Exhibit 10.5
TREX DISTRIBUTOR AGREEMENT
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THIS AGREEMENT is made as of ______________, by and between TREX COMPANY,
LLC, having its principal office at 000 Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000 (the "Company") and ______________________________, with its
principal office at ____________________________________________ (the
"Distributor").
1. Appointment of Distributor.
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(a) Appointment: Distributor's Location(s)/Territory. Upon the terms
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and conditions of this Agreement, the Company hereby appoints the Distributor as
an authorized non-exclusive distributor of the Company's line of composite
decking products (the "Trex Products"), and the Distributor hereby accepts such
appointment, with respect to the Distributor's location(s) and within the
territory ("Territory") set forth in Schedule A attached hereto and incorporated
herein. In such capacity, the Distributor will purchase Trex Products from the
Company and will devote its continuing best efforts to the promotion and sale of
such Trex Products in the Territory.
(b) Amendments to Schedule A. The parties may amend Schedule A from
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time to time to add or remove Distributor location(s) and/or modify the
Distributor's Territory.
(c) Reservation of Rights by the Company. The Company reserves the
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right to take the following actions within the Distributor's Territory: (i) to
appoint or be represented by other or additional distributors; (ii) to make
sales directly to any or all customers of the same and/or other Company
products, and (iii) to sell exclusively, on a direct basis, to certain types of
customers or specific accounts which Company may, in its sole discretion,
designate from time to time in accordance with then current Company policies.
The Company will notify Distributor prior to appointing additional distributors
in its Territory.
(d) Addition, Discontinuance and Modification of Products. The
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Company shall have the right at any time to introduce new Trex Products,
discontinue the manufacture or sale of any of its Trex Products and make changes
in the design or construction of any of such Trex Products without incurring any
obligation or liability whatsoever. The Company will give the Distributor thirty
(30) days prior notice of any discontinuance of a Trex Product.
2. Terms of Purchase.
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(a) Ordering of Trex Products. All orders for Trex Products placed by
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Distributor shall be in writing or by fax or e-mail. (A telephone request to
purchase, or to modify an existing order, shall not be considered an order
unless and until followed up in writing.) All orders shall be subject to
acceptance by the Company at Winchester, Virginia.
(b) Prices. The Distributor shall purchase Trex Products at the
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prices in effect at the time of order. The Company may implement price changes
at any time during the term of this Agreement upon thirty (30) days prior
written notice thereof to Distributor. In addition to the purchase price,
Distributor shall pay to the Company the amount of all taxes, excises or other
governmental charges (except taxes on or measured by net income) that the
Company may be required to pay on the sale or delivery of any Products sold and
delivered hereunder, except where the law otherwise provides.
(c) Delivery. All products shall be shipped FOB shipping point, with
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title and risk of loss passing at such point. The shipment destination must be
within the Distributor's Territory. The Company will not ship product outside of
the Distributor's Territory unless the Company elects to do so in certain
limited situations. Any taxes, administrative or governmental charges incurred
as a result of the purchase of Trex Products are the sole responsibility of the
Distributor.
(d) Payment. The Company shall invoice the Distributor for the Trex
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Products at the time of shipment and the Distributor shall pay such invoices on
a net ten (10) day basis unless otherwise approved by the Company prior to
shipment. In the event the Distributor fails to pay such invoices within such
period, the Distributor hereby agrees to pay a monthly service charge at one and
one-half percent (1 1/2%), or, if such rate is prohibited under applicable law,
a service charge at such lesser rate of interest as is the maximum rate
permitted to be contracted for under such applicable law.
(e) Warranty. The Company warrants that for a period of one (1) year
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from the date of shipment to the Distributor, the Trex Products sold shall be
free from defects in workmanship and materials, and shall conform to the
Company's standard specifications for such Trex Products in effect at the time
of the shipment. If defects occur within the warranty period, the Distributor
shall notify the Company immediately and, upon confirmation by an authorized
Company sales representative of the defects, the Company's sole responsibility
shall be to replace the defective items. This warranty does not apply to defects
not caused by the Company (for example, accidents or abuse while in
Distributor's possession). The Company shall not have any liability of any kind
under this warranty unless the Distributor gives the Company notice of its claim
within thirty (30) days after the date the Distributor knows or should know of
its claim. EXCEPT AS SET FORTH HEREIN, THERE ARE NO WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO TREX PRODUCTS. THE COMPANY EXPRESSLY EXCLUDES AND
DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY AND ANY WARRANTIES OF FITNESS
FOR A PARTICULAR PURPOSE, APPLICATION OR USE. UNDER NO CIRCUMSTANCES WILL THE
COMPANY BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER SUCH
DAMAGES ARE SOUGHT IN CONTRACT, IN TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE
AND STRICT LIABILITY) OR OTHERWISE, AND THE
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COMPANY'S LIABILITY SHALL IN NO EVENT EXCEED THE PURCHASE PRICE OF THE TREX
PRODUCTS ON WHICH SUCH LIABILITY IS BASED.
