EXHIBIT 10.1
This Agreement made as of the 3rd day of February, 2005.
BY AND BETWEEN:
HYUNDAI HEAVY INDUSTRIES CO., LTD. a corporation
incorporated under the laws of Korea, with its
principal place of business located at 0
Xxxxxxx-Xxxx, Xxxx-Xx, Xxxxx, Xxxxx.
(hereinafter called "HHI")
- and -
XXXXXX EQUIPMENT 2004 INC. (XXXXXX EQUIPMENT 2004
INC. INCLUDES XXXXXX EQUIPMENT INC.), a
corporation incorporated under the laws of the
Province of New Brunswick, with its principal
place of business located at Xxxxxxx Xxxx,
Xxxxxxxxxxx, Xxx Xxxxxxxxx, Xxxxxx, X0X 0X0
(hereinafter called "XXXXXX")
BACKGROUND
1. XXXXXX is engaged in the business of the manufacture, distribution, supply
and sale of both private label brand and XXXXXX xxxxx skid loaders, spare parts
and accessories therefore;
2. HHI wishes to obtain (a) from XXXXXX, supply of private label skid steer
loaders and spare parts. ("Products") The Skid Loaders to be painted in HHI
colours as designated from time to time (b) the right to distribute and sell
throughout the Territory (as defined hereinafter) such equipment and spare
parts; and,
3. HHI has appointed XXXXXX as exclusive supplier of the said EQUIPMENT. However
HHI reserves right to sell its own brand Skid Steer Loaders, spare parts and
accessories therefore worldwide.
NOW THEREFORE, in consideration of the background and the mutual covenants
contained herein, the parties hereto agree as follows:
1. INTERPRETATION
1.1 Definitions: For the purposes of this Agreement, the following terms shall
have the following meanings:
"Agreement" means this Agreement together with all schedules attached hereto.
"Dealer" means an authorized dealer of HHI.
"Order" means any purchase order issued by HHI to XXXXXX pursuant to this
Agreement.
"Parts and Accessories" respectively shall mean the parts and accessories for
the Xxxxxx Skid Loaders as designated under this Agreement.
"Products" shall mean all Xxxxxx Manufactured Products, Parts and Accessories
and Xxxxxx Packaging.
"Territory" shall mean all countries and territories in the world.
"Trade-Marks" means those trade-marks, certification marks and/or trade name
rights which are listed on Schedule "B" attached to this Agreement.
"Xxxxxx Packaging" means all packaging for Xxxxxx Skid Loaders, including
decals, labels, sales material and literature, parts manuals, service manuals,
operating manuals, technical literature and warranty cards.
1.2 Trade terms: Trade terms shall, where appropriate and where not inconsistent
with the provisions of this Agreement, be interpreted in accordance with the
International Rules of the Interpretation of Trade Terms of the International
Chamber of Commerce (Incoterms, 2000).
1.3 Number, Gender, Headings: All words used in this Agreement, regardless of
the number and gender in which they are used, shall be deemed to include any
other number and any other gender as the context or sense of this Agreement may
require. Headings used herein are inserted for convenience of reference only and
do not form part of this Agreement.
1.4 Currency: Unless specified otherwise, all monetary amounts are expressed in
US $.
1.5 Schedules: The following Schedules are incorporated into and form part of
this Agreement:
Schedule "A" - List of Products
Schedule "B" - Xxxxxx Trade-Marks
Schedule "C" - Prices
Schedule "D" - Form of Letter of Credit
Schedule "E" - Terms and Conditions
Schedule "F" - Form of XXXXXX Warranty
1.6 In case of conflict between this main Agreement and the Schedule, this main
Agreement shall prevail.
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PART I
PURCHASE AND SUPPLY OF PRIVATE LABEL PRODUCTS
2. PURCHASE AND SUPPLY
2.1 HHI and Xxxxxx agree that Xxxxxx shall be the exclusive supplier to HHI for
distribution and sale throughout the Territory, the quantities of Products so
ordered by HHI on the terms and conditions contained herein. Notwithstanding the
foregoing, HHI shall not be obligated to purchase any minimum quantity of the
Products.
2.2 HHI may issue, from time to time, to XXXXXX, Orders, which will be in
writing.
