DISTRIBUTION AGREEMENT
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THIS DISTRIBUTION AGREEMENT (this "Agreement"), made this 18 day of
September, 2003, by and between GLOTECH INDUSTRIES, INC., a Nevada corporation
with its principal offices located in Gainesville, Florida, (hereinafter
"SUPPLIER"), and 15 Inc., a Kentucky corporation with its principal offices
located in London, KY (hereinafter "DISTRIBUTOR").
RECITALS
WHEREAS, SUPPLIER manufactures and markets certain products and desires to
increase the sales of such products;
WHEREAS, DISTRIBUTOR has represented that it possesses the necessary
expertise and marketing organization to promote and sell such products; and
WHEREAS, SUPPLIER is willing to appoint DISTRIBUTOR and DISTRIBUTOR is
willing to accept such appointment as distributor of SUPPLIER's products in the
territory defined herein;
NOW, THEREFORE, In consideration of the mutual premises and covenants
hereinafter set forth, the parties agree as follows:
ARTICLE 1
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DEFINITIONS
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For purposes of this Agreement, the following words, terms and phrases,
where written with an initial capital letter, shall have the meanings assigned
to them in this Article 1 unless the context otherwise requires:
1.1 Products. "Products" shall mean those products described in
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Exhibit I hereto as that Exhibit may be amended by SUPPLIER, at its sole
discretion, from time to time. SUPPLIER shall give DISTRIBUTOR thirty (30) days
written notice of any such Amendment.
1.2 Territory. "Territory" shall mean the area specifically described
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in Exhibit II hereto as that Exhibit may be amended from time to time.
1.3 Distributor List Price. "Distributor List Price" shall mean the
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prices then being quoted by SUPPLIER for sales of Products to its
[INTERNATIONAL] distributors.
1.4 SUPPLIER Information. "SUPPLIER Information" shall mean all
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information, other than information in published form or expressly designated by
SUPPLIER as non-confidential, which is directly or indirectly disclosed to
DISTRIBUTOR or embodied in Products provided hereunder, regardless of the form
in which it is disclosed, relating in any way to SUPPLIER's markets, customers,
products, patents, inventions, procedures, methods, designs, strategies, plans,
assets, liabilities, costs, revenues, profits, organization, employees, agents,
distributors or business in general.
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1.5 Quota. "Quota" shall mean the minimum quantities of Products which
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DISTRIBUTOR shall be expected to purchase from SUPPLIER in accordance with the
terms and conditions of Article 5 of this Agreement.
ARTICLE 2
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APPOINTMENT
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2.1 Scope. SUPPLIER hereby appoints DISTRIBUTOR, and DISTRIBUTOR
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hereby accepts appointment, as SUPPLIER's exclusive distributor during the term
of this Agreement with the right to sell or otherwise distribute Products in the
Territory, under SUPPLIER's name and trademarks, subject to all the terms and
conditions of this Agreement.
2.2 Subdistributors. DISTRIBUTOR shall not, without the prior written
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approval of SUPPLIER, appoint any subdistributors or agents to promote and/or
distribute Products within the Territory. Further, notwithstanding any such
appointments, or SUPPLIER's approval thereof, DISTRIBUTOR shall at all times
remain fully liable for the performance of its subdistributors and/or agents and
DISTRIBUTOR hereby agrees to indemnify and hold harmless SUPPLIER from all
damages, losses, costs or expenses arising in any manner from any act or
omission on the part of itself or its subdistributors or agents.
2.3 Sales Outside the Territory. Nothing herein shall be construed as
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precluding DISTRIBUTOR from selling Products outside the Territory, provided
that DISTRIBUTOR shall not actively advertise, promote or solicit customers for
Products outside the Territory nor establish any office through which orders are
solicited or any depot at which inventories of SUPPLIER Products are stored
outside the Territory.
2.4 Reserved Sales Rights. Notwithstanding any other provision of this
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Agreement, SUPPLIER reserves the right to sell, rent or lease Products under the
SUPPLIER's name and trademarks directly to any of the customers listed in
Exhibit VI, as that Exhibit may be amended by SUPPLIER from time to time upon
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[THIRTY (30)] days notice to DISTRIBUTOR.
ARTICLE 3
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GENERAL OBLIGATIONS OF DISTRIBUTOR
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3.1 Marketing. DISTRIBUTOR shall have the following obligations with
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respect to the marketing and distribution of SUPPLIER Products:
(a) To use its best efforts to further the promotion, marketing, sale and
other distribution of Products in the Territory;
(b) To maintain an adequate and balanced inventory of Products, supplies,
and spare parts;
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(c) To promptly respond to all inquiries from customers, including
complaints, process all orders, and effect all shipments of Products;
(d) To diligently investigate all leads with respect to potential
customers referred to it by SUPPLIER;
(e) To permit SUPPLIER to visit DISTRIBUTOR's customers and to visit
DISTRIBUTOR's place of business and inspect its inventories, service
records, and other relevant documents.
(f) To maintain throughout the Territory an adequate sales force dedicated
to the sale of Products;
(g) To participate actively in sales or merchandising programs prepared by
SUPPLIER; to participate in all fairs and exhibitions in the Territory
where such participation will, in the judgment of SUPPLIER, promote
the Products; and to develop and implement sales programs for the
promotion of the Products;
(h) To provide SUPPLIER within ninety (90) days of the end of
DISTRIBUTOR's fiscal year with a report of its activities with respect to the
Products in the Territory during such year, which report shall be in such form
and in such detail as SUPPLIER may reasonably require.
