EXHIBIT 10.5
DISTRIBUTOR AGREEMENT
This DISTRIBUTOR AGREEMENT ("Agreement"), having an effective date of 1
April, 2002 ("Effective Date"), is by and between EC2000, Inc., a Delaware
corporation ("EC2000") and Pioneer Technology, Inc., a Michigan corporation
("Distributor").
In consideration of the promises made herein by EC2000 and Distributor,
the parties hereto agree as follows:
1. APPOINTMENT AND ACCEPTANCE
1.1 Upon the terms and subject to the conditions of this Agreement,
EC2000 hereby appoints Distributor as a nonexclusive distributor of those
EC2000 products identified in EXHIBIT A attached hereto (the "Products") in the
geographical area described in EXHIBIT B attached hereto (the "Territory")
solely to those customers located and operating within the Territory, to the
exclusion of any customers engaged in the development, manufacture,
distribution and/or sale of Original Equipment Manufacture (OEM) products,
including, but not limited, to OEM vehicles, OEM engines, or OEM components
thereof. Distributor hereby accepts said appointment subject to the terms
herein. Except for those customers identified in EXHIBIT C attached hereto for
which Distributor shall have limited rights of exclusive distribution pursuant
to Sections 1.3 and 1.4 (the "Distributor Customers"), nothing in this
Agreement shall preclude EC2000 from selling to any other person or from
appointing any other person its distributor for the sale of Products in the
Territory or elsewhere.
1.2 In its sole discretion, EC2000 may from time to time add to or delete
from: (a) those "Products" identified in EXHIBIT A, (b) the "Territory"
described in EXHIBIT B, or (c) those "Distributor Customers" identified in
EXHIBIT C pursuant to an amendment to this Agreement executed in accordance
with Section 15.6 hereof.
1.3 Distributor shall have the exclusive right to sell Products to those
Distributor Customers identified on EXHIBIT C during the first twelve (12)
month period commencing on the Effective Date or the date of addition of the
Distributor Customer on EXHIBIT C, as the case may be ("Trial Period").
Immediately after the expiration of the Trial Period, if Distributor either:
(a) sells to a Distributor Customer the lesser of ten (10) Product
units or Twenty (20%) percent of total potential sales volume as determined by
EC2000 in its sole discretion ("Initial Target Volume") and delivers EC2000
proof of the same within the Trial Period, then such Distributor Customer shall
attain the status of an "active" Distributor Customer with immediate effect as
of the expiration of the Trial Period and Distributor shall continue to have
rights to the "active" Distributor Customer as conferred herein during the term
of this Agreement, or
(b) fails to sell to a Distributor Customer the Initial Target Volume
or fails to deliver EC2000 proof of the same within the Trial Period, then such
Distributor Customer shall have the status of an "inactive" Distributor
Customer with immediate effect as of the expiration of the Trial Period and the
same shall be automatically removed and excluded as a Distributor
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Customer identified on EXHIBIT C (without physical amendment thereto) and
Distributor shall have no further rights to, or in, the "inactive" Distributor
Customer whatsoever, including any right of exclusive distribution. For purposes
of Sections 1.3(a) and 1.3(b), proof of Initial Target Volume shall be in the
form of copies of Distributor Customer purchase order, together with
corresponding copies of Distributor invoices.
1.4 During the term of this Agreement, if Products are sold to the
Distributor Customers (which are not "inactive" Distributor Customers) by EC2000
or another distributor authorized by EC2000, then EC2000 shall pay Distributor a
commission equal to the difference between the Product net sales price (after
credits, discounts, returns, and allowances) charged to and collected from the
Distributor Customer and the Product price charged by EC2000 to Distributor
pursuant to Section 4.1, which shall be Distributor's sole and exclusive remedy
for an occurrence of the same.
2. DUTIES OF DISTRIBUTOR
Distributor, in addition to performing such other obligations as are
required by this Agreement, shall have the following duties:
2.1 Initial Inventory. On or before August 5, 2002, Distributor shall
purchase from EC2000 an initial inventory of 10 product units.
2.2 Minimum Purchases; Per Order, Annually. Distributor shall purchase from
EC2000 a minimum of one hundred (100) Product units per order. Distributor shall
purchase an annual minimum of one thousand (1,000) Product units during the
first twelve (12) month period, commencing on the Effective Date and one
thousand (1,000) Product units during each successive twelve (12) month period
thereafter commencing on the next anniversary Effective Date.
2.3 Orders. All orders will be governed by the EC2000 Order Policy
specified on EXHIBIT D attached hereto. EC2000 reserves the right to change the
EC2000 Order Policy, in its sole discretion, provided that EC2000 shall give
distributor not less than thirty (30) days written notice of any such change.
2.4 Promotion. Distributor, at its own cost and consistent with good
business practice shall use best efforts promote the sale of, solicit for, and
stimulate interest in the Products in the Territory.
