Exhibit 10.6
TREX DISTRIBUTOR AGREEMENT
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THIS AGREEMENT is made this day of , (the "Execution Date"),
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by and between the TREX COMPANY, LLC at 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000 (the "Company") and
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the "Distributor"
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WITNESSETH:
WHEREAS, the Company is engaged in the business of developing,
manufacturing, assembling and distributing synthetic wood products under the
trademark "Trex(R)" (collectively, the "Trex Products"); and
WHEREAS, the Distributor wishes to have the right to purchase and resell
Trex Products; and
WHEREAS, the Company desires to appoint Distributor to sell Trex Products.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties hereto agree as follows:
1. APPOINTMENT: PRIMARY AREA OF RESPONSIBILITY
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Upon the terms and subject to the conditions of this Agreement, the
Company hereby appoints the Distributor as an authorized distributor of Trex
Products, and the Distributor hereby accepts such appointment within the
following area of primary responsibility: See Schedule A. In such capacity, the
Distributor will purchase Trex Products from the Company and will devote its
continuing best efforts to the promotion, sale and use of such products. Subject
to the provisions of Sections 8 and 9 of this Agreement, the Distributor shall
have the non-exclusive right to sell Trex Products.
Company reserves the right to take the following actions within the
Distributor's Primary Area of Responsibility (PAR): (I) to appoint or be
represented by other or additional distributors; (ii) to make sales directly to
any or all customers of the same and/or other Company products; and (iii) to
sell exclusively on a direct basis, to certain types of customers or specific
accounts which Company may, in its sole discretion, designate from time to time
in accordance with then current Company policies. The Company will notify
Distributor prior to appointing additional distributors.
2. TERM
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The term of this Agreement shall be for a period of one (1) year,
commencing upon the acceptance and execution of this Agreement by the Company
unless previously terminated pursuant to the provisions of this agreement. The
Agreement shall automatically renew for additional one year terms on the
anniversary date of this Agreement with the same terms and conditions of this
Agreement unless either party provides the other with sixty (60) days prior
written notice of their intent to terminate this Agreement.
3. PRICES: TERMS OF PURCHASE
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(a) Prices. The Distributor shall purchase Trex Products at the prices
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in effect at the time of shipment of the order except as follows: All orders
that have been received by the Company as of the effective date of a price
change and have a ship date as specified on the Company's Order Acknowledgment
Form of no more than 60 days from the date of the price change by the Company
will be billed at the price which was in effect when the order was received by
the Company.
(b) Terms of Purchase. All orders for Trex Products placed by
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Distributor shall be in writing or by fax. All orders shall be subject to
acceptance by the Company at Winchester, Virginia. All products shall be shipped
FCA assigned plant or warehouse. The shipment destination must be within the
Distributor's primary area of responsibility. The Company will not ship product
outside of the Distributor's primary area of responsibility (PAR) unless the
destination is an unassigned PAR or the shipment is in support of a negotiated
national account or OEM program. Payment shall be net 10 days unless otherwise
approved by the Company prior to shipment. Any taxes, administrative or
governmental charges incurred as a result of the purchase of Trex Products are
the sole responsibility of the Distributor. The Distributor agrees to indemnify
and hold harmless the Company against any and all claims made against the
Company for taxes; administrative or governmental charges as set forth above and
all losses to the Company associated herewith including but not limited to
attorneys fees and costs. The Distributor agrees to submit current financial
statements to the Company.
4. ADDITION, DISCONTINUANCE AND MODIFICATION OF PRODUCTS
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The Company shall have the right from time to time, and at any time, to
introduce new Trex Products, discontinue the manufacture or sale of any of its
Trex Products and to make changes in the design or construction of any of such
Trex Products without incurring any obligation or liability whatsoever. The
Company will give the Distributor 60-day prior notice of any discontinuance of a
Trex Product.
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5. NONEXCLUSIVE LICENSE
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The Company is the owner and registrant of the trademarked name "Trex".