3.2 Advertising. DISTRIBUTOR shall diligently undertake to advertise
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the Products in the Territory. SUPPLIER shall furnish DISTRIBUTOR with a
reasonable quantity of SUPPLIER's brochures, if SUPPLIER has developed any
brochures, for use by the DISTRIBUTOR in preparing its own advertising
materials. DISTRIBUTOR may utilize such advertising materials to promote sales
of the Products and in preparing its own advertising materials. All expenses
incurred by DISTRIBUTOR with respect to creating advertising materials and
advertising the Products shall be borne by DISTRIBUTOR.
3.3 Manufacture or Distribution of Competitive Goods. DISTRIBUTOR
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shall not manufacture or distribute any products which are directly or
indirectly competitive with the Products.
3.4 Customer Support. DISTRIBUTOR agrees to cooperate with SUPPLIER in
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dealing with any customer complaints concerning the Products and to take any
action requested by SUPPLIER to resolve such complaints. DISTRIBUTOR also
agrees to assist SUPPLIER in arranging for any customer warranty service.
3.5 Expenses. DISTRIBUTOR assumes full responsibility for all costs and
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expenses which it incurs in carrying out its obligations under this Agreement,
including but not limited to all rentals, salaries, commissions, advertising,
demonstration, travel and accommodation expenses without the right to
reimbursement for any portion thereof from SUPPLIER.
3
ARTICLE 4
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ORDERS FOR PRODUCTS
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4.1 Purchase Orders. DISTRIBUTOR shall submit purchase orders for the
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Products to SUPPLIER in writing or by facsimile transmission or electronic mail
which shall set forth, at a minimum:
(a) An identification of the Products ordered, including model numbers,
(b) Quantity,
(c) Requested delivery dates, and
(d) Shipping instructions and shipping address.
DISTRIBUTOR shall ensure that its purchase orders are received by SUPPLIER at
least [NINETY (90)] days prior to the delivery dates requested in the order.
DISTRIBUTOR shall not be entitled to order quantities of the Products in any
calendar quarter in excess of ____ percent (___%) of DISTRIBUTOR's forecast for
the then current fiscal year established in accordance with Section 5.2 hereof
without the specific approval of SUPPLIER pursuant to a writing separate from
any acceptance of a purchase order.
4.2 Acceptance of Orders. All purchase orders from DISTRIBUTOR are
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subject to acceptance in writing by SUPPLIER at its principal offices in
Gainesville, Florida, which acceptance shall be delivered by mail to a regularly
established post office, or by facsimile transmission or electronic mail. Each
purchase order shall be deemed to be an offer by DISTRIBUTOR to purchase the
Products pursuant to the terms of this Agreement and, when accepted by SUPPLIER
as hereinabove provided, shall give rise to a contract under the terms set forth
herein to the exclusion of any additional or contrary terms set forth in the
purchase order.
4.3 Delivery Terms. All deliveries of the Products shall be [FREE
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CARRIER] at or near SUPPLIER's manufacturing or warehouse facility. [UNLESS
OTHERWISE PROVIDED IN THIS AGREEMENT, "FREE CARRIER" SHALL BE CONSTRUED IN
ACCORDANCE WITH INCOTERMS 2000 OF THE INTERNATIONAL CHAMBER OF COMMERCE.]
SUPPLIER shall have no further responsibility for the Products, and all risk of
damage to or loss or delay of the Products shall pass to DISTRIBUTOR upon their
delivery at the [FREE CARRIER] delivery point to (a) a common carrier or (b) an
agent or any other person specified by DISTRIBUTOR acting on behalf of
DISTRIBUTOR. DISTRIBUTOR shall insure each shipment of Products with a
reputable insurer for the full invoice of such shipment. Such insurance shall
provide for full coverage from the time the Products are delivered at the [FREE
CARRIER] point until DISTRIBUTOR shall have paid SUPPLIER for such Products in
full. SUPPLIER reserves all rights with respect to delivered Products permitted
by law including, without limitation, the rights to rescission, repossession,
resale and stoppage in transit until the full amount due from DISTRIBUTOR in
respect of all delivered Products has been paid.
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4.4 Modification of Orders. No accepted purchase order shall be
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modified or cancelled except upon the written agreement of both parties.
DISTRIBUTOR's purchase orders or mutually agreed change orders shall be subject
to all provisions of this Agreement, whether nor not the purchase order or
change order so states.
4.5 Change Order Charges. In the event DISTRIBUTOR requests
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modifications in an accepted order more than [FORTY-FIVE (45)] days prior to the
scheduled delivery date provided in such order, SUPPLIER may, in consideration
for accepting such change order, require DISTRIBUTOR to pay a change order
charge equal to ____ percent (___%) of the U.S. dollar value of that portion of
the order which is affected by DISTRIBUTOR's change order request or _____
dollars ($____.00), whichever is greater. In the event DISTRIBUTOR requests
modifications in an order less than [FORTY-FIVE (45)] days prior to the
scheduled delivery date, SUPPLIER may require DISTRIBUTOR to pay a change order
charge of ____ percent (___%) of the U.S. dollar value of that portion of the
order which is affected by such order modification or ________________ dollars
($_____.00), whichever is greater.