3. QUALITY CONTROL
3.1 The first unit of each of the Products delivered hereunder, which has been
approved and accepted by Xxxxxx shall be considered by Xxxxxx as a sample, and
such sample shall be used as a master quality control guide against which all
production runs will be checked for quality control.
3.2 All Products supplied pursuant to this Agreement shall be of the highest
grade and quality and shall conform strictly to the samples accepted and
approved by Xxxxxx, from time to time, hereunder.
3.3 Inspection standards will be established in order to maintain high quality
Products. XXXXXX shall comply with the inspection standards established or
approved by HHI.
3.4 XXXXXX will submit to HHI all production, functional and quality control
test reports and other data as may be requested by HHI from time to time
concerning the Products.
4. DESIGN CONTROL
4.1 HHI shall not make any changes in the specifications, design, manufacture or
composition of any Products ordered hereunder without the prior written approval
of Xxxxxx.
5. SPECIFICATIONS / PACKAGING
5.1 XXXXXX warrants and agrees that all Products supplied hereunder shall
conform strictly with the samples of each of the Products furnished pursuant to
Section 3.1 hereof and in particular the quality of the Products supplied
hereunder shall meet or surpass the quality of such sample Products. Further,
all Products supplied hereunder shall be in strict compliance with all
(i) specifications, samples, standards and designs approved in writing
by HHI and HHI will not unreasonably reject any specifications,
samples, standards and designs;
(ii) applicable laws, regulations (engine emission, CE, EPA, etc), orders
and standards in the Territory, including, without limitation, those
applicable to the manufacture, quality, durability, representations
and warranties and labeling thereof;
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(iii) required specifications and shall have received all non-voluntary
certifications or approvals and have successfully passed all
applicable testing requirements; and,
(iv) ROPS (Rollover Protective Structure) and FOPS (Falling Object
Structure) certifications for canopies and cabs.
Respecting subsections 5.1(ii) and (iii) hereof, HHI will assist XXXXXX in
determining such applicable laws, regulations, orders and standards and required
specifications, certifications and approvals (the "Applicable Standards") in
those jurisdictions in the Territory where XXXXXX'x products are not currently
being distributed, provided, however, that XXXXXX shall be responsible for
determining the Applicable Standards in Canada, the United States and Australia
where the XXXXXX xxxxx products are now being distributed.
5.2 XXXXXX will provide ROPS and FOPS certifications for canopies and cabs.
5.4 XXXXXX shall paint the Skid Steer Loaders in the colour as designated to be
HHI brand. HHI shall furnish all colour specification as required by XXXXXX.
Xxxxxx will install Hyundai decal on the products instead of Xxxxxx decals. HHI
shall provide Xxxxxx with designs of such decals in order for Xxxxxx to
manufacture or purchase. Xxxxxx shall not use the foregoing for any other
purpose except for supplying the products to HHI.
6. XXXXXX TRADE-MARKS
6.1 HHI acknowledges that the trade-marks "Xxxxxx", "Xxxxxx Design", "T Design"
and "T Bear Design", are trade-marks of Xxxxxx. It is understood and agreed that
HHI has no proprietary interest in, or right to, any trade-xxxx, trade name or
logo used by Xxxxxx and that all such Trade-Marks, trade-marks, trade names and
logos are the property of Xxxxxx.
6.2 Xxxxxx will not use the Trade-Marks on the Products, unless otherwise agreed
by HHI.
6.3 XXXXXX will affix to the Products a serial number tag and such other notices
as agreed by HHI are required by law.
PART II
DISTRIBUTION OF PRODUCTS
7. GRANT OF EXCLUSIVE SUPPLY RIGHTS
7.1 HHI grants to Xxxxxx and Xxxxxx accepts the appointment to act as exclusive
supplier of the Products under the terms and conditions of this Agreement.
However HHI reserves right to sell its own brand of Skid Steer Loaders
worldwide.
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PART III
TERMS AND CONDITIONS OF SALE
8. PRICE
8.1 PRODUCT PRICING: Xxxxxx agrees to sell the Products to HHI at the prices set
forth on Schedule "C" attached and that during the first twelve months of the
term of this Agreement the prices shall not be higher than the prices set out in
Schedule "C".
