Exhibit 10.14
M&R
INTERNATIONAL DISTRIBUTOR
AGREEMENT
TABLE OF CONTENTS
Page
----
I GRANT OF DlSTRIBUTORSHIP........................................... 1
1.01 Appointment.................................................. 1
1.02 Products..................................................... 1
1.03 Efforts...................................................... 1
II TERRITORY.......................................................... 1
2.01 Definition................................................... 1
2.02 Inquiries.................................................... 2
2.03 Exclusivity.................................................. 2
III TERM............................................................... 2
3.01 Initial Term................................................. 2
IV SALES GOALS........................................................ 2
4.01 Minimum Sales................................................ 2
4.02 Renegotiation of Standards................................... 3
V PRICES, DISCOUNTS AND SECURITY INTEREST............................ 3
5.01 Prices....................................................... 3
5.02 Discounts.................................................... 3
5.03 Security Interest............................................ 3
5.04 Terms of Payment............................................. 4
VI INDEPENDENT PARTIES................................................ 4
6.01 No Agency.................................................... 4
6.02 Independent Contractors...................................... 4
VII M&R'S LIABILITY.................................................... 5
7.01 Non-Liability................................................ 5
VIII DISTRIBUTOR'S RESPONSIBILITIES..................................... 5
8.01 Sales Organization........................................... 5
8.02 Reporting.................................................... 5
8.03 Confidential Information..................................... 5
8.04 Showroom..................................................... 5
8.05 Product Inventory............................................ 5
8.06 Technical Support............................................ 5
8.07 Competitive Equipment........................................ 5
8.08 Tax and Duties............................................... 6
i
TABLE OF CONTENTS
(Continued)
IX ORDER ENTRY........................................................ 6
9.01 Order Procedure.............................................. 6
X TERMINATION........................................................ 6
10.01 Early Termination............................................ 6
10.02 Bankruptcy................................................... 8
10.03 Actions on Termination....................................... 8
XI PRODUCT MARKINGS; TRADEMARKS....................................... 9
11.01 Serial or Machine Numbers.................................... 9
11.02 Equipment Identification..................................... 9
11.03 Trademarks................................................... 9
XII FORCE MAJEURE...................................................... 9
12.01 Relief of M&R................................................ 9
Xlll WARRANTY........................................................... 9
13.01 Individual Warranties of Products............................ 10
XIV M&R POLICIES....................................................... 10
14.01 Policies..................................................... 10
14.02 Product Changes.............................................. 10
14.03 Non-Assignability............................................ 10
14.04 Benefit...................................................... 10
14.05 Severability................................................. 10
14.06 Counterparts................................................. 10
14.07 Governing Law................................................ 10
14.08 Amendments................................................... 11
14.09 Enforcement.................................................. 11
SCHEDULE 1 M&R Sales & Services, Inc. / Discounts
EXHIBIT A The Territory
EXHIBIT B 1996 Sales Goals in Territory
ii
DISTRIBUTOR AGREEMENT
THIS AGREEMENT made and entered as of the 16 of September, between M&R
SALES AND SERVICE, INC., a Delaware corporation, with a principal place of
business in Glen Ellyn, Illinois (hereinafter referred to as "M&R"), and Clinton
Machinery Corp., a Florida corporation, and Clinton Machinery Corp., a Delaware
corporation, each with a principal place of business in Miami Lakes, Florida
(hereinafter referred to as "DISTRIBUTOR").
W I T N E S S E T H:
I
I GRANT OF DlSTRIBUTORSHIP
1.01 Appointment. M&R hereby appoints DISTRIBUTOR as its distributor for
its line of Products (other than Excluded Equipment and Custom Equipment (all as
defined in Paragraph 1.02 below)) manufactured by M&R Printing Equipment, Inc.
and Precision Screen Machines, Inc. (collectively, "Manufacturers") in the
Exclusive Territory and the Non-Exclusive Territory as defined in Paragraph 2.01
below.
1.02 Products. As used herein, Products shall mean all standard textile
and graphic screen printing and drying equipment and parts manufactured by the
Manufacturers. All equipment and parts designed to customers' specifications and
not of M&R's standard design are hereinafter referred to as "Custom Equipment."