4.6 Product Changes. SUPPLIER reserves the right, in its sole
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discretion and without incurring any liability to DISTRIBUTOR, to:
(a) Alter the specifications for any Product;
(b) Discontinue the manufacture of any Product;
(c) Discontinue the development of any new product, whether or not such
product has been announced publicly; or
(d) Commence the manufacture and sale of new products having features
which make any Product wholly or partially obsolete, whether or not
DISTRIBUTOR is granted any distribution rights in respect of such new
products.
4.7 Forecasts. DISTRIBUTOR agrees to provide SUPPLIER with a [FIFTEEN
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(15)] month forecast indicating DISTRIBUTOR's intended purchases of Products
during each calendar [QUARTER] of such period as well as such other information
as SUPPLIER may reasonably request in the format specified by SUPPLIER from time
to time. Such forecast shall be updated by DISTRIBUTOR on a rolling basis for a
new [FIFTEEN (15)] month period, which updated forecast must be received by
SUPPLIER no later than [THIRTY (30)] days prior to the first day of each
succeeding calendar [QUARTER]. Such rolling forecasts by DISTRIBUTOR shall be
used for purposes of facilitating DISTRIBUTOR's marketing plans and in order to
meet the lead times required by certain of SUPPLIER's suppliers, but they shall
not be determinative for purposes of establishing the mutually agreed fiscal
year forecast and DISTRIBUTOR's Quota pursuant to Section 5.2 hereof.
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ARTICLE 5
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MINIMUM PURCHASE REQUIREMENT
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5.1 General Requirement. During each SUPPLIER fiscal year during the
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term of this Agreement, DISTRIBUTOR agrees to purchase and take delivery of the
Quota of Products established for such period as specified in Exhibit IV hereof.
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DISTRIBUTOR understands and agrees that the establishment and achievement of the
Quota is the essence of this Agreement, and that failure by DISTRIBUTOR to
satisfy its obligation under this Article 5 shall constitute a failure of
consideration on the basis of which SUPPLIER shall be entitled to terminate this
Agreement pursuant to Section 14.2(c) hereof.
5.2 Determination of Quota. DISTRIBUTOR's forecast of intended
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purchases of Products for the initial term of this Agreement is set forth in
Exhibit IV hereof. For each SUPPLIER fiscal year after such initial period and
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for the duration of this Agreement, DISTRIBUTOR and SUPPLIER shall mutually
agree in writing on the forecast for such SUPPLIER fiscal year at least [SIXTY
(60)] days prior to the commencement of each such fiscal year. DISTRIBUTOR
understands and hereby agrees that the forecast for each succeeding SUPPLIER
fiscal year during the term of this Agreement shall be such that it is at least
____ percent (___%) greater than (a) the forecast for the previous fiscal year
or (b) the volume of Products actually delivered to DISTRIBUTOR during the
previous SUPPLIER fiscal year, whichever is greater. DISTRIBUTOR's Quota for
the initial term of this Agreement shall be ____ percent (____%) of the forecast
set forth in Exhibit IV hereto, and the Quota for each succeeding SUPPLIER
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fiscal year during the term of this Agreement shall be ___ percent (___%) of the
fiscal year forecast mutually agreed upon by DISTRIBUTOR and SUPPLIER pursuant
to this Section 5.2.
ARTICLE 6
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PRICES AND PAYMENTS
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6.1 Prices. The prices to be paid by DISTRIBUTOR for Products
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purchased pursuant to this Agreement shall be the Distributor List Prices in
effect at the time of acceptance of the relevant purchase order submitted by
DISTRIBUTOR, except as provided in Section 6.2 below. All Distributor List
Prices are [FREE CARRIER] SUPPLIER's manufacturing or warehouse facility and
including packing in accordance with SUPPLIER's standard commercial export
practices in effect at the time of shipment. Special packing or handling shall
be at the sole expense of DISTRIBUTOR.
6.2 Price Increases, Decreases. SUPPLIER may, at any time during the
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term of this Agreement, increase its prices for the Products by providing
DISTRIBUTOR with at least [SIXTY (60)] days prior written notice. Increased
prices for all Products shall not apply to purchase orders accepted prior to the
effective date of the price increase unless such orders provide for delivery,
and delivery is in fact made, more than [ONE-HUNDRED AND TWENTY (120)] days
after the date of acceptance of the order. Price decreases with respect to all
Products shall be effective immediately upon written notice to the DISTRIBUTOR
on all such Products not yet delivered.