8.2 PRICE INCREASES: Subject to Section 8.1 above, Xxxxxx reserves the right to
change the prices after the end of the first twelve months of the term hereof
and after the end of each twelve month period which commences on [July] 1st in
each year during the term of this Agreement or any renewal hereof, provided that
Xxxxxx shall give HHI not less than ninety (90) days prior written notice before
the effective date of any increase in price. Any orders for Products submitted
by HHI and accepted by Xxxxxx which have not been shipped to HHI before such
effective date will be filled at the price in effect on the date of HHI's order
for such Products.
8.3 All prices for the Products shall be designated Ex-works Xxxxxx Factory.
Xxxxxx shall assist HHI in arranging both trucking and overseas shipping.
9. PAYMENT AND TERMS OF SALE
9.1 Payment for each shipment of Products shall be made by HHI by an irrevocable
letter of credit payable against presentation of documents in the form of
Schedule "D" attached hereto, opened in favour of Xxxxxx.
9.2 All payments for the Products shall be in United States Currency.
9.3 The terms of this Agreement, together with the terms and conditions set out
on Schedule "E" attached hereto, constitute the terms of sale for the Products
sold hereunder.
9.4 Xxxxxx shall provide to HHI all documents which HHI may require for purposes
of exportation and the importation of the Products into the country of
destination, including all documents required for customs and excise purposes.
10. WARRANTY
10.1 WARRANTY: XXXXXX warrants that all Products supplied hereunder shall
conform strictly to the applicable specifications, instructions and governmental
regulations referred to herein, be fit for the use intended by Xxxxxx, and be of
merchantable quality.
All warranties in respect of the Products shall survive any inspection,
acceptance or payment by HHI and shall survive the expiration or termination of
this Agreement (however and for whatsoever reason the termination occurs) and
shall ensure to the benefit of HHI and its Dealers, users and subsequent
purchasers of the Products.
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10.2 PRODUCT WARRANTY: XXXXXX'x own manufacturer's warranty in respect of each
Product sold hereunder and such warranty shall be in the form attached hereto as
Schedule "F".
10.3 Xxxxxx shall defend, indemnify and hold harmless HHI from claim of any
alleged or actual infringements of patents, trademarks or other industrial or
intellectual property rights arising from or in connection with HHI's
distribution and sale of the products.
PART IV
COVENANTS OF THE PARTIES
11. ORDERS
All purchase orders for Products shall be submitted in writing by HHI to the
address of Xxxxxx as determined from time to time. Xxxxxx shall provide HHI with
a written acknowledgement and acceptance of purchase orders for Products,
provided, that, Xxxxxx shall be deemed to have accepted HHI' purchase order
without any adjustment thereto if Xxxxxx has not responded in writing to HHI
within ten (10) days after receipt of such purchase order.
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12. CONFIDENTIALITY
12.1 Each of the parties hereto and their respective officers, directors and
employees shall, during the term of this Agreement and after the termination of
this Agreement, hold confidential, not publish, reveal or otherwise make known
to others and not use for their own benefit any confidential or proprietary
information of the others which now or in the future may be disclosed or become
known to any of them in connection with the manufacture for, and supply of the
Products to Xxxxxx under this Agreement, except to the extent required by law.
12.2 HHI understands that all confidential information, including plans and
documents, received from XXXXXX are proprietary to XXXXXX and confidential. HHI
agrees that all such confidential designs, documents and information received by
HHI from XXXXXX under this Agreement and all other confidential information
relating to XXXXXX'x methods of production, costing or operations shall be kept
strictly confidential.
12.3 Both parties shall not disclose either during the term of this Agreement or
thereafter, to any third party, the price of any Product sold to HHI pursuant to
this Agreement, without the other party's prior written consent.
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16. PARTS AND ACCESSORIES
Xxxxxx will maintain an inventory of Parts and Accessories sufficient to
reasonably service Xxxxxx skid steer loaders within the Territory. XXXXXX shall
provide to HHI a list of the spare parts and special tools for each model of the
Products which XXXXXX would recommend be maintained in inventory by HHI and by
its Dealers. HHI will not, directly or indirectly, purchase, sell or otherwise
deal in spare parts similar to or interchangeable with the Parts and Accessories
except with the express written consent of XXXXXX, provided, however, that HHI
may use parts and accessories other than the Parts and Accessories in respect of
the consumable parts listed on Schedule "F" hereto. HHI will not perform or
condone any repairs or maintenance of Xxxxxx skid steer loaders which will
prejudice any right or entitlement provided by XXXXXX'x warranty.