1.03 Efforts. DISTRIBUTOR agrees to use its best efforts to promote and
sell Products in the Territory. DISTRIBUTOR shall, at its cost and expense,
hire, develop, and supervise its own personnel under such terms and conditions
as DISTRIBUTOR may deem appropriate. Under no circumstances shall any employee,
agent, Independent contractor or subcontractor of DISTRIBUTOR be deemed to be a
third party beneficiary of this Agreement. All expenses and disbursements
incurred in the solicitation of orders for Products shall be borne by
DISTRIBUTOR. DISTRIBUTOR shall not incur any liability for the account of M&R,
and shall indemnify and defend M&R against and hold M&R harmless from all
claims, expenses and disbursements in connection with the sale of Products.
DISTRIBUTOR shall, at its own cost and expense, comply with all federal, state
and local laws of the United States and other laws in effect in any jurisdiction
in which any sales are made, including but not limited to all licensing and
permitting laws, statutes or ordinances which may be required in connection with
its business.
II
II TERRITORY
2.01 Definition. As used herein the terms "Exclusive Territory" and
"Non-Exclusive Territory" shall mean the areas listed on Exhibit "A." The
Exclusive Territory and the
1
Non-Exclusive Territory is sometimes hereinafter collectively referred to as the
"Territory." DISTRIBUTOR shall have the exclusive right to market Products
(other than Excluded Equipment and Custom Equipment) in the Exclusive Territory
an-d shall have the right, together with M&R and other distributors, to market
Products in the Non-Exclusive Territory.
2.02 Inquiries. M&R agrees to refer to DISTRIBUTOR all inquiries and
orders received from customers or prospective customers in the Exclusive
Territory.
2.03 Exclusivity. If, in the reasonable opinion of M&R, DISTRIBUTOR fails
to maintain a sales force, showroom and technical personnel necessary to perform
all of its obligations to promote sales in the Exclusive Territory, upon written
notice to DISTRIBUTOR, M&R may convert all or part of the Exclusive Territory
into a Non-Exclusive Territory.
III
III TERM
3.01 Initial Term. The term ("Term") of this Agreement shall expire on
December 31, 1996, unless terminated in accordance with the early termination
provisions set forth in Article X. The Term shall be automatically renewed for
successive one year terms unless on or before September 1 of the year in which
the Term is due to expire, M&R or DISTRIBUTOR delivers a written notice to the
other party electing to terminate this Agreement as of December 31 of that year.
IV
IV SALES GOALS
4.01 Minimum Sales. If DISTRIBUTOR fails to meet its Sales Goal as
hereinafter defined) for the Territory for any fiscal year (January 1 to
December 31) commencing January 1, l996, M&R may terminate this Agreement upon
written notice to DISTRIBUTOR. If DISTRIBUTOR shall meet its Sales Goal for the
entire Territory, but shall fail to meet its Sales Goal in any particular area
in the Exclusive Territory, at M&R's sole and absolute discretion and upon
written notice from M&R, DISTRIBUTOR shall lose its exclusive status in such
area for which it did not meet its Sales Goal and such area shall thereafter be
deemed to be a Non-Exclusive Territory. If DISTRIBUTOR shall meet its Sales Goal
for the entire Territory, but shall fail to meet its Sales Goal in any area in
the Non-Exclusive Territory, at M&R's sole and absolute discretion and upon
written notice from M&R, DISTRIBUTOR shall no longer have the right to sell that
category of Products In the area in which its Sales Goal was not met.
DISTRIBUTOR shall be deemed not to have met its Sales Goal for a fiscal year if
the List Price (as defined in Section 5.01) for new Products shipped by M&R
during such fiscal year, net of discounts, warranty claims, service charges,
crating, freight, insurance, taxes and returns fails to equal or exceed the
applicable Sales Goal set forth on Exhibit "B" attached hereto.
2
4.02 Renegotiation of Standards. The Sales Goal for the Territory,
together with the Sales Goal for each area in the Territory, shall be
renegotiated by the parties annually for the following fiscal year and shall be
agreed to by the parties not later than September 15 of each year during the
Term. In renegotiating the new Sales Goal, the parties shall consider additions
to or deletions from M&R's list of Products, changes in prices charged by M&R,
planned marketing promotions and other relevant factors. in the event that the
parties fail to agree upon a new Sales Goal prior to the date set forth above.
either party may terminate this Agreement as of a date at least six months after
written notice is delivered to the other party of such party's election to
terminate this Agreement. During the period from the delivery of the notice to
terminate until the termination of this Agreement, all Exclusive areas shall be
deemed Non-Exclusive areas and, for the purposes of determining discounts
pursuant to Schedule 1, the then existing Sales Goals shall remain in effect.