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6.3 Payment Terms. Until such time as DISTRIBUTOR shall have
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established a credit history satisfactory to SUPPLIER, payments by DISTRIBUTOR
hereunder shall be made by irrevocable, transferable and divisible letter of
credit opened at DISTRIBUTOR's expense, issued or confirmed by a bank specified
by, or acceptable to, SUPPLIER, cash in advance, or such other method of secured
payment as SUPPLIER shall prescribe. Thereafter, all payments hereunder shall
be due net [THIRTY (30)] days from the date of shipment of the Products, or from
the date of invoice for such charges as taxes, duties, interest or like special
charges, payable to the bank or banks specified by SUPPLIER in writing from time
to time. All payments hereunder shall be made in U.S. dollars or such other
currency as may be mutually agreed upon. SUPPLIER shall not be obligated to
ship Products against accepted orders in the event SUPPLIER's outstanding
accounts receivable from DISTRIBUTOR then exceed or would after any such
shipment exceed ____ percent (___%) of the U.S. dollar value of DISTRIBUTOR's
then current fiscal year forecast based on the then current Distributor List
Prices or such other amount as may be mutually agreed upon from time to time by
SUPPLIER and DISTRIBUTOR. In the event of any dispute arising over any part of
an invoice or the total amount due under an invoice, all undisputed amounts
shall be promptly paid by DISTRIBUTOR in accordance with this Section 6.3.
6.4 Resale Prices. DISTRIBUTOR may resell Products at such prices as
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DISTRIBUTOR, in its sole discretion, shall determine. DISTRIBUTOR shall,
however, provide SUPPLIER with a list of its initial sales prices for the
Products to be charged to its customers and shall keep SUPPLIER fully informed
by providing SUPPLIER with any new list sales prices.
6.5 Overdue Payments. If and for so long as any payment from
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DISTRIBUTOR to SUPPLIER under this Agreement shall be overdue:
(a) Interest at the rate of ___ percent (___%) per annum shall
automatically become due on all balances outstanding plus a minimum
administrative and handling charge of U.S. $____ per month or part
thereof; and
(b) SUPPLIER shall have the right, in its sole discretion, to require
payment for additional shipments of Products either by cash in advance
or by an irrevocable transferable, divisible letter of credit in U.S.
dollars confirmed by a U.S. bank specified by SUPPLIER, instead of by
open account as provided above.
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ARTICLE 7
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ACCEPTANCE [AND WARRANTY]
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7.1 Acceptance of Products. In the event of any shortage, damage or
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discrepancy in or to a shipment of Products, DISTRIBUTOR shall promptly report
the same to SUPPLIER and furnish such written evidence or other documentation as
SUPPLIER may deem appropriate. SUPPLIER shall not be liable for any such
shortage, damage or discrepancy unless SUPPLIER has received notice and
substantiating evidence thereof from DISTRIBUTOR within [THIRTY (30)] days of
arrival of the Products at DISTRIBUTOR's shipping address in the Territory. If
the substantiating evidence delivered by DISTRIBUTOR demonstrates to SUPPLIER's
satisfaction that SUPPLIER is responsible for such shortage, damage or
discrepancy, SUPPLIER shall promptly deliver additional or substitute Products
to DISTRIBUTOR in accordance with the delivery procedures set forth herein;
provided that in no event shall SUPPLIER be liable for any additional costs,
expenses or damages incurred by DISTRIBUTOR directly or indirectly as a result
of such shortage, damage or discrepancy in or to a shipment.
[7.2 PRODUCT WARRANTY. SUPPLIER WARRANTS FOR A PERIOD OF [FORTY-FIVE
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(45)] DAYS AFTER THE DATE OF DELIVERY IN ACCORDANCE WITH SECTION 4.3 HEREOF THAT
THE PRODUCTS SHALL BE FREE FROM DEFECTS IN MATERIAL AND WORKMANSHIP. SUPPLIER'S
SOLE OBLIGATION IN THE EVENT OF A BREACH OF SUCH WARRANTY SHALL BE TO PROVIDE AT
NO CHARGE TO DISTRIBUTOR REPLACEMENT PARTS FOR ALL DEFECTIVE PARTS. IN NO EVENT
SHALL SUPPLIER HAVE ANY RESPONSIBILITY OR BEAR ANY LIABILITY FOR THE COST OF
LABOR FOR THE REPAIR OF ANY DEFECTIVE PRODUCTS OR PARTS, THE REMOVAL OF
DEFECTIVE PARTS OR THE INSTALLATION OF REPLACEMENT PARTS. ALL COSTS OF SHIPMENT
OF THE REPLACEMENT PARTS TO DISTRIBUTOR SHALL BE BORNE BY DISTRIBUTOR.
DISTRIBUTOR SHALL RETAIN ALL REPLACED PARTS SUBJECT TO THE FOREGOING WARRANTY
FOR SUPPLIER'S INSPECTION FOR A PERIOD OF [SIX (6) MONTHS] AFTER THEIR
REPLACEMENT. ALL SUCH REPLACED PARTS SHALL BECOME THE PROPERTY OF SUPPLIER UPON
THEIR REPLACEMENT.]
[7.3 Notice. Warranty claims hereunder must be made promptly and in
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writing; must recite the nature and details of the claim, the date the cause of
the claim was first observed and the serial number of the Product concerned; and
must be received by SUPPLIER no later than [fifteen (15)] days after the
expiration of the warranty period provided for in Section 7.2 hereof.]
[7.4 Excluded Claims. SUPPLIER shall have no obligation under Section
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7.2 above in the event that:
(a) Repair or replacement of Products or parts shall have been required
through normal wear and tear or necessitated in whole or in part by
the fault or negligence of DISTRIBUTOR or its customers; or
(b) The Products or parts have not been properly used, maintained, or
repaired [in accordance with SUPPLIER's then applicable operating
and/or maintenance manuals], whether by DISTRIBUTOR or its customers,
or shall have been modified in any manner without prior written
consent of SUPPLIER.]
