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EXHIBIT 10.1
DISTRIBUTION AGREEMENT
This AGREEMENT, made as of this 11th day of October 1995 (the
"Agreement"), by and between THE COAST DISTRIBUTION SYSTEM, a California
corporation having its principal offices at 0000 Xxxxxx Xxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 (hereinafter called "Distributor"), and RECREATION VEHICLE
PRODUCTS, INC., a Delaware corporation having its principal offices at 0000 X.
Xx. Xxxxxxx, Xxxxxxx, Xxxxxx 00000 (hereinafter called "RVP").
R E C I T A L S
A. RVP is the manufacturer of aftermarket accessories and parts
for recreational vehicles, including the accessories and parts listed in
Exhibit A hereto (the "RVP Products");
B. Distributor purchases and distributes and resells, at
wholesale, aftermarket accessories and parts of the types set forth in Exhibit
A hereto, to customers consisting primarily of retail dealers, supply stores
and service centers in the United States, and to other wholesale distributors
of such products that operate outside of the United States, that sell such
products for use in connection with the sale or lease, the use or operation or
the servicing, repair or reconditioning of recreation vehicles (hereinafter
"After-Market Customers").
C. Distributor has developed marketing and support programs for
its After-Market Customers that enhance the marketability and salability of the
products it distributes.
D. Distributor also has developed the tooling for the manufacture
of various proprietary recreational vehicle accessories and parts which are
manufactured for Distributor by third-party manufacturers on an exclusive basis
(which products are listed on Exhibit B hereto and are referred to hereinafter
as the "Coast Proprietary Products").
E. RVP desires to obtain more extensive distribution of the RVP
Products, both within and outside the United States and, at the same time,
reduce the costs of the distribution thereof by having such Products
distributed through Distributor's distribution channels in the geographic areas
set forth in Exhibit C hereto (the "Territories"), and to enhance the
marketability of the RVP Products by being able to offer to end-users of the
RVP Products the marketing and support programs developed by Distributor.
F. RVP also desires to be supplied with Coast Proprietary
Products for the purpose of re-selling the Coast Proprietary Products to
manufacturers of recreational vehicles (hereinafter "OEM's") solely for
incorporation of such Products in the vehicles at the time of their manufacture
by such OEM's ("OEM Sales").
G. Distributor desires to market the RVP Products to its
customers, and is willing to provide marketing support therefor, and to arrange
for RVP to be supplied with Coast Proprietary Products for OEM Sales by RVP, on
the terms and conditions hereinafter set forth in this Agreement.
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A G R E E M E N T:
NOW, THEREFORE, in consideration of the above premises and of the
respective promises of the parties hereinafter set forth, it is agreed as
follows:
1. SALES OF PRODUCTS TO DISTRIBUTOR
1.1 Commencing not later than October 11, 1995 and continuing
through the remainder of the term of this Agreement, RVP shall sell the RVP
Products to Distributor in the quantities thereof required by Distributor, and
RVP hereby appoints Distributor as a distributor of the RVP Products to sell
the RVP Products for re-sale in the Territories to After-Market Customers. For
purposes of this Agreement, the term "RVP Products" shall include, in addition
to those products specifically identified on Exhibit A hereto, any accessories,
parts or supplies for recreational vehicles that are introduced by RVP after
the date hereof, whether they represent improved models of existing RVP
Products or new products that RVP has not previously offered for sale and
whether or not manufactured by RVP or by a third party for RVP.
1.2 RVP agrees that, effective as of February 1, 1996, and
continuing for the remainder of the term of this Agreement, but subject to the
terms and conditions set forth in Paragraphs (a), (b) and (c) of this Section
1.2, Distributor shall have the exclusive right to market and sell the RVP
Products to After-Market Customers in the Territories and RVP will not (i) sell
or otherwise supply (whether by consignment, lease or otherwise) the RVP
Products, or any products that are functionally equivalent thereto or
competitive therewith, whether manufactured by or for RVP, to (A) any wholesale
distributor or other business that sells, or proposes to sell, any of the RVP
Products, or any products that are functionally equivalent to or competitive
with any of the RVP Products, in any of the Territories to After-Market
Customers, or (B) to any After-Market Customers in the Territories, or (ii)
authorize or appoint any other distributor or representative to market or sell
the RVP Products in any of the Territories, except that RVP shall continue to
conduct marketing programs for the RVP Products in the Territories to support
sales thereof by Distributor in accordance with its obligations under this
Agreement. Notwithstanding anything to the contrary contained hereinabove in
this paragraph:
(a) Nothing herein shall preclude RVP from selling:
(i) To Camping World, solely for resale at
Camping World retail stores, roof-mount air conditioners or any other products
that include the Xxxxxxx(R) trademark in its brand name; provided, however,
that RVP agrees not to sell to Camping World any RVP Products, or any products
that are functionally equivalent to or competitive with any of the RVP
Products, including, but not limited to, roll- up patio awnings (but excluding
awning supports or awning cradles), that are identified as a Xxxxxxxx(R)
product or are branded with any Xxxxxxxx(R) trade name or trademark or any
variant thereof;
(ii) RVP Products to OEM's, but only for
incorporation of such Products on recreational vehicles at the time of their
manufacture;
(iii) RVP Products to, or for resale to, end-users
that use such Products other than in connection with the sale or lease, the use
or operation or the servicing, repair or
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reconditioning of recreation vehicles (which, for purposes of this Agreement,
include, without limitation, Class A and Class B motor homes, travel trailers,
fifth-wheel campers and tent campers; and
(iv) RVP Products to Xxx Xxxx, a wholesale
distributor owned by Xxx Co., provided that RVP agrees to terminate sales of
RVP Products to Xxx Xxxx in the event Xxx Co. ceases to own more than fifty
percent (50%) of the outstanding voting stock, or more than fifty percent (50%)
of all of the capital stock, voting and non-voting, of Xxx Xxxx.
(b) Distributor shall not be entitled to purchase, for
resale to After-Market Customers in the Territories, from any manufacturer
other than RVP, any products that are functionally equivalent to or competitive
with the RVP Products listed on Exhibit D hereto (the "Primary Products") prior
to the expiration of the period beginning on February 1, 1996 and ending on
the later of (i) December 31, 1998 or (ii) twelve (12) months from the giving
by Distributor to RVP of written notice of Distributor's intention to begin
making such purchases (the "Distributor's Exclusivity Period"), except that
Distributor may make such purchases during Distributor's Exclusivity Period
from other manufacturers, and RVP shall have no right of termination hereunder
as a result thereof, if and only if such purchases are made by Distributor due
to any of the following events or circumstances: (A) RVP has terminated this
Section 1.2 for any of the reasons set forth in Subparagraphs 1.2(c) (ii) or
(iii) hereof, (B) an inability or failure by RVP, for any reason (including,
but not limited to, a Force Majeure Event as defined in Section 8), to supply
Distributor, in accordance with the provisions of this Agreement, with all of
the requirements of Distributor for the Primary Products as and when needed by
Distributor, (C) a material increase in the incidence of warranty problems, as
compared to 1994, with respect to, or a manufacturer's recall of, either of the
Primary Products or any model thereof, (D) the failure of either of the Primary
Products, or any model thereof, to meet any laws or government regulations
applicable thereto or to the sale or use thereof in any of the Territories, (E)
any material breach of this Agreement by RVP (provided that, in the case of the
occurrence of any of the events or circumstances set forth in clauses (B), (C)
or (D) hereinabove during Distributor's Exclusivity Period, Distributor shall
cease purchasing products that are functionally equivalent to or competitive
with the Primary Products ("Competing Products") when such event or
circumstance has been corrected and Distributor has been able to increase unit
sales of the Primary Products to its customers back to the unit sales volumes
thereof being achieved prior to the occurrence of such event or circumstance).