V
V PRICES, DISCOUNTS AND SECURITY INTEREST
5.01 Prices. Applicable prices for any Products ordered by DISTRIBUTOR for
resale shall be the price for said Products as set forth in M&R's then current
published list of prices for the particular model or part ordered ("List Price")
less the discounts, if any. referred to in 5.02 below.
5.02 Discounts. DISTRIBUTOR will receive discounts from the List Price
pursuant to and subject to the conditions set forth on Schedule 1 attached
hereto. Notwithstanding anything contained herein or on Schedule 1, if payment
in full for Products ordered by DISTRIBUTOR is received by M&R more than thirty
(30) days but less than sixty (60) days after the shipping date of the Product
by M&R, no Bonus Discount or 1% Discount as described on Schedule 1 ) will be
earned by DISTRIBUTOR and if payment in full for Products ordered DISTRIBUTOR is
not received by M&R within sixty (60) days after the shipping date of the
Product by M&R, DISTRIBUTOR shall earn no Base Discount, Bonus Discount or 1%
Discount on such Product. All Base Discounts shall be deductible only from the
List Price of the Products for which the Base Discount is given. So long as
DISTRIBUTOR is not in default hereunder, the Bonus Discounts and 1% Discounts
may be credited, at DISTRIBUTOR's option, against any open invoice due M&R by
DISTRIBUTOR. If DISTRIBUTOR is in default hereunder, M&R may credit the Bonus
Discount and 196 Discount against any invoice of its choice. No discounts shall
be payable by M&R to DISTRIBUTOR in cash. Schedule 1 may be modified or amended
by M&R on an annual basis, as of the first day of January of each Year during
the Term.
5.03 Security Interest. It M&R believes in good faith that it would not be
prudent for M&R to sell a Product without obtaining a first lien security
interest in the Product, upon written notice to DISTRIBUTOR, M&R may sell the
Product directly to the buyer of the Product identified by DISTRIBUTOR without
first selling the Product to DISTRIBUTOR, so long as M&R pays or credits to
DISTRIBUTOR the profit that DISTRIBUTOR would have made if such sale was made to
DISTRIBUTOR pursuant to the terms of this Agreement and then
3
resold to the ultimate buyer of the Product for the price and on the terms of
the direct sale by M&R to such ultimate buyer, considering all discounts to
which DISTRIBUTOR would otherwise have been entitled pursuant to this Agreement.
5.04 Terms of Payment. Payment in good funds of 15% of the List Price, net
of the Base Discount, of ordered Products shall accompany all orders of Products
and no Products will be shipped without receipt by M&R of such 1596 payment;
provided, however, leased equipment shall be subject to terms negotiated by M&R
and DISTRIBUTOR on a case-by-case basis prior to shipping. The remainder of the
List Price, net of any applicable discounts, for the ordered Products shall be
due not later than sixty (60) days after shipment of the Products by M&R.
Notwithstanding the foregoing, if DISTRIBUTOR disputes the validity of an
invoice and M&R determines in its sole and absolute discretion that the basis
for the dispute was justified and caused by the fault of M&R, for purposes of
this Agreement, DISTRIBUTOR's obligation to pay such invoice shall be suspended
until actions deemed appropriate by M&R are taken with respect to such dispute.
5.05 Excluded Equipment: Custom Equipment. If during The Term, DISTRIBUTOR
introduces to M&R a customer in the Territory who purchases Excluded Equipment
from M&R, DISTRIBUTOR shall be eligible to receive a finder's fee upon the sale
of the Excluded Equipment and receipt by M&R of the entire purchaser, price
thereof, in the amount and subject to the conditions set forth in Schedule 1.
All finder's fee or other arrangements with respect to sales of Custom Equipment
in the Territory shall be subject to mutual agreement between M&R and
DISTRIBUTOR, provided that absent an express prior agreement with respect to the
sale of such Custom Equipment, no commission, finder's fee or other
consideration shall be Payable to DISTRIBUTOR based on the sale of Custom
Equipment.
