure to perform, and (ii) shall have the right to terminate
this Agreement in its entirety in accordance with Section 10.2. No price change
will be effective unless Manufacturer has provided at least thirty (30) days
written notice of such change.
4.3 All Purchase Orders and Release Orders are subject to acceptance by
Manufacturer. Manufacturer will use commercially reasonable efforts to deliver
Products as soon as such Products are produced, subject to (i) events of force
majeure, (ii) the right and ability of Manufacturer to obtain all required
permits and licenses and legally make such sale, (iii) prior orders (after Year
1), and (iv) the receipt by Manufacturer of (A) Distributor's written Purchase
Order or Release Order, as applicable, and (B) complete information necessary
for production including, but not limited to, Distributor's approval of drawings
when applicable and sufficient customer approved technical specifications.
Distributor hereby acknowledges that any delay in completing the approved
technical specifications may adversely affect the shipment date and that the
actual time of shipment may vary based on quantity ordered and available
capacity at the time of order. The Distributor further acknowledges and agrees
that where the scheduled shipment of any Products is delayed by Distributor,
Manufacturer may deliver such Products by moving them to storage for the
account, cost and risk of Distributor.
4.4 During Year 1, Products will be manufactured as soon as
manufacturing capacity becomes available. Upon the signing of this Agreement,
Manufacturer shall provide Distributor with a two (2) month rolling forecast (a
"Forecast") of Manufacturer's manufacturing capacity for the Products broken
down by stock keeping unit (an "sku"). Within three (3) business days of the
receipt by Distributor of such Forecast, Distributor shall submit a firm release
order to Manufacturer specifying the quantities by sku of each particular
Product (a "Release Order") for the first two (2) months of this Agreement.
Thereafter, for the duration of Year 1, Manufacturer shall submit a Forecast to
Distributor fifteen (15) days prior to the end of each calendar month. Upon
receipt by Distributor of such Forecast, and in any case no later than seven (7)
days prior to the end of such calendar month, Distributor shall submit a Release
Order to Manufacturer for such calendar month. The aggregate weight of the
Products specified in any Release Order must be the same as the aggregate weight
of the Products specified in the Forecast for that period. If Manufacturer does
not receive a Release Order by the end of any given calendar month, Manufacturer
may ship the Products shown by sku in that calendar month Forecast as submitted
by Manufacturer and Distributor shall be obligated to accept and pay for such
Products. Without derogating from the foregoing, in Year 1, should
Manufacturer's entire manufacturing capacity exceed 15 million pounds,
corresponding to 1.25 million pounds per month, Distributor will have the right
of first refusal to purchase the excess capacity up to 2 million pounds per
month.
4.5 No later than the end of the eighth month of Year 1 and of the
Subsequent Years, the parties will negotiate for any additional volume that
Distributor may require for the following Subsequent Year above the Minimum
Purchase Volume (the "Additional Volume") (the sum of the Additional Volume and
the Minimum Purchase Volume shall be referred to as the "Total Yearly Volume").
Once agreed between the parties, and provided that such Total Yearly Volume does
not exceed the Manufacturer's maximum manufacturing capacity, Distributor will
have committed Additional Volume on top of the Minimum Purchase Volume for such
Subsequent Year. No later than the end of the eight month of Year 1 and the
Subsequent Years, Distributor will submit to Manufacturer a rolling purchase
order covering the Total Yearly Volume (the "Yearly Purchase Order"). In
addition to specifying the Total Yearly Volume for such Subsequent Year, such
Yearly Purchase Order shall include quantities, configurations, expected order
dates and expected shipping dates for the duration of the Subsequent Year. On
the first day of the first month of each quarter, Distributor will also submit
to Manufacturer a rolling purchase order for the following quarter (the
"Quarterly Purchase Order"). The Quarterly Purchase Order will cover
Distributor's needs for the entire quarter broken down by sku and by month. Such
Quarterly Purchase Order shall be firm for each month within such quarter (the
"Monthly Release Order"). The total size of the Quarterly Purchase Order may not
exceed twenty five percent (25%) of the quarterly committed volume, as
calculated by dividing the Total Yearly Volume by a factor of four, and the
volume of the Monthly Release Order may not exceed twenty five percent (25%) of
the monthly committed volume, as calculated by dividing the Total Yearly Volume
by a factor of twelve. In addition, the sum of the four Quarterly Purchase
Orders for any given Subsequent Year, and the sum of the twelve Monthly Release
Orders for such Subsequent Year may not exceed the Total Yearly Volume for that
Subsequent Year, respectively. As an example, for purposes of illustration only,
if in the first Subsequent Year the Additional Volume is 10 million pounds,
making the Total Yearly Volume 40 million pounds, or 10 million pounds per
quarter and 3.33 million pounds per month, the Monthly Release Order for any one
month may not exceed 4.16 million pounds, the Quarterly Purchase Order may not
exceed 12.5 million pounds and the Total Yearly Volume for that Subsequent Year
may not exceed 40 million pounds.