The Company hereby grants to the Distributor a nonexclusive license to use the
Trademark in connection with the sale of Trex Products. Any use of the Trademark
by the Distributor must be in a form and format approved by the Company in
advance of such usage, and the Distributor agrees to comply with such standards
and procedures as may be established by the Company from time to time for the
use of the Trademark. No right, title or interest is conferred by this Agreement
to the Distributor in the Trademark other than the nonexclusive license
described above and any use by the Distributor of the Trademark shall not be
construed as conferring any title or ownership therein in the Distributor. The
Distributor agrees and acknowledges the right of the Company to the exclusive
right to use and to license the Trademark.
The Distributor agrees that both during the term of this Agreement, and after
the expiration or termination of this Agreement, the Distributor will not
directly or indirectly contest the validity or ownership of the Trademark.
During the term of this Agreement, Distributor agrees that it will promptly
notify the Company if it becomes aware of any claims by any other person as to
the validity or ownership of the Trademark.
6. PROMOTIONAL MATERIALS
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In connection with the license granted by this Agreement, the Company
may, in its sole and absolute discretion, take reasonable action to assist the
Distributor in the Distributor's efforts to promote and sell Trex Products. The
Company may, in consideration of the Distributor's active promotion of Trex
Products, provide the Distributor with reasonable quantities of support
materials such as product information and sales promotional literature.
7. OBLIGATIONS OF DISTRIBUTOR
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(a) Sales Activities. The Distributor agrees to use its continuing best
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efforts vigorously and actively to promote the sale and safe use of Trex
Products. In connection with such efforts, the Distributor, at its sole cost and
expense, shall organize and maintain a sales force and shall maintain adequate
sales and warehouse facilities within the primary area of responsibility, that
are satisfactory to the Company.
The Distributor should use his best efforts to ensure that all material
sold to its customers and to parties responsible for designing and engineering
Trex can be resold only into appropriate applications for Trex and must be in
complete compliance with all federal, state and local statutes and ordinances as
well as local building codes as needed. Trex Products are not to be used as
primary load-bearing members such as joints, stringers, posts, studs, beams, or
ledgers. The Distributor should refer to the physical properties and usage date
including but not limited to the NES(NER-508), Trex Usage Guidelines and CSI
Spec Data Sheet supplied by the Company and devote its best efforts to make this
information available to its customers and to parties responsible for designing
and engineering applications utilizing Trex. The distributor understands that
these and other publications are updated periodically and that it will be the
Distributor's responsibility and obligations to review the updated publications
and upon signed certified mail receipt thereof communication this information to
its customers. The Distributor is
charged with the responsibility of ensuring that structural and other
limitations of the Trex Product are communicated to its customers and that these
customers agree to properly educate all prospective users regarding these
limitations.
(b) Minimum Inventory Requirements.
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The Distributor agrees to maintain an inventory during the April-
September period of a minimum number of trailer loads as specified in Schedule B
(Minimum Inventory Requirement).
(c) Advertising. Each printed advertisement, flyer, handbill,
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television spot, radio script, yellow pages listing or any other advertising or
promotional material bearing or using the trade name "Trex" or pertaining to
Trex Products must be approved by the Company in writing prior to its use by the
Distributor. Such approval will not be unreasonably withheld or delayed.
(d) Reputation The Distributor shall continually maintain to the
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satisfaction of the Company a general reputation for honesty, integrity and good
credit standing and shall maintain the highest quality standards.
(e) Compliance With Law. The Distributor shall comply with all laws,
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ordinances and regulations, both state and federal, applicable to the
Distributor's business.
(f) Expenses. The Distributor shall pay and discharge, and the
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Company shall have no obligation to pay for, any expenses or costs of any kind
or nature incurred by the Distributor in connection with its distribution
function hereunder, including, without limitation, any expenses or costs
involved in marketing Trex Products.