VI
VI INDEPENDENT PARTIES
6.01 No Agency. It is acknowledged that DISTRIBUTOR and its employees
shall not be deemed and shall under no circumstances represent themselves to be
agents or representatives of M&R, and, further, that DISTRIBUTOR shall have no
right to enter into any contracts and/or commitments of any type on behalf of
M&R.
6.02 Independent Contractors. DISTRIBUTOR and M&R understand that, except
as specifically set forth herein, the provisions of this Agreement are not
intended to give M&R any substantial control over DISTRIBUTOR's method of
operation. DISTRIBUTOR shall be solely responsible for its conduct, direction,
operation and activities, including, but not limited to, the conduct, direction,
operation and activities of its employees and subcontractors in connection with
its business and the performance of its obligations under this Agreement. This
Agreement is not intended to grant a franchise to DISTRIBUTOR.
4
VII
VII M&R'S LIABILITY
7.01 Non-Liability. M&R shall not be liable for any injury, loss or damage
to any individual, person or property, which injury or damage was caused
directly or indirectly by the negligence of DISTRIBUTOR or its employees. M&R
shall not be liable for any injury, loss or damage, unless the same was directly
caused by the negligence of M&R, its agents or employees. M&R assumes no
liability for any damages, including incidental or consequential damages for
loss of goodwill, production or income which results from the use or misuse of
its Products by DISTRIBUTOR or others.
VIII
VIII DISTRIBUTOR'S RESPONSIBILITIES
8.01 Sales Organization. DISTRIBUTOR will establish and maintain a
trained, conscientious and effective sales organization to assure representation
of M&R'S Products in the Territory at a level to achieve the highest level of
sales possible.
8.02 Reporting. DISTRIBUTOR will eport promptly in writing to M&R any
complaint or customer requirements which DISTRIBUTOR cannot immediately remedy,
any recurring complaint regarding Products and all incidents involving Products
which result in personal injury or property damage. DISTRIBUTOR will conduct a
market review with M&R on a quarterly basis, covering all key issues selected by
M&R.
8.03 Confidential Information. All materials provided to DISTRIBUTOR by
M&R which are not generally known in the trade are confidential (including price
lists) and furnished solely for DISTRIBUTOR's use in performing DISTRIBUTOR's
obligations under this Agreement. DISTRIBUTOR agrees to return such materials to
M&R upon request and, in any event, upon termination of this Agreement .
8.04 Showroom. DISTRIBUTOR shall maintain on its premises a showroom to
demonstrate Products.
8.05 Product Inventory. DISTRIBUTOR agrees to keep in inventory a
representative grouping of Products.
8.06 Technical Support. DISTRIBUTOR agrees to provide technical
support to customers in its Territory after sale to ensure the Products are
properly installed and operating.
8.07 Competitive Equipment. As partial consideration for this grant of a
distributorship, DISTRIBUTOR agrees that it will not carry or offer for sale any
equipment competitive with Products offered for sale by M&R as of the date
hereof or Products offered for sale by M&R hereafter; provided that M&R agrees
that DISTRIBUTOR may carry and offer for sale small manual presses and screen
washers that may be competitive with the Products. If at
5
the time a new Product is added to those offered by M&R, DISTRIBUTOR then has in
inventory or has ordered products competitive with M&R's Products, DISTRIBUTOR
shall be permitted to dispose of the competitive equipment within eighteen
months after the introduction of the competitive Product by M&R, but DISTRIBUTOR
shall not place orders for such new competitive equipment after the date of
M&R's introduction of its Product.
8.08 Tax and Duties. DISTRIBUTOR shall be solely responsible for the
collection, reporting and payment of all sales, use and other similar taxes and
duties payable to DISTRIBUTOR hereunder. DISTRIBUTOR shall provide M&R with all
documents including certificates of resale, exemption etc.) necessary pursuant
to the various countries' laws to ensure that if M&R has not collected tax and
duties from DISTRIBUTOR in connection with a sale hereunder, such sale of
Products pursuant to this Agreement is exempt from such taxes. DISTRIBUTOR
hereby indemnifies and holds M&R harmless from all liability and expense in
connection with such taxes and duties.