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[7.5 LIMITED WARRANTY. THE WARRANTIES SET FORTH IN THIS ARTICLE 7 ARE
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INTENDED SOLELY FOR THE BENEFIT OF DISTRIBUTOR. ALL CLAIMS HEREUNDER SHALL BE
MADE BY DISTRIBUTOR AND MAY NOT BE MADE BY DISTRIBUTOR'S CUSTOMERS. THE
WARRANTIES SET FORTH ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY SUPPLIER, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE AND ALL OBLIGATIONS OR LIABILITIES ON THE PART OF SUPPLIER FOR DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THE USE, REPAIR OR PERFORMANCE OF THE
PRODUCTS.]
ARTICLE 8
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LIMITATION OF REMEDIES
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DISTRIBUTOR UNDERSTANDS AND AGREES AS FOLLOWS:
8.1 Delay. SUPPLIER SHALL NOT BE LIABLE FOR ANY LOSS OR DAMAGE CAUSED
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BY DELAY IN FURNISHING PRODUCTS AND SERVICES OR ANY OTHER PERFORMANCE UNDER OR
PURSUANT TO THIS AGREEMENT.
8.2 Sole Remedies. THE SOLE AND EXCLUSIVE REMEDIES FOR BREACH OF ANY
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AND ALL WARRANTIES AND THE SOLE REMEDIES FOR SUPPLIER'S LIABILITY OF ANY KIND
(INCLUDING LIABILITY FOR NEGLIGENCE) WITH RESPECT TO THE PRODUCTS AND SERVICES
COVERED BY THIS AGREEMENT AND ALL OTHER PERFORMANCE BY SUPPLIER UNDER OR
PURSUANT TO THIS AGREEMENT [SHALL BE LIMITED TO THE REMEDIES PROVIDED IN SECTION
7.2,] PRODUCT WARRANTY.
8.3 Consequential Damages. IN NO EVENT SHALL SUPPLIER'S LIABILITY OF
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ANY KIND INCLUDE ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR
DAMAGES, EVEN IF SUPPLIER SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
POTENTIAL LOSS OR DAMAGE.
ARTICLE 9
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CONFIDENTIALITY
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DISTRIBUTOR acknowledges and agrees that all SUPPLIER Information is
confidential and proprietary to SUPPLIER. DISTRIBUTOR agrees not to use any of
such SUPPLIER Information during the term of this Agreement and for a period of
[FIVE (5)] years thereafter for any purpose other than as permitted or required
for performance by DISTRIBUTOR hereunder. DISTRIBUTOR further agrees not to
disclose or provide any of such SUPPLIER Information to any third party and to
take all necessary measures to prevent any such disclosure by its employees,
agents, contractors or consultants during the term hereof and for a period of
[FIVE (5)] years thereafter. Nothing herein shall prevent DISTRIBUTOR from
using, disclosing or authorizing the disclosure of any SUPPLIER Information
which is, or hereafter becomes, part of the public domain.
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ARTICLE 10
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TRADEMARKS
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10.1 Use of Trademarks. SUPPLIER hereby grants to DISTRIBUTOR a
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non-exclusive, non-transferable, and royalty-free right and license to use the
SUPPLIER trademarks specified in Exhibit V attached hereto, as such Exhibit may
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be modified from time to time during the term of this Agreement, in connection
with the sale or other distribution, promotion, advertising and maintenance of
the Products for so long as such trademarks are used by DISTRIBUTOR in
accordance with SUPPLIER's standards, specifications and instructions, but in no
event beyond the term of this Agreement. DISTRIBUTOR shall afford SUPPLIER
reasonable opportunities during the term hereof to inspect and monitor the
activities of DISTRIBUTOR in order to ensure DISTRIBUTOR's use of the trademarks
in accordance with SUPPLIER's standards and instructions. DISTRIBUTOR shall
acquire no right, title or interest in such SUPPLIER trademarks other than the
foregoing limited license, and DISTRIBUTOR shall not use any SUPPLIER trademarks
as part of DISTRIBUTOR's corporate or trade name or permit any third party to do
so without the prior written consent of SUPPLIER.
[10.2 REGISTRATION. SUPPLIER SHALL USE REASONABLY COMMERCIAL EFFORTS
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TO REGISTER THE SUPPLIER TRADEMARKS SPECIFIED IN EXHIBIT V, AS SUCH EXHIBIT MAY
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BE MODIFIED DURING THE TERM OF THIS AGREEMENT, IN SUCH JURISDICTIONS WITHIN THE
TERRITORY IN WHICH SUPPLIER DETERMINES THAT REGISTRATION IS NECESSARY TO THE
SUCCESSFUL DISTRIBUTION OF THE PRODUCTS. IN ADDITION, IN THE EVENT SUPPLIER
BELIEVES THAT IT IS ADVISABLE TO EFFECT ANY FILING OR OBTAIN ANY GOVERNMENTAL
APPROVAL OR SANCTION FOR THE USE BY DISTRIBUTOR OF ANY OF SUPPLIER'S TRADEMARKS
PURSUANT TO THIS AGREEMENT, THE PARTIES SHALL FULLY COOPERATE IN ORDER TO DO SO.