2.5 Office, Staff and Product Service. Distributor shall maintain an office
that shall be open during normal business hours and shall employ staff adequate
to solicit Products orders, and "Service" Products, for which Distributor agrees
to perform said Service on each Product purchased by Distributor pursuant to
this Agreement. The term "Service," as used herein, shall mean the
responsibility of Distributor to install and certify each Product on specified
customer equipment at the direction of EC2000, which Distributor shall give
EC2000 ten (10) days prior notification of Distributor's/the customer's intent
to do the same.
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2.6 Customer Relations. Distributor shall use its best efforts to
establish and maintain good relations with all Distributor customers in the
Territory. Distributor shall report to EC2000, within ten (10) days of receipt,
all complaints relating to the Products, together with the names and addresses
of the persons making such complaints.
2.7 Advertising. Distributor shall not use in any manner any trademarks,
imprints, or service marks of EC2000 ("Marks") without prior written consent of
EC2000, except for use of advertising or promotional material supplied by
EC2000. If EC2000 gives such consent, Distributor shall use the Marks strictly
in accordance with such consent. Distributor shall submit to EC2000 for approval
prior to use any advertising or public relations material prepared by or for
Distributor which uses EC2000's name or EC2000's technical information. EC2000
shall have the right to approval or reject such advertising or promotional
material in its sole discretion. Further, Distributor shall not, under any
circumstances, acquire any property interest in any Marks or in any goodwill
associated therewith. Distributor shall do nothing anything to infringe, impeach
or lessen the validity of the Marks.
2.8 Proprietary Information. Distributor acknowledges and agrees that all
information related to patents, copyrights, inventions, designs, discoveries,
improvements, formulae, product data and specifications, production data and
processes, customer lists and contacts, information on customer product
preferences, information on customer quantity and technical requirements,
product pricing information, geographic and sales data, sales and marketing
methodologies and strategies, sales and marketing research and data, any
information relating to EC2000 and its business operations, products, and
financial affairs, or ideas which may be disclosed by EC2000 to Distributor
during the performance of Distributor's work under this Agreement, or conceived,
developed, or made by Distributor related to fuel savings and emission
controlled devices and related technologies while performing its work hereunder
are highly confidential and proprietary information of EC2000 and are the sole
and exclusive property of EC2000 ("EC2000 Proprietary Information"). During the
term of this Agreement and any time thereafter, Distributor agrees to maintain
the confidentiality of all EC2000 Proprietary Information, including, without
limitation, such information contained on or in correspondence, notes, records,
drawings, memoranda, files, computer programs or disks, CDs, training manuals,
customer lists, mailing or contract lists, or other documents or electronic
media. Upon the termination of this Agreement, Distributor shall immediately
deliver to EC2000 all documents or electronic media containing any EC2000
Proprietary Information, including any copies thereof and shall make no further
use of such information. Distributor shall, in all cases of termination of any
employee or agent of Distributor, recover any such information from such
employee or agent. This section shall survive the termination of this Agreement.
2.9 Good Will. Distributor shall use best efforts and take all such steps
as EC2000 may reasonably request to preserve and enhance EC2000's good will and
reputation in the Territory.
2.10 Competitive Products. Distributor shall from time to time, or as
EC2000 requests, advise EC2000 of any existing or new products, devices, or
technology, which are or may become competitive with the Products in the
Territory.
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2.11 Training Programs. At Distributor's expense, Distributor shall
participate in, and shall cause its key sales employees to participate in,
EC2000 distributor training programs which EC2000 may, in its sole discretion,
provide from time to time; provided, however, such training programs are
conducted within a one (100) hundred mile radius of Distributor's address set
forth in Section 15.1 hereof. EC2000 shall pay Distributor's expenses for
travel, meals and lodging incurred by Distributor in connection with training
sessions attended by Distributor at EC2000's request held outside the
designated area.
2.12 Sales Forecasts. Distributor shall provide EC2000 with periodic sales
forecasts, as and when requested by EC2000.
2.13 Reports. Distributor shall provide EC2000 with monthly reports
summarizing collective efforts and Distributor shall provide such other
information relating to the performance of its obligations under this Agreement
as EC2000 may from time to time reasonably request.
2.14 Notice of Changes of Control. Distributor shall give EC2000 thirty
(30) days advance notice of any changes in the ownership, management or control
of Distributor, including without limitation, any merger, consolidation or sale
of substantially all of Distributor's assets ("Change of Control").
2.15 Identification of Products. Distributor shall not remove, deface,
destroy or conceal in any way the insignia, decal, label or other markings
placed on the Products or Product containers by EC2000.