RVP shall be entitled to terminate this Agreement or may elect, instead, to
terminate Section 1.2 of this Agreement only, if, during the Distributor
Exclusivity Period, Distributor purchases Competing Products other than due to
any of the events or circumstances set forth in Clauses (A) through (E) in this
Subparagraph 1.2(b), and Distributor does not cease such purchases of Competing
Products within thirty (30) days of written notice from RVP that Distributor
has violated Subparagraph 1.2(b).
(c) RVP may terminate this Section 1.2 in its entirety,
including the restrictions agreed to by RVP in, and the exclusive rights
granted by RVP to Distributor under, this Section 1.2, but shall not be
entitled to terminate this Agreement:
(i) On, or at any time after, expiration of the
Distributor Exclusivity Period as a result of the giving by Distributor of 12
months' notice of its intention to begin, at any time after December 31, 1998,
making purchases of Competing Products for resale to After-Market Purchasers in
the Territories, provided that no such termination of this Section 1.2 shall
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be effective until the later of (A) the expiration of the Distributor
Exclusivity Period or (B) two (2) months following the delivery by RVP of
written notice of such termination of this Section 1.2 to Distributor; or
(ii) If, over the period commencing on the date
hereof and ending on December 31, 1996, the aggregate number of units of either
of the Primary Products purchased by Distributor from RVP is less than ninety
percent (90%) of the number thereof specified in Annex 1 to Exhibit D hereto,
other than due to (A) an inability or failure by RVP, for any reason
(including, but not limited to, a Force Majeure Event), to supply Distributor,
in accordance with the terms of this Agreement, with all of its requirements
for either of the Primary Products as and when needed by Distributor, (B) a
material increase in the incidence of warranty problems, as compared to 1994,
with respect to, or a manufacturer's recall of, either of the Primary Products,
or any model thereof, (C) the failure of either of the Primary Products or any
model thereof, to meet any laws or government regulations applicable thereto or
to the sale or use thereof in any of the Territories, (D) any Force Majeure
Event (as defined in Section 8 of this Agreement) or any other events outside
the reasonable control of Distributor that adversely affects Distributor's
ability to sell either of the Primary Products; (E) the failure of RVP to have
introduced, by January 1, 1996, or such later date as may be agreed to by
Distributor, an improved version of the Roll-Up Patio Awning that meets the
requirements set forth in Annex 1 to Exhibit D or (F) any material breach of
this Agreement by RVP.
(iii) If, in any calendar year during the
Distributor Exclusivity Period, commencing with calendar 1997, Distributor
fails to purchase either of the Primary Products in the respective quantities
determined in accordance with Annex 2 to Exhibit D, other than due to (A) an
inability or failure by RVP, for any reason (including, but not limited to, a
Force Majeure Event), to supply Distributor, in accordance with the terms of
this Agreement, with all of its requirements for either of the Primary Products
as and when needed by Distributor, (B) a material increase in the incidence of
warranty problems, as compared to 1994, with respect to, or a manufacturer's
recall of, either of the Primary Products or any model thereof, (C) the failure
of the Primary Products, or any model thereof, to meet any laws or government
regulations applicable thereto or to the sale or use thereof in any of the
Territories, (D) any Force Majeure Event (as defined in Section 8 of this
Agreement) or any other events outside the reasonable control of Distributor
that adversely affect Distributor's ability to sell either of the Primary
Products, (E) the failure of RVP to have introduced, by January 1, 1996, or
such later date as may be agreed to hereafter by Distributor, an improved
version of the Roll-Up Patio Awning that meets the requirements set forth in
Annex 1 of Exhibit D, or (F) any material breach of this Agreement by RVP.
(d) To be effective, termination of this Agreement by RVP
pursuant to Section 1.2(b) or termination of this Section 1.2 by RVP pursuant
to Subparagraph (c)(ii) or (iii) of this Section 1.2, shall require ninety (90)
days' prior written notice of such termination by RVP to Distributor that must
be given by RVP no later than thirty (30) days following the final
determination that Distributor has violated Section 1.2(b) or by March 31 of
the calendar year immediately following any calendar year in which Distributor
has been determined to have failed to meet the minimum purchase requirements of
either Subparagraph 1.2(c)(ii) or Subparagraph 1.2(c)(iii). Failure to give
such written notice of termination of this Agreement pursuant to Section 1.2(b)
within such thirty (30) day period or written notice of termination of this
Section 1.2 pursuant to Subparagraph 1.2(c)(ii) or Subparagraph 1.2(c)(iii) by
March 31 of the
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calendar year immediately following any calendar year in which Distributor has
been determined to have failed to meet the minimum purchase requirements of
either Subparagraph 1.2(c)(ii) or Subparagraph 1.2(c)(iii) shall constitute a
waiver of such right of termination as a result of the event or circumstance
giving rise to such right. If a dispute arises between the parties as to
whether Distributor has violated Section 1.2(b) or failed to meet the minimum
purchase requirements of Subparagraph 1.2(c)(ii) or Subparagraph 1.2(c)(iii),
or as to whether any such violation or failure is excused by reason of any one
of the exceptions set forth in Section 1.2(b) or by any of the causes set forth
in clauses (A) through (F) of Subparagraph 1.2(c)(ii) or Subparagraph
1.2(c)(iii), then, either party may, after giving written notice of its intent
to do so to the other party, submit the matter in dispute to binding
arbitration in accordance with Section 14 hereof and, in the event of the
initiation of any such arbitration, any termination of this Agreement pursuant
to Section 1.2(b) or any termination of this Section 1.2 (as the case may be)
by RVP shall not become effective until the earlier of the issuance of a
decision in such arbitration that RVP is entitled to terminate this Agreement
due to a violation of Section 1.2(b) or to terminate Section 1.2 pursuant to
Section 1.2(c) thereof (as the case may be), or the expiration of a period of
one hundred eighty (180) days following the initiation of such arbitration if
no decision has been rendered by the end of that 180-day period by the
arbitrators. Termination of this Agreement shall be RVP's sole right and remedy
in the event of Distributor's violation of Section 1.2(b) and its failure to
cease such violation within thirty (30) days after written notice from RVP, and
termination of Section 1.2 in accordance herewith shall be RVP's sole right and
remedy in the event Distributor has failed to meet the minimum purchase
requirements of either Subparagraph 1.2(c)(ii) or Subparagraph 1.2(c)(iii).