8. FAILURE TO MEET MINIMUM INVENTORY REQUIREMENTS QUOTAS
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The Distributor agrees to exert its best efforts to meet the Minimum
Inventory Requirements Quota indicated in Section 7(b) of this Agreement. If the
Distributor does not achieve the established Minimum Inventory Requirements
Quota during any particular one-year period, the Company has the option to
terminate this Agreement in accordance with the provisions of Section 12(b) upon
the Distributor's failure to achieve the established Minimum Inventory
Requirements Quota. Inventory quotas are not applicable during a period of
restricted allotment.
9. FORCE MAJEURE
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Company shall be excused from delay or non-performance in the delivery
of an order and Distributor shall have no claim for damage if and to the extent
such delay or failure is caused by occurrences beyond the control of the Company
including, but not limited to, market conditions; acts of God; war, riots and
civil disturbances; expropriation or confiscation of facilities or compliance
with any order or request of governmental authority; strikes, labor or
employment difficulties whether direct or indirect; or any cause whatsoever
which is not within the reasonable control of the Company. The Company shall
immediately notify the Distributor of the existence of any such force majeure
condition and the anticipated extent of the delay or non-delivery. The Company
shall, in such event, have the right to allocate available Trex Products among
its customers and Distributors in its sole discretion.
10. DISTRIBUTOR'S REMEDIES
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If the Company, for any reason whatsoever, fails or is unable to deliver
any Trex Products ordered by the Distributor, the Distributor's sole and
exclusive remedy shall be the recovery of the purchase price, if any, paid by
the Distributor to the Company for such Trex Products. The Company shall not
incur any liability whatsoever for any delay in the delivery of any Trex
Products to the Distributor. In no event shall the Company be liable for any
incidental, consequential or other damages arising out of any failure to deliver
any Trex Products to the Distributor or any delay in the delivery thereof.
11. RELATIONSHIP OF PARTIES: INDEMNIFICATION OF COMPANY
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(a) Independent Contractor Status. The relationship of the parties
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established by this Agreement is that of vendor and vendee, and all work and
duties to be performed by the Distributor as contemplated by this Agreement
shall be performed by it as an independent contractor. The full cost and
responsibility for hiring, firing and compensating employees of the Distributor
shall be borne by the Distributor.
(b) No Authority to Bind Company. Nothing in this Agreement or
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otherwise shall be construed as constituting an appointment of the Distributor
as an agent, legal representative, joint venture, partner, employee or servant
of the Company for any purpose whatsoever. The Distributor is not authorized to
transact business, incur obligations, sell goods, solicit orders, or assign or
create any obligation of any kind, express or implied, on behalf of the Company,
or to bind it in any way whatsoever, or to make any contract, promise, warranty
or representation on the Company's behalf with respect to products sold by the
Company or any other matter, or to accept any service of process upon the
Company or receive any notice of any nature whatsoever on the Company's behalf.
(c) Indemnification. Under no circumstances shall the Company be
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liable for any act, omission, contract, debt or other obligation of any kind of
the Distributor or any salesman, employee, agent or other person acting for or
on behalf of the Distributor. The Distributor shall indemnify and hold the
Company harmless from any and all claims, liabilities, losses, damages or
expenses (including reasonable attorneys, fees and costs) arising directly or
indirectly from, as a result of, or in connection with, the Distributor's
operation of the Distributor's business. The terms of this indemnity shall
survive the termination of this Agreement.
12. TERMINATION
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(a) Voluntary Termination. The Distributor shall have the right to
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terminate this Agreement at any time by giving written notice to the Company not
less than 90 days prior to the effective date of such termination.
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(b) Termination by Company and Immediate Termination. The Company
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shall have the right to terminate this Agreement at any time by giving written
notice to the Distributor not less than 90 days prior to the effective
termination except for the occurrence of any of the following events which shall
immediately terminate the rights granted to the Distributor under this agreement
without the need for notification to be sent to or received by the Distributor:
(1) the Distributor becomes bankrupt or insolvent; a receiver
is appointed to take possession of the Distributor's
business or property, or any part thereof; the Distributor
makes a general assignment for the benefit of creditors or
any similar event occurs;
(2) the Distributor is convicted of a crime of moral turpitude
or any felonious criminal offense; or
(3) the Distributor attempts to assign or dispose of its
interest in this Agreement in violation of the terms of
this Agreement.