17. INSPECTION
HHI may at all reasonable times, on reasonable notice, permit a representative
of XXXXXX to inspect its sales offices and service facilities.
18. CHANGES / DISCONTINUANCE
XXXXXX reserves the right to discontinue the production and sale of, or to
make changes in the specifications of any of the Products at any time, without
liability, provided, however, that, as far as the major change is concerned,
XXXXXX shall give one hundred and eighty (180) days prior written notice to HHI
of the discontinuance of any Product.
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19. REPLACEMENT PARTS AND ACCESSORIES
19.1 XXXXXX shall provide to HHI, within thirty (30) days of the commencement of
this Agreement, a price list and parts catalogue by part number, for all parts
required for the Products.
19.2 XXXXXX recognizes HHI' need for replacement Parts and Accessories and shall
maintain an adequate stock of all replacement Parts and Accessories in respect
of each of the Products for a period of ten (10) years from the date of the
expiration or termination of this Agreement and XXXXXX agree to supply to HHI
and its Dealers replacement Parts and Accessories for the said Products for the
said ten (10) year period.
20. INSURANCE
20.1 XXXXXX shall procure and maintain in full force and effect during the term
of this Agreement, a commercial general liability insurance policy (the "CGL
Policy") including product liability insurance to cover worldwide, which shall
provide coverage, during the term hereof and for claims made for ten (10) years
thereafter, for product liability, vendors broad form liability, contractual
liability, cross liability, personal injury, bodily injury, including death, and
property damage liability.
PART V
SUPPORT AND TRAINING
21. TRAINING
On the commencement of this Agreement and on an annual basis thereafter,
throughout the term of this Agreement, XXXXXX shall at the request of HHI,
provide 3 days of training at HHI facilities in Korea, USA and Belgium at
Xxxxxx' expenses.. Such training programs shall provide service and support
respecting the sales and marketing, use, operation, maintenance, servicing and
repair of the Products.
22. MANUALS
XXXXXX shall provide to HHI, service manuals, operation and service manuals,
parts manuals for each model of the Products and such other manuals and
materials as are required for the safe operation and repair of the Products, in
English and other languages available, and in such number as HHI may, from time
to time, require. Xxxxxx shall provide HHI with PDF file of such manuals and
materials including catalog for HHI's printing.
23. PROMOTIONAL MATERIALS
XXXXXX shall provide to HHI, at no charge, such amount of product brochures,
literature, advertising and sales promotional materials, including films, as
required by HHI. HHI shall receive from Xxxxxx semi-annually, 2% of purchase
amount of equipment, attachment and parts as marketing fee. It is agreed that 2%
shall apply to all invoice that have been paid to Xxxxxx.
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PART VI
TERM AND GENERAL PROVISIONS
24. TERM OF THE AGREEMENT
Subject to prior termination at any time pursuant to the provisions of Section
25. hereof, the term of this Agreement, when executed by Xxxxxx and HHI, shall
be deemed to commence on the day and year first above written and shall continue
in full force for two (2) years until the second anniversary date thereof and
shall be automatically renewed for successive terms of one year, unless any
party has given at least three (3) months prior written notice to the other
parties that this Agreement is to terminate on the expiration of the initial
term or at the end of any renewal term of this Agreement.
25. TERMINATION
25.1 In the event of any default of the terms and conditions provided for
herein, the aggrieved party shall have the right to terminate this Agreement if
such default is not corrected within thirty (30) days after written notice is
given of such default provided, however, that if the nature of the default is
such that it cannot reasonably be cured within thirty (30) days, the party shall
have such additional time as may be reasonably required to cure the default,
provided it shall be diligently engaged in curing the default during such entire
period.
25.2 Any party shall have the right to terminate this Agreement by written
notice, effective immediately, in the event a party becomes bankrupt or
insolvent, or its business shall be placed in the hands of a receiver, assignee
or trustee, whether by voluntary act or otherwise, or if a petition for the
winding up of the business of the party is filed or if any proceedings are
commenced relating to the party under any liquidation laws applicable thereto.