(e) Notwithstanding anything to the contrary set forth
above in this Section 1.2, Distributor shall be entitled to purchase, market,
distribute and sell to After-Market Customers in the Territories any Competing
Products from any manufacturer other than RVP (i) in Distributor's discretion
at any time on or after the expiration of the Distributor Exclusivity Period,
(ii) in Distributor's discretion at any time on or after RVP has given
Distributor notice of RVP's intention to terminate this Section 1.2 due to any
of the events or circumstances set forth in Subparagraphs (c)(ii) or (iii) of
this Section 1.2. Any termination by RVP of this Section 1.2 due to any of the
events or circumstances set forth in Subparagraphs (c)(i), (ii) or (iii) of
this Section 1.2, or any election by Distributor to purchase and market,
distribute or sell any Competing Products pursuant to clauses (B), (C) (D) or
(E) of Section 1.2(b) or pursuant to clause (i) or (ii) of this Subsection 1.2
(e), shall not affect the obligations of RVP or the rights of Distributor under
Section 1.1 or any other Sections of this Agreement, which shall continue in
full force and effect, provided that any and all restrictions on Distributor's
right to purchase and market, distribute or sell Competing Products from other
manufacturers also shall terminate in the event of a termination of this
Section 1.2 by RVP or an election by Distributor to purchase and market,
distribute or sell any Competing Products pursuant to clause (i) of this
Subsection 1.2(e).
1.3 Distributor hereby agrees to authorize and permit the
third-party manufacturers of the Coast Proprietary Products ("Third- Party
Manufacturers"), who have exclusive supply arrangements with Distributor
covering sales of such Products for recreation vehicle applications, to sell
such Coast Proprietary Products directly to RVP exclusively for OEM Sales by
RVP under any of the RVP Trademarks (which are listed on Exhibit H hereto),
during the term of this Agreement. The prices and delivery terms that shall
govern purchases of the Coast Proprietary Products by RVP shall be subject to
determination by agreement directly between RVP and such
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Third-Party Manufacturers who, RVP hereby acknowledges, are under no obligation
or duty to sell any of the Coast Proprietary Products to RVP. RVP agrees that
the failure or refusal of any such Third-Party Manufacturers to sell the Coast
Proprietary Products to RVP shall not constitute a breach of this Agreement by
Distributor, but Distributor shall provide reasonable cooperation to RVP in its
efforts to obtain the agreements of such Third-Party Manufacturers to sell such
Products to RVP for OEM Sales. RVP further agrees that if it elects to
purchase any Coast Proprietary Products from any of the Third-Party
Manufacturers, it shall notify Distributor thereof in writing and, prior to
commencing purchases thereof (whether or not such notice has been given), RVP
shall have agreed to compensate Distributor, on an equitable basis, for
research and development expenses incurred or to be incurred by Distributor in
the design of and the development of tooling for, such Coast Proprietary
Product and, upon agreement of the parties as to the amount to be paid by RVP
to Distributor, such amount shall be set forth on Exhibit B hereto.
Distributor agrees that the rights of RVP under this Section 1.3 shall survive
any termination of this Agreement, and, as consideration for such agreement by
Coast, RVP agrees that (i) it will not sell any Coast Proprietary Products, or
any products that are functionally equivalent thereto or competitive therewith,
to any After-Market Customers (including, but not limited to, Camping World) in
the Territories, other than to OEM's in OEM Sales, either during the term of
this Agreement or at any time thereafter without the prior written consent of
Distributor, which it may withhold in its sole and absolute discretion, (ii)
RVP is not acquiring hereby and agrees not to seek to acquire from any such
Third-Party Manufacturers any rights to manufacture or make any of the Coast
Proprietary Products and RVP shall not develop tooling to manufacture or make,
or have made by any other manufacturers, any of the Coast Proprietary Products
or any products functionally equivalent thereto, either during the term of this
Agreement or at any time thereafter without the prior written consent of
Distributor which it may withhold in its sole and absolute discretion. RVP
further agrees that it shall not enter into any agreement with any of such
Third-Party Manufacturers that would breach, violate or conflict with any of
the restrictions set forth hereinabove in this Section 1.3 with respect to
resales or manufacture of the Coast Proprietary Products by RVP, which
restrictions shall survive any termination of this Agreement.
2. ORDERS AND PRICES
2.1 RVP Products shall be purchased hereunder pursuant to purchase
orders issued by Distributor to RVP specifying the RVP Products and the
quantities thereof being purchased and the delivery locations therefor;
provided that, if any provision of any such purchase order conflicts with any
of the provisions of this Agreement, the provisions of this Agreement shall
control and no such purchase order shall be effective to impose any obligation
on RVP that is not contained in this Agreement or imposed by applicable laws or
regulations, or to diminish any rights that RVP may have under this Agreement
or under applicable laws or regulations. No terms or provisions contained in
any order confirmation, invoice or shipping order issued by RVP shall be
effective to alter any provisions of this Agreement or to impose any obligation
on Distributor that is not contained in this Agreement or imposed by applicable
laws or regulations, or to diminish any rights that Distributor may have under
this Agreement or under applicable laws or regulations. RVP shall deliver, or
cause to be delivered, to the locations specified by Distributor, substantially
all of the RVP Products ordered by Distributor within at least thirty (30) days
of the date the Distributor's purchase order for such RVP Products is delivered
to RVP. In each six-month period during the term of this Agreement from and
after April 1, 1996, Distributor shall endeavor to order RVP Products from RVP
in a quantity that will not vary, by
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more than twenty percent (20%) from the forecast of its anticipated RVP Product
orders for such periods given to RVP by Distributor pursuant to Section 4.4
hereof.
2.2 The Distributor shall pay RVP, for the RVP Products purchased
by Distributor pursuant to this Agreement, the applicable prices for such
Products listed on Exhibit E hereto. Such prices are not subject to change
until October 1, 1996. Effective as of October 1, 1996, and on each April 1
and October 1 in each year thereafter during the term of this Agreement
(hereinafter, "Adjustment Dates"), the prices set forth in Exhibit E hereto
shall be subject to adjustment as follows:
(a) At least sixty (60) days prior to each Adjustment
Date during the term of this Agreement (the "Notice Dates"), RVP shall notify
Distributor, in writing, of the increases or decreases (as the case may be) in
the direct materials costs and the direct labor costs being incurred by RVP in
the manufacture of each RVP Product as of a date within ten (10) business days
preceding each Notice Date (hereinafter, the "Determination Date") from the
direct materials costs and direct labor costs being incurred by RVP in the
manufacture of each RVP Product as of the immediately preceding Determination
Date (which shall be the date of this Agreement in the case of the price
adjustments to be made as of October 1, 1996). Each such notice shall set
forth RVP's determination, made in accordance with the provisions hereinafter
set forth in this Subsection 2.2, of the price increases or decreases in each
of the RVP Products that will become effective as of the next succeeding
Adjustment Date, and shall be accompanied by sufficiently detailed financial
information and invoices of RVP's direct materials suppliers by which
Distributor, or its accountants, will be able to verify the amount of any such
cost increases or decreases and RVP shall provide to Distributor such
additional information as it may reasonably request for that purpose.
(b) Subject to Subsection 2.2(d), if the sum of the
dollar amounts of the direct materials costs and the direct labor costs of any
RVP Product as of the Determination Date immediately preceding a Notice Date
(the "Current Determination Date") has decreased from the sum of such costs as
of the Determination Date immediately preceding such Current Determination Date
(the "Immediately Preceding Determination Date"), the price of such RVP Product
in effect on the Current Determination Date shall be reduced, as of the next
succeeding Adjustment Date, by the dollar amount of that decrease. For
example, if as of a Current Determination Date the direct materials costs of a
RVP Product is $20.00 lower, and the direct labor costs are $10.00 higher, than
at the Immediately Preceding Determination Date, then, the price of that RVP
Product will be reduced by $10.00 per Product as of the next succeeding
Adjustment Date (i.e., $10 + (-$20) = -$10).