4.6 Manufacturer will maintain one to two truckloads of the Soundwall
system and one to two truckloads of the Railing/Decking system as inventory at
Manufacturer's plant or plants throughout the Term of this Agreement (as defined
in Section 10.4 below).
4.7 All Products ordered by Distributor shall be packed for shipment and
storage in accordance with Manufacturer's standard commercial practices and
delivered to the possession of a common carrier or freight forwarder designated
by Distributor. Manufacturer will use commercially reasonable efforts to comply
with Distributor's requested changes from Manufacturer's standard commercial
practices, at Distributor's sole cost and expense.
4.8 Risk of loss and damage to a Product shall pass to Distributor upon
the delivery of such Product to the common carrier. All claims for
non-conforming shipments must be made in writing to Manufacturer within fifteen
(15) days of such passing of the risk of loss and damage. Any claims not made
within such period shall be deemed waived and released and such Products shall
be deemed accepted.
4.9 No part of any amount payable to Manufacturer hereunder may be
reduced due to any counterclaim, set-off, adjustment or other right which
Distributor may have against Manufacturer, any other party or otherwise.
Manufacturer reserves the right, at any time, to require payment for all
Products delivered hereunder to be made by irrevocable letter of credit,
providing for sight payment. Any such letter of credit shall be governed by
Uniform Customs and Practice for Documentary Credit (UCP) 500.
4.10 Manufacturer has the right to charge interest in U.S. Dollars at
the rate of the lesser of (i) one and one-half (1.5%) percent per month or (ii)
the maximum lawful interest rate permitted under applicable law on all amounts
due and owing to Manufacturer hereunder but not paid by Distributor on the due
date thereof. Such interest shall accrue on the balance of unpaid amounts from
time to time outstanding from the date on which portions of such amounts become
due and owing until payment thereof is made in full.
4.11 No terms and conditions proposed by either party in any document,
including, without limitation, a Purchase Order or a Release Order, shall be
binding upon the other party, or in any way modify, amend or add to the terms of
this Agreement. Without derogating from the foregoing, the parties hereby
acknowledge, subject to Section 10.2(iv), that certain provisions of the Terms
and Conditions of Blanket Purchase Order 100 between the parties ("Blanket
Purchase Order 100") have been incorporated herein and as such Blanket Purchase
Order 100 shall have no further force and effect upon the signing of this
Agreement.
5. Intellectual Property
5.1 Distributor acknowledges that all trade secrets, Manufacturer
Trademarks (as defined below), patent rights, copyright rights, know-how and
other intellectual property of Manufacturer hereunder is Proprietary Information
pursuant to Section 9 of this Agreement.
5.2 Distributor shall not use any Manufacturer trademark, logo, trade
name, service xxxx or any other intellectual property right of Manufacturer
("Manufacturer Trademarks"), without Manufacturer's express prior written
consent therefor. Distributor shall not at any time do or permit to be done any
act which may in any way impair the rights of Manufacturer in the Manufacturer
Trademarks.
5.3 Distributor shall (i) use the Manufacturer Trademarks in compliance
with all relevant laws and regulations, (ii) accord Manufacturer the right to
inspect during normal business hours, without prior advance notice,
Distributor's facilities used in connection with efforts to sell the Products
and records relating to the Products in order to confirm that Distributor's use
of such Manufacturer Trademarks is in compliance with this Agreement and (iii)
not modify any of the Manufacturer Trademarks in any way or use any of the
Manufacturer Trademarks on or in connection with any goods or services other
than the Products.
5.4 Distributor shall retain and shall not alter or obscure any notices,
markings or other insignia which are affixed to the Products or any related
documentation and shall ensure that any reproductions or copies, whether in
English or translations, contain all such notices, markings and other insignia.
5.5 Distributor agrees that any advertising or publicity which is
released by it in which Manufacturer or any Product is identified shall be in
accordance with this Agreement and with any information or data which
Manufacturer has furnished in connection with this Agreement. Distributor shall
provide copies of all such publicity and/or advertising to Manufacturer before
use for its prior written approval thereof.
5.6 Manufacturer agrees that it shall not use any Distributor trademark,
logo, trade name, service xxxx or any other intellectual property right of
Manufacturer ("Distributor Trademarks") or Distributor's proprietary designs of
(i) Xxxxxxxx Rail, as set forth in the Specs in Exhibit B, or (ii) Privacy
Fence, as set forth in Exhibit C hereto (the "Designs"), without Distributor's
express prior written consent therefor. Manufacturer shall not at any time do or
permit to be done any act which may in any way impair the rights of Distributor
in the Distributor Trademarks or the Designs.
5.7 The provisions of this Section 5 shall survive the termination of
this Agreement.
6. Limited Warranty and Extended Limited Warranty
6.1 Limited Warranty
(a) Products sold by Manufacturer to Distributor pursuant to this
Agreement are warranted to be free of defects in material or workmanship and in
accordance with the Specs upon shipment by Manufacturer.
(b) Manufacturer will, as its sole obligation under this
warranty, repair or replace, at its sole expense, any such defective Products or
part thereof during the warranty period.
(c) Warranty claims hereunder not made within thirty (30) days of
the date of shipment by Manufacturer shall be null and void.
