EXHIBIT 99.1
EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement ("Agreement") is entered into this
31st day of July, 1997 (the "Effective Date") between Amour Fiber Core, Inc., a
Washington corporation ("Manufacturer") and AMREPRO, Inc., a Washington
corporation ("Distributor").
R E C I T A L S
A. Manufacturer has developed, manufactures, and licenses production of
railroad ties and highway guardrail posts made of recycled and new fiberglass
and resins, both hereafter (the "Products");
B. Distributor plans to engage, among other things, in the distribution
of recycled fiberglass products for specific applications throughout the world;
C. Manufacturer desires to appoint Distributor as its exclusive
distributor of the Products, and Distributor desires to accept such appointment,
on the terms and subject to the conditions set forth herein
Now Therefore, the parties agree as follows:
1. Appointment as Exclusive Distributor. Manufacturer hereby grants to
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Distributor, and Distributor hereby accepts such grant of, the exclusive right
(the "Distribution Rights") to warehouse, promote, market, distribute and sell
the Products. The territory ("Territory") for Distributor's Distribution Rights
is world-wide. During the term of this Agreement Manufacturer shall not, and
shall not permit its Affiliates to, grant any distribution or license rights to
any other person with respect to the Products, nor shall it directly sell,
distribute or otherwise deliver any Products to any other person, firm or
entity.
During the term of this Agreement Manufacturer agrees to supply
Distributor with Products as ordered on a continuous basis. Distributor agrees
to buy such Products from Manufacturer and use its best efforts to sell Products
in the Territory.
2. Products and Conditions. Manufacturer shall be entitled to add to or
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replace any of the Products consistent with buyers specifications and
certification; provided that any replacement of any product shall be
substantially equivalent in function to the replaced product, shall be in
compliance with the regulatory requirements and shall be subject to the approval
of Distributor. Manufacturer shall advise Distributor in writing in advance of
any proposed modification, or replacement, to any certified or regulatory
approved Product
accompanied by details of the replacement product and specifying the effective
date of the proposed change.
Any modifications, updates, developments, engineering changes or
supplements which collectively or individually affect the shape, composition or
function of the Products (collectively, the "Product Changes") shall be
incorporated into the Products offered for sale by Manufacturer to Distributor
pursuant to the terms of this Agreement. Manufacturer shall support the
Distributor who shall be responsible for obtaining any regulatory approvals or
clearances, if applicable. Manufacturer shall disclose all proposed Product
Changes to Distributor. Manufacturer also agrees to provide Distributor with
price lists and preproduction samples of the Products incorporating the Product
Changes for evaluation, as reasonably may be requested by Distributor. Such
Product Changes shall be deemed to be Products hereunder and all terms and
conditions contained herein with respect to the Products (including
Distributor's Distribution Rights) shall equally apply to such Product Changes.
3. Status as Independent Contractor. Each party shall be an independent
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contractor in relationship to the other party, and this Agreement does not
create an employer-employee or a principal-agent relationship between
Manufacturer and Distributor. Neither party is authorized to enter into
agreements for or on behalf of the other party, create any obligation or
responsibility, express, or implied, for or on behalf of the other party, accept
payment of any obligation due or owed to the other party, accept service of
process for the other party, or bind the other party in any manner.
4. Terms of Distribution Rights.
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4.1 The price for the Products shall be as set forth on Schedule A
attached hereto, until such time as a price change is instituted pursuant to
Section 4.2 below.
4.2 Manufacturer may initiate a price change annually for the Products
on the terms set forth in this agreement ("Price Changes"), which shall be set
forth in a revised price list to be furnished by Manufacturer to Distributor.
Each Price Change shall be limited to increases in raw materials, labor, and
general overhead. Price Changes will be effective as of 30 days following
Distributor's receipt of such revised price list and Distributor will pay for
the Products in accordance with the Price Changes on all orders made on or after
such 30 day period.
4.3 Terms of sale are thirty days net, F.O.B. Amour Fiber Core, Inc.,
Sultan Washington, or the USA site of manufacture or other sites of manufacture
acceptable to Distributor. Transfer of title and risk of loss shall pass to
Distributor when the Products are delivered to Distributors plant or are
delivered to a common carrier approved by Distributor.
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4.4 All payments by Distributor to Manufacturer shall be made in U.S.