(4) The Distributor knowingly sells Trex for other than
appropriate applications.
13. EFFECT OF TERMINATION
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(a) Licenses. All rights and licenses granted to the Distributor
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pursuant to this Agreement shall terminate automatically upon the termination of
this Agreement.
(b) Indebtedness. Termination of this Agreement shall not operate as
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a cancellation of any indebtedness of either party to the other party at the
time of such termination.
(c) Distributor's Obligations. Upon termination of this Agreement
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for any reason, including its expiration or its termination under Section 12,
the Distributor shall:
(1) immediately cease to be a Trex distributor;
(2) immediately and permanently discontinue, and cease to use
in any advertising, sign, display, telephone directory or
listing, or printed matter whatsoever, the words
"authorized," "dealer," distributor" and/or any other word
or words suggesting a dealership or distributorship, in
connection with the name "Trex";
(3) cease to use the name "Trex" in conjunction with the
Distributor's corporate, trade or business name;
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(4) cease to engage in any other activity or practice which
would tend to indicate, suggest or represent, either
directly or indirectly, that the Distributor is part of the
Company's organization or that the Distributor is
authorized or franchised by the Company to sell Trex
Products;
(5) immediately take all steps and actions which are reasonably
necessary or appropriate to comply with the foregoing;
(6) within 10 days of the effective date of such termination,
pay the Company all sums then outstanding and owed to the
Company; and
(7) all provisions of this Agreement except 14(a) shall remain
in full force and effect.
(d) Company's Obligations. If this Agreement is terminated by the
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Company, the Company shall, within sixty days of such termination, purchase
Distributor's inventory of Trex Products at a price equal to the price initially
paid by the Distributor for such products.
(e) Rights of the Company.
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(I) If the Distributor shall refuse or fail to comply with any
of the foregoing provisions of this Section 13, the Distributor shall be liable
to and shall indemnify and reimburse the Company for all costs, attorney fees,
and/or other expenses incurred by the Company in connection with the enforcement
of said provisions, provided, however, that the remedies provided herein shall
not be exclusive of other remedies available to the Company.
(ii) The Company may set-off or apply any sums due the
Distributor to any sums for which the Distributor is indebted or owes to the
Company.
14. RESTRICTIVE COVENANTS
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(a) Noncompetition. The Distributor acknowledges that confidential
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information relative to marketing, manufacturing and installing methods for Trex
Products will be made available to the Distributor during the term of this
Agreement. Furthermore, the Distributor will enjoy the benefits and goodwill of
the Trex trade name, the opportunity and right to sell the quality products
associated therewith, the goodwill generated for Trex Products by the Company
and its other distributors, as well as the marketing and technical support of
the Company, all of which the Distributor agrees and acknowledges is highly
advantageous and valuable to the Distributor. In order to protect the Company's
interest in the aforesaid and to strengthen the Distributor's commitment to the
promotion of Trex Products, the Distributor and each of the individuals signing
this Agreement on behalf of the Distributor agrees that during the term of this
Agreement, that neither the Distributor nor the designated individuals will, in
any manner, directly or indirectly, except with the prior written consent of the
Company, promote, advertise,
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manufacture, market, distribute, sell or install a product produced from
composite recycled plastics and composite recycled wood fibers which competes
with Trex Products, which has the same purpose, function or use as Trex
Products, or which is essentially of the same or similar design as Trex
Products. This restriction applies to all Distributor locations that are
authorized to sell Trex. The Distributor will make its best effort to restrict
any confidential information including pricing, marketing programs, and product
development plans to the locations authorized to sell Trex.
(b) Nonsolicitation. The Distributor, and each of the individuals
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signing this Agreement on behalf of the Distributor, agrees that during the term
of this Agreement, except as expressly permitted by this Agreement, and for a
period of 24 months after termination of this Agreement for any reason, neither
the Distributor nor any of the signing individuals, will solicit, or cause to be
solicited, the employees of the Company.
