EXHIBIT 10.36
EXCLUSIVE DISTRIBUTOR AGREEMENT
BOYDS ULTRA VIOLET PRODUCT
AGREEMENT made this 20th day of November, 1995 between Boyds Wheels,
Inc., a corporation organized and existing under the laws of the State of
California and having its principal place of business at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter "Manufacturer") and Performance
Distribution Incorporated, a Delaware Corporation, having its principal place of
business at 00000 Xxxxxx Xxxx Xx., Xxxxxx, Xxxxxxxxxx 00000 (hereinafter
"Distributor").
WHEREAS, the Manufacturer is engaged in the business of designing,
packaging and marketing car care products under the tradename Boyds Ultra
Violet, and wishes to grant an exclusive distribution Agreement to the
Distributor, with respect to such products.
WHEREAS, the Distributor is engaged in the direct distribution of
automotive parts and accessories to mass merchandisers (as described in Appendix
A) in the United States, as well as any other foreign countries (except those
mass merchandisers with which Manufacturer has an existing relationship and
listed on Appendix B)
WHEREAS, the Distributor will agree to represent Boyds Ultra Violet
car care products as its only chemical product in the car care polish, wax and
cleaner category.
NOW THEREFORE, in consideration of the mutual promises herein
contained, it is hereby agreed:
1. GRANT OF LICENSE
(a) Upon the terms and conditions set forth herein, the Manufacturer
grants to the Distributor, and the Distributor accepts, the right to distribute
Boyds Ultra Violet car care products in the United States principally.
(b) The distribution rights granted under this Agreement will be
exclusive with respect to mass merchandiser retailers (as described In Appendix
"A") and nonexclusive as to all other retailers, end-users and other purchasers
of the products.
(c) The Distributor agrees to use its best efforts to maintain price
margins and retail prices commensurate with those set forth by the Manufacturer
and to consult with the Manufacturer before opening any new mass merchandiser.
Distributor agrees it will not open any merchandiser which would infringe on
the quality standards set by the Manufacturer.
(d) The term of this agreement shall begin on November 20, 1995
and shall continue for a term of five (5) years, and shall automatically
renew for consecutive one (1) year periods so long as the Distributor actively
distributes the Boyds Ultra Violet product line. Upon expiration of this
agreement the Distributor will have first right of refusal.
2. MUTUAL SALES RIGHTS
(a) The Manufacturer shall have sales rights for all product sales in
existing accounts or those under development, which are set forth in Appendix B,
the Manufacturer will have rights to distribute products to any retailer, mail
order or wholesaler who does not classify as a mass merchandiser, additionally
sales of said products will be continued direct from the Manufacturer at special
events and mail order.
(b) The Manufacturer agrees not retail products for less than its
current advertised pricing.
(c) The Manufacturer shall refer all mass merchandise national
account inquires, sales prospects and orders it receives to the Distributor.
3. MANUFACTURER'S TITLE AND PROTECTION
(a) The Distributor will not during the term of this Agreement or
thereafter, attack the title or any rights of the Manufacturer in and to the
Names or attack the validity of this Agreement. Manufacturer hereby indemnifies
the Distributor and undertakes to hold it harmless against any claims or suits
arising solely out of the use by the Distributor of the Names as authorized in
this Agreement, provided that prompt notice is given to the Manufacturer of any
such claim or suit, and provided further, that the Distributor shall have the
option to undertake and conduct the defense of any suit so brought, and no
settlement of any such claim or suit is made without the prior written consent
of the Manufacturer.
(b) The Distributor shall assist the Manufacturer, to the extent
necessary, in the procurement of any protection or defense of any of
Manufacturer's rights to the Names and Manufacturer, if it so desires, may
commence or prosecute any claims or suits in its own name. The Distributor
shall notify Manufacturer in writing of any infringements or imitations by
others of the names or articles similar to the Vehicles which may come to the
Distributor's attention, and Manufacturer shall take action against such
infringements or imitations. The Distributor shall not institute any suit or
take any action on account of any such infringements or limitations without the
prior written consent of the Manufacturer.