Dollars, without set-off or counterclaim and free and clear of, and without
deduction for, any taxes, levies, import duties, charges, fees, deductions,
withholdings, restrictions or conditions of any nature now or hereafter imposed
or levied by any country or any political subdivision thereof or taxing or other
authority therein, unless Distributor is compelled by law to make such deduction
or withholding.
4.5 Invoices for the Products will be issued upon shipment. Payment
for these invoices shall be made in full within thirty (30) days from the date
of invoice. In the event Distributor defaults in making payment for the Product
sold to it hereunder, and such default is not cured within 30 days after written
notice, Manufacturer may, without limitation to Manufacturer's other rights and
remedies, suspend further shipments to Distributor until Manufacturer receives
adequate assurances of payment.
4.6 Manufacturer shall ship Products ordered hereunder to
Distributor's facility or to such address as Distributor may request, provided
that shipping costs shall be borne by Distributor. Manufacturer will use its
best efforts to meet each order for the Products placed by Distributor on or
before the requested shipment date.
4.7 Manufacturer agrees to manufacture and sell to Distributor the
Products meeting the Manufacturer's specification applicable to the Products.
Orders for Products shall be on written forms ("Purchase Orders") stating
therein the quantity and type of Products desired and the date and destination
of delivery.
4.8 Each shipment of Products shall be accompanied by a Certificate,
signed by a quality control representative of Manufacturer, certifying that the
Products conform to the specification applicable to the Products. Upon the
arrival of Products at the destination designated by Distributor in the Purchase
Order, Distributor shall promptly inspect the Products and shall give written
notice to Manufacturer within 60 days after the arrival of any claims if the
Products do not conform with the Specification. If Distributor retains the
Products in its possession after arrival at the destination designated in its
Purchase Order without giving Manufacturer such notice within the 60-day period
described above, such failure to give timely notice shall constitute acceptance
of the Products by Distributor.
4.9 Any shipment of Products delivered to Distributor by Manufacturer
which does not conform to the specification and is rejected by Distributor will
be promptly replaced by Manufacturer. If replacement is not feasible, any sums
actually paid therefor will be promptly refunded by Manufacturer. The remedy of
replacement or refund is available only if such
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nonconformance was not caused by Distributor's unauthorized modifications,
improper testing or improper storage.
4.10 All terms of this agreement are subject to the rights of the
Distributor, or an affiliate of the Distributor, to manufacture the Products as
a licensee of the manufacturer.
4.11 Distributor agrees to pay for all reasonable costs directly
associated with the development, and test of new Products which are the subject
of this agreement and to pay for all direct cost associated with regulatory
approval and/or certification of the Products for sale in the U.S. and all other
countries in which the Distributor enters the market.
5. Duties and Covenants of Distributor.
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5.1 Distributor shall use its best efforts to promote, market and sell
the Products in the Territory and to develop the sales potential for the
Products throughout the Territory. Distributor shall conduct its business in an
efficient, professional and responsible manner so as to enhance and support the
reputation and goodwill of the Products in the Territory.
5.2 Distributor shall maintain a Product inventory, sales force and
warehouse facilities in the Territory reasonably sufficient to perform all of
its duties hereunder.
5.3 Distributor shall produce the sales, marketing, promotional and
other informational material regarding the Products for use in the Territory in
reasonable quantity at its own expense.
5.4 Distributor shall be responsible for the credit of its own
dealers, customers and agents.
5.5 Distributor shall not change any Product in any manner, except
with the prior written consent of Manufacturer. Upon the termination or
expiration of this Agreement, Distributor shall immediately cease the use of any
of Manufacturer's trademarks, tradenames, service marks, or brand names
incorporated into the Private Label.
5.6 Distributor shall comply in all material respects with all
applicable laws or regulations or orders of any and all governmental authorities
within the Territory, including those applicable to any export/ import and sales
activities with respect to the Product. Distributor agrees that it will not
directly or indirectly do any act or thing which will constitute a violation by
Distributor or Manufacturer of any applicable laws or regulations.
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5.7 Distributor shall promptly advise Manufacturer of any changes or
amendments to any applicable governmental rules or regulations or the issue of
any new rules or regulations of any area within the Territory of which
Distributor becomes aware and which would cause the Products and/or their
manufacture or labeling not to meet applicable requirements or which require
adjustment to the Products and/or their manufacture or labeling.
