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EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT, made at Sarasota, Florida, by and between SUN
HYDRAULICS CORPORATION, a Florida corporation, hereinafter referred to as
"SUN," and __________________________________, hereinafter referred to as the
"DISTRIBUTOR," on the ______ day of _______, 19__, to become effective
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W I T N E S S E T H:
WHEREAS, SUN and the Distributor desire to enter into an agreement
whereby SUN will sell and the Distributor will purchase and resell the SUN
products specified herein,
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable considerations, the receipt and
sufficiency of which is hereby acknowledged by each of the parties hereto, the
parties agree as follows:
1) Appointment. SUN hereby appoints the Distributor to purchase and
resell the SUN products specified in Paragraph 2 below upon the terms
and conditions set forth hereafter.
2) Products.
a) Standard Products. The products covered by this agreement are
the products designated by SUN as Industrial and Mobile
Hydraulics Components, including those currently in production
and those which may be introduced in the future under this
designation, hereinafter called standard "products" or
"product." SUN shall have the right to discontinue supplying
Distributor with any product if SUN ceases production or
distribution of such products.
b) Custom Manifolds - a product manufactured by SUN to meet the
specific requirements of customer.
3) Limitations on Sales and Use of Products. Distributor and SUN mutually
agree that SUN products, as stated in SUN's product catalog, are not
suited for any of the following applications:
a) Any product which comes under the Federal Highway Safety Act,
namely steering or braking systems for passenger-carrying
vehicles or on-highway trucks.
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b) Aircraft or space vehicles.
c) Ordinance equipment.
d) Life support equipment.
e) Any end product which, when sold, comes under U.S. Nuclear
Regulatory Commission rules and regulations.
SUN does not have any performance assurance programs for testing their
products for the above applications. SUN's products are not designed for these
applications and SUN does not warrant, recommend, or approve its products for
these applications. Accordingly, the Distributor is prohibited from and agrees
not to solicit or sell SUN's products for any of the above uses or
applications. Distributor shall be solely responsible for any loss or damages
occasioned by breach of the provisions of this paragraph and shall carry
product liability and liability insurance as provided for under the provisions
of Paragraph 15 hereafter to insure against such loss or damages.
4) Prices. Distributor will comply with the "Sun Confidential
Distributor's Guide" and will pay SUN for its Products as follows:
a) SUN will xxxx each of the Distributor's orders at the SUN's
Distributor's net prices (SUN suggested U.S. list prices, less
applicable Distributor discount) in effect at the time
Distributor's order is accepted.
b) All prices, discounts and allowances are subject to change
without notice. Unshipped orders on hand at the time of a
price change will be shipped at the lower of the old or new
price, provided that shipment is made within sixty (60) days
of the date of the price change.
c) Distributor agrees to pay SUN's invoices within thirty (30)
days subject to any and all cash discounts in effect at the
time of billing.
d) SUN may advise customers or others of the SUN suggested list
prices and suggested customer quantity discounts.
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5) Area of Primary Sales Responsibility - Territory.
a) The Distributor is assigned primary sales responsibility for
the territory described below, except as noted in Section 6 of
this agreement:
(INSERT TERRITORY)
b) It is SUN's basic policy to have a single appointed qualified
Hydraulic Distributor in each trading area. However, it is
understood that SUN cannot prevent sales by other Distributors
within the territory assigned to Distributor.
c) Distributor will not solicit sales in any sales area assigned
to another Distributor.
d) SUN shall have the right, after thirty (30) days written
notice, to terminate this agreement if Distributor solicits
sales in another Distributor's sales area.
e) The Distributor agrees to actively promote sales of SUN
products and to call on actual and potential users and
customers of the products in this area for this purpose.
f) If SUN is not satisfied that the Distributor can and will
adequately solicit business for the entire range of SUN
products among prospective customers in the entire assigned
territory, SUN may, on thirty (30) days notification to the
Distributor, appoint another Distributor in that part of the
territory where sales coverage is required, or for those
products where sales coverage is required.
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6) Direct Sales. IT IS SUN'S POLICY NOT TO SELL DIRECTLY TO CUSTOMERS
IN THE DISTRIBUTOR'S TERRITORY except as noted below:
a) SUN may at its discretion sell directly to companies
manufacturing hydraulic components who are currently or have
been members in good standing of the National Fluid Power
Association (NFPA).
b) SUN may sell to customers in Distributor's territory when
customers' purchase orders have been refused by the
Distributor.
c) SUN may sell to any and all customers in the Distributor's
territory, if Distributor is delinquent in paying SUN's
invoices.
d) Under b) and c) above, SUN will credit commissions to
Distributor's account, on all shipments handled in this
manner, until Distributor's account is once again current, or
until this agreement is cancelled.
e) SUN may sell to any non-distributor whenever the
non-distributor is unable to acquire the product from the
distributor.