ALL EXPENSES RELATING TO THE REGISTRATION OF SUPPLIER'S TRADEMARKS IN THE
TERRITORY AS WELL AS THE MAKING OF ANY FILING OR OBTAINING ANY GOVERNMENTAL
APPROVALS FOR THE USE BY DISTRIBUTOR OF SUPPLIER'S TRADEMARKS SHALL BE BORNE BY
SUPPLIER.]
10.3 Markings. DISTRIBUTOR shall not, without the prior written
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consent of SUPPLIER, remove or alter any patent numbers, trade names,
trademarks, notices, serial numbers, labels, tags or other identifying marks,
symbols or legends affixed to any Products or containers or packages.
10.4 Infringements. DISTRIBUTOR shall promptly notify SUPPLIER of any
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use by any third party of SUPPLIER's trademarks or any use by such third parties
of similar marks which may constitute an infringement or passing off of
SUPPLIER's trademarks. SUPPLIER reserves the right in its sole discretion to
institute any proceedings against such third party infringers and DISTRIBUTOR
shall refrain from doing so. DISTRIBUTOR agrees to cooperate fully with
SUPPLIER in any action taken by SUPPLIER against such third parties, provided
that all expenses of such action shall be borne by SUPPLIER and all damages
which may be awarded or agreed upon in settlement of such action shall accrue to
SUPPLIER.
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10.5 Termination of Use. DISTRIBUTOR acknowledges SUPPLIER's
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proprietary rights in and to the SUPPLIER trademarks and any trade names applied
by SUPPLIER to the Products, and DISTRIBUTOR hereby waives in favor of SUPPLIER
all rights to any trademarks, tradenames and logotypes now or hereafter
originated by SUPPLIER. DISTRIBUTOR shall not adopt, use or register any words,
phrases or symbols which are identical to or confusingly similar to any of
SUPPLIER's trademarks. Upon termination of this Agreement, DISTRIBUTOR shall
cease and desist from use of the SUPPLIER trademarks in any manner. In
addition, DISTRIBUTOR hereby empowers SUPPLIER and agrees to assist SUPPLIER, if
requested, to cancel, revoke or withdraw any governmental registration or
authorization permitting DISTRIBUTOR to use SUPPLIER trademarks in the
Territory.
ARTICLE 11
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PATENTS
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11.1 Limitation of Obligation. SUPPLIER shall have no liability
--------------------------
whatsoever to DISTRIBUTOR with respect to any patent infringement or claim
thereof which is based upon or arises out of (i) the use of any Product in
combination with an apparatus or device not manufactured or supplied by
SUPPLIER, if such combination causes or contributes to the infringement, (ii)
the use of any Product in a manner for which it was neither designed nor
contemplated, or (iii) any modification of any Product by DISTRIBUTOR or any
third party which causes the Product to become infringing.
ARTICLE 12
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TAXES
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12.1 DISTRIBUTOR shall be solely responsible for and shall pay, or
reimburse SUPPLIER for, all taxes, duties, import deposits, assessments and
other governmental charges, however designated, which are now or hereafter
imposed under or by any governmental authority or agency, that are (a)
associated with the performance by SUPPLIER of its obligations hereunder or the
payment of any amount by DISTRIBUTOR to SUPPLIER pursuant to this Agreement, (b)
based on the Products or their use, or (c) relate to the import of the Products
into the Territory in accordance with then prevailing law or regulations.
12.2 All payments to be made by DISTRIBUTOR to SUPPLIER pursuant to
this Agreement represent net amounts SUPPLIER is entitled to receive and shall
not be subject to any deductions for any reason whatsoever. In the event any of
said charges become subject to taxes, duties, assessments or fees of whatever
kind or nature levied outside the United States, said payments shall be
increased to such an extent as to allow SUPPLIER to receive the net amounts due
under this Agreement.
[ARTICLE 13
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IMPORT AND EXPORT OF PRODUCTS
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13.1 IMPORT DOCUMENTATION. DISTRIBUTOR SHALL BE RESPONSIBLE FOR
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OBTAINING ALL LICENSES AND PERMITS AND FOR SATISFYING ALL FORMALITIES AS MAY BE
REQUIRED TO IMPORT PRODUCTS INTO THE TERRITORY IN ACCORDANCE WITH THEN
PREVAILING LAW OR REGULATIONS.
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13.2 EXPORT REGULATIONS. DISTRIBUTOR SHALL SUPPLY SUPPLIER ON A TIMELY
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BASIS WITH ALL NECESSARY INFORMATION AND DOCUMENTATION REQUESTED BY SUPPLIER IN
ORDER TO PERMIT SUPPLIER TO EXPORT THE PRODUCTS WITH RESPECT TO ANY SALE OR
ORDER SOLICITED BY DISTRIBUTOR HEREUNDER. DISTRIBUTOR SHALL NOT DISPOSE OF ANY
U.S. ORIGIN PRODUCTS, SOFTWARE, KNOW-HOW, TECHNICAL DATA, DOCUMENTATION OR OTHER
PRODUCTS OR MATERIALS FURNISHED TO IT PURSUANT TO THIS AGREEMENT TO ANY PART OR
IN ANY MANNER WHICH WOULD CONSTITUTE A VIOLATION OF THE EXPORT CONTROL
REGULATIONS OF THE UNITED STATES NOW OR HEREAFTER IN EFFECT IF THE DISPOSITION
WAS MADE BY A U.S. CORPORATION, OR A NON-U.S. CORPORATION SUBJECT TO THOSE
REGULATIONS.]