6.2 Extended Limited Warranty
(a) Manufacturer warrants that the Products are manufactured from
cellulose and recycled plastic and will not rot, split, splinter, check or
suffer structural damage from termite or fungal decay for a period of ten (10)
years from the date of shipment. This Section 6.2 shall not be construed to
apply to any claims based on color or any other Specs.
(b) MANUFACTURER'S LIABILITY UNDER THIS WARRANTY IS LIMITED
SOLELY TO REPLACEMENT OF DEFECTIVE PRODUCT OR REFUND ON A TEN YEAR STRAIGHT-LINE
DEPRECIATING BASIS, AT MANUFACTURER'S OPTION. Distributor's sole remedy for any
claim whatsoever, whether in contract, warranty, tort or strict liability,
arising out of the use, storage or possession of the Products, including without
limitation any claim that the Products failed to perform as warranted, shall be
replacement with substituted Products or refund on a depreciated basis, at
Manufacturer's option.
6.3 Procedures for Warranty Claims. To obtain repair, replacement or
refund, as applicable, pursuant to Sections 6.1 or 6.2, Distributor must submit
to Manufacturer its claim together with evidence of the Product's original
shipment and of Distributor's sale to its customer indicating the date of such
sale, pictures of the defective product and a detailed description.
6.4 Exclusions and Limitations
(a) Manufacturer's warranties shall run to Distributor, its
permitted successors and assigns and customers for the Products. MANUFACTURER'S
WARRANTIES SHALL APPLY ONLY TO THE PRODUCTS AND ITS OWN LABOR IN REPAIRING OR
REPLACING THE PRODUCTS. IN NO EVENT SHALL MANUFACTURER BE RESPONSIBLE OR LIABLE
FOR LABOR OR OTHER EXPENSE INCURRED BY DISTRIBUTOR OR ANY OTHER PERMITTED
BENEFICIARY OF THESE WARRANTIES.
(b) THE WARRANTIES PROVIDED ABOVE IN SECTIONS 6.1 AND 6.2 ARE THE
SOLE AND EXCLUSIVE WARRANTIES PROVIDED BY MANUFACTURER HEREUNDER. ALL OTHER
WARRANTIES, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR
WRITTEN STATEMENTS BY MANUFACTURER OR OTHERWISE (INCLUDING, WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED. WITHOUT
LIMITATION, MANUFACTURER DOES NOT WARRANT THAT THE PRODUCTS WILL SATISFY
DISTRIBUTOR'S OR ITS CUSTOMERS' REQUIREMENTS.
(c) The Distributor acknowledges that the Products are not
structural lumber and therefore may not be used as such. DISTRIBUTOR IS SOLELY
RESPONSIBLE FOR DETERMINING THE SUITABILITY OF USE OR APPLICATION OF ANY
PRODUCT, OR WHETHER PRODUCTS MEET REQUIREMENTS OF APPLICABLE BUILDING CODES OR
SAFETY CODES FOR SPECIFIC APPLICATIONS.
(d) THESE WARRANTIES SHALL NOT APPLY TO PRODUCTS, WHICH HAVE NOT
BEEN INSTALLED IN ACCORDANCE WITH MANUFACTURER'S AND BOCA GUIDELINES. The
warranties provided hereunder shall not cover defects due to (i) natural
disasters, including fire, smoke, water, earthquakes, lightning or static
electricity, (ii) causes external to the Product such as, but not limited to,
weather, (iii) the neglect, abuse, misuse (including faulty installation, repair
or maintenance by other than Manufacturer), improper storage of the Product or
other failure to comply with the instructions set forth in the documentation and
or manual constituting part of the Product, (iv) a modification of the Product
not provided by Manufacturer, (v) a malfunction of any product not provided by
Manufacturer with which the Product is used or combined, (vi) use, modification
or other treatment of the Product in a manner for which it was not designed or
intended, (vii) defects in articles purchased by Manufacturer and resold by it
without alteration and defects in materials purchased by Manufacturer which
cannot be discovered by warranty factory inspection, (viii) placement under or
subjection to abnormal use conditions, or (ix) normal wear and tear. These
warranties shall not apply to (a) supplies, accessories or other materials which
are by their nature expendable, (b) any services, including, without limitation,
installation, alterations, modifications, maintenance or removal of, or relating
to, any item not furnished by Manufacturer or (c) any services related to work
external to the Product.
(e) Laws from time to time in force in certain jurisdictions may
imply warranties that cannot be excluded or can only be excluded to a limited
extent. This Agreement shall be read and construed subject to any such statutory
provisions.
(f) Distributor shall be responsible for any warranty it extends,
either directly or indirectly, expressly or by operation of law, beyond the
warranties expressly granted in this Section 6.
(g) All service work not covered by Manufacturer's warranty will
be charged at the prevailing service rate plus all expenses, transportation,
material and parts.
(h) No person or entity is authorized by Manufacturer to make and
Manufacturer shall not be bound by any statement or representation as to the
performance of the Products other than what is contained in these warranties.