3. Trex Trademarks. The Distributor shall have the right hereunder to
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represent that it is "an Authorized Distributor of Trex Company Products." Any
other use by the Distributor of the trademark "Trex" or any other trademark
owned by the Company must be in a form and format approved by the Company in
advance of such usage.
4. Promotional Materials. During the term of this Agreement, the Company
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shall take reasonable action to assist the Distributor in the Distributor's
efforts to promote and sell Trex Products, including the provision of reasonable
quantities of support materials such as product information and sales
promotional literature.
5. Duties of the Distributor.
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(a) Sales Activities. The Distributor agrees to use its best efforts
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vigorously and actively to promote the sale of Trex Products in the Territory.
In connection with such efforts, the Distributor, at its sole cost and expense,
shall organize and maintain a sales force and shall maintain adequate sales and
warehouse facilities within the Territory that are satisfactory to the Company.
(b) Storage of Inventory. The Distributor agrees to store Trex
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Products in accordance with Trex's storage guidelines.
(c) Appropriate Use of Trex Products. The Distributor shall use its
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best efforts to train dealers and contractors in its Territory as to the proper
usage and application of Trex Products in accordance with NES (NER-508)
Contractors Handbook, Trex Usage Guidelines and CSI Spec Data Sheet, supplied by
the Company from time to time to the Distributor.
(d) Inventory Levels. The Distributor agrees to maintain an inventory
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equal to at least fifteen percent (15%) of the mutually agreed upon annual
objective, in various profiles and colors, to adequately serve the needs of its
customers.
(e) Trex Authorized Dealers/Territory. The Distributor agrees to
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resell Trex Products only to Trex Authorized Dealers (as defined by the Company)
who are located within the Territory. The Distributor further agrees not to
resell Trex Products to any Trex Authorized Dealer located within the Territory
where the Distributor has reason to know that such Dealer intends to resell the
Trex Products outside of the Territory.
(f) Advertising. Each printed advertisement, flyer, handbill,
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television spot, radio script, yellow pages listing, webpage or any other
advertising or promotional material bearing or using the trademark or trade name
"Trex" or pertaining to Trex Products must be approved by the Company in writing
prior to
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its use by the Distributor. Such approval will not be unreasonably withheld or
delayed.
(g) Reputation. The Distributor shall continually maintain to the
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satisfaction of the Company a general reputation for honesty, integrity and good
credit standing and shall maintain the highest quality standards.
(h) Competing Products. With respect to each Distributor location set
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forth on Schedule A, the Distributor shall not, directly or indirectly, promote,
advertise, manufacture, market, distribute or sell a decking or associated
railing product produced from predominately plastics, or plastics and wood,
which competes with Trex Products.
(i) Compliance With Law. The Distributor shall comply with all laws,
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ordinances and regulations, both state and federal, applicable to the
Distributor's business.
(j) Expenses. The Distributor shall pay and discharge, and the
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Company shall have no obligation to pay for, any expenses or costs of any kind
or nature incurred by the Distributor in connection with its distribution
function hereunder, including, without limitation, any expenses or costs
involved in marketing Trex Products.
(k) Monthly Reports. Within fifteen (15) days after the end of each
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calendar month, the Distributor shall submit a report to the Company setting
forth an ending inventory balance of Trex Products as of the end of such month
and sales of Trex Products for such month (both in the aggregate and for select
markets defined by the Company). The Company shall provide the format of such
report to the Distributor.
(l) Financial Statements. Within forty-five (45) days after the end
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of each fiscal year, the Distributor shall submit audited financial statements
to the Company.
6. Force Majeure. The Company shall be excused from delay or
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non-performance in the delivery of an order and the Distributor shall have no
claim for damage if and to the extent such delay or failure is caused by
occurrences beyond the control of the Company including, but not limited to,
market conditions; acts of God; war, acts of terrorism, riots and civil
disturbances; expropriation or confiscation of facilities or compliance with any
order or request of governmental authority; strikes, labor or employment
difficulties whether direct or indirect; or any cause whatsoever which is not
within the reasonable control of the Company. The Company shall immediately
notify the Distributor of the existence of any such force majeure condition and
the anticipated extent of the delay or non-delivery. The Company shall, in such
event, have the right to allocate available Trex Products among its customers in
its sole discretion.
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7. Distributor's Remedies. If the Company, for any reason whatsoever,
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fails or is unable to deliver any Trex Products ordered by the Distributor, the
Distributor's sole and exclusive remedy shall be the recovery of the purchase
price, if any, paid by the Distributor to the Company for such Trex Products.
The Company shall not incur any liability whatsoever for any delay in the
delivery to the designated delivery location of any Trex Products. In no event
shall the Company be liable for any incidental, consequential or other damages
arising out of any failure to deliver any Trex Products to the Distributor or
any delay in the delivery thereof.
8. Relationship of Parties: Indemnification of Company.
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(a) Independent Contractor Status. The relationship of the parties
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established by this Agreement is that of vendor and vendee, and all work and
duties to be performed by the Distributor as contemplated by this Agreement
shall be performed by it as an independent contractor. The full cost and
responsibility for hiring, firing and compensating employees of the Distributor
shall be borne by the Distributor.