2.16 Covenant Not to Compete. Distributor agrees that during the term of
this Agreement and for a period of twelve (12) months thereafter, it will not
promote or sell (either for its own account or as agent or Distributor for
another) any fuel savings or emission controlled devices and related
technologies or products competitive to the Products in the Territory, and will
not become involved as a partner, shareholder, officer, director, employee,
principal, consultant, subsidiary, division, affiliate, or in any other way,
either directly or indirectly, in any corporation or other entity which
promotes, sells, or manufactures any competitive products in the Territory.
Distributor agrees that the subject matter, geographic area and duration of
this covenant are reasonable and necessary for protection of EC2000 and if any
court finds this section unreasonable it shall rewrite this section to the
fullest extent enforceable by law.
3. OTHER RIGHTS AND DUTIES OF EC2000
3.1 Orders. The EC2000 Order Policy (EXHIBIT D) will govern all orders.
EC2000 reserves the right to change the Order Policy in any manner and at
EC2000's sole discretion, provided that EC2000 shall give Distributor not less
than thirty (30) days written notice of any such change.
3.2 Sample Products. For a period of six (6) months after the Effective
Date ("Sample Period"), EC2000 shall permit Distributor to possess six (6)
sample Product units, the selection of which shall be at the discretion of
EC2000. The sample Products shall be used solely for Distributor internal
evaluation, Distributor demonstration to customer, and customer
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internal evaluation purposes and shall not be used or disclosed for any other
purpose. Distributor shall not transfer possession of a sample Product unit to
any customer, unless such customer has first signed and returned to EC2000 an
original unamended EC2000 Evaluation Agreement, the exact form of which shall
be provided by EC2000 to Distributor upon Distributor's request. Distributor
shall neither disassemble nor test the sample Products, except for upon the
written consent of EC2000. Distributor acknowledges that the sample Products
shall be owned at all times of EC2000 and shall be treated by Distributor as
containing EC2000 Proprietary Information. Upon the expiration of the Sample
Period, Distributor shall return the sample Products to EC2000 in the same
condition as delivered.
3.3 Promotion. EC2000 shall list and publish Distributor's name and
address in EC2000's authorized distributor list. EC2000 shall permit
Distributor to state orally or in writing that it is "an authorized distributor
of EC2000 products." EC2000 shall promote customer demand in the Territory for
the Products by carrying out such advertising and promotional activity as is
deemed desirable by EC2000.
3.4 Marketing Materials and Guidance. EC2000 shall provide Distributor
with EC2000's standard assortment of catalogues, bulletins, and advertising
materials ("EC2000 Marketing Materials") at such times and in such quantities
reasonably required by Distributor as determined by Distributor. EC2000 shall
provide such marketing direction and guidance to Distributor as EC2000 deems
appropriate.
3.5 Information and Assistance. EC2000 shall provide without charge such
sales and technical information and assistance relating to the Products as
EC2000 deems appropriate. To the extent possible, EC2000 will provide such
sales and technical information in advance of the initial production or sale
of the Products.
3.6 Right to Discontinue Products. EC2000 shall have the right in its
sole discretion to discontinue Products in its product line at any time upon
providing thirty (30) days written notice to Distributor. EC2000 shall, to the
extent commercially reasonable, provide Distributor with notice prior to
discontinuing any of the Products from EC2000's product line. Upon
discontinuance, EXHIBIT A shall be automatically amended by deletion of the
discontinued Product, if included thereon.
3.7 Return of Products. Distributor may return Products to EC2000 at its
discretion, less a ten (10%) percent restocking fee, and Distributor may return
Products to EC2000 without a restocking fee, only if (a) the Products sought to
be returned fail to comply with applicable specifications due to EC2000's
fault, (b) the Products sought to be returned have been properly stored, are in
their original condition, and are in packages containing standard quantities,
and (c) the Products sought to be returned were purchased directly from EC2000
by Distributor.
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4. PAYMENT
Distributor shall pay for the Products in accordance with the following
terms:
4.1 Pricing. Prices charged by EC2000 to Distributor for all Products
shall be established by EC2000 in its sole discretion by means of the pricing
and payment schedule attached hereto as EXHIBIT E (the "EC2000 Pricing and
Payment Schedule"). EC2000 reserves the right to change the prices in the
EC2000 Pricing and Payment Schedule, provided that EC2000 shall give
Distributor not less than thirty (30) days written notice of any such change.
If EC2000 increases the price of any Product, orders received from Distributor
prior to the effective date of the price increase will be accepted at the old
price, provided Distributor agrees to accept delivery of all Products covered
by such previous orders within thirty (30) days after acceptance of such orders
by EC2000.
4.2 Terms of Payment. Payment for orders of Product by Distributor from
EC2000 by shall be due and payable pursuant to EC2000 Pricing and Payment
Schedule (EXHIBIT E).
4.3 Security Interest. Distributor hereby grants to EC2000 a security
interest in all Distributor inventory of the Products now and hereafter
acquired to secure payment on all past, current, and future obligations of
Distributor to EC2000 arising out of or related to this Agreement.