These warranties shall not be amended or altered except in a written instrument
signed by Manufacturer and Distributor.
(i) MANUFACTURER'S LIABILITY ARISING OUT OF THE MANUFACTURE, SALE
OR SUPPLYING OF THE PRODUCTS OR THEIR USE OR DISPOSITION, WHETHER BASED UPON
WARRANTY, CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE ACTUAL PURCHASE
PRICE PAID BY DISTRIBUTOR FOR THE PRODUCTS. IN NO EVENT SHALL MANUFACTURER BE
LIABLE TO DISTRIBUTOR OR ANY OTHER PERSON OR ENTITY FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF
DATA OR LOSS OF USE DAMAGES) ARISING OUT OF THE MANUFACTURE, SALE OR SUPPLYING
OF THE PRODUCTS, EVEN IF MANUFACTURER HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES OR LOSSES OR IS NEGLIGENT.
7. Distributor Indemnification
7.1 Distributor shall indemnify, protect and save Manufacturer, its
affiliates and all officers, directors, employees and agents thereof (each
hereinafter referred to as an "indemnitee") harmless from all claims, demands,
suits or actions (including attorneys' fees incurred in connection therein)
which may be asserted against the indemnitee for any kind of damages, including,
but without limitation, damage or injury to property or persons and incidental
and consequential damages which may be sustained by any third party or an
indemnitee occurring out of or incident to the design, possession or use
(including demonstrations) of the Products under this Agreement, including,
without implied limitation, claims arising from or in connection with (i) the
negligence or willful misconduct of Distributor, its agents, employees,
representatives or contractors, (ii) use of the Products in combination with
articles not supplied by Manufacturer, (iii) Manufacturer's compliance with
designs, specifications or instructions supplied to Manufacturer by Distributor,
(iv) use of the Products in an application or environment for which they were
not designed, and (v) modifications of Products by anyone other than
Manufacturer without Manufacturer's prior written approval.
7.2 The indemnification set forth herein shall not apply in the event
that such claim arises directly from a manufacturing defect resulting from
Manufacturer's negligence or willful misconduct.
7.3 This indemnification shall survive expiration or earlier termination
of this Agreement.
8. Compliance with Laws; Contract Goals
8.1 The Distributor warrants, represents and covenants that all of its
activities under this Agreement and/or in connection with the Products do and
shall comply with all applicable laws, rules, regulations, ordinances and
orders. Without limiting the foregoing, Distributor shall obtain all licenses,
permits and approval necessary or advisable for the sale of Products in the
Territory and the performance of its duties under this Agreement, unless already
obtained or provided by Manufacturer.
8.2 Distributor agrees not to re-export any Products except in
compliance with all applicable decrees, statutes, rules and regulations.
Distributor agrees not to sell, transfer or otherwise dispose of the Products in
violation of the export laws of the United States. Distributor agrees to
indemnify and hold harmless Manufacturer from and against any and all fines,
damages, losses, costs and expenses (including reasonable attorneys' fees)
incurred by Manufacturer as a result of any breach of this Section 8 by
Distributor or any customer of Distributor.
9. Confidentiality
9.1 Distributor agrees that Manufacturer has a proprietary interest in
its Proprietary Information. For purposes of this Agreement, "Proprietary
Information" shall mean all information (whether or not patentable or
copyrightable) owned, possessed or used by Manufacturer, whether in written or
oral form, including without limitation any trade secrets, know-how, patents,
copyrights, data, processes, formulas, methods, technology, pricing, sales and
marketing information and all other information which is confidential,
proprietary and non-public. Distributor shall not at any time disclose to third
parties, or use for its own benefit or the benefit of others, any Proprietary
Information, except to such extent as may be necessary in the ordinary course of
performing its obligations. Distributor shall disclose Proprietary Information
only to those of its agents and employees to whom it is necessary in order
properly to carry out their duties as limited by the terms and conditions
thereof. Both during and after the Term of this Agreement, all disclosures by
Distributor to its agents, employees, consultants or subcontractors (for whose
actions Distributor shall remain liable) shall be held in strict confidence by
such agents and employees. During and after the Term of this Agreement,
Distributor, its agents and employees shall not use the Proprietary Information
for any purpose other than in connection with Distributor's sale and
distribution of Products in the Territory in accordance with this Agreement.
9.2 Distributor shall, at its expense, return to Manufacturer any
Proprietary Information, including, without limitation, all records, files,
memoranda, notes, data, reports, price lists, customer lists, drawings, plans
and other documents (and all copies or reproductions thereof) relating to the
actual or anticipated business of Manufacturer or its technology, in written
form as soon as practicable after the termination or expiration of this
Agreement (or, if earlier, upon Manufacturer's request therefor). All
Proprietary Information shall remain the sole and exclusive property of
Manufacturer during the Term of this Agreement and thereafter.