(c) Every use of the Names by the Distributor shall inure to the
benefit of the Manufacturer. The Distributor shall not at any time acquire any
rights in such Names by the virtue of any use it may make of such Names.
(d) The Distributor shall cooperate in good faith with the
Manufacturer for the purpose of preserving Manufacturer's (or any grantor of
Manufacturer's) rights in and to the Names. At the termination or expiration of
this Agreement the Distributor will be deemed to have assigned, transferred, and
conveyed to Manufacturer any trade rights, equities, goodwill, titles, or other
rights in and to the Names which may have been obtained by the Distributor or
which may have vested in the Distributor as a result of the exercise of any
rights under this Agreement. The Distributor will execute any instruments
requested by the Manufacturer to accomplish or confirm the foregoing. Any such
assignment, transfer, or conveyance shall be without any consideration other
than the mutual covenants and considerations of this Agreement.
(e) The Manufacturer shall indemnify and hold the Distributor
harmless against all claims made by third parties, whether arising out of the
use of the Names as set forth in 3(a) above, but for personal injury or because
of the Manufacturer use or sale of the Boyds Ultra Violet car care products.
4. QUALITY OF MERCHANDISE
(a) The Distributor warrants that the image, promotion and
advertising it produces shall be
of high standard and of such style, appearance and quality as to be adequate and
suited to their exploitation to the best advantage and to the protection and
enhancement of the Names and the goodwill pertaining thereto. The policies of
sale, distribution, and exploitation by the Distributor shall be of high
standard and to the best advantage and shall in no manner reflect adversely
upon the goodwill of Manufacturer or product, furnish to the Manufacturer free
of cost, for its written approval, proof copies of printed materials. After
samples have been approved pursuant to this paragraph, the Distributor shall
not depart thereforth in any material respect without Manufacturer's prior
written consent. These items will be furnished upon written requests if no such
request is made the Distributor may proceed uninterruped.
(b) The Manufacturer will not vary the quality of the products or the
packages from the samples provided with this Agreement without prior consent of
the Distributor.
5. ASSIGNMENTS
This Agreement and all rights and duties hereunder are personal to the
Distributor and shall not, without the written consent of the Manufacturer, be
assigned, the Manufacturer may assign but shall furnish written notice of
assignment to the Distributor.
6. TERMINATION
(a) If the Distributor files a petition in bankruptcy or is
adjudicated a bankrupt, or if a petition in bankruptcy is filed against the
Distributor, or if it makes an assignment for the benefit of its creditors or an
arrangement pursuant to any bankruptcy law, or if the Distributor discontinues
its business, or if a receiver is appointed for it or its business, this
Agreement and the rights hereby granted may be terminated forthwith. Should
this agreement and the rights be so terminated, the Distributor, its receivers,
representatives, trustees, agents, administrators, successors, or assigns shall
have no rights to distribute, sell, exploit, or in any way deal with or in any
of the products or advertising, promotional, or display material pertaining
thereto, except with and under the special consent and instructions of the
Distributor shall have the right to distribute and sell Distributor's inventory
of the products in existence as of the date of termination.
(b) If the Manufacturer files a petition in bankruptcy or is
adjudicated a bankrupt, or if a petition in bankruptcy is filed against the
Manufacturer, or if it makes an assignment for the benefit of its creditors or
an arrangement pursuant to any bankruptcy law, or if the Manufacturer
discontinues its business, or if a receiver is appointed for it or its
business, this Agreement and the rights hereby granted may be terminated by the
Distributor forthwith. Should this Agreement and rights be extended as
described under these aforementioned terms the Distributor will have first
rights to negotiate renewal of all rights for the categories of Boyds Ultra
Violet sales.