(c) Subject to Subsection 2.2(d), if the sum of the
direct materials costs and direct labor costs of any RVP Product as of the
Current Determination Date has increased from the sum of the direct materials
costs and direct labor costs of such Product as of the Immediately Preceding
Determination Date, then, the price for that RVP Product that is in effect on
such Current Determination Date shall be increased as of the next succeeding
Adjustment Date by a dollar amount that is determined by multiplying the price
of the Product in effect on the Current Determination Date by the percentage
that results from multiplying (x) 0.87 times (y) the percentage increase that
has occurred in the sum of the direct materials and direct labor costs of such
RVP Product between such Immediately Preceding Determination Date and the
Current Determination Date. For example, if the sum of the direct materials
costs and direct labor costs
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of an RVP Product as of the Current Determination Date is three percent (3%)
higher than the sum of such costs of that Product as of the Immediately
Preceding Determination Date, the price of that Product shall be increased as
of the next succeeding Adjustment Date by a dollar amount that results from
multiplying the price of that Product in effect as of the Current Determination
Date by 2.61% (which is the percentage that results from multiplying 0.87 and
3%).
(d) Notwithstanding the foregoing, any price adjustment
that is to be effective as of any Adjustment Date occurring during the period
from October 1, 1996 through September 30, 1997, inclusive, shall be based only
on the increases or decreases (as the case may be) in direct materials costs
that have occurred from the Immediately Preceding Determination Date to the
Current Determination Date, so that increases or decreases in RVP's direct
labor costs occurring between the date hereof and October 1, 1997 shall be
disregarded in the determination of price adjustments, if any, that will become
effective on October 1, 1996, April 1, 1997 and October 1, 1997.
(e) On or before each Adjustment Date, Exhibit E hereto
shall be amended to set forth the prices of each of the RVP Products, as they
have been adjusted or are to be adjusted as of such Adjustment Date. In the
event that, during the term of this Agreement, any new products are added to
the list of RVP Products in Exhibit A hereto, the price thereof shall not be
adjusted until the first Adjustment Date occurring after two (2) months have
elapsed following Distributor's initial purchase of such Product from RVP and,
in determining the first price adjustment thereto, the date of such initial
purchase shall be deemed to be the immediately preceding Determination Date.
2.3 All amounts due RVP by Distributor for the purchase of any RVP
Products pursuant to this Agreement are due thirty (30) days from the date of
invoice thereof, provided that the invoice date shall be no earlier than the
date such RVP Products are shipped to Distributor. Distributor shall receive a
discount of two percent (2%) of all amounts paid within thirty (30) days from
the date of invoice thereof. Any such amounts not paid within thirty (30) days
of the invoice date shall bear interest thereafter at the lesser of fifteen
percent (15%) per annum or the maximum rate permitted by law, until such
amounts have been paid.
3. DELIVERY OF PRODUCTS
RVP Products to be delivered by RVP pursuant to any Distributor
purchase order to locations designated by Distributor within the United States
shall be shipped by truck and, in the case of shipments of roll-up patio
awnings or roof-mount air conditioners, shall be shipped in truckloads of 100
units and 224 units, respectively; unless Distributor supplies to RVP explicit
instructions for another method of shipment and Distributor agrees to pay for
any additional freight changes that result from its choice of an alternative
method of delivery or the parties agree on another method of delivery.
Distributor shall take title to the RVP Products at the time such Products are
delivered to the delivery location specified on the purchase order issued by
Distributor for such Products. Deliveries of RVP Products by RVP to
Distributor shall be (a) F.O.B. the Distributor's warehouse in the United
States or Canada for which the RVP Products have been ordered by Distributor,
(b) F.O.B. at a location at the U.S. Border designated by Distributor with
respect to RVP Products for Mexico, (c) F.O.B. at a United States port
designated by Distributor with respect to air conditioners for Australia, and
(d) F.O.B. Malden, Massachusetts with respect to Awnings for Australia.
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4. OBLIGATIONS OF DISTRIBUTOR
4.1 Distributor shall, during the term of this Agreement, use its
commercially reasonable efforts to sell and promote the sale of the RVP
Products in the Territories.
4.2 Distributor shall, during the term of this Agreement, maintain
(i) an adequate sales organization reasonably capable of the active
solicitation of the sale of the RVP Products in the Territories; (ii) general
liability and contractual liability insurance, in such amounts as are set forth
on Exhibit I hereto, and with such insurance companies as is customary in
accordance with sound business practices for a business of the nature, size and
scope of the Distributor; and (iii) inventory levels of the RVP Products
reasonably adequate to meet the needs of Distributor's customers for the RVP
Products.
4.3 Commencing not later than February 1, 1996, or such later date
as may be agreed by RVP, and continuing during the term of this Agreement,
Distributor shall undertake advertising and promotional activities with respect
to the RVP Products that are comparable to those activities undertaken by
Distributor with respect to functionally comparable products marketed and sold
by Distributor prior to entering into this Agreement. In connection therewith,
during the term of this Agreement, RVP shall, at the request of and at no
charge to Distributor, provide Distributor with camera-ready, full-color
photographs and illustrations of all of the RVP Products for inclusion in
Distributor's catalogs and advertising materials.
4.4 Distributor agrees to supply RVP with monthly reports prepared
by Distributor relating to each quarter's sales of the RVP Products by
Distributor in the Territories; inventories of the RVP Products on-hand at the
warehouses of the Distributor; forecasts twice each calendar year regarding
anticipated sales of the RVP Products in the Territories for the succeeding six
(6) months; and statistical and other information regarding the customers that
purchase the Products from Distributor; provided that Distributor shall not be
obligated to provide RVP with customer lists or other information identifying
Distributor's customers.
5. OBLIGATIONS OF RVP
RVP agrees, during the term of this Agreement, that:
5.1 Subject to the provisions of this Agreement, RVP shall supply
all of Distributor's requirements for the RVP Products as and when needed by
Distributor.
5.2 RVP shall invoice Distributor for each Product sold no sooner
than the date of shipment thereof to the F.O.B. point and, unless otherwise
instructed by Distributor in writing, RVP shall ship the RVP Products ordered
by Distributor as soon as reasonably practicable after orders for Products are
received by RVP from Distributor; provided, however, that RVP agrees that,
unless excused by Section 8 or otherwise agreed by the parties, in no event
shall RVP Products ordered by Distributor be delivered by RVP more than thirty
(30) days after receipt by RVP of the purchase order therefor issued by
Distributor.
5.3 RVP will from time to time provide Distributor with sales
literature relating to the RVP Products, at RVP's expense, in such quantities
as RVP reasonably determines.
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5.4 RVP shall undertake in the Territories advertising and
promotional activities with respect to the RVP Products comparable to those
activities undertaken by RVP for the RVP Products prior to entering into this
Agreement. In addition, RVP shall participate in cooperative advertising
programs with Distributor on the terms described in Exhibit G hereto.
5.5 RVP shall use its best reasonable efforts to conduct on-going
product development and improvement activities designed to maintain and improve
the operation and competitiveness, and to prevent the obsolescence, of the RVP
Products.
5.6 Maintain, either directly, or through a third-party service
provider reasonably acceptable to Distributor, adequate service centers in the
Territories to provide warranty and post-warranty service on the RVP Products.
Notwithstanding any other provision hereof to the contrary, RVP may sell repair
parts to such service centers in the Territories.