(c) Extension. The period of time during which the Distributor and
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the individuals signing on its behalf are prohibited from engaging in the
business activities specified in the provisions of Sections 14(a) and 14(b)
shall be extended by any length of time during which the Distributor or a
signing individual is in breach of such provisions.
(d) Enforcement.
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(i) It is agreed and understood by and among the parties to
this Agreement that the restrictive covenants set forth in this Section 14 are
essential elements of this Agreement and that, but for the agreement of the
Distributor to comply with such covenants, the Company would not have agreed to
enter into this Agreement. Such covenants of the Distributor shall be construed
as agreements independent of any other provisions of this Agreement and shall
survive the termination of this Agreement and continue for the duration
specified. The existence of any claim or cause of action of the Distributor
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of such restrictive
covenants.
(ii) It is agreed by the parties to this Agreement that if any
portion of the restrictive covenants set forth in Sections 14(a) and 14(b) is
held to be unreasonable, arbitrary or against public policy, then each such
covenant shall be considered divisible both as to time and geographical area,
with each month of a specified period being deemed a separate period of time and
each county within each state being deemed a separate geographical area, it
being the intention of the parties that a lesser period of time or geographical
area shall be enforced so long as the same is not unreasonable, arbitrary or
against public policy. The parties to this Agreement agree that, in the event
any court of competent jurisdiction determines that a specified time period or a
specified geographical area is unreasonable, arbitrary or against public policy,
a lesser time period or geographical area which is determined to be reasonable,
nonarbitrary and not against public policy may be enforced against the
Distributor.
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(iii) The parties hereto agree that damages at law will be an
insufficient remedy to the Company in the event that the restrictive covenants
of this Section 14 are violated and that in addition to any other remedies of
rights that may be available to the Company, the Company shall also be entitled,
upon application to a court of competent jurisdiction, to obtain injunctive
relief to enforce the provisions of this Section 14.
(e) Binding on Individuals. Each of the individuals signing this
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Agreement on behalf of the Distributor specifically agrees to be fully bound by
the foregoing restrictive covenants of this Section 14.
15. CONFIDENTIAL INFORMATION
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(a) Except as authorized in writing by the Company, Distributor shall
not at any time, either during or after the term of this Agreement, disclose or
use, directly or indirectly, any proprietary information of the Company of which
the Distributor gains knowledge during or by reason of this Agreement and the
Distributor shall retain all such information in trust in a fiduciary capacity
for the sole use and benefit of the Company.
(b) Proprietary information means information developed by or for the
Company which is not otherwise generally known in any industry in which the
Company is or may become engaged and includes, but is not limited to,
information developed by or for the Company, whether now owned or hereafter
obtained, concerning plans, marketing and sales methods, materials, processes,
procedures, devices utilized by the Company, prices, suppliers, manufacturers,
customers with whom the Company deals (or organizations or other entities or
persons associated with such customers), trade secrets and other confidential
information of any type, together with all written, graphic and other materials
relating to all or any part of the same.
(c) The Distributor acknowledges that the proprietary information of
the Company is valuable, special and unique to the Company's business, that on
such proprietary information the Company's business depends and that the Company
wishes to protect such proprietary information by keeping it secret and
confidential for the sole use and benefit of the Company. The Distributor shall
take all steps necessary, and all steps reasonably requested by the Company, to
insure that all such information is kept secret and confidential for the sole
use and benefit of the Company, including, if requested by the Company, using
its best efforts to have all employees and agents of the Distributor execute and
deliver to the Company confidentiality agreements in a form satisfactory to the
Company. Distributor represents that it has a policy and procedure designed to
protect all proprietary information including notices to its employees to
prevent unauthorized publication and disclosure of any such information.
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(d) Upon termination of this Agreement, the Distributor shall promptly
return to the Company any property of the Company, including, without
limitation, all sales and marketing documents, manuals and other records and
proprietary information of the Company, as well as any samples in the
Distributor's possession or control, whether prepared by the Distributor or
others and whether the Distributor acquired or received such property or
material in connection with its performance under this Agreement or otherwise.