ARTICLE 14
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TERM AND TERMINATION
--------------------
14.1 Term. This Agreement shall take effect with respect to the
----
Territory as set forth in Exhibit II as of the date first above written and
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shall continue in force for the initial period specified in Exhibit III.
-----------
Thereafter, this Agreement shall be renewed for additional periods of [_______ ]
each, commencing on [_________] 1 of each year, if each of the parties shall
have given the other written notice of its renewal of this Agreement no later
than [________] 1 of the previous year.
14.2 Termination. Notwithstanding the provisions of Section 14.1
-----------
above, this Agreement may be terminated in accordance with the following
provisions:
(a) Either party hereto may terminate this Agreement at any time by giving
notice in writing to the other party, which notice shall be effective
upon dispatch, should the other party file a petition of any type as
to its bankruptcy, be declared bankrupt, become insolvent, make an
assignment for the benefit of creditors, go into liquidation or
receivership, or otherwise lose legal control of its business, or
should the other party or a substantial part of its business come
under the control of a third party;
(b) Either party may terminate this Agreement by giving notice in writing
to the other party in the event the other party is in material breach
of this Agreement and shall have failed to cure such breach within
[THIRTY (30)] days of receipt of written notice thereof from the first
party;
(c) SUPPLIER may terminate this Agreement at any time on written notice
within [SIXTY (60)] days after the end of the initial term or any
renewal term as set forth in Section 14.1 above if, during such
initial term or renewal term, DISTRIBUTOR shall have failed to meet
the Quota applicable to such period or if SUPPLIER and DISTRIBUTOR
shall have failed to agree at least [SIXTY (60)] days prior to the
expiration of the initial term or any renewal term on the forecast and
Quota for the succeeding fiscal year.
12
14.3 Partial Termination. In the event SUPPLIER shall have the right
--------------------
pursuant to the provisions of 14.2(b) or 14.2(c) to terminate this Agreement in
its entirety, SUPPLIER may elect to terminate this Agreement solely as it
applies to any specific jurisdiction within the Territory upon providing
DISTRIBUTOR with written notice in accordance with the relevant Section referred
to above; provided, that nothing in this Section 14.3 shall be construed as
creating a precondition to or otherwise precluding SUPPLIER from terminating
this Agreement in its entirety in accordance with the terms of Section 14.2.
14.4 Rights and Obligations on Termination. In the event of
-----------------------------------------
termination of this Agreement for any reason, the parties shall have the
following rights and obligations:
(a) Termination of this Agreement shall not release either party from the
obligation to make payment of all amounts then or thereafter due and
payable;
(b) SUPPLIER shall have the right, at its option, to (i) cancel any or all
accepted purchase orders which provide for delivery after the
effective date of termination, and/or (ii) repurchase any part or all
of DISTRIBUTOR's inventory of Products in DISTRIBUTOR's possession as
of the termination date at SUPPLIER's invoiced price to DISTRIBUTOR
for such products, less depreciation calculated on a [THIRTY-SIX (36)
MONTH], straight-line basis and less any appropriate amount for
excessive wear and tear, plus freight to the original [FREE CARRIER]
shipping point. SUPPLIER shall exercise its option under this
subsection by notifying DISTRIBUTOR in writing no later than [THIRTY
(30)] days after the effective termination date.
(c) DISTRIBUTOR's obligations pursuant to Article 9 hereof shall survive
termination of this Agreement.
(d) Within [THIRTY (30)] days of the effective date of termination of this
Agreement, DISTRIBUTOR shall furnish SUPPLIER with a list of all
DISTRIBUTOR'S customers and the place of destination of all Products
sold which are still covered by a SUPPLIER warranty. In addition,
DISTRIBUTOR agrees to furnish SUPPLIER with complete information as to
calls or the status of any negotiations for the sale of the Products.
14.5 No Compensation. In the event either party terminate this
----------------
Agreement for any reason in accordance with the terms hereof, the parties hereby
agree that, subject to the provisions of Section 14.4(a) hereof and without
prejudice to any other remedies which either party may have in respect of any
breach of this Agreement, neither party shall be entitled to any compensation or
like payment from the other as a result of such termination.
ARTICLE 15
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ARBITRATION
-----------
15.1 Disputes. Any dispute, controversy or claim arising out of or
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relating to this Agreement shall be finally settled by arbitration in
Louisville, Kentucky in accordance with the Commercial Arbitration Rules of the
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American Arbitration Association in effect on the date of this Agreement and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
15.2 Indemnification. This Article 15 provides the sole resource for
---------------
the settlement of any dispute arising under or in connection with this
Agreement. DISTRIBUTOR shall and hereby agrees to indemnify SUPPLIER against
any award or judgment, which relates to this Agreement, made by any court,
tribunal or arbitral panel of any kind, in any jurisdiction, except as provided
in this Article 15.
15.3 Governing Law. This Agreement shall be governed by, and
--------------
interpreted and construed in accordance with, the laws of the Commonwealth of
Kentucky.