(c) If the Distributor shall violate any of its other material
obligations under the terms of this Agreement, the Manufacturer shall have the
right to terminate this Agreement hereby granted upon sixty days notice in
writing, and such notice of termination shall become effective unless the
Distributor shall cure the violation within the sixty-day period.
(d) Except as otherwise provided herein, termination of this
Agreement and the license under the provisions of this Section 5 shall be
without prejudice to any rights which either party may otherwise have against
the other party.
7. INVENTORY UPON TERMINATION OR EXPIRATION
(a) Ninety days before the expiration of this Agreement and the
license granted hereunder or ninety days after receipt of such notice of
termination of this Agreement, a statement showing the number
and description of the product on hand or in process shall be furnished by the
Distributor to the Manufacturer. The Manufacturer, through an independent
certified public accountant shall have the right to take a physical inventory to
ascertain or verify such inventory and statement.
(b) After termination of this Agreement under the provisions of
Section 9, the Distributor, except as otherwise provided in this Agreement, may
dispose of the product which is on hand or on order at the time of notice of
termination, provided statements are furnished as required herein.
8. EFFECT OF TERMINATION OR EXPIRATION
Upon the expiration or termination of this Agreement, all rights
granted to the Distributor hereunder shall forthwith terminate and revert to the
Manufacturer, who shall be free to distribute and sell product.
9. THE MANUFACTURER'S REMEDIES
(a) The Distributor acknowledges that its failure (except as
otherwise provided herein) to cease the distribution of product upon the
termination or expiration of this Agreement may result in immediate and/or
irremediable damage to the Manufacturer and to the rights of any subsequent
Distributor. The Distributor acknowledges that there may be no adequate remedy
at law for such failure to cease sale, or distribution, and that in the event of
such failure the Manufacturer may be entitled to equitable relief by way of
temporary and permanent injunctions and such other further relief as any court
with jurisdiction may deem just and proper.
(b) Resort to any remedies referred to herein shall not be construed
as a waiver of any rights and remedies to which either party is entitled under
this Agreement or otherwise.
10. EXCUSE FOR NONPERFORMANCE
The Distributor/Manufacturer shall be released from its obligations
hereunder in the event that governmental regulations or other causes arising
out of a state of national emergency or war or causes beyond the reasonable
control of the parties render performance impossible, and one party so informs
the other in writing of such causes and its desire to be so released.
11. NOTICES
All notices and statements to be given, and all payments to be made
hereunder, shall be given or made at the respective addresses of the parties as
set forth below unless notification of a change of address is given in writing,
and the date of mailing shall be deemed the date the notice or statement is
given:
To The Manufacturer: Boyds Wheels, Inc.
Attn: Xxxx Xxxxxxxxxx Xx. CEO
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
With copy to: Boyds Wheels, Inc.
Attn: C.F.O.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
To The Distributor: Performance Distribution Incorporated
Attn: Xxxxxxx Xxxxxxx, President
X.X. Xxx 0000
Xxxxxx, XX 00000
12. NO JOINT VENTURE
Nothing herein contained shall be construed to place the parties in
the relationship of partners or joint venturers, and the Distributor shall have
no power to obligate or bind the Manufacturer in any manner whatsoever.
13. APPLICABLE LAWS
This Agreement shall be construed in accordance with the laws of the
State of California, United States of America.
14. WAIVER
None of the terms of this Agreement can be waived or modified except
by an express Agreement in writing signed by both parties. There are no
representations, promises, warranties, covenants, or undertakings other than
those contained in this Agreement, which represents the entire understanding of
the parties. The failure of either party hereto to enforce, or the delay by
either party in enforcing, any of its rights under this Agreement shall not be
deemed a continuing waiver or a modification thereof and either party may,
within the time provided by applicable law, commence appropriate legal
proceedings to enforce any or all such rights. No person, firm, group or
corporation (whether included in the Names or otherwise) other than the
Distributor and the Manufacturer shall be deemed to have acquired any rights by
reason of anything contained in this Agreement, except as provided in Section 5.