The Distributor agrees that it will not make or retain any copy of, or extract
from, such property or materials. The Company agrees to compensate the
Distributor for the cost of any returned sales materials that were authorized by
the Company and purchased by the Distributors within 12 months of the date of
termination.
16. GENERAL
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(a) Insurance. Both parties hereto agrees to carry such liability
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insurance and/or other insurance as they deem advisable in connection with their
respective businesses. Neither party shall be obligated to carry any insurance
for the protection of the other.
(b) Waiver. Failure of either party at any time to require performance
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by the other party of any provision hereof shall not be deemed to be a
continuing waiver of that provision, or a waiver of its rights under any other
provision of this Agreement, regardless of whether such provision is of the same
or a similar nature.
(c) Specific Performance. The parties agree that the subject matter of
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this Agreement is unique and that damages at law will be insufficient to protect
the interests of the Company in the case of a violation by the Distributor of
its obligations under this Agreement. In addition to any remedies or rights that
may be available to the Company under this Agreement, the Company shall be
entitled, upon application to a court of competent jurisdiction, to obtain
injunctive relief to enforce the provisions of this Agreement against the
Distributor.
(d) Effective Date. This Agreement shall not become effective until
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accepted and executed by the Company in Winchester, Virginia.
(e) Complete Agreement. This Agreement (including the exhibits hereto
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and all documents and papers delivered pursuant hereto and any written
amendments hereof executed by the parties to this Agreement) constitutes the
entire agreement, and supersedes all prior agreements and understandings, oral
and written, among the parties to this Agreement with respect to the subject
matter hereof. This Agreement may be amended only by written agreement executed
by all of the parties hereto. No purchase order or sales form will be applicable
to any sales pursuant to this Agreement and only the terms of this Distributor
Agreement shall govern such sales.
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(f) Applicable Law: Severability.
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(i) This Agreement shall be construed under, and governed by, the
laws of the State of Virginia (except that if any choice of law provision of
Virginia law would result in the application of the law of a state or
jurisdiction other than Connecticut, such provision shall not apply). The
parties agree that jurisdiction and venue for any legal proceedings arising from
or in any way connected to this Agreement will lie in the State Court of any
appropriate county in the state of Virginia.
(ii) If any provision of this Agreement is unenforceable or
invalid, the Agreement shall be ineffective only to the extent of such
provisions, and the enforceability or validity of the remaining provisions of
this Agreement shall not be affected thereby.
(g) Transfer by the Distributor. Without the prior written approval of
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the Company (which shall not be unreasonably withheld), the Distributor shall
have no right to sell, assign, transfer, convey, give away, pledge, mortgage or
encumber or otherwise dispose of the license granted hereunder or any interest
in this Agreement. Any transfer, assignment or other disposition made other than
in accordance with the requirements of this Agreement, whether made by operation
of law or otherwise or for no consideration, shall be null and void and without
any legal force or effect; and, the Company shall not be obligated to recognize
the same. Prior to making any proposed assignment, transfer or other disposition
of the Distributor or an interest in this Agreement, the Distributor shall
provide the Company with 60 days' prior written notice, which notice shall
include a complete and accurate written description of the purpose, terms and
conditions of the proposed transaction.
(h) Assignment by the Company. Upon thirty days' prior written notice
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to the Distributor, the Company may assign its rights, duties and obligations
under this Agreement.
(i) Notices. Any notice or other communication related to this
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Agreement shall be effective if sent by first class mail, postage prepaid, to
the address set forth in this Agreement, or to such other address as may be
designated in writing to the other party.
(j) Headings. The section and other headings in this Agreement are for
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purposes of reference only and shall not be referred to in interpreting its
provisions.
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IN WITNESS WHEREOF, the parties have signed this Agreement, the Distributor
having signed on the day and year first above written, and the Company having
signed on the date indicated below.
TREX COMPANY, LLC
By:
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ATTEST:
(CORPORATE SEAL) Effective Date:
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Secretary
"Distributor"
ATTEST: ---------------------------------------
(CORPORATE SEAL)
By:
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Secretary
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