IX
IX ORDER ENTRY
9.01 Order Procedure. All orders from DISTRIBUTOR are subject to
acceptance by M&R at its offices in Glen Ellyn, Illinois, according to M&R's
policies and procedures and shall not be deemed accepted for any purpose unless
accompanied by a completed purchase order on M&R's approved form and except for
leased Products which shall be subject to prior agreement between M&R and
Distributor a fifteen percent 15%) down payment. DISTRIBUTOR understands that
M&R may reject or withhold acceptance and shipment of orders if DISTRIBUTOR
fails to comply with this Agreement, M&R's credit or other policies, or if
DISTRIBUTOR's credit standing becomes impaired. M&R reserves the right to
determine in its sole and absolute discretion in which sequence orders from
DISTRIBUTOR and from other customers will be filled.
X
X TERMINATION
10.01 Early Termination. M&R may terminate this Agreement, at M&R's option
with respect to the entire Territory or with respect to a geographical area or
Country within the Territory, upon six (6) months prior written notice to
DISTRIBUTOR the date six (6) months after the date of such termination notice is
referred to herein as the "Effective Termination Date") in the following events;
provided that during such six (6) month period prior to the Effective
Termination Date all areas which constitute Exclusive Territories under Section
2.01 hereof shall instead be deemed to be Non-Exclusive Territories:
(a) failure by DISTRIBUTOR to remit payments for Products to M6R when due
pursuant to this terms of this Agreement, when such failure continues for sixty
160J days after written notice of such failure is given to DISTRIBUTOR;
6
(b) repeated failure by DISTRIBUTOR to cooperate with M&R's management in
the promotion and sale of Products, when such failure continues for sixty (60)
days after written notice of such failure is given to DISTRIBUTOR;
(c) failure by DISTRIBUTOR to maximize the market potential of Products in
the Territory by (i) failing to cooperate with M&R's management in coordinating
sales and marketing effect in order to maximize their effect, and/or (ii)
continuing to take actions which M8zR's management reasonably believes, and has
advised DISTRIBUTOR it believes. do not enhance the reputation of Products
and/or do not contribute to maximizing the market potential of the Territory,
when such failure or action continues for sixty l60) days after written notice
of such failure or action is given to DISTRIBUTOR:
(d) breach by DISTRIBUTOR of a material provision in this Agreement
including, without limitation, the obligations set forth in Paragraph 8.07
hereof, when such breach continues for sixty (60) days after written notice of
such failure is given to DISTRIBUTOR:
(e) six (6) months following written notice to DISTRIBUTOR stating the
failure of DISTRIBUTOR to meet at least 80% of its Sales Goals for the
Territory:
(f) if DISTRIBUTOR owns an interest in or control a graphics or textile
printing business which uses equipment similar to the Products and does not
dispose of such interest within sixty (60) days after written notice from M&R.
This paragraph shall not apply if DISTRIBUTOR acquires such ownership or control
rights upon foreclosure of security for a trade account. In such event,
DISTRIBUTOR shall give written notification to M&R within thirty 130) days of
acquiring such interest and divest itself of such business as soon as possible,
and in all events within ninety (90) days after acquisition.
(g) if after December 31, 1996 M&R delivers a written notice to
DISTRIBUTOR indicating that its strategic direction with respect to
international distribution of the Products has changed and M&R no longer wishes
to distribute the Products pursuant to this Agreement. If, pursuant to this
Section 1 0.0l (g), M&R terminates this Agreement with respect to the entire
Territory or with respect to a geographical area or a country, and, within
eighteen (18) months following the Effective Termination. Date M&R sells any
Products in such terminated portion of the Territory directly to the end user of
the Products and not through a distributor or other third party, then
DISTRIBUTOR shall be entitled to receive from M&R a finder's fee equal to five
percent 15%) of M&R's net manufacturer's price (defined as M&R's then list price
for the Product less the discount otherwise receivable by DISTRIBUTOR pursuant
to this Agreement with respect to such sale. The finder's fee will be payable
within sixty (60) days after the shipment of the Products by M&R.
Notwithstanding the foregoing, in no event shall M&R be obligated to pay
finder's fees to DISTRIBUTOR pursuant to this preceding sentence (g) for any
Products shipped more than eighteen (18) months following the Effective
Termination Date with respect to such portion to the Territory or (ii) in excess
of live percent (5%X of the total manufacturer's net sales price of all Products
shipped by M&R in such portion of the Territory during the eighteen (18) month
period preceding the Effective Termination Date.