7) Refusal of Orders. SUN reserves the right, at its discretion, to
refuse shipment of any Distributor's order(s) if the Distributor is
delinquent in paying SUN's invoices or is in default under any of the
other terms and conditions hereunder. Any acceptance of an order, or
shipment of a different order or any part of an order, does not waive
SUN's right to refuse to complete shipment or to refuse to ship or
accept additional orders from Distributor.
8) Shipments. All shipments to Distributor or to customers of Distributor
shall be FOB Sarasota, Florida, except certain Distributor stock
(inventory) orders which exceed a certain dollar value, the amount to
be determined by SUN and announced periodically to Distributor as part
of SUN's Distributor Policy. Distributor stock orders which qualify
will be shipped freight prepaid to Distributor's warehouse by a
carrier to be selected by SUN.
On Distributor's orders, SUN will make drop shipments to Distributor's
customers, FOB Sarasota, Florida, to any place in the continental U.S.
except Alaska.
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9) Split Responsibility for Sale. When a customer's product engineering
(or point of specification of SUN products), purchasing (or point of
origin of customers' purchase order for SUN products) and shipping
destination (or customers' manufacturing plant where SUN products will
be installed on machinery) are in different Distributor territories,
the Distributor agrees that the gross margin on the sale (SUN's
suggested customer price including applicable quantity discounts less
Distributor price) will be retained by SUN and distributed among the
participating Distributors as follows:
a) 40% of the Distributor gross margin will be forwarded to the
Distributor in whose territory specification of SUN products
was obtained, providing:
1) SUN, or Distributor obtaining components
specifications, provides written evidence of
engineering work with customer resulting in
specification of SUN's component, and:
2) The total Distributor gross margin to be split
exceeds $100.00 per customer order.
b) 10% of Distributor gross margin will be forwarded to the
Distributor into whose territory shipment is made provided
that the full Distributor margin exceeds $100.00 per customer
order.
c) 50% of the Distributor gross margin will be forwarded to the
Distributor placing the order to SUN and in addition, any
portion of the gross margin not distributed under Paragraph A)
and B) above.
10) Distributor Stock Service. Distributor will at all times maintain an
adequate inventory of SUN products and furnish prompt, efficient and
willing service to purchasers of SUN products in the territory. The
minimum inventory to be maintained by Distributor is set by the "Sun
Confidential Distributor's Guide."
11) Sales Effort Cooperation.
a) SUN agrees to forward directly to Distributor all sales leads
generated within the territory from SUN's direct mail,
advertising and publicity.
b) In order to assist SUN in providing up-to-date market data and
analysis to the Distributor, determine SUN's needs for future
plant capacity, and otherwise carry out its obligations,
Distributor agrees to provide sales and market data from time
to time, when requested by SUN, in a form mutually agreeable
to both parties.
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12) Promotional Materials. SUN will provide the Distributor with a supply
of catalogs, service bulletins, technical data and other advertising
and promotional materials, some free and some at a price established
by SUN.
13) Good Will. SUN and the Distributor mutually agree that performance
under this contract will generate goodwill for both parties with
customers and prospective customers of the Distributor who are users
or prospective users of SUN products. The Distributor's contribution
to this goodwill will include, but not be limited to, active sales
effort on behalf of SUN's products and the maintenance of adequate
stock of SUN products to meet customer's needs. SUN's contribution to
this goodwill will include, but not be limited to, advertising and
promotion of SUN products, referral of sales leads to the Distributor,
training of Distributor sales personnel in the application and sale of
the products, and joint sales and service efforts with Distributor
personnel when mutually agreed upon. Both parties recognize the mutual
creation of this goodwill and their individual contributions to it and
each party agrees herewith that no future claim for goodwill will be
made against the other party under any conditions whatsoever.
14) Relationship of SUN and Distributor. The relationship created by this
agreement is that of buyer and seller, not principal and agent. SUN
may not make a binding contract on behalf of the Distributor, and may
not do any other act that would be the act of an Agent of the
Distributor. Distributor is not and shall not be the agent, employee
or partner of, or joint venturer with SUN. In no event shall SUN be
responsible for any obligation or liability of the Distributor,
whether or not the obligation or liability shall have been incurred in
connection with the sale of any products manufactured or supplied
hereunder except as described in Paragraph 15) hereafter.
15) Patent Litigation; Product Liability.
a) SUN agrees at its sole expense to defend and hold Distributor
harmless from any loss or liability for any patent
infringements, patent claims or patent damages that
Distributor incurs by reason of selling SUN products under the
provisions hereof.