Contemporaneous with the execution of this Agreement, Distributor shall execute
the State of Michigan Form UCC1 (UCC Financing Statement) attached hereto as
EXHIBIT F. Distributor hereby authorizes EC2000 to file the same with the State
of Michigan in such location(s) and at such office(s) as required by the laws
thereof.
5 WARRANTIES
There shall be no warranties of any kind or nature applicable to the
Products expressed, implied in fact or implied in law, except those warranties
expressly set forth in the EC2000 warranty card packaged with all Products
delivered by EC2000 to Distributor (the "EC2000 Warranty"), which Distributor
shall ensure the customer's receipt upon delivery and/or installation of each
Product. If an EC2000 warranty card has not been packaged with a Product
delivered by EC2000 to Distributor, then Distributor shall procure an original
of the same for packaging with the Product and delivery to the customer.
Distributor shall neither offer nor extend to its customer any warranties
differing from the EC2000 Warranty. EC2000 reserves the right to change, in
its sole discretion, the terms and conditions of the EC2000 Warranty, which
change shall become effective immediately upon notice by EC2000 to Distributor.
Distributor shall have no right or claim against EC2000 on account of any claim
asserted or any judgment obtained by a customer against the Distributor for any
alleged breach of any warranty of any kind or nature, expressed, implied in
fact or implied in law, except for breaches of the EC2000 Warranty, in which
case EC2000 agrees to hold harmless Distributor from claims by customer
purchasing Product through Distributor related to breaches of the EC2000
Warranty. EC2000 represents and warrants to Distributor that the Product has
been tested and works in the manner warranted by EC2000 under the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and represented in the EC2000 Marketing Materials.
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EXCEPT AS OTHERWISE PROVIDED UNDER THE EC2000 WARRANTY, EC2000 MAKES NO OTHER
WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY
WARRANTY FROM EC2000, WHETHER GRANTED PURSUANT TO THIS AGREEMENT, OR BY LAW,
SHALL BE VOID IF THE PRODUCT IS MODIFIED AFTER ITS DELIVERY DATE.
6. TERM AND TERMINATION
6.1 This Agreement shall become effective as of the Effective Date and
shall continue for a period of twelve (12) months, unless otherwise terminated
as follows or upon default:
6.1.1 Mutual Consent. This Agreement may be terminated at any time
by the mutual written consent of EC2000 and Distributor.
6.1.2 At Will upon Thirty-Day Notice. This Agreement may be
terminated at will and without cause by either party giving the other party
thirty (30) days prior written notice of termination.
6.1.3 Minimum Purchase. This Agreement may be terminated by EC2000
effective upon thirty (30) days prior notice by EC2000 if Distributor fails to
purchase from EC2000 the minimum annual purchase requirements as provided in
subsection 2.2 above.
6.1.4 Change of Control. This Agreement may be terminated by EC2000
immediately upon expiration of thirty (30) days after notice of Change of
Control is provided by Distributor pursuant to Section 2.14 above.
6.1.5 Events of Default. This Agreement may be terminated by EC2000
immediately upon the occurrence of any event of default as defined in Section 7
below.
6.2 Effect of Termination. If this Agreement is terminated for any
reason, EC2000 shall repurchase all of the Distributor's remaining inventory at
EC2000's invoice price to Distributor. The Distributor shall provide, within
thirty (30) days of termination of this Agreement, an itemized list of
inventory stating the original quantity purchased and EC2000 invoice price, as
well as a copy of each original EC2000 invoice. The Distributor, at it's own
cost of shipping, shall return to EC2000 for repurchase under this Section 6.2
only Products that are standard box quantities in their original unbroken
packages.
6.3 Post-Termination Commissions. If this Agreement is terminated by
EC2000 pursuant to Sections 6.1.1 (Mutual Consent), 6.1.2 (At Will upon
Thirty-Day Notice), 6.1.3 (Minimum Purchase), or 6.1.4 (solely for a Change of
Control which is not in violation of Section 2.16), 7.1.1 (Late Payment), 7.1.3
(solely for a Distributor dissolution which is not in violation of Section
2.16), 7.1.8 (Other Breach), then EC2000 shall pay Distributor a
post-termination commission equal to twenty-five (25%) percent of the net sales
price (after credits, discounts, returns, and allowances) on all the Products
ordered within the twelve (12) month period following the termination of this
Agreement only by those Distributor Customers who
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purchase the Products as a result of sales efforts of Distributor after set-off
of any amounts asserted by EC2000 to be owed to EC2000 by Distributor.
Post-termination commissions shall be paid by EC2000 to Distributor on or
before the last day of the month in which EC2000 receives payment from the
customers for the corresponding Products sold, net of any amounts which may be
due from Distributor to EC2000 pursuant to this Agreement. Except as otherwise
provided herein, Distributor shall not be entitled to any post-termination
commissions.