9.3 Notwithstanding the foregoing, Distributor shall not be liable for
the disclosure of information (i) in the public domain at the time of disclosure
without breach of this Agreement, (ii) Distributor can demonstrate was known to
it or contained in its records at the time of disclosure by Manufacturer or
(iii) which is disclosed to Distributor without a duty of non-disclosure or
confidentiality by a person without a duty of non-disclosure or confidentiality
to Manufacturer. Distributor may disclose Proprietary Information to the extent
required to comply with any governmental or judicial order provided Distributor
notifies Manufacturer of such order in sufficient time to permit Manufacturer to
obtain a protective order relating thereto, cooperates with Manufacturer in any
attempt Manufacturer determines to make to maintain the confidentiality of such
Proprietary Information and strictly limits its disclosure to the fullest extent
permitted by applicable law.
9.4 Distributor acknowledges that any breach of the provisions of this
Section 9 shall result in serious and irreparable injury to Manufacturer for
which Manufacturer cannot be adequately compensated by monetary damages alone.
Accordingly, Distributor agrees that, in addition to any other remedy it may
have, Manufacturer shall be entitled to enforce the specific performance of the
obligations of Distributor under this Section 9 and to seek both temporary and
permanent injunctive relief (to the extent permitted by law) without the
necessity of proving actual damages. Distributor shall be responsible for any
breach of the provisions of this Section 9 by any employee, agent, subcontractor
or consultant of Distributor. If Distributor engages in any activities
prohibited by this Agreement, Distributor shall pay to Manufacturer all
compensation, remuneration or monies or property of any sort received in
connection with such activities; and such payment shall not impair any rights or
remedies or obligations or liabilities which Manufacturer may have under this
Agreement or applicable law.
9.5 These obligations of confidentiality shall survive the termination
of this Agreement.
10. Termination
10.1 Either party hereto may terminate this Agreement upon thirty (30)
days written notice to the other in the event of a breach of this Agreement by
the non-terminating party which is not cured to the satisfaction of the
terminating party within such thirty (30) day period.
10.2 Without derogating from the rights of the Manufacturer set forth
elsewhere in this Agreement, including without limitation, in Sections 2.4, 2.5
and 10.3 hereof, and in addition thereto, Manufacturer may terminate this
Agreement upon written notice to Distributor in the event of the occurrence of
one of the events listed below:
(i) A breach of the confidentiality provisions set forth in Section 9
hereto;
(ii) A breach of the intellectual property protection provisions set
forth in Section 5 hereto;
(iii) Failure to pay for Products within the time period specified
herein;
(iv) Failure to purchase the agreed Minimum Purchase Volumes of Products
in Year 1, upon the occurrence of which Blanket Purchase Order 100 between the
parties shall remain in effect;
(v) Failure to purchase the agreed Minimum Purchase Volumes of Products
in any Subsequent Year;
(vi) An assignment of all or any portion of this Agreement, whether
voluntarily or involuntarily or by operation of law, including, without
limitation, pursuant to a change of control of the Distributor; or
(vii) The filing of a petition in bankruptcy, insolvency or
reorganization against or by Distributor, Distributor becoming subject to a
composition for creditors, whether by law or agreement, or Distributor going
into receivership or otherwise becoming insolvent.
10.3 Without derogating from the rights of the Manufacturer pursuant to
Sections 10.2, 2.4 and 2.5 hereof, and in addition thereto, in the event of the
occurrence of one of the events listed in Section 10.2, paragraphs (iv) and (v),
the Manufacturer may upon written notice to Distributor, in its sole discretion,
unilaterally render this Agreement non-exclusive with respect to the Products
listed on Exhibit A within the corresponding Territories listed on Exhibit A. In
addition to the foregoing, without derogating from the rights of the
Manufacturer pursuant to Sections 10.2 and 2.7, and in addition thereto, if the
Distributor fails to sell the agreed Minimum Sale Volumes of Products,
Manufacturer may, in its sole discretion, (i) terminate the exclusivity for the
Soundwall products in the Territory, or any part thereof, outside of the United
and Canada or (ii) terminate Distributor's distribution rights for the Soundwall
products in the Territory, or any part thereof, outside of the United States and
Canada.
10.4 The Term of this Agreement shall begin on the later of the dates
that (i) Manufacturer executes this Agreement and (ii) Distributor executes this
Agreement (the later of such dates being referred to as the "Effective Date").
The Term of this Agreement shall end on the fifth anniversary of the Effective
Date, unless terminated earlier pursuant to the terms of this Agreement (the
"Term").
10.5 In the event of a termination of this Agreement, all obligations of
either party hereto shall terminate other than the obligation of Distributor to
pay amounts owing to Manufacturer hereunder for (i) Products delivered to
Distributor, (ii) the value of the Minimum Purchase Volume for Year 1, as
provided in Section 2.5 hereto, or (iii) any remaining warranty obligation of
Manufacturer with respect to Products shipped to Distributor prior to the date
of termination. Manufacturer may, but is not obligated to, fill Purchase Orders
or Release Orders placed before the effective date of any such termination and
Distributor shall fulfill all obligations to Manufacturer arising from any
Product shipped pursuant to this Section.