5.7 RVP hereby grants to Distributor a fully-paid, non-exclusive
right and license, during the term of this Agreement, to (i) disclose to the
public that it is an authorized distributor of the RVP Products, (ii) to use
and reproduce the "Xxxxxxx" and "Xxxxxxxx" and other trademarks described and
illustrated on Exhibit H hereto, as well as any other trademarks that RVP may
use hereafter to identify or describe any of the RVP Products purchased by
Distributor from RVP for resale in the Territories (collectively the "RVP
Trademarks") in connection with the promotion, marketing and sale of the RVP
Products, and (iii) use and reproduce the RVP Trademarks listed on Annex 1 to
Exhibit H on, and in connection with the promotion, marketing and sale of, the
Coast Proprietary Products and those additional products manufactured by or for
Distributor that, by agreement of the parties hereafter, are listed on Annex 2
to Exhibit H hereto (the "Coast After- Market Products"), provided that, in the
case of the Coast After-Market Products, such Products meet RVP's quality
standards. RVP shall determine whether any such Coast After-Market Products
listed, as of the date hereof, on Annex 2 to Exhibit H hereto meet RVP's
quality standards within sixty (60) days of the date hereof, and within sixty
(60) days after Distributor submits for evaluation by RVP any additional
product for inclusion as a Coast After-Market Product. If RVP concludes that
any Coast After-Market Product does not meet its quality standards, it shall
provide Distributor with written notice thereof within such applicable review
period, specifying in detail the deficiencies of such product (a "rejected
product"). Distributor may re-submit any such rejected products for
re-evaluation by RVP, which shall not unreasonably delay its evaluation
thereof. The right and license granted hereunder by RVP to Distributor shall
be irrevocable during the term of this Agreement; provided that Distributor
agrees that it will not use any of the RVP Trademarks in connection with the
marketing or sale of any goods or services, other than the RVP Products, the
Coast Proprietary Products, and the Coast After-Market Products approved by
RVP, and shall not publish any advertising literature or other materials that
incorporate any of the RVP Trademarks unless such literature or other materials
have been furnished to Distributor by RVP or have been approved in advance by
RVP. Distributor shall submit all advertising copy and other materials (other
than those supplied by RVP) in which it intends to use any RVP Trademarks to
RVP for its approval thereof at least thirty (30) days prior to the anticipated
publication thereof by Distributor. RVP agrees to advise Distributor in
writing within such thirty (30) day period of RVP's approval or disapproval of
such literature or other materials and, if RVP disapproves of any literature or
materials it shall specify in the notice of disapproval the reasons therefor
and any changes it requires before it will approve the literature or other
materials so submitted. Distributor shall not make any material changes in any
advertising or other documents containing any RVP Trademarks that have
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previously been approved by RVP without again obtaining RVP's approval thereof
in accordance with the provisions hereof. In the event of and notwithstanding
any termination of this Agreement, other than by reason of a material breach of
this Agreement by or the bankruptcy of Distributor, Distributor may elect, by
written notice to RVP to extend the term of the non-exclusive fully-paid
trademark license granted to Distributor by RVP hereunder for the Coast
Proprietary Products and the Coast After-Market Products for an additional five
(5) years beyond the effective date of termination of this Agreement without
the payment of any royalty or license fee to RVP.
5.8 RVP shall participate as a presenting manufacturer at each of
Distributor's annual trade shows that takes place during the term of this
Agreement, and, in connection therewith, shall:
(a) Pay to Distributor the sum of $32,000 for the floor
space occupied or used by RVP in promoting the sale of its Products at each
annual trade show; and
(b) In connection with sales of RVP Products made at each
such trade show under Distributor's "Dating Program," RVP shall provide
Distributor with credit terms comparable to those offered by Distributor to its
customers under such program; provided that the period of any such credit
extension by RVP to Distributor, as a result of the extension of credit by
Distributor to any of its customers, shall not exceed ninety (90) days and RVP
shall not be obligated to provide Distributor with any such credit extension
more than once per calendar year in respect of any extension of credit by
Distributor to any customer under Distributor's Dating Program.
5.9 RVP agrees that:
(a) During the term of this Agreement and for a period of
three (3) years following its termination, RVP shall maintain policies of
insurance in the amounts and with the insurers set forth in Exhibit I hereto,
at all times naming Distributor as an additional insured thereunder and, in
addition, protecting Distributor from any and all liabilities to customers or
to other third parties arising out of the manufacture by RVP, or the sale by
Distributor or by its customers (unless arising from the negligence or
intentional wrongful acts of Distributor or its customers), or the use by any
person or entity, or the condition of, any of the RVP Products.
(b) In the event RVP is self-insured for any portion of
its general liability obligations, RVP agrees to maintain, during the period
specified in Subsection 5.9(a) above, policies of insurance naming Distributor
as an additional insured under RVP's primary and excess umbrella liability
policies and shall furnish to Distributor a certificate of an officer of RVP as
to the amount of the self-insured retention and the existence of umbrella
coverage of at least $_________.
(c) Each policy of insurance required to be maintained by
RVP hereunder shall contain provisions to the effect that the policy limits may
not be reduced, terms changed or the policy cancelled on less than thirty (30)
days' prior written notice to Distributor. The insurance required to be
provided under this Subsection 5.9 shall be primary with respect to any other
insurance available to Distributor or its subsidiaries and shall contain a
waiver of
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subrogation by the RVP's insurance carriers against Distributor and its
insurance carriers with respect to the liabilities and obligations required to
be covered by insurance to be obtained and maintained by RVP pursuant hereto.
(d) Within thirty (30) days of the date hereof, and at
such other times as may be requested by Distributor during the term of this
Agreement and during the three-year period referenced in Subsection 5.9(a)
above, RVP shall furnish Distributor certificates of insurance evidencing RVP's
compliance with the provisions of this Section 5.9.
6. RETURN OF PRODUCTS
RVP Products purchased by Distributor hereunder may be returned to RVP
when (i) such Products are defective or do not meet specifications; (ii) when
such Products are returned to Distributor by its customers pursuant to any RVP
Product warranty. RVP agrees to accept, without charge, the return of all RVP
Products returned for any of the reasons hereinabove set forth and all RVP
Products shipped in error by RVP to Distributor pursuant to this Agreement and
to issue to Distributor a credit in an amount equal to the prices charged by
RVP for such returned RVP Products, plus the freight charges incurred by
Distributor in returning such RVP Products. RVP further agrees, at
Distributor's request, to rework or upgrade obsolete RVP patio and window
awnings in Distributor's inventories of such RVP Products to current and
saleable fabric colors or patterns and to bear fifty percent (50%) of the costs
thereof, provided that Distributor agrees to pay the other fifty percent (50%)
of such costs.
7. PATENTS AND TRADEMARKS
7.1 No rights to manufacture are granted to Distributor by this
Agreement and no licenses are granted or implied by this Agreement under any
patents used, owned or controlled by RVP or under which RVP has any rights of
manufacture, except the right to market, sell and use the RVP Products.
7.2 Except as and to the extent otherwise provided in Section 5.9,
Distributor shall not acquire any right, title or interest in or to any of the
RVP Trademarks. Distributor shall not in any way mutilate, deface, or alter
trademarks, trade names, or company names affixed to the RVP Products by RVP.
RVP agrees to add to the RVP Products or Product packaging materials, labeling,
commercially acceptable to RVP, that is required by any laws or regulations
applicable to the marketing or sale of such Products.