6.4 Return of Information and Ceasing Activities. Upon termination of
this Agreement for any reason whatsoever, Distributor shall immediately deliver
to EC2000 all proprietary and confidential information, data or documents and
copies thereof, and shall make no further use of such information. At such
time, Distributor shall also cease using all advertising materials related to
the Products and shall cease all conduct (including the performance of Services
pursuant to Section 2.5), which might cause anyone to believe that Distributor
is a distributor of EC2000 Products.
7. DEFAULT
7.1 Events of Default. The occurrence of any of the following events
shall constitute an event of default under this Agreement:
7.1.1 Late Payment. Failure by Distributor to pay any obligation
within fifteen (15) days after receipt of notice that such payment is due.
7.1.2 Misrepresentation. The making or furnishing by Distributor of
any representation, warranty, financial statement or other information that is
materially untrue.
7.1.3 Dissolution. Commencement of any action or processing to
dissolve Distributor.
7.1.4 Bankruptcy. Commencement of any action or proceeding by or
against Distributor under any applicable bankruptcy, corporate reorganization
or insolvency statute or other statute providing for relief from creditors,
appointment of a receiver or trustee for Distributor, or issuance of an
attachment or entry of a judgment against Distributor the effect of which is
not stayed within sixty (60) days, or if Distributor is generally unable to pay
its debts as they become due.
7.1.5 Change of Control. Any Change of Control in which Distributor
fails to provide notice.
7.1.6 EC2000 Proprietary Information. The breach by Distributor of
any obligation imposed upon Distributor pursuant to Section 2.8 hereof with
respect to EC2000 Proprietary Information.
7.1.7 Covenant Not to Compete. The breach by Distributor of any
obligation imposed upon Distributor pursuant to Section 2.16 hereof with
respect to its covenant not to compete.
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7.1.8 Other Breach. Failure by Distributor to observe or perform any
other provisions of this Agreement, if such failure has not been cured within
fifteen (15) days after notice is given by EC2000 of such failure.
7.2 Remedies on Default. Upon the occurrence of any event or default
hereunder, EC2000 may in its sole discretion declare any or all of the
obligations of Distributor under this Agreement to be immediately due and
payable and EC2000 may exercise any one or more of the rights and remedies
granted pursuant to this Agreement or given to EC2000 under the Uniform
Commercial Code, or other applicable law.
8. DISCLOSURE OF OTHER ACTIVITIES
Upon execution of this Agreement, Distributor shall inform EC2000 of the
products and firms which it now sells or represents related to fuel savings and
emissions reducing devices and thereafter shall give notice to EC2000 of new
lines of products and new firms which it intends to represent or whose products
it intends to sell related to fuel savings and emissions reducing devices.
Should EC2000, in its opinion, believe that such additional representation or
sale will adversely affect Distributor's ability to use its best efforts to
promote and sell Products, EC2000 shall so notify Distributor and, should
Distributor nevertheless sell or represent the new product or firm, EC2000 may,
at its option, terminate this Agreement in accordance with subsection 6.1.5
above.
9. FORCE MAJEURE
For purposes of this Agreement, the term "Force Majeure" shall mean wars,
riots, acts of God, such as floods, fires, or earthquakes, which are beyond the
reasonable control of the party whose performance is delayed, prevented,
restricted or interfered with in spite of such party's reasonable efforts. In
the event a party is subject to Force Majeure, then such party shall not be
responsible for any delay or failure of performance of this Agreement for such
length of time; provided, however, that (a) such party gives the other party
prompt notice of the occurrence of such cause or circumstance, (b) such party
takes reasonable steps to avoid or remove such cause or circumstance of
nonperformance, to the extent possible, (c) such party continues performance
whenever and to the extent such cause or circumstance is removed, and (d) such
party gives the other party prompt notice of the cessation of such cause or
circumstance.
10. EMPLOYEES
Except as may be mutually agreed in writing, Distributor and EC2000
mutually agree not to solicit any employees, sales representatives, or agents of
the other during the term of this Agreement, provided, however, that Distributor
provides EC2000 with a written list of Distributor sales representatives and
Distributor agents within five (5) days after the execution of this Agreement by
EC2000.
11. CONFIDENTIALITY OF THIS AGREEMENT
This Agreement contains confidential information and no term or provision
of this Agreement may be disclosed in whole or in part by Distributor, without
the prior written consent of EC2000, to any person except as may be required by
law.