5.8 Distributor shall promptly investigate, respond to and send copies
of all correspondence involving any and all complaints concerning the Products
from dealers, agents, sales representatives, customers, end-users, or patients
within the Territory. Manufacturer shall provide such assistance in the
evaluation of complaints received by Distributor as may be reasonably requested
by Distributor. Distributor shall notify Manufacturer of all material complaints
which are found by Distributor to be related to the design or manufacture of the
Products.
5.9 Distributor shall notify Manufacturer promptly after Distributor
becomes aware of any of the following: alleged infringement by Manufacturer of
the trademark, tradename, service xxxx xxxxx name, patent, trade secrets or any
other intellectual property rights of any third parties; alleged infringement of
Manufacturer's logo, trademark tradename, service xxxx xxxxx name, patent, trade
secrets or any other intellectual property rights of Manufacturer; any liability
claims regarding the Products; and any other matters that have had or may
reasonably be expected to have an adverse effect on the sale of the Products in
the Territory.
5.10 Distributor shall furnish all reasonable assistance as may be
required, at Manufacturer's request and expense, to enable Manufacturer to
defend against any claims of third parties that may be threatened or filed
against Manufacturer or its affiliates relating to the sale or use of any of the
Products in the Territory, or that Manufacturer or its affiliates may assert
against third parties relating to the sale or use of any of the Products in the
Territory.
6. Duties and Covenants of Manufacturer. Manufacturer shall ensure
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that all Products are manufactured, labeled and sold to Distributor in
accordance with all applicable laws, rules and regulations. Manufacturer shall
comply in all material respects with all laws, regulations or orders of any and
all governmental authorities within the United States and shall use best efforts
to comply in all material respects with all laws, regulations or orders of any
governmental authorities outside the United States as to which Distributor has
provided notice. Manufacturer agrees that it will not directly or indirectly do
any act or thing which will constitute a violation by Distributor or
Manufacturer of any applicable laws or regulations.
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7. Product Warranty--Limitations of Liability. For the period commencing
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with the date of shipment of the Product and continuing until twenty-four (24)
months following the date of shipment, Manufacturer warrants that the Products
shall be free from defects in material and workmanship.
THE FOREGOING WARRANTY IS IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES,
WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTES OF
MERCHANT ABILITY OR FITNESS-FOR-USE, AND OF ANY OTHER OBLIGATION ON THE PART OF
MANUFACTURER.
Manufacturer's sole obligation under this warranty shall be to repair
or replace any Product in breach of warranty and pay transportation expenses for
such replacement at no charge to Distributor.
8. Representations. Each party to this Agreement represents to the other
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as follows:
8.1 It is a corporation in good standing under the laws of its
jurisdiction of incorporation, with all necessary corporate power and authority
to execute, deliver and perform this Agreement.
8.2 Execution, delivery and performance of this Agreement have been
approved by all necessary corporate action.
9. Term and Termination.
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9.1 This Agreement shall commence on the Effective Date and continue,
unless earlier terminated pursuant to the terms hereof, for an initial term of
ten (10) years. The term of this Agreement shall thereafter be automatically
renewed for one successive term of ten (10) years, provided the Distributor has
not given the Manufacturer at least 90 days prior written notice of its election
to not renew the term of this Agreement.
9.2 Either party may give the other party written notice of
termination of this Agreement if such other party is in material breach of any
of its obligations under this Agreement. The termination shall become effective
ninety (90) days from the date such notice is given unless, within such 90-day
period, such breach and any intervening breaches have been cured to the
reasonable satisfaction of the non-breaching party.
9.3 Notwithstanding the foregoing, either party may immediately cancel
any order and may immediately terminate this Agreement, in whole or in part, (i)
upon the filing of any petition in bankruptcy against the other party which is
not cured or dismissed within sixty (60) days thereafter, (ii) if the other
party is ordered or adjudged bankrupt, becomes insolvent or goes into
liquidation, or
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generally fails to pay debts as they become due, (iii) upon appointment of a
receiver or custodian of all or a part of the other party's assets by any
judicial or governmental procedure, (iv) upon admission of the other party to
the benefit of any procedure for the settlement of its debts, or (v) upon
seizure of all or a substantial part of the other party s assets by any judicial
or governmental procedure.
9.4 Upon any termination of this Agreement, Distributor shall
forthwith discontinue selling the Products and making representations regarding
its status as a distributor for Manufacturer, and from taking any other action
or doing any other thing relating to Manufacturer or the Product, and shall
return all information and materials in its possession described herein. Upon
any early termination of this Agreement, all amounts owed from Distributor to
Manufacturer shall become immediately due and payable; provided, however, that
Distributor shall be entitled to continue to market and sell the Products in
Distributor's inventory until such time as it has sold all Products which
Distributor held in inventory prior to the termination hereof, provided further
that such marketing and sales shall be made pursuant to the terms hereof.