7
In addition, in consideration of M&R's oblation to pay a finder's fee to
DISTRIBUTOR pursuant to this 10.01 (g), during such period that DISTRIBUTOR is
entitled to a finder's fee, the covenant set forth in Section 8.07 hereto shall
continue to be effective, notwithstanding the termination or partial termination
of this Agreement pursuant to Paragraph 10.01 19).
10.02 Bankruptcy. This Agreement shall be deemed to be immediately
terminated upon written notice to DISTRIBUTOR If proceedings are initiated by or
against DISTRIBUTOR in bankruptcy, or under any insolvency laws, or for
reorganization, receivership, dissolution or liquidation, an assignment for the
benefit of creditors or if a change occurs in the ownership, form of
organization or working capital position of DISTRIBUTOR which reasonably causes
M&R to believe DISTRIBUTOR cannot fulfill its obligations under this Agreement:
and
10.03 Actions on Termination. Upon the termination of this Agreement for
any reason:
(a) M&R or any of its agents, representatives or other designees,
including any successor DISTRIBUTOR, shall have the right, immediately upon
termination, to sell Products directly or indirectly to any customer developed
or dealt with by DISTRIBUTOR without incurring any liability or accountability
to DISTRIBUTOR:
(b) M&R may, at is option, repurchase from DISTRIBUTOR for the price
actually paid to M&R by DISTRIBUTOR (exclusive of any amounts attributable to
any freight, insurance or forwarding charges, or any taxes or other governmental
charges, all or any portion of the salable, unused and undamaged Products
purchased by DISTRIBUTOR from M&R prior to termination that remain in
DISTRIBUTOR's inventory; provided, however, that DISTRIBUTOR may sell Products
for which it has accepted orders from customers prior to the date of
termination, or for which M&R does not exercise its right of repurchase.
DISTRIBUTOR shall return all repurchased Products to M&R at DISTRIBUTOR's cost
and expense (including, without limitation, freight, insurance and forwarding
charges);
(c) All unpaid amounts owing from either party to the other hereunder
shall be paid, including amounts owing for Products purchased by DISTRIBUTOR
prior to termination but for which an invoice has not yet been submitted;
(d) DISTRIBUTOR shall cease promoting or marketing the Products or making
any use of M&R's or Manufacturer's trademarks and shall return promptly to M&R
all promotional and sales materials provided to it; and
(e) Neither party shall have any continuing duty, liability or obligation
to the other hereunder, except that the DISTRIBUTOR's obligations relating to
confidentiality and all undertakings hereunder by DISTRIBUTOR to indemnify and
defend M&R shall survive such termination.
8
XX
XX PRODUCT MARKINGS; TRADEMARKS
11.01 Serial or Machine Numbers. Manufacturers shall identify each Product
with a serial number or machine number, which number shall not be removed,
altered or transferred to any other machine or piece of equipment at any time.
11.02 Equipment Identification. All equipment sold under the terms of this
Agreement as well as all proposals forwarded to any prospective customers by
DISTRIBUTOR shall clearly identify the equipment being sold as being
manufactured by the Manufacturer and shall carry the Manufacturer's trademarks.
Under no circumstances shall DISTRIBUTOR, its agents or employees, represent
Products furnished by the Manufacturer as being manufactured by DISTRIBUTOR or
by anyone other than the Manufacturer, directly or indirectly.
11.03 Trademarks. DISTRIBUTOR expressly understands and acknowledges that
M&R has developed and will develop considerable goodwill in connection with its
and Manufacturer's names and marks (the "MARKS") and that DISTRIBUTOR will not
by virtue of this Agreement or performance under it acquire any interest in the
marks. In order to more fully protect M&R's and the Manufacturer's interest in
the marks, it is agreed that. except on literature provided by M&R, any use by
DISTRIBUTOR of the marks, either alone or in conjunction with DISTRIBUTOR's
name, whether for purposes of advertising or otherwise, will be subject to prior
submission to M&R and receipt of written approval of use as submitted. Under no
circumstances will DISTRIBUTOR use any of the marks in the absence of such prior
written approval from M&R, and unauthorized use may, at M&R's election, result
in immediate termination of this Agreement. DISTRIBUTOR shall not use the names
"M&R Sales and Service, Inc.," "M&R Printing Equipment" or "Precision Screen
Machines" nor any other name confusingly or deceptively similar to it in or in
conjunction with the trade name of DISTRIBUTOR or in connection with the sale or
distribution of any Products other than those manufactured by the Manufacturers.