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12. REPRESENTATION AND WARRANTY OF DISTRIBUTOR
Distributor represents and warrants to EC2000 that: (a) the execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action; (b) this Agreement is a valid and binding obligation of
Distributor enforceable against it in accordance with its terms; (c) Distributor
is a Michigan corporation with permits and certificates necessary to conduct the
business of selling and Servicing Products within the State of Michigan and
throughout the Territory, (d) Distributor has no contractual obligations, nor
are there any pending actions or proceedings, or threatened actions or
proceedings, which if adversely determined, would impair Distributor's right to
perform its obligations hereunder; (e) Distributor has the necessary knowledge,
experience, and expertise to perform the duties provided herein; (f) Distributor
shall perform its duties and respond to customers in a timely, courteous,
competent and workmanlike manner; (g) Distributor shall do nothing to cause the
EC2000 name or Products any disrepute. Distributor covenants and agrees with
EC2000 that at all times during the term of this Agreement, Distributor, its
promotion and all activities connected therewith or incident thereto, shall
comply with all applicable federal, state and local laws, statutes, rules and
regulations.
13. ARBITRATION
Any controversy or claim arising out of or related to this Agreement, or
the breach thereof, shall be first be settled by mediation governed by the rules
of the American Arbitration Association then in effect. If no resolution is
reached after two (2) full days of mediation, the dispute shall be settled by
arbitration governed by the American Arbitration Association ("AAA") under its
Commercial Arbitration Rules, the venue for which shall be in the Southfield,
Michigan (or successor) office of the AAA. The arbitration shall be conducted by
one neutral arbitrator (admitted to practice law in Michigan and experienced in
commercial litigation) mutually agreed upon by the parties in writing, or in the
event of no such agreement, one neutral arbitrator selected by the American
Arbitration Association. The decision by the arbitrator (and/or award) shall be
final and binding on the parties and judgment on the decision (and/or award) may
be entered by any court having jurisdiction thereof. All reasonable fees and
expenses of the arbitrators, all reasonable fees and expenses of the lawyers,
and any of the arbitration fees and/or court costs resulting from the
arbitration and any related court proceedings will be allocated in proportion to
each party's relative success.
14. INJUNCTIVE RELIEF
Distributor acknowledges that (a) the restraints imposed upon it pursuant
to paragraphs 2.8 (Proprietary Information) and 2.16 (Covenant Not to Compete)
of this Agreement are no greater than is reasonably necessary to preserve and
protect the legitimate business interests of EC2000, (b) said restraints will
not impose an undue hardship upon it, and (c) any violation or threatened
violation of said restraints will irreparably injure EC2000. Accordingly, EC2000
may, in addition to pursuing its other remedies, obtain such equitable and
injunctive relief (including, but not limited to, preliminary and permanent
injunctions) from any court of competent jurisdiction, as may be necessary to
enjoin any such violation of the foregoing restraints, and further, no bond or
other security shall be required to obtain such relief.
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15. LIMITATION OF LIABILITY
15.1 Direct Damages. EXCEPT FOR ANY POST TERMINATION COMMISSIONS DUE
DISTRIBUTOR UNDER SECTION 6.2 OF THIS AGREEMENT OR ANY PAYMENTS DUE EC2000
UNDER SECTION 4 OF THIS AGREEMENT, NEITHER EC2000 NOR DISTRIBUTOR SHALL BE
LIABLE TO THE OTHER PARTY FOR ANY DAMAGES ARISING OUT OF OR RELATING TO ITS
PERFORMANCE UNDER THIS AGREEMENT, WHETHER BASED ON AN ACTION OR CLAIM IN
CONTRACT, EQUITY, NEGLIGENCE, TORT OR OTHERWISE, FOR ALL EVENTS, ACTS OR
OMISSIONS, IN AN AMOUNT NOT TO EXCEED IN THE AGGREGATE AN AMOUNT EQUAL TO FIFTY
THOUSAND ($50,000) DOLLARS (THE "DAMAGES CAP").
15.2 Consequential Damages. NEITHER EC2000 NOR DISTRIBUTOR SHALL BE LIABLE
FOR, NOR WILL THE MEASURE OF DAMAGES INCLUDE, ANY SPECIAL OR CONSEQUENTIAL
DAMAGES OR AMOUNTS FOR LOSS OF INCOME, PROFITS OR SAVINGS ARISING OUT OF OR
RELATING TO EC2000'S OR DISTRIBUTOR'S PERFORMANCE UNDER THIS AGREEMENT,
INCLUDING ANY BREACH OF ANY REPRESENTATION OR WARRANTY MADE BY EC2000 PURSUANT
TO SECTION 5 OF THIS AGREEMENT.
16. GENERAL PROVISIONS
16.1 Notices. Any notices, requests, demands, or other communications
required in this Agreement shall be in writing and shall be either personally
delivered, sent by fax, or sent by registered mail, return-receipt requested.
Unless amended as provided for herein, the following are the addresses and fax
numbers for delivery/transmission of notices and other communications pursuant
to this Agreement:
EC2000: DISTRIBUTOR:
EC2000, Inc. Pioneer Technology, Inc.