9.5 Except as otherwise provided for herein, termination of this
Agreement shall not release either party hereto from any liability which at the
time of termination has already accrued to the other party hereto or which after
termination may accrue in respect of any act or omission prior to termination
from any obligation which is expressly stated herein to survive termination.
10. Indemnification.
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10.1 Distributor will indemnify, defend and hold harmless
Manufacturer, Manufacturer's officers, directors, employees and agents from and
against any and all losses, liabilities, damages and expenses, including, but
not limited to, court costs and actual attorneys' fees (collectively, "Losses")
suffered or incurred by them as a result of (i) the breach of any of
Distributor's duties or covenants under this Agreement, or (ii) the breach of
any of the representations and warranties of Distributor set forth in this
Agreement. The foregoing indemnity shall not require payment as a condition
precedent to recovery and shall survive termination of this Agreement.
10.2 Manufacturer will indemnify, defend and hold harmless
Distributor, Distributor's officers, directors, employees and agents from and
against any and all losses, liabilities, damages and expenses, including, but
not limited to, court costs and actual attorneys' fees (collectively, "Losses")
suffered or incurred by them as a result of (i) the breach of any of
Manufacturer's duties or covenants under this Agreement, (ii) the breach of any
of the representations and warranties of Manufacturer set forth in this
Agreement, excluding that covered by the breach of Product Warranty set forth in
Section 7 hereof, (iii) any claims of (actual or alleged) infringement of
patent, trademark trade secret or
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other intellectual property rights of any third party in connection with the
manufacture, sale, distribution or use of the Products, and (iv) any claims for
products liability related to the Products. The foregoing indemnity shall not
require payment as a condition precedent to recovery and shall survive
termination of this Agreement.
11. Proprietary Rights, Confidentiality, License.
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11.1 Distributor acknowledges that Manufacturer is the exclusive
master Licensee of all patents, patent applications, trade secrets and
intellectual property rights relating to the Products and all the trademarks
used in the promotion and sale of the Products, and that Distributor has no
rights or interest in or to such patents, patent applications, trade secrets,
intellectual property rights, trademarks and tradenames. Distributor shall never
contest the exclusive right of Manufacturer to such patents, patent
applications, trade secrets, intellectual property rights, trademarks and
tradenames. Distributor shall have no further rights or interest in such
trademarks and tradenames.
11.2 The parties acknowledge that any and all trade secrets, ideas,
information, research, methods, improvements, patents, copyrighted material and
all other confidential information, and the good will associated with them,
owned or developed by one party (the "disclosing party") and directly or
indirectly revealed to the other party (the "receiving party") are, and shall
remain, the sole and exclusive property of the disclosing party. All such
information and knowledge about the disclosing party, its products, services,
standards, specifications, procedures and techniques, which are not in the
public domain or generally known in the industry, and such information and
material as the disclosing party may designate in writing as confidential, shall
be deemed confidential for purposes of this Agreement. The receiving party
agrees to keep all such information confidential and to use it only for the
purpose and in the manner authorized by the disclosing party. Each party agrees
that during and after the termination of this Agreement, neither the receiving
party nor any of its agents or employees shall copy or disclose to any other
person or entity, or use for any purpose other than as contemplated by this
Agreement, any proprietary or confidential information in contravention of this
Section. At the disclosing party's request, the receiving party shall enforce
any such agreement on the disclosing party's behalf.
11.3 Subject to the terms and conditions of this Agreement,
Manufacturer hereby grants to Distributor an exclusive world-wide royalty-free
license to use the trademark (the "Licensed Xxxx") in the marketing and sales of
the Products pursuant to this Agreement. This license does not include the right
to sublicense and is not assignable without the prior written consent of
Manufacturer.
11.4 Distributor agrees to use the Licensed Xxxx in a
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commercially acceptable and reasonable manner and style to protect and enhance
the image and reputation of the Licensed Xxxx and Manufacturer, and to ensure
that no such use shall reflect adversely upon the goodwill, prestige or
reputation of the Licensed Xxxx or Manufacturer. In the event that Manufacturer
shall object to any label, packaging or advertising as violating the provisions
of this Agreement, Manufacturer shall notify Distributor in writing of any
objection and afford Distributor sixty (60) days to introduce new labels,
packaging, marketing or advertising. Distributor shall use appropriate trademark
notices on all the labels and advertising and all other written embodiments of
the Licensed Xxxx, including the federal trademark notice "@" in the United
States.