Upon and after termination of this Agreement, DISTRIBUTOR shall not use said
names or the marks or similar names or marks in any shape or form. DISTRIBUTOR
will, insofar as it is or becomes aware of same, immediately bring to the
attention of M&R any improper or wrongful or confusing use of Manufacturers'
names, marks, emblems, designs or packages, or confusingly similar names, marks,
emblems, designs or packages or other similar industrial or commercial rights on
products which come to his notice or attention, together with such information
as will enable M&R to identify the sources of such improper or wrongful or
confusing use, and will cooperate with M&R in causing such improper or wrongful
or confusing use to be discontinued.
XII
XII FORCE MAJEURE
12.01 Relief of M&R. It is further acknowledged by and between the parties
that M&R's obligation to deliver any equipment or parts ordered is subject to
the availability of raw
9
materials, to prior commitments, fires, strikes, acts of God, governmental
regulations, decrees, actions, and any other cause beyond its control which may
delay or prevent performance by M&R.
Xlll
Xlll WARRANTY
13.01 Individual Warranties of Products. Products are supplied with a
statement of warranty. No other warranties, express or implied, are made by M&R
or the Manufacturers, and DISTRIBUTOR cannot and will not attempt to commit or
bind M&R or the Manufacturers to any other warranty without M&R's written
consent.
XIV
XIV M&R POLICIES
14.01 Policies. DISTRIBUTOR shall at all times conform to all policies and
guidelines from time to time promulgated by M&R in connection with the
performance of DISTRIBUTOR's duties under this Agreement.
14.02 Product Changes. M&R or the Manufacturers may change the design or
composition of any Products without obligation to DISTRIBUTOR. M&R will,
however, give DISTRIBUTOR reasonable notice of all significant changes.
14.03 Non-Assignability. DISTRIBUTOR has been selected as a distributor
based on its particular sales and service ability, and this Agreement
contemplates significant personal services by DISTRIBUTOR. No rights under this
Agreement may be assigned by DISTRIBUTOR without M&R's prior written consent,
which may be given or withheld in M&R's sole and absolute discretion.
14.04 Benefit. This Agreement shall obligate and benefit the successors
and assigns of M8tR and the permitted successors and assigns of DISTRIBUTOR.
14.05 Severability. The provisions of this Agreement are severable and any
invalidity, unenforceability or illegality in any provision or provisions in
this Agreement shall not affect the remaining provisions of this Agreement.
14.06 Counterparts. This Agreement is legally binding on the parties and
shall inure to the benefit of the parties hereto. It may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement represents
the entire understanding between the parties and supersedes any and all prior
agreements.
14.07 Governing Law. This Agreement shall be deemed made and construed
under the laws of the State of Illinois and venue for resolution of all
controversies arising out of
10
this Agreement or the subject matter hereof shall only be proper in the Circuit
Court of DuPage County, Illinois or the federal court in the Northern District
of Illinois.
14.08 Amendments. The terms and conditions of this Agreement cannot be
terminated, modified, or amended, except in writing, signed by both parties
hereto.
14.09 Enforcement. Should it be necessary for M&R to initiate legal
proceedings to enforce its rights under this Agreement and M&R is the prevailing
party in such proceedings (whether or not such proceeding result in a court
order or judgment), DISTRIBUTOR agrees to pay and discharge all costs,
attorney's fees and expenses that are incurred by M&R in enforcing the
provisions and agreements contained herein.
DISTRIBUTOR: CLINTON MACHINERY CORP. M&R SALES AND SERVICE, INC.
By:__________________________________ By:_____________________________
Title:_______________________________ Title:__________________________
11
Schedule 1
M&R Sales & Service, Inc.
Discounts
1. All capitalized terms not otherwise defined in this Schedule 1 shall have
the same meanings as set forth in the attached Distributor Agreement.
2. This schedule of Discounts shall be effective from January 1, 1996 through
December 31, 1996.
3. DISTRIBUTOR shall receive a discount ("Base Discount") equal to
twenty-five percent (25%) of the List Price of all Products (other than
Excluded Equipment and Custom Equipment) sold to DISTRIBUTOR for resales
in the Territory during the Term.