10.6 In the event of a termination arising from Manufacturer's breach of
this Agreement, Manufacturer agrees to purchase Distributor's unsold inventory
of Products after the date of termination, subject to the following:
(i) Manufacturer may perform, at its option and at Distributor's
expense, a full audit of (a) the Manufacturer Products remaining in
Distributor's inventory and (b) records relating to Products.
(ii) All Products must be (a) new and unused, and (b) in the original
packaging materials.
(ii) The purchase price payable by Manufacturer shall be as determined
by Manufacturer after audit, based on the condition of the Product, to a maximum
of the lesser of 85% of the original invoice price therefor (upon presentation
by Distributor of such original invoices) or 50% of the then current dealer
prices (upon presentation by Distributor of proof thereof). The purchase price
therefor will be payable by Manufacturer after receipt by Manufacturer at the
location to which Manufacturer notifies Distributor it shall deliver the Product
and verification by Manufacturer that such Product is new, unused and in
original condition. The purchase price therefor shall be net of any expenses
relating to such return, including without limitation, packaging, freight,
customs charges and restocking expenses and net of any amounts owed by
Distributor to Manufacturer.
10.7 In the event of a termination of this Agreement, Manufacturer shall
not have any obligation to Distributor or any employee or agent of Distributor,
except as expressly stated above, for compensation or for damages of any kind,
whether on account of the loss by Distributor or such employee or agent of
present or prospective sales, investments, compensation or goodwill. Distributor
hereby, for itself and on behalf of its employees and agents, waives any rights
which may be granted to it or them under the laws and regulations of the
Territory or otherwise which are not expressly granted to it or them by this
Agreement.
10.8 In the event of a breach of this Agreement by Distributor which
gives rise to, or could, by the mere passage of time give rise to, a right of
Manufacturer to terminate this Agreement, Manufacturer may (but shall not be
obligated to) sell Products, directly or indirectly, into the Territory without
such action giving rise to an obligation to pay royalties to Distributor
hereunder, constituting a breach of this Agreement or otherwise giving rise to
any obligation of Manufacturer to Distributor.
11. Construction of Agreement and Resolution of Disputes
11.1 This Agreement, which is in English, shall be interpreted in
accordance with the commonly understood meaning of the words and phrases hereof
in the United States of America and it, and the performance of the parties
hereto, will be construed and governed according to the laws of the Commonwealth
of Massachusetts, USA, applicable to contracts made and fully performed therein,
without reference to its conflicts of laws principles.
11.2 The parties recognize that disputes as to certain matters may from
time to time arise during the Term of this Agreement that relate to either
party's rights and/or obligations hereunder. It is the objective of the parties
to establish procedures to facilitate the resolution of disputes arising under
this Agreement in an expedient manner by mutual cooperation and without resort
to litigation. To accomplish this objective, the parties agree to follow the
procedures set forth in this Section 11.2 if and when a dispute arises under
this Agreement. Unless otherwise specifically recited in this Agreement,
disputes between the parties under this Agreement shall be first referred to the
employee of either party responsible for supervising the implementation of this
Agreement as soon as reasonably possible after such dispute has arisen. If such
employee is unable to resolve such a dispute within fifteen (15) days of being
requested by a party to resolve such dispute, either party may, by written
notice to the other, have such dispute referred to their respective executive
officers designated below or their designees, for attempted resolution by
negotiations within thirty (30) days after such notice is received. The
designated officers are as follows:
For Manufacturer: President of NEXT Fiber Products Inc.
For Distributor: President of Nex Products Inc.
If such designated officers cannot resolve such a dispute within thirty (30)
calendar days after submission, each party shall have the right to avail itself
of any remedies available to it under law or equity, in order to enforce such
party's rights hereunder.
12. Force Majeure
12.1 Neither Manufacturer nor Distributor shall be liable in damages nor
shall this Agreement be subject to termination by the other party for any delay
or default in performing any obligation hereunder (other than an obligation to
pay money) if that delay or default is due to any cause beyond the reasonable
control and without default or negligence of that party; provided that in order
to excuse its delay or default hereunder, a party shall notify the other of the
occurrence of the cause, specifying the nature and particulars thereof and the
expected duration thereof and shall use commercially reasonable efforts to
mitigate the duration and effect of such cause and provided further that within
fifteen (15) days after the termination of such occurrence or cause, such party
shall give notice to the other party specifying the date of the termination
thereof. All obligations of both parties shall return to being in full force and
effect upon the termination of such occurrence or cause.
12.2 A "cause beyond the reasonable control" of a party shall include,
without limiting the generality of the phrase, any act of God, act of any
government or other authority or statutory undertaking, industrial dispute,
fire, explosion, accident, power failure, riot or war (declared or undeclared).
13. Miscellaneous
13.1 This Agreement contains the entire understanding between the
parties and supersedes all prior written or oral agreements.
13.2 This Agreement may only be amended in a writing signed by both
parties hereto.
13.3 Distributor is an independent contractor of Manufacturer and the
relationship between the parties shall not be construed to be that of employer
and employee, or to constitute a partnership, joint venture or agency of any
kind. Distributor shall not have the right to enter into any contracts or
commitments in the name of, or on behalf of, Manufacturer or to bind
Manufacturer in any respect whatsoever. Distributor shall not obligate
Manufacturer or purport to obligate Manufacturer by issuing or making any
affirmations, representations, warranties or guaranties with respect to
Manufacturer or the Products to any third party.