7.3 Upon termination of this Agreement, Distributor shall return
to RVP all materials received by Distributor from RVP bearing any trademarks of
RVP, and shall not make any further use thereof, except in connection with the
marketing and sale of inventories of the RVP Products in the possession of
Distributor at the time of such termination as permitted by Section 12.1 of
this Agreement, and in connection with the marketing and sales, following such
termination, of Coast Proprietary Products and Coast After-Market Products.
7.4 RVP represents and warrants that it has the right to grant to
Distributor the licenses granted under Section 5.7 hereof, without violating
the rights of any other person or entity, and that neither the use by
Distributor in accordance with the terms of this Agreement of the RVP
Trademarks licensed hereunder to Distributor, nor any of the RVP Products
supplied to
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Distributor hereunder, will infringe any patent, copyright, trademark or other
industrial or intellectual property right or trade secret or other proprietary
rights of any third party in any country in the Territories.
8. FORCE MAJEURE
If any party hereto is prevented from performing its obligations
hereunder by reason of the occurrence of an event of force majeure or an act of
God (a "Force Majeure Event"), which shall include insurrections, riots, wars
and war-like operations, trade embargoes, explosions, governmental acts,
epidemics, failure of independent contractors to perform, strikes, lock-outs,
fires, acts of any public enemy, earthquakes, hurricanes and storms, inability
to obtain required materials or supplies or qualified labor or services (such
as, but not limited to, freight services), and the promulgation of any
applicable law, regulation or restriction, not in effect on the date hereof, by
any foreign, or federal, state or local governmental entity or instrumentality,
such party shall be excused from the performance of those of its obligations
affected thereby for the duration of such Force Majeure Event and for such
period thereafter as may be reasonably required to resume performance
hereunder; but only if the occurrence of the Force Majeure Event preventing
performance could not have been avoided through the exercise of reasonable
diligence by the party seeking to be excused from performance. Any party
hereto whose performance is prevented by any such Force Majeure Event shall use
its commercially reasonable best efforts to avoid, remove, or cure such
circumstances and shall resume performance with utmost dispatch when such
circumstances are removed or cured. Any party claiming such circumstances as
an excuse for delay in performance shall give prompt notice in writing thereof
to the other party, together with an estimate as to when performance shall be
resumed.
9. TAXES
Distributor shall, at its sole expense, pay all sales or similar taxes
or levies or import or export duties required by any state, local or municipal
government to be paid on the resale by Distributor of the RVP Products
purchased by it pursuant to this Agreement.
10. COMPLIANCE WITH LAWS
RVP agrees that the RVP Products, and all materials in which they are
packaged, shall comply with all applicable foreign, federal, state, and local
laws, including, but not limited to, those applicable to product packaging and
labeling and all environmental laws and regulations applicable to the Products
or the product packaging. Distributor shall comply with all applicable
federal, state, and local laws relating to its marketing and sales of the
Products in the Territories.
11. DURATION AND TERMINATION
11.1 Unless sooner terminated pursuant to Section 11.2 or Section
11.3 below, this Agreement shall become effective on the date hereof and shall
remain in full force and effect for a period of five (5) years from the date
hereof (the "Initial Term") and, commencing at the end of the Initial Term and
each year thereafter, this Agreement shall be automatically renewed (without
the requirement of any action on the part of either party) for an additional
one (1) year period (each, a "Renewal Period"). Notwithstanding the foregoing,
either party may terminate this Agreement, without cause, effective on two (2)
years' prior written notice of termination to
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the other party; provided that no termination, other than a termination
pursuant to Section 11.2 or Section 11.3, shall be effective prior to the end
of the Initial Term. For example, by way of illustration, for a party to
terminate this Agreement at the end of the Initial Term, it must give written
notice of termination to the other party by no later than the end of the 36th
month of the Initial Term; or, if a party were to give such notice in the 37th
month of the Initial Term, the effective date of such termination (unless this
Agreement is sooner terminated pursuant to Sections 11.2 or 11.3) would be the
end of the 72nd month of the term of this Agreement, because such termination
notice would have been given less than two years prior to the commencement of
the first Renewal Period; or if such notice is given in the 61st month (which
would be the first month of the first Renewal Period), this Agreement would not
terminate (unless sooner terminated pursuant to Sections 11.2 or 11.3) until
the end of the third Renewal Period which would end in the 96th month of the
term of this Agreement, because such termination notice would have been given
less than two (2) years prior to the commencement of the third Renewal Period.
For purposes of this Agreement, the phrase "term of this Agreement" shall refer
to the period from the date hereof to the effective date of any termination of
this Agreement pursuant to this Section 11.1, Section 11.2 or Section 11.3
hereof, as the case may be.
11.2 In the event that either party shall have breached any of its
representations or warranties hereunder (other than a product warranty) or any
material covenant to be performed by it hereunder, including, but not limited
to, the failure of Distributor to have paid for any purchase of RVP Products
within thirty (30) days from the date of the delivery thereof to the F.O.B.
point (unless otherwise agreed to in writing by RVP), or the failure of RVP to
supply the RVP Products ordered by Distributor in accordance with the terms of
this Agreement (other than due to a Force Majeure Event, as defined in Section
8), the non-breaching party may terminate this Agreement effective on ninety
(90) days' prior written notice (which notice shall specify the nature of such
breach) to the breaching party; provided that no such termination shall become
effective if the breaching party shall have cured such breach within ninety
(90) days after its receipt of such notice.
11.3 This Agreement shall be deemed terminated immediately and
automatically in the event that either RVP or Distributor shall be adjudged,
voluntarily, or involuntarily, bankrupt or shall have petitioned for consent to
or relief under bankruptcy, reorganization, receivership, liquidation or
arrangement.
12. TERMINATION PROCEDURES
In the event of the termination of this Agreement, whether pursuant to
Section 11.1, 11.2 or 11.3 hereof:
12.1 Distributor shall be entitled to continue selling RVP Products
held in its inventories, and to perform any other acts (not inconsistent with
the terms of this Agreement) which are necessary or appropriate to the sale
thereof and the orderly winding up of the dealings between the parties
hereunder.
12.2 All of the rights of Distributor to purchase additional RVP
Products from RVP shall cease, except that Distributor shall have the right to
purchase additional quantities of the RVP Products on the terms contained in
this Agreement to meet purchase orders received prior
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to the effective date of termination that cannot be filled from the existing
inventories of Distributor or to supply parts or components for roll-up awnings
in connection with sales of its existing inventories of RVP roll-up patio
awnings.
12.3 Within ninety (90) days of termination, RVP shall offer to
repurchase the unused and unopened inventory of RVP Products that is held by
Distributor and is in a saleable condition and not over one (1) year old
(measured from the date of the delivery thereof to Distributor), at the
purchase price charged for such Products to Distributor, plus the costs of
freight to ship those RVP Products to locations designated by the RVP;
provided, however, that there shall be credited against such repurchase price a
restocking fee equal to 15% of that current purchase price in the event this
Agreement was terminated pursuant to Section 11.2 by RVP due to a material
uncured breach by Distributor or pursuant to Section 11.3 due to the bankruptcy
of Distributor. Distributor may accept such offer by written notice to RVP,
given to RVP not more than thirty (30) days following Distributor's receipt
of such offer, which notice shall specify the RVP Products and quantities
thereof to be repurchased by RVP hereunder. Amounts due hereunder by RVP to
Distributor shall first be credited against any unpaid amounts due by
Distributor to RVP for Products purchased pursuant to this Agreement and, if
any amounts remain due by RVP to Distributor after giving effect to such
credits, such remaining amounts shall be paid to Distributor within sixty
(60) days after shipment of such Products by Distributor to RVP.