4. In addition to the Base Discount, DISTRIBUTOR shall receive a discount
("Bonus Discount") from the List Price of Products sold to DISTRIBUTOR for
resale in the Territory during the Term if DISTRIBUTOR meets or exceeds
its Sales Goal for the Territory during a fiscal year. Such Bonus Discount
shall be equal to two percent (2%) of the aggregate purchase price, net of
Base Discount, of Products sold in the Territory during such fiscal year
(hereinafter "Net Sales")
5. Nothing contained in this Schedule 1 should be deemed to detract from
M&R's rights to terminate the Agreement or terminate DISTRIBUTOR's
exclusivity or right to sell Products in an area or Territory in the event
any Sales Goal is not met, all as set forth in Articles IV and X of the
Agreement.
6. If DISTRIBUTOR exceeds the aggregate Sales Goal for the Territory during a
fiscal year, DISTRIBUTOR shall receive an additional discount ("1%
Discount is equal to 1% of all Net Sales in excess of DISTRIBUTOR's annual
Sales Goal for the Territory in such fiscal year).
7. The granting of all discounts hereunder is subject to and contingent upon
meeting the payment requirements set forth in Section 5.02 of the
Agreement.
8. All Excluded Equipment shall be sold by M&R directly to buyer in the
Territory and shall not be sold to DISTRIBUTOR for resale. However,
DISTRIBUTOR shall receive as a finder's fee the following percentages of
the purchase price paid and received by M&R from purchasers of the
following equipment (other than House Accounts) in the Territory who are
introduced to M&R by Distributor:
(a) Conquest and HST Transfer Press - ten percent (10%);
(b) VOF Glass Printers - five percent (5%);
(c) Processor - five percent (5%).
So long as DISTRIBUTOR is not in default under the Agreement, such finder's fee
shall be credited against any outstanding invoice owed by DISTRIBUTOR to M&R at
DISTRIBUTOR's choice. Upon a default by DISTRIBUTOR under the Agreement, the
finder's fee shall be credited against outstanding invoices at M&R's choice. The
sales price paid and received by M&R for any of the foregoing Excluded Equipment
shall be included in the calculation of DISTRIBUTOR's Net Sales for the purpose
of determining whether DISTRIBUTOR has met its Sales Goal, but no Bonus
Discounts or 1% Discounts shall be granted to DISTRIBUTOR based on the purchase
price received by M&R for Excluded Equipment.
9. Custom Equipment shall be sold directly by M&R to buyers in the Territory
and not sold to DISTRIBUTOR for resale. All compensation, credits,
discounts and other consideration, if any receivable by DISTRIBUTOR based
on the sale of Custom Equipment shall be negotiated by M&R and DISTRIBUTOR
in writing prior to the sale.
10. If DISTRIBUTOR reasonably believes that because of the reduced purchase
price negotiated by a prospective buyer of Products in the Territory,
it is not economically feasible for DISTRIBUTOR to purchase the
Products for resale to such buyer, DISTRIBUTOR may request that M&R
sell the Products to the buyer. If M&R ion its sole and absolute
discretion decides to directly sell Products to such buyer, M&R will
credit DISTRIBUTOR's account with an amount equal to the excess, if
any, of the price actually received by M&R from such buyer over the
List Price of the Product, less the Base Discount. In such event, as
with Excluded Equipment, the sales price of the Product will count
toward fulfillment of DISTRIBUTOR's Sales Goal, but shall not be the
basis of the receipt by DISTRIBUTOR of Bonus Discounts or 1% Discounts.
Exhibit "A"
THE TERRITORY
"Exclusive Territory"
---------------------
Textile Graphics
------- --------
Xxxx 0 - Xxxxxxx Xxxxxxx (including None
Mexico), the Caribbean, and Xxxxx
Xxxxxxx
Xxxx 0 - Xxxxxx, Xxxxx Xxxxxx and the None
Middle East
Area 3 - Asia (including the Far None
East), Southeast Asia, India,
Australia and South Africa
"Non-Exclusive Territory"
-------------------------
Textile Graphics
------- --------
Xxxx Xxxx 0
Xxxx 0
Xxxx 2
Exhibit "B"
1996 Sales Goal in Territory = $7,500,000
Area 1 - Central America (including $2,500,000
Mexico), the Caribbean, and Xxxxx
Xxxxxxx
Xxxx 0 - Xxxxxx, Xxxxx Xxxxxx and the $2,750,000
Middle East
Area 3 - Asia (including the Far $2,250,000
East), Southeast Asia, India,
Australia and South Africa