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b) SUN agrees to hold Distributor harmless from liability for
failure of a SUN product to operate within specifications set
forth for each product in SUN's catalogs, or within
engineering specifications published by SUN for products not
catalogued. Distributor agrees to defend and hold SUN harmless
from any loss or liability by reason of any sale by
Distributor of SUN products which loss or liability is caused
by any act or failure to act, misrepresentation, or
misapplication on the part of the Distributor. Distributor
further acknowledges and agrees it is Distributor's
responsibility to technically train its sales and service
personnel and to inform its representatives of known
characteristics of SUN products or of specific restrictions on
use of SUN products. SUN agrees to provide technical training
assistance to Distributor at such time and in such manner as
is mutually agreeable to SUN and Distributor.
c) To cover the liabilities of Distributor and SUN hereunder,
each party shall carry, at its expense, product liability and
liability insurance with a minimum coverage of $1,000,000.00
and, upon request, shall furnish proof of such coverage to the
other party.
EXCEPT as to applications prohibited under the provisions of Paragraph
3) above, all SUN products shipped to Distributor hereunder shall be covered by
the SUN warranty as set forth in its current Products Catalog with Suggested
Prices & Discounts - as from time to time revised. No other terms, including
warranties, shall apply except as may be specifically agreed in writing for a
particular order.
16) Taxes. SUN prices do not include applicable sales, use, excise or
similar taxes, if any. Distributor agrees to supply SUN with tax
exemption certificates and agrees to assume responsibility for all
such taxes on Distributor orders for SUN products, literature and
sales aids.
17) Excusable Delays. SUN will endeavor to deliver products of suitable
quality within agreed upon time limits, but SUN shall not be liable
for any damages resulting from failure to deliver, delay in making
deliveries or cancellation of Distributor's orders initiated by SUN,
nor for any loss of profits by Distributor or customer.
18) Terms of Sale. Except as otherwise indicated herein, SUN's standard
Terms & Conditions of Sale as modified from time to time (Sun
Confidential Distributor Guide) shall be applicable to all Distributor
orders placed with SUN and to articles furnished under such orders.
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19) Trademarks, Trade Names. Distributor shall not use, directly or
indirectly, any trademark or trade name which is now or may
hereinafter be owned by SUN as part of the Distributor's corporate or
business name, or in any way in connection with Distributor's
business, except in the manner or to the extent that SUN may
specifically consent to such use in writing.
20) Assignment. This Distribution Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective
heirs, successors and assigns; provided, however, that the
Distributor's rights hereunder cannot be assigned or transferred, in
whole or in part, directly or indirectly, whether by Distributor or by
operation of law or otherwise, to any person, firm or corporation, nor
shall there by a change of corporate control or ownership, without
prior written consent of SUN.
21) Entire Agreement. This Distribution Agreement constitutes the entire
Agreement between the parties, superseding all previous agreements, if
any, relating to distribution of the products whether oral or written.
No terms or provisions of this agreement may be waived, modified or
supplemented except by written consent of both parties.
22) Waiver. Failure of either party at any time to require performance by
the other party of any provision hereof shall not be deemed a
continuing waiver of the provision or waiver of any other provision of
this agreement whether or not it is of the same or similar nature.
23) Life of Agreement - Termination. This Distributor Agreement shall
remain in force until terminated. Either party may terminate, with or
without cause, by giving of at least thirty (30) days advance written
notice specifying the date of termination. Either party may also
terminate this agreement without written notice upon insolvency of,
appointment of a receiver for, or filing of a petition in bankruptcy
by or against, the other party.
a) At termination of this agreement, Distributor agrees to return
to SUN, freight collect, all sales literature, sales aids and
any confidential material in the Distributor's possession.
b) Orders on hand at termination of the agreement will be honored
provided:
1) Orders are scheduled for shipment within sixty (60)
days from termination of this agreement.
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2) Payment for SUN's shipments to Distributor are made
in advance. SUN reserves the right to waiver this
requirement to provide continuity of service to
customers.
c) SUN products in Distributor's stock at termination of this
agreement may be returned to SUN for credit under the
following terms:
1) Full credit will be issued by SUN for products that
have been in Distributor's stock for less than one
year and which are in new condition and in factory
boxes.
2) Products which have been used or have been in
Distributor's stock for more than one year will be
evaluated by SUN and credit determined on a piece by
piece basis.
3) All products returned for credit will be shipped
freight prepaid to SUN by the Distributor.
24) Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Florida.
Distributor agrees that the venue of any legal proceedings shall be in
Sarasota County, Florida.
25) Attorney Fees. The parties agree that in the event of a breach of this
agreement by either party, and litigation ensues, that the prevailing
party shall be entitled to be reimbursed for the reasonable attorney
fees and court costs that are incurred in the litigation. This
provision shall include any attorney fees and costs that are incurred
in all appellate proceedings.
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IN WITNESS WHEREOF, we have hereunto set our hands and seals and have
caused this Agreement to be executed as of the day and year first above
written.
In the presence of:
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Corporate Partnership
Individual
By:
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SUN HYDRAULICS CORPORATION
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