12.4 The respective rights and obligations of the parties hereto
under clause (ii) of Section 4.2, and under Section 5.7, Section 5.9, Section
6, Section 7.4, this Section 12, Section 14, Section 17, Section 18, Section
19, Section 20 and the provisions of Section 22, shall survive the termination
of this Agreement.
13. HIRING OF FORMER EMPLOYEES
During the term of this Agreement, no party hereto shall solicit for
hire or hire any person who is employed by the other party, except with the
prior written consent of the Chief Executive Officer of such other party.
14. DISPUTES
14.1 Except as otherwise provided in Section 14.2 or in Annex 1 to
Exhibit D, any disputes, controversies or claims between the parties arising
out of or relating to this Agreement, or the performance by either party of any
of its obligations under this Agreement, that are not resolved by mutual
agreement of RVP and Distributor within thirty (30) days of receipt of written
notice of such dispute, controversy or claim, shall be submitted to binding
arbitration in accordance with the rules of the American Arbitration
Association (the "Association"). Either party may initiate such arbitration
after the end of such thirty (30) day period. RVP and Distributor agree that
the Association will use a panel of three (3) arbitrators to review the
dispute, controversy or claim in question in accordance with the Association's
standard arbitration rules, and in accordance with then existing statutes of
the State of California. Each party shall select one arbitrator from a listing
of available arbitrators furnished by the Association and those two arbitrators
shall select the third; provided that if any party fails to select an
arbitrator within fifteen (15) days after the submission of such listing of
available arbitrators, the
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Association shall select an arbitrator for such party. Any decision concurred
in by at least two of the three arbitrators shall be binding on the parties.
This arbitration agreement shall be specifically enforceable and judgment upon
any award rendered by arbitration may be entered in any court having
jurisdiction. The first arbitration initiated under or with respect to this
Agreement shall take place in San Jose, California, unless the parties agree on
another location for such arbitration. Thereafter, the location of subsequent
arbitrations hereunder shall alternate successively between Wichita, Kansas and
San Jose, California, unless the parties otherwise agree. Each party agrees to
submit to and not to contest the jurisdiction of the Association or the venue
of any such arbitration and to accept service of process by certified or
registered mail, return receipt requested.
14.2 Notwithstanding Section 14.1 above, either party may seek
equitable relief, such as specific performance or the issuance of a temporary
restraining order, or a preliminary or permanent injunction, with respect to a
breach or threatened breach of this Agreement in any court of competent
jurisdiction.
14.3 In the event that any arbitration or other proceeding is
instituted between the parties pursuant to this Section 14, the non- prevailing
party shall pay all reasonable attorney fees and other legal costs of the other
party hereto.
15. ASSIGNMENT
Each party agrees not to assign, transfer, sublicense, or convey this
Agreement without the prior written consent of the other party; except that
either party may assign this Agreement without the other party's consent in
connection with a merger of a party with, or a sale (in a single or series of
related transactions) of all or substantially all of a party's voting stock or
assets to, another person or entity; provided that at least thirty (30) days'
prior written notice of the anticipated date of such merger or sale is given to
the other party and the party to which this Agreement is assigned in any such
merger or sale confirms in writing that it will comply with the terms of this
Agreement. Any assignment, transfer, sublicense, or conveyance of this
Agreement made in violation of this Section 15 shall be void and ineffective.
In the event of an assignment made in accordance with this Section 15, all of
the rights and benefits under this Agreement to which the assigning party is
entitled shall inure to the benefit of the assignee of such party, and all
obligations of the assigning party under this Agreement shall be assumed by the
assignee of such party, provided that the assigning party shall remain liable
hereunder for the performance of any of its obligations that its assignee fails
to perform.
16. INDEPENDENT CONTRACTORS
Nothing contained in this Agreement shall be deemed to create a
partnership or joint venture between the parties hereto, and neither of the
parties hereto shall in any matters connected hereto, or otherwise, hold itself
out as the partner of the other, nor shall either of the parties incur any
indebtedness or obligation in the name of, or which shall be binding on, the
other party, without the prior written consent of such other party.
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17. CONFIDENTIAL INFORMATION
Each party (hereinafter, a "receiving party") shall take all
reasonable steps and do all things reasonably necessary to insure that
confidential information relating to any aspect of the business of the other
party (the "disclosing party"), disclosed to the receiving party under or in
connection with this Agreement, including, without limitation, any customer
lists and sales information furnished by Distributor to RVP, shall not be
disclosed or made use of by the receiving party except in connection with the
performance by the receiving party of its obligations under this Agreement,
provided, however, that the foregoing shall not apply to information which:
(a) The receiving party demonstrates was known to it
prior to the disclosure by the disclosing party;
(b) Is or becomes public knowledge through no fault or
action of the receiving party;
(c) Is lawfully disclosed to the receiving party by a
third party that is not subject to a confidentiality obligation to the
disclosing party and acquired such information with the consent of the
disclosing party; or
(d) Is compelled by judicial process or subpoena to be
disclosed, provided that in such event the receiving party shall promptly
notify the other party thereof and shall cooperate with such other party to
quash such subpoena or obtain an appropriate protective order limiting the
disclosure thereof.
The parties' obligations hereunder shall survive the termination of
this Agreement.
18. PRODUCT WARRANTIES; LIMITATION OF LIABILITY
18.1 RVP warrants each RVP Product as set forth in the warranty
attached hereto in Exhibit F that is applicable to such Product, as such
warranties may be amended from time to time by mutual agreement of the parties.
IT IS UNDERSTOOD AND AGREED THAT EXCEPT FOR THE WARRANTIES OF RVP IN SECTION
7.4 OF THIS AGREEMENT, RVP'S PRODUCT WARRANTIES TO DISTRIBUTOR SET FORTH IN
EXHIBIT F ARE IN LIEU OF ALL OTHER PRODUCT WARRANTIES TO DISTRIBUTOR, EXPRESSED
OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Distributor shall not
have any authority to make any representations or warranties concerning the RVP
Products other than those set forth in Exhibit F or in written materials
provided to Distributor or approved by RVP pursuant to this Agreement.