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President & CEO Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇(▇▇▇) ▇▇▇-▇▇▇▇ Fax: ▇▇(▇▇▇) ▇▇▇-▇▇▇▇
WITH COPY TO: WITH COPY TO:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, P.L.C. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, Floor 22 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇(▇▇▇) ▇▇▇-▇▇▇▇ Fax: ▇▇(▇▇▇) ▇▇▇-▇▇▇▇
11
16.2 Controlling Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Michigan.
16.3 Successors and Assigns. This Agreement shall inure to the benefit of
EC2000, its successors and assigns. Because EC2000 has entered into this
Agreement on the basis of the particular abilities of Distributor, Distributor
may not assign its rights or obligations under this Agreement, or any part
thereof, without the prior written consent of EC2000, which may determine in
its sole discretion whether to give such consent.
16.4 No Waiver. Any waiver by either party to this Agreement of any
condition, part, term or provision of this Agreement shall not be construed as
a waiver of any other condition, part, term or provision respecting any future
event or circumstance.
16.5 Headings. The headings used in this Agreement are intended for
reference and convenience and shall not by themselves determine the
construction of this Agreement.
16.6 Complete Agreement. This Agreement constitutes the entire contract
between EC2000 and Distributor. All prior or contemporaneous agreements,
proposals, understandings and communications between or involving EC2000 or
Distributor, whether oral or written, are merged into this Agreement, which
shall specifically include the agreement referred to by the parties as the
"interim agreement," dated 4 December, 2001. This Agreement may be amended only
by a written instrument signed by the party against whom enforcement is sought.
16.7 Severability. If any part, term or provision of this Agreement is
determined to be invalid or unenforceable, the remaining parts, terms and
provisions shall be enforced to the maximum extent possible.
16.8 Signing Authority. The person executing this Agreement on behalf of
Distributor hereby represents that he or she has corporate authority to sign on
behalf of Distributor.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the date first above written.
EC2000: DISTRIBUTOR
(EC2000, Inc.) (Pioneer Technology, Inc.)
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------ -------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: President & CEO Its: President
Date: April 2nd/2002 Date: April 1, 2002
------------------ -------------------
12
EXHIBIT A
To
DISTRIBUTOR AGREEMENT
---------------------
(EC2000, Inc./Pioneer Technology, Inc.)
PRODUCT IDENTIFICATION:
----------------------
EC2000 Fuel Energizing Cell for Commercial Diesel Application
13
EXHIBIT B
To
DISTRIBUTOR AGREEMENT
---------------------
(EC2000, Inc./Pioneer Technology, Inc.)
TERRITORY DESCRIPTION:
---------------------
The United States of America
Canada
The Republic of Mexico
14
EXHIBIT C
To
DISTRIBUTOR AGREEMENT
(EC2000, Inc./Pioneer Technology, Inc.)
NO. DISTRIBUTOR CUSTOMER IDENTIFICATION:
--- ------------------------------------
1. ▇.▇. ▇▇▇▇ TRANSPORT SERVICES, INC., having a principal address of 615 ▇.▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, including all subsidiaries located
within the Territory in which the same directly owns 50% or more of the
voting stock and excluding all other subsidiaries and affiliates thereof.
2. ▇▇▇▇▇▇▇▇▇ NATIONAL, INC., having a principal address of ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, including all
subsidiaries located within the Territory in which the same directly owns
50% or more of the voting stock and excluding all other subsidiaries and
affiliates thereof.
3. THE INTERNAL USE FLEET VEHICLES OF THE GENERAL MOTORS CORPORATION, located
and operated within the Territory to the exclusion of any new or used
vehicles sold by the General Corporation, as well as any subsidiary,
affiliate or division thereof, to any third party.
4. THE US ARMY TANK-AUTOMOTIVE AND ARMAMENTS COMMAND of the Department of
Defense of the federal government of the United States of America, to the
exclusion of all other departments, agencies, and instrumentalities of the
same.
5. THE MICHIGAN DEPARTMENT OF TRANSPORTATION, having a department address of
The State Transportation Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to the exclusion of all other departments, agencies, and
instrumentalities of the same.
6. THE DETROIT DEPARTMENT OF TRANSPORTATION, having a department address of
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to the exclusion of all other
departments, agencies, and instrumentalities of the same.
7. SUBURBAN MOBILITY AUTHORITY FOR REGIONAL TRANSPORTATION (SMART) OF THE
STATE OF MICHIGAN, having a address of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to the exclusion of all other departments, agencies, and
instrumentalities of the same.
8. RYDER SYSTEM, INC., having a principal address of ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, including all subsidiaries located within the
Territory in which the same directly owns 50% or more of the voting stock
and excluding all other subsidiaries and affiliates thereof.
9. ROADWAY EXPRESS, INC., having a principal address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, including all subsidiaries located within the Territory
in which the same directly owns 50% or more of the voting stock and
excluding all other subsidiaries and affiliates thereof and the Roadway(R)
Corporation.
15
EXHIBIT D
To
DISTRIBUTOR AGREEMENT
(EC2000, Inc./Pioneer Technology, Inc.)