IN WITNIESS WHEREOF the parties hereto have caused this instrument to be duty
executed as of the day and year first above written.
------------
Boyds Wheels, Inc. Performance Distribution Incorporated
BY: /s/ Xxxx Xxxxxxxxxx Xx. BY: /s/ Xxxxxxx Xxxxxxx
-------------------------- ----------------------------
Xxxx Xxxxxxxxxx Xx. CEO Xxxxxxx Xxxxxxx, President
11/20 1995 November 20th, 0000
XXXXXXXX "A" For the purpose of this Agreement "Mass Merchandiser"
shall be defined as any national chain store not described in Appendix "B" that
have in excess of one hundred (100) locations.
APPENDIX "B" ASAP
Xxx Xxxxxx
American Racing
Any individual account currently sold by Boyds Wheels
AMENDMENT NO. 1
TO
EXCLUSIVE DISTRIBUTOR AGREEMENT
The Exclusive Distributor Agreement, (the "Agreement') entered into on
November 20, 1995 by and between Boyds Wheels, Inc., a California corporation
("Boyds") and Performance Distribution Incorporated, a Delaware corporation
('PDI') is hereby amended, effective October 18, 1996, as follows:
l. Boyds shall pay to PDI an amount equal to one third (1/3) of the
royalties ("Royalties") received by Boyds from Auto Zone, Inc. ("Autozone")
which result from sales by AutoZone of all products (the "Products") marketed
under the trademark "Boyds Ultra Violet" (the "Trademark") pursuant to that
certain License Agreement, dated as of October 18, 1996, by and between Boyds
and AutoZone (the "License Agreement").
2. Boyds hereby grants to PDI, for the period commencing with the
effective date hereof and terminating on November 20, 2000, a non-exclusive
right to purchase the Products directly from the companies utilized by Boyds
and AutoZone to manufacture such Products. PDI, in consideration of such grant
of rights, shall pay to Boyds an amount equal to twenty percent (20%) of the
wholesale cost of the Products so purchased.
3. Boyds hereby grants to PDI the right to be Boyds' exclusive
manufacturer's representative with respect to other accessory products
("Accessories") which may be offered by AutoZone as part of its vendor direct
program. Boyds shall sell Accessories to PDI at the prices set forth on Exhibit
A, subject to annual adjustment by Boyds in its sole and absolute discretion.
4. Boyds hereby grants to PDI a non-exclusive license (the
"License") to use the Trademark for the purpose of marketing, manufacturing and
selling T-shirts and other apparel to AutoZone. Boyds shall receive, as
consideration for the License, fifteen percent (15%) of the net wholesale price
of each item of apparel sold to AutoZone (the "Royalties").
5. All amounts payable hereunder by any party shall be paid no
later than five (5) days after the end of each monthly period.
6. Each party, and their duly authorized representatives, shall
have the right upon reasonable notice and at all reasonable hours of normal
business days to (i) examine and copy such books of account and records and all
other documents and materials in the possession or under the control of the
other party with respect to the subject matter and terms of this
Agreement, as amended, and (ii) to conduct an audit of the other party's
operations under this Agreement. Boyds, in addition, hereby consents to allow
PDI or its representative to be present and to participate in up to one (1)
audit of AutoZone per year. In the event PDI elects to so participate, PDI
shall (i) be entitled to approve Boyds' choice of auditor, which approval shall
not be unreasonably withheld, and (ii) pay for fifty percent (50%) of the cost
of such audit.
7. Except as provided in this Amendment No. 1 to the Agreement, all
terms and provisions of the Agreement are in full force and effect, and have not
been changed, amended or modifled.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Exclusive Distributor Agreement as of the day and year first above written.
"BOYDS"
BOYDS WHEELS, INC., a California
corporation
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxxx, Chief Executive
Officer
"PDI"
PERFORMANCE DISTRIBUTION
INCORPORATED, a Delaware
corporation
By:
-----------------------------------
Xxxxxxx X. Xxxxxxx, President
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