12. Assignment. This Agreement may not be assigned or otherwise
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transferred by either party, in whole or in part, by operation of law or
otherwise, without the prior written consent of the other party, which consent
shall not be unreasonably withheld and any such assignment or transfer without
such prior written consent shall be null and void and of no force or effect
whatsoever, provided, however, that either party may assign this Agreement
without the other party's consent in connection with the sale of substantially
all of the assets associated with such party's business.
13. Entire Agreement. This Agreement constitutes the complete, final and
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exclusive statement of the terms of the understanding between the parties
concerning the purchase, sale and distribution of the Products. This Agreement
supersedes all prior agreements and understandings concerning its subject matter
and may not be amended without further written agreement of both parties. If any
provision of this Agreement should be found to be invalid or unenforceable, all
of the other provisions shall nonetheless remain in full force and effect to the
maximum extent permitted by law.
14. Applicable Law. This Agreement shall be construed in accordance with,
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and all disputes hereunder shall be governed by, the internal laws of the State
of Washington.
15. Attorneys' Fees. In any action or proceeding arising hereunder, the
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prevailing party shall be entitled to recover its costs and reasonable
attorneys' fees, as determined by the court.
16. Notices. Any notice required or permitted hereunder shall be given in
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writing by hand delivery, by carrier guarantying overnight delivery, by prepaid
certified mail, return receipt requested, or by facsimile or similar electronic
means, addressed to the parties at their respective addresses above (or such
other addresses as they may from time to time designate) and directed to the
attention of the president of the recipient. Notice by hand delivery shall be
effective upon receipt. Notice by carrier guarantying overnight delivery shall
be effective upon the day following delivery of the notice to such carrier.
Notice by
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mail shall be deemed received five (5) days after mailing. Electronic notice
shall be effective upon receipt of confirmation of transmission.
17. Controlling Forms. It is understood that Manufacturer and Distributor
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may use their standard purchase order and sales agreement forms during the
performance of this Agreement and that the Products may be ordered by such order
forms or by telephone or fax. All telephone orders must be confirmed in writing
as soon after the order is placed as practicable and any such confirming order
must plainly be marked with the word, "CONFIRMATION", on its face. Any purchase
order, sales agreement or other form used by the parties hereto shall be used
for convenience only and any terms or provisions which may be contained therein
which are in addition to or inconsistent with those contained therein shall have
and be of no force and effect.
18. Waiver. Any party's failure to insist, in one or more instances, upon
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the performance of any term or terms of this Agreement shall not be construed as
a waiver or relinquishment of right to such performance or the future
performance of such term or terms, and the other party's obligation with respect
thereto shall continue in full force and effect.
19. Force Majeure. The obligations of either party to perform under this
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Agreement shall be excused if such failure to perform or any delay is caused by
acts of God or the public enemy, strikes, civil commotion, riots, war,
revolution, fire, explosion, flood, compliance with or other action taken to
carry out the intent or purpose of any law or regulation, or any other cause
reasonably beyond the control of the party obligated to perform. Upon the
occurrence of such an event, the duties and obligations of the parties shall be
suspended for the duration of the event preventing proper performance under this
Agreement, provided, however, that if such suspension shall continue in excess
of sixty (60) days, the parties shall meet and attempt to arrive at a mutually
acceptable compromise within the spirit and intent of this Agreement.
20. Publicity. Neither party will originate any publicity, new release, or
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other public announcement, written or oral, whether to the public press, to
holders of publicly owned stock, or otherwise, relating to this Agreement, to
any amendment thereto or to performance hereunder or the existence of an
arrangement between the parties without the prior written approval of the other
party. Such approval will not be unreasonably withheld.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned
authorized representatives of the parties as of the Effective Date stated above.
//
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AMOUR FIBER CORE, INC.
a Washington corporation
By: /s/ XX X. AMOUR
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Xxxxxxx X. Amour
President and Chief Executive Officer
AMREPRO, INC.
a Washington corporation
By: /s/ XXXXX X. XXXXXXXX
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Xxxxx Xxxxxxxx
President
Schedule A
Wholesale of Prices of Products
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