13.4 Distributor agrees that Manufacturer is not liable for any expenses
of Distributor, including travel, lodging and entertainment expenses.
Manufacturer will not reimburse Distributor for any such expenses and
Distributor shall indemnify and hold Manufacturer harmless from any liability
for any such expenses.
13.5 This Agreement and the rights and obligations hereunder may not be
assigned, delegated or transferred by Distributor without the express prior
written consent of Manufacturer. This Agreement shall inure to the benefit of
the successors and assigns of Manufacturer.
13.6 All notices hereunder shall be in writing and shall be sent by
registered or certified mail or by reliable overnight delivery service providing
evidence of receipt, address to the parties, as follows:
If to Manufacturer: NEXT Fiber Products Inc.
0 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
XXX
Attention: President
with a copy to: Thermo Electron Corporation
00 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
XXX
Attention: General Counsel
and: Thermo Fibertek Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
XXX
Attn: Chief Executive Officer
If to Distributor: B&F Composites, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx
Attn:
Compact Industries Ltd.
00 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx
Attn:
NEX Products Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx
Attn:
Either party may change its address for purposes of this Agreement by
faxing the other party written notice of its new address or telecopy number.
13.7 None of the conditions or provisions of this Agreement shall be
held to have been waived by any act or knowledge on the part of either party,
except by an instrument in writing signed by a party against which the waiver is
sought. Further, the waiver by either party of any right hereunder or the
failure to enforce at any time any of the provisions of this Agreement or any
rights with respect thereto, shall not be deemed to be a waiver of any other
rights hereunder or any breach or failure of performance of the other party.
13.8 Distributor warrants that this Agreement is lawful and may be
performed in accordance with its terms under all applicable laws. Distributor
covenants that it will advise Manufacturer of any changes in the laws which
might or will impair the validity of all or any part of this Agreement.
13.9 No rights or licenses with respect to the Products or the
Trademarks are granted or deemed granted hereunder or in connection herewith,
other than those rights expressly granted in this Agreement.
13.10 Taxes which the Territory, any other country or any other
governmental entity, now or hereafter imposes with respect to the transactions
contemplated hereunder (with the exception of income taxes or other taxes
imposed upon Manufacturer and measured by the gross or net income of
Manufacturer) shall be the responsibility of Distributor and if paid or required
to be paid by Manufacturer, the amount thereof shall be added to and become part
of the amounts payable by Distributor hereunder.
13.11 If any provision of this Agreement is declared invalid or
unenforceable by a court having competent jurisdiction, it is mutually agreed
that this Agreement shall endure except for the part declared invalid or
unenforceable by order of such court. The parties shall consult and use their
best efforts to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid or unenforceable provision in light of
the intent of this Agreement.
13.12 The parties hereby acknowledge and agree that the terms of this
Agreement, including, without limitation the exclusivity provisions, shall not
apply to the continuation of an existing business or operations, including but
not limited to existing proprietary designs or products of such business or
operations, in any acquisition or purchase of a business or entity consummated
by Manufacturer, or its parent, subsidiary or sister entities subsequent to the
signing of this Agreement.
13.13 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
DISTRIBUTOR:
B&F COMPOSITES, INC. NEX Products Inc.
By: By:
Name: Name:
Title: Title:
Date: Date:
COMPACT INDUSTRIES LTD.
By:
Name:
Title:
Date:
MANUFACTURER:
NEXT FIBER PRODUCTS INC.
By:
Name:
Title:
Date:
EXHIBIT A
---------------------------------------------- ------------------------------------ -------------------
Products Nature of Distributorship Territory
---------------------------------------------- ------------------------------------ -------------------
---------------------------------------------- ------------------------------------ -------------------
1. Soundwall Products Exclusive* Worldwide
The following Products in accordance with Soundwall Market
the Specs set forth in Exhibit B :
Xxxxxxxxx 0"x0" post
Soundwall 4"x4" top and bottom rail
Soundwall 2 lb. or greater 2"x6" tongue
and groove board
Any new Distributor-developed soundwall
profiles and systems
---------------------------------------------- ------------------------------------ -------------------
---------------------------------------------- ------------------------------------ -------------------
2. Exclusive for Distributor's Worldwide Market
Xxxxxxxx rail, as per Distributor's proprietary Design
proprietary Design, as set forth as part
of Exhibit B
---------------------------------------------- ------------------------------------ -------------------
---------------------------------------------- ------------------------------------ -------------------
3. Exclusive** Canada
Railing/Decking, as per Specs, as set
forth in Exhibit B
Privacy Fence, as per Distributor's
proprietary Design, as set forth in
Exhibit C
---------------------------------------------- ------------------------------------ -------------------
---------------------------------------------- ------------------------------------ -------------------
4.*** Non-Exclusive Outside Canada
Railing/Decking, as per Specs, as set
forth in Exhibit B
Privacy Fence, as per Distributor's
proprietary Design, as set forth in
Exhibit C
---------------------------------------------- ------------------------------------ -------------------
*Under the terms of this Agreement, Manufacturer may sell newly designed
Soundwall products in all geographic areas, but, if Manufacturer chooses to sell
such newly designed products (a) Manufacturer will be obligated to pay to
Distributor a 5 cents per pound royalty and (b) the Soundwall system must meet
or exceed the Specs for flexural strength. Manufacturer may use monthly
available manufacturing capacity beyond its commitment to Distributor in order
to produce such newly designed products for sale. Nothing in this paragraph
should be construed, however, as permitting Manufacturer to use Distributor's
profiles as outlined in these numbers 1 and 2 of Exhibit A without Distributor's
written approval.