ARTICLE 16
----------
MISCELLANEOUS
-------------
16.1 Relationship. This Agreement does not make either party the
------------
employee, agent or legal representative of the other for any purpose whatsoever.
Neither party is granted any right or authority to assume or to create any
obligation or responsibility, express or implied, on behalf of or in the name of
the other party. In fulfilling its obligations pursuant to this Agreement each
party shall be acting as an independent contractor.
16.2 Assignment. SUPPLIER shall be entitled to assign any or all of
----------
its rights and obligations hereunder; however DISTRIBUTOR shall not have any
right to assign, subdistribute or license any of its rights and obligations
hereunder without the prior written consent of SUPPLIER. Any prohibited
assignment shall be null and void.
16.3 Notices. Notices permitted or required to be given hereunder
-------
shall be deemed sufficient if given by registered or certified air mail, postage
prepaid, return receipt requested, addressed to the respective addresses of the
parties as first above written or at such other addresses as the respective
parties may designate by like notice from time to time. Notices so given shall
be effective upon (a) receipt by the party to which notice is given, or (b) on
the fifth (5th) day following the date such notice was posted, whichever occurs
first.
16.4 ENTIRE AGREEMENT. THIS AGREEMENT, INCLUDING EXHIBITS I THROUGH VI
----------------
ATTACHED HERETO AND INCORPORATED AS AN INTEGRAL PART OF THIS AGREEMENT,
CONSTITUTES THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF, AND SUPERSEDES ALL PREVIOUS DISTRIBUTORSHIP AGREEMENTS BY AND
BETWEEN SUPPLIER AND DISTRIBUTOR AS WELL AS ALL PROPOSALS, ORAL OR WRITTEN, AND
ALL NEGOTIATIONS, CONVERSATIONS OR DISCUSSIONS HERETOFORE HAD BETWEEN THE
PARTIES RELATED TO THIS AGREEMENT. DISTRIBUTOR ACKNOWLEDGES THAT IT HAS NOT
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY ANY REPRESENTATIONS OR STATEMENTS,
ORAL OR WRITTEN, NOT EXPRESSLY CONTAINED HEREIN.
14
16.5 Amendment. This Agreement shall not be deemed or construed to be
---------
modified, rescinded, cancelled or waived, in whole or in part, except by written
amendment signed by the parties hereto.
16.6 Publicity. This Agreement is confidential and no party shall
---------
issue press releases or engage in other types of publicity of any nature dealing
with the commercial and legal details of this Agreement without the other
party's prior written approval, which approval shall not be unreasonable
withheld. However, approval of such disclosure shall be deemed to be given to
the extent such disclosure is required to comply with governmental rules,
regulations or other governmental requirements. In such event, the publishing
party shall furnish a copy of such disclosure to the other party.
16.7 Severability. In the event that any of the terms of this
------------
Agreement are in conflict with any rule of law or statutory provision or are
otherwise unenforceable under the laws or regulations of any government or
subdivision thereof, such terms shall be deemed stricken from this Agreement,
but such invalidity or unenforceability shall not invalidate any of the other
terms of this Agreement and this Agreement shall continue in force, unless the
invalidity or unenforceability of any such provisions hereof does substantial
violence to, or where the invalid or unenforceable provisions comprise an
integral part of, or are otherwise inseparable from, the remainder of this
Agreement.
16.8 Counterparts. This Agreement shall be executed in two or more
------------
counterparts and each such counterpart shall be deemed an original hereof.
16.9 Waiver. No failure by either party to take any action or assert
------
any right hereunder shall be deemed to be a waiver of such right in the event of
the continuation or repetition of the circumstances giving rise to such right.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]
15
IN WITNESS WHEREOF, The parties have caused this Agreement to be executed
on the date first above written.
GLOTECH INDUSTRIES, INC. 15, Inc.
---------
By/s/ Xxxxxx X. Xxxxxx By/s/ Xxxx Xxxxxxxx
-------------------- ---------------------
Xxxxxx X. Xxxxxx Xxxx Xxxxxxxx
Title Chairman Title President
-------- -----------
16
EXHIBIT I
---------
PRODUCTS
--------
1. GLO LOGOS
2. GLO HATS
17
EXHIBIT II
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TERRITORY
---------
1. Exclusive distributor of University of Kentucky and University of Louisville
GloTech Products
18
EXHIBIT III
-----------
TERM OF AGREEMENT
-----------------
19
EXHIBIT IV
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INITIAL FORECAST AND QUOTA
--------------------------
The initial term of this Agreement shall commence on the date first above
written in this Agreement and shall continue through ________________, 200__.
During such initial term DISTRIBUTOR shall be expected to achieve as its initial
Quota ____ percent (___%) of the forecast set forth below:
Initial Forecast
--------------------------------------------------------------------------------
Jurisdiction
Within Units per [CALENDAR
Product Territory Year QUARTER]
--------------------------------------------------------------------------------
O O O O O
- -- -- -- --
20
EXHIBIT V
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TRADEMARKS
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21
EXHIBIT VI
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CUSTOMERS
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1. All Kentucky Wal-Mart Stores
2. 30 Kroger Stores located in Kentucky
3. Over 20,000 Convenient type stores located in Kentucky
4. 15 Inc. Website
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