(b) No Authority to Bind Company. Nothing in this Agreement or
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otherwise shall be construed as constituting an appointment of the Distributor
as an agent, legal representative, joint venturer, partner, employee or servant
of the Company for any purpose whatsoever. The Distributor is not authorized to
transact business, incur obligations, sell goods, solicit orders, or assign or
create any obligation of any kind, express or implied, on behalf of the Company,
or to bind it in any way whatsoever, or to make any contract, promise, warranty
or representation on the Company's behalf with respect to products sold by the
Company or any other matter, or to accept any service of process upon the
Company or receive any notice of any nature whatsoever on the Company's behalf.
(c) Indemnification. Under no circumstances shall the Company be
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liable for any act, omission, contract, debt or other obligation of any kind of
the Distributor or any salesman, employee, agent or other person acting for or
on behalf of the Distributor. The Distributor shall indemnify and hold the
Company harmless from any and all claims, liabilities, losses, damages or
expenses (including reasonable attorneys, fees and costs) arising directly or
indirectly from, as a result of, or in connection with, the Distributor's
operation of the Distributor's business. The terms of this indemnity shall
survive the termination of this Agreement.
9. Confidential Information.
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(a) Definition. As used in this Section, "Proprietary Information"
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means information developed by or for the Company which is not otherwise
generally known in any industry in which the Company is or may become engaged
and includes, but is not limited to, information developed by or for the
Company, whether now owned or hereafter obtained, concerning plans,
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marketing and sales methods, materials, processes, procedures, devices utilized
by the Company, prices, quotes, suppliers, manufacturers, customers with whom
the Company deals (or organizations or other entities or persons associated with
such customers), trade secrets and other confidential information of any type,
together with all written, graphic and other materials relating to all or any
part of the same.
(b) Non-Disclosure. Except as authorized in writing by the
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Company, the Distributor shall not at any time, either during or after the term
of this Agreement, disclose or use, directly or indirectly, any Proprietary
Information of which the Distributor gains knowledge during or by reason of this
Agreement and the Distributor shall retain all such information in trust in a
fiduciary capacity for the sole use and benefit of the Company. In the event
that the Distributor operates one or more locations other than those set forth
on Schedule A, the Distributor shall not disclose any Proprietary Information to
local management or employees of such other location(s).
10. Patent and Trademark Indemnity. The Company will defend at its
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expense any legal proceeding brought against the Distributor based on a claim
that Trex Products sold by the Company under this Agreement infringe upon a
United States patent or trademark, provided that the Company is notified
promptly and given full authority, information and assistance for such defense.
If the Distributor complies with the foregoing obligation, the Company will pay
all damages and costs finally adjudicated against the Distributor, but will not
be responsible for any compromise made without the Company's consent. If the
Trex Products are held to be infringing and their use enjoined, the Company may,
at its election and expense, either (1) obtain for the Distributor the right to
continue selling the Trex Products, (2) replace the Trex Products with
noninfringing Products, or (3) refund the purchase price paid, upon return of
the Trex Products to the Company.
11. Term and Termination.
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(a) Term. The term of this Agreement shall be for a period
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beginning on the date hereof and ending on _____________. Thereafter, this
Agreement shall automatically renew for successive one (1) year periods unless
either party gives to the other party written notice of termination at least
thirty (30) days prior to the end of the initial or any renewal term.
(b) Voluntary Termination. Either party may terminate this
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Agreement in its entirety, or with respect to one (1) or more Distributor
location(s) set forth on Schedule A, at any time during the term hereof, with or
without cause, by giving to the other party thirty (30) days prior written
notice of termination. If this Agreement is only terminated with respect to one
(1) or more Distributor location(s) set forth on Schedule A, and there are
remaining Distributor location(s) still remaining on Schedule A, the provisions
of this Agreement relating to termination shall only apply to the terminated
location(s),
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and this Agreement shall remain in full force and effect with respect to the
other Distributor location(s).
(c) Default by the Distributor. This Agreement may be terminated
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by the Company immediately upon the failure of the Distributor to pay for Trex
Products purchased by the Distributor in accordance with the terms of Section
2(d) hereof or upon the material default by the Distributor of any other
obligation under this Agreement, or upon the filing of a petition in bankruptcy
or for reorganization under the Bankruptcy Act by the Distributor, or upon the
making of an assignment for benefit of creditors by the Distributor, or upon the
Distributor's taking any action or failing to act in such a manner as to
unfavorably reflect upon the Company.
(d) Effect on Outstanding Orders. Upon the effective date of
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termination of this Agreement, all outstanding orders from the Distributor to
the Company shall be deemed cancelled, to the extent Trex Products have not yet
been shipped by the Company.
(e) Repurchase of Inventory. Upon termination of this Agreement
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for any reason, the Company shall have the option, within sixty (60) days after
the effective date of such termination, to purchase the Distributor's inventory
which was purchased by the Distributor within the past twelve (12) months prior
to the date of termination. If the Company exercises such option, the
Distributor will sell and release to the Company such inventory at a price equal
to the price initially