** Under the terms of this Agreement, Manufacturer may sell Railing/Decking and
newly designed Privacy Fence products in Canada, but, if Manufacturer chooses to
sell such products, Manufacturer will be obligated to pay to Distributor a 5
cents per pound royalty. Manufacturer may use monthly available manufacturing
capacity beyond its commitment to Distributor in order to produce such products
for sale. Nothing in this paragraph should be construed, however, as permitting
Manufacturer to sell Xxxxxxxx Rail, as per Distributor's proprietary Design, as
set forth as part of Exhibit B, or Privacy Fence, as per Distributor's
proprietary Design, as set forth in Exhibit C, in any Territory without
Distributor's written approval.
*** This non-exclusive right to distribute some or all of the Products outlined
in this number 4 on Exhibit A may be terminated by Manufacturer, in whole or in
part, in its sole and exclusive discretion, upon thirty (30) days written notice
to Distributor for the purpose of granting exclusive rights to another entity or
person to distribute said Products in such Territory. The parties agree to
negotiate in good faith to agree on pricing which is commercially reasonable.
EXHIBIT B
"Specs" to be attached
EXHIBIT C
Design for Privacy Fence to be attached
EXHIBIT D
Table 1: Minimum Purchase Volumes
----------------------------------------- ---------- --------- ---------- --------- ----------
Year 1 Year 2 Year 3 Year 4 Year 5
----------------------------------------- ---------- --------- ---------- --------- ----------
----------------------------------------- ---------- --------- ---------- --------- ----------
Total Purchase Commitment (million lbs.) 15* 30* 45* 60* 75*
----------------------------------------- ---------- --------- ---------- --------- ----------
* Or manufacturing capacity, whichever is less.
Table 2: Minimum Sale Volumes
------------------------------------ ----------- ---------- ----------- ---------- -----------
Year 1 Year 2 Year 3 Year 4 Year 5
------------------------------------ ----------- ---------- ----------- ---------- -----------
------------------------------------ ----------- ---------- ----------- ---------- -----------
Total Sale Commitment for 0 10% of 10% of 20% of 20% of
Soundwall Outside the United minimum minimum minimum minimum
States and Canada (million lbs.) (i.e., 3) (i.e., (i.e., (i.e., 15)
4.5) 12)
------------------------------------ ----------- ---------- ----------- ---------- -----------
Table 3: Rebate Formula
----------------------- -------------- ------------- -------------- -------------- -------------
Year 1 Year 2 Year 3 Year 4 Year 5
----------------------- -------------- ------------- -------------- -------------- -------------
----------------------- -------------- ------------- -------------- -------------- -------------
Total Purchase
Commitment (million 15* 30* 45* 60* 75*
lbs.)
----------------------- -------------- ------------- -------------- -------------- -------------
----------------------- -------------- ------------- -------------- -------------- -------------
Actual Purchased
by Distributor 15-20 30-35 45-50 60-65 75-80
(million lbs.)
----------------------- -------------- ------------- -------------- -------------- -------------
----------------------- -------------- ------------- -------------- -------------- -------------
Rebate ($/1b.) 0.06 0.06 0.06 0.06 0.06
----------------------- -------------- ------------- -------------- -------------- -------------
----------------------- -------------- ------------- -------------- -------------- -------------
Actual Purchased
by Distributor >20 >35 >50 >65 >80
(million lbs.)
----------------------- -------------- ------------- -------------- -------------- -------------
----------------------- -------------- ------------- -------------- -------------- -------------
Rebate ($/lb.) 0.08 0.08 0.08 0.08 0.08
----------------------- -------------- ------------- -------------- -------------- -------------
*Or manufacturing capacity, whichever is less.
EXHIBIT E
Any formulation or product that contains
At least 10% by weight of a thermoplastic or thermoset resin
AND contains at least 5% by weight of a natural fiber
AND such material may be
- Extruded
- OR injection molded
- OR compression molded
- OR blow molded
EXHIBIT F
Construction products, including, but not limited to:
- Retaining walls
- Sound walls
- Fencing
- Decking
- Board walk
- Railing
- Docks
- Paving blocks
Building products, including, but not limited to:
- Siding
- Ceiling panels
- Bricks
- Roofing tiles
- Window frames
- Doors and door frames
Automotive parts
Amusement park constructions
Railroad ties
T-bars
Pallets