25.3 Xxxxxx will report the change of ownership, inheritance, company name or
other major change at Xxxxxx and get the HHI's acceptance in writing in advance.
26. GENERAL PROVISIONS
26.1 Survival of Covenants: Notwithstanding the termination of this Agreement
for any reason whatsoever, the provisions of Sections 6, 10, 12, 16,19, 21, 22,
23 and 30 hereof and any other provisions of this Agreement necessary to give
efficacy thereto shall continue in full force and effect and survive the
termination of this Agreement. Any termination of this Agreement shall be
without prejudice to rights accruing at or before or in connection with or after
such termination, or to any remedies or proceedings with respect to such rights.
26.2 Assignment: This Agreement may not be transferred or assigned, in whole or
in part by any party, without the prior written consent of the other parties.
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26.3 NOTICES: Any notice authorized or required to be given hereunder or for the
purposes hereof shall be in writing in English and shall be sufficiently given
if given by personal delivery or sent by telecopier, addressed as follows:
in the case of HHI:
HYUNDAI HEAVY INDUSTRIES CO., LTD
0 XXXXXXX-XXXX, XXXX-XX, XXXXX, XXXXX
Attention: Mr. S. P. Ji
Senior Manager
Telecopier No: 00-00-000-0000
in the case of Xxxxxx:
XXXXXX EQUIPMENT INC., (CORPORATE OFFICE)
0000 XXXXXXX XXXX
XXXXXXXXXXX, XXXXXXX
XXXXXX X0X 0X0
Attention: Xxxxxxxx X.Xxxx
President
Telecopier No: (000) 000-0000
or at such other address or telecopier number as the party to whom such notice
is to be given shall have last notified to the party giving same in the manner
provided in this paragraph. Any notice delivered or telecopied to the party to
whom it is addressed as herein provided shall be conclusively deemed to have
been received if given by personal delivery, on the date and at the time of
actual delivery thereof and, if given by telecopier, on the first business day
following the time of transmittal thereof.
26.4 GOVERNING LAW: This Agreement and the rights and obligations arising
hereunder shall be governed by and construed according to the laws of Republic
of Korea.
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26.5 ENTIRE AGREEMENT: This Agreement, together with the schedules attached,
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof, and subject to any other provision to the contrary herein
contained, no amendment or modification of this Agreement shall be binding on
the parties unless made in writing and duly executed by all parties. There are
no representations, warranties, covenants, agreements or collateral
undertakings, oral or otherwise, express or implied, affecting this Agreement
which are not expressly set forth herein.
26.6 EXECUTION IN COUNTERPART: This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
and such counterparts together shall constitute one and the same instrument.
26.7 RELATIONSHIP OF PARTIES: The relationship between each of XXXXXX and HHI
shall be that of seller and buyer and this Agreement is no way constitutes
either party as an agent or legal representative of the other party. No party
hereto has the right or authority, express or implied, to incur, assume or
create, in writing or otherwise, any warranty, liability or obligation of any
kind, on behalf of or in the name of any other party hereto.
26.8 WAIVER: No waiver or consent by any party of or to any breach in the
performance or observance by any other party of any term, condition, covenant,
agreement, representation or warranty contained in this Agreement, shall be
effective unless given by written instrument executed and delivered by the party
giving the waiver or consent. Any such waiver or consent shall not constitute a
consent to or waiver of any subsequent breach of such term, condition, covenant,
agreement, representation or warranty unless expressly stated in such waiver or
consent.
26.9 SEVERABILITY: If any provision of this Agreement should be held invalid or
unenforceable for any reason whatsoever or to violate any law of any
jurisdiction, this Agreement shall be considered severable from such provision,
and such provision shall be deemed deleted from this Agreement in such
jurisdiction or, in the event that it should be held only to violate the laws of
any one jurisdiction, such provision shall be inapplicable only within such
jurisdiction, and the remainder of this Agreement shall be valid and binding
upon the parties as if such provision was not included herein.
26.10 BINDING AGREEMENT: This Agreement shall ensure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first written above.
HYUNDAI HEAVY INDUSTRIES CO., LTD.
by: /s/ X.X. XXX (c/s)
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X.X. Xxx, Vice President
XXXXXX EQUIPMENT 2004 INC.
by: XXXXXXXX X. XXXX (c/s)
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Xxxxxxxx X. Xxxx, President
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