18.2 EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 18.2 AND IN
SECTION 19.1 OF THIS AGREEMENT, THE LIABILITY OF RVP TO DISTRIBUTOR FOR OR IN
CONNECTION WITH ANY DEFECT IN OR NEGLIGENT MANUFACTURE OF ANY OF THE RVP
PRODUCTS SOLD TO DISTRIBUTOR HEREUNDER (WHETHER BASED ON PRINCIPLES OF STRICT
PRODUCT LIABILITY OR NEGLIGENCE OR BREACH OF WARRANTY OR ANY OTHER PRINCIPLES
OF LAW) SHALL NOT
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EXCEED THE PURCHASE PRICE PAID BY DISTRIBUTOR FOR THE DEFECTIVE OR NEGLIGENTLY
MANUFACTURED PRODUCTS AND THE DIRECT COSTS INCURRED BY DISTRIBUTOR IN
CONNECTION WITH THE REPLACEMENT, REPAIR OR RECALL THEREOF, AND THE LIABILITY OF
DISTRIBUTOR FOR NEGLIGENCE IN CONNECTION WITH THE DISTRIBUTION OR SALE OF ANY
OF THE RVP PRODUCTS SHALL NOT EXCEED THE PRICE PAID BY DISTRIBUTOR FOR THE RVP
PRODUCTS THAT WERE SOLD OR DISTRIBUTED IN A NEGLIGENT MANNER BY DISTRIBUTOR AND
NO PARTY HERETO SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO,
LOSS OF PROFITS, LOSS OF BUSINESS OPPORTUNITIES, OR LOSS OF BUSINESS INVESTMENT
ARISING OUT OF ANY DEFECT IN, OR NEGLIGENCE IN THE MANUFACTURE OR DISTRIBUTION
OR SALE OF, ANY OF THE RVP PRODUCTS; PROVIDED THAT ANY LOSSES, DAMAGES,
LIABILITIES, COSTS OR EXPENSES (INCLUDING, BUT NOT LIMITED TO, ATTORNEYS FEES)
INCURRED BY DISTRIBUTOR IN CONNECTION WITH ANY CLAIM, ACTION OR SUIT BY ANY
PURCHASER OR USER OF THE RVP PRODUCTS ARISING OUT OF THE SALE, OPERATION,
CONDITION OR USE OF ANY RVP PRODUCT, OTHER THAN DUE TO NEGLIGENT ACTS OF
DISTRIBUTOR, SHALL BE DEEMED TO CONSTITUTE DIRECT DAMAGES, AND NOT INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCURRED BY DISTRIBUTOR AND SHALL
NOT BE SUBJECT TO ANY OF THE LIMITATIONS ON LIABILITY SET FORTH HEREINABOVE.
19. INDEMNIFICATION
19.1 RVP shall indemnify, defend, and hold harmless Distributor and
its directors, officers, employees, representatives and their successors in
interest and permitted assigns (the "Distributor Indemnified Parties") from and
against any and all demands, claims, actions, suits and other proceedings, and
any and all losses, damages or liabilities, costs and expenses (including, but
not limited to, reasonable attorneys' fees), whether or not incurred in
connection with any demand, claim, action, suit or other proceeding, that arise
out of or are based on (i) any claim or determination that any of the RVP
Products are or were defective or were negligently manufactured, whether based
on principles of strict manufacturer's product liability, negligence or breach
of warranty, or otherwise, (ii) any claim or determination that the
manufacture, marketing, distribution, sale, lease or use of the Products, or
the reproduction or use of any of the trademarks of RVP which Distributor is
granted the right to use hereunder, infringes any patent rights, trademarks,
copyrights or other intellectual or industrial property, trade secret or other
proprietary rights of any third party, or (iii) any negligent act or negligent
omission to act of RVP, other than any act or omission for which the
Distributor Indemnified Parties are entitled to indemnification pursuant to
clause (i) or clause (ii) of this Section 19.1. The limitation on liabilities
set forth in Section 18.2 of this Agreement shall not apply to the obligations
of RVP with respect to, or losses, damages, liabilities or costs or expenses
(including, but not limited to, attorneys fees) arising out of, any of the
claims or any of the determinations referenced in clause (i) or clause (ii) of
this Section 19.1. Without limiting the indemnification rights of the
Distributor Indemnified Parties hereunder, RVP agrees that if any RVP Product
is held by any court of competent jurisdiction in any of the Territories to
infringe any patent or other intellectual or industrial property or trade
secret or other proprietary right of any other person or entity (an"Infringing
Product"), or if RVP believes that such a claim is reasonably likely to occur,
RVP shall promptly notify Distributor thereof in writing and RVP shall, at its
sole expense and at no
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expense to Distributor, take one or more of the following actions: (x) modify
such Infringing Products so that they are no longer infringing, or (y) procure
the rights needed to permit RVP to continue manufacturing and selling the
Infringing Products to Distributor and to permit Distributor to continue
marketing, distributing and selling such Products in the Territories on the
terms and conditions of and with the licenses and rights provided to
Distributor under this Agreement and without any additional obligations being
imposed as a result thereof on Distributor, or (z) repurchase all of the
Infringing Products in the possession of Distributor for resale, or returned by
any of its customers, in any of the Territories in which the manufacture,
marketing or sale of such RVP Product was held, or RVP believes is reasonably
likely to be held, to be infringing, at the price paid by Distributor for such
Infringing Products. The determination of which of the three foregoing actions
that shall be taken by RVP with respect to any Infringing Products shall be
made by RVP. In addition, in the event RVP repurchases any Infringing
Products, RVP also shall reimburse Distributor for all packaging and shipping
costs incurred in connection with the shipment thereof to RVP or to any person
designated by RVP to receive such items. Amounts due Distributor in respect of
the repurchase, packaging and shipment of Infringing Products shall first be
credited against unpaid amounts due hereunder by Distributor to RVP and any
amounts remaining due by RVP to Distributor, after giving effect to such
credits, shall be paid to Distributor within thirty (30) days after shipment of
such Products by Distributor to RVP or to a person designated by RVP in the
United States.
19.2 Distributor shall indemnify, defend, and hold harmless RVP and
its directors, officers, employees, representatives and their successors in
interest and permitted assigns (the "RVP Indemnified Parties") from and against
any and all demands, claims, actions, suits and other proceedings, and any and
all losses, damages or liabilities, costs and expenses (including, but not
limited to, reasonable attorneys' fees), whether or not incurred in connection
with any demand, claim, action, suit or other proceeding, that arise out of or
are based on any negligent act or negligent omission to act of Distributor.
20. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings (written or oral) of the parties in connection therewith.
21. AMENDMENTS AND WAIVERS
Any modifications to or amendments or waivers of any provision of this
Agreement must be in writing and bear the signatures of an authorized officer
of both RVP and Distributor. The failure of either party to require the
performance of any term of this Agreement, or the waiver by either party of any
breach of this Agreement, shall not prevent a subsequent enforcement of such
term nor be deemed a waiver of any subsequent breach.
22. MISCELLANEOUS
22.1 This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California.
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22.2 If any term of provision of this Agreement or any application
thereof shall be invalid or unenforceable, the remainder of this Agreement and
any other application of such provision shall not be affected thereby. The
section headings in this Agreement are for convenience of reference only and
shall not affect the construction or interpretation of any of the provisions of
this Agreement. This Agreement is the result of arms'-length negotiations
between the parties and no provision of this Agreement shall be construed
against any party because its attorneys were the draftsmen or principal
draftsmen of such provision.
22.3 Any notice hereunder given in writing shall be deemed
sufficiently given by one party to another (i) on the date of delivery or
tender, if delivered or tendered in person, or (ii) three (3) days after its
deposit in the United States Mail, if mailed in a sealed envelope, registered
or certified, with postage and postal charges prepaid, and addressed, if to
Distributor, to the attention of Distributor's Chief Executive Officer, at:
THE COAST DISTRIBUTION SYSTEM
0000 Xxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
and, if to RVP, to the attention of its Chief Executive Officer, at:
RECREATION VEHICLE PRODUCTS, INC.
0000 Xx. Xxxxxxx
Xxxxxxx, Xxxxxx 00000
Any party may change its address at which any notices are to be delivered or to
which they are to be mailed by giving the other party at least ten (10) days'
prior written notice of such change in the manner specified in this Subsection
22.3.
22.4 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of this date first above written.
THE COAST DISTRIBUTION SYSTEM
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------
Date: October 11, 1995
RECREATION VEHICLE PRODUCTS, INC.
By: /s/ XXXXXX X. XXXXX
-----------------------------------
Date: October 11, 1995
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