EC2000 ORDER POLICY
ORDERS:
Minimum order is 100 Product units.
Changes to an order must be requested, in writing, within two (2) weeks of the
original order date.
SHIPMENTS:
All products shipped EXW EC2000 warehouse.
Payment Terms: per EXHIBIT E of Distributor Agreement.
RETURNS:
Product returns may be allowed per Section 3.7 of Distributor Agreement.
A return authorization must be obtained from EC2000 prior to returning Products.
16
EXHIBIT E
To
DISTRIBUTOR AGREEMENT
(EC2000, Inc./Pioneer Technology, Inc.)
EC2000 PRICING AND PAYMENT SCHEDULE
PRODUCT DESCRIPTION: PRICING PAYMENT SCHEDULE*
-------------------- ------- -----------------
EC2000 Fuel Energizing Cell for $550.00 per $250.00 per unit or Balance due within
Commercial Diesel Application unit. 25% of the total forty (40) days
order sales price, after delivery of
whichever is lesser, Product by EC2000 to
due at and with Distributor.
placement of Product
order by Distributor
with EC2000.
*Payment due under the payment schedule may be modified by written pre-arranged
agreement with respect to individual Product orders approved by EC2000.
17
EXHIBIT F
To
DISTRIBUTOR AGREEMENT
---------------------
(EC2000, Inc./Pioneer Technology, Inc.)
UCC Financing Statement attached hereto
18
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (FRONT AND BACK) CAREFULLY
----------------------------------------------
A. NAME & PHONE OF CONTACT AT FILER (OPTIONAL)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. (▇▇▇) ▇▇▇-▇▇▇▇
----------------------------------------------
B. SEND ACKNOWLEDGEMENT TO: (NAME AND ADDRESS)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Miller, Canfield, Paddock and Stone, P.L.C.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
THE ABOVE SPACE IS FOR FILING
OFFICE USE ONLY
----------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME -- insert only ONE debtor name (1a or 1b) -- do not abbreviate or combine names
----------------------------------------------------------------------------------------------------------------------------
1a. ORGANIZATION'S NAME
Pioneer Technology, Inc.
----------------------------------------------------------------------------------------------------------------------------
OR 1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
----------------------------------------------------------------------------------------------------------------------------
1C. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
----------------------------------------------------------------------------------------------------------------------------
1D. TAX ID # ADD'L INFO RE 1E. TYPE OF 1F. JURISDICTION 1G. ORGANIZATIONAL
SSN OR EIN ORGANIZATIONAL ORGANIZATION OF ORGANIZATION ID#, IF ANY
▇▇-▇▇▇▇▇▇▇ DEBTOR CORPORATION MICHIGAN 525-224 / /
============================================================================================================================
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME -- insert only ONE debtor name (2a or 2b) -- do not abbreviate or combine names
2a. ORGANIZATION'S NAME
Pioneer Technology, Inc.
----------------------------------------------------------------------------------------------------------------------------
OR 2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
----------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
----------------------------------------------------------------------------------------------------------------------------
2d. TAX ID # ADD'L INFO RE 2e. TYPE OF 2f. JURISDICTION 2g. ORGANIZATIONAL
SSN OR EIN ORGANIZATIONAL ORGANIZATION OF ORGANIZATION ID#, IF ANY
▇▇-▇▇▇▇▇▇▇ DEBTOR CORPORATION MICHIGAN 525-224 / / NONE
============================================================================================================================
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) -- insert only ONE secured party name (3a or 3b)
----------------------------------------------------------------------------------------------------------------------------
3a. ORGANIZATION'S NAME
EC2000, Inc.
----------------------------------------------------------------------------------------------------------------------------
OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
----------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
============================================================================================================================
4. This FINANCING STATEMENT covers the following types or items of property:
All inventory now and hereafter acquired.
----------------------------------------------------------------------------------------------------------------------------
5. ALTERNATIVE DESIGNATION (if applicable) / / LESSEE/LESSOR / / CONSIGNEE/CONSIGNOR / / BAILEE/▇▇▇▇▇▇ / / SELLER/BUYER
/ / AG. LIEN / / NON-UCC FILING
----------------------------------------------------------------------------------------------------------------------------
6. / / This FINANCING STATEMENT is to be filed (or recorded in 7. Check to REQUEST SEARCH REPORT(S) on Debtor(s)
the REAL ESTATE RECORDS. (if applicable) [ADDITIONAL FEE] (optional) / / All Debtors
Attach Addendum / / Debtor 1 / / Debtor 2
----------------------------------------------------------------------------------------------------------------------------
8. OPTIONAL FILER REFERENCE DATA
----------------------------------------------------------------------------------------------------------------------------
FILING OFFICE COPY -- NATIONAL UCC FINANCING STATEMENT (FORM UCC1) (REV. 07/29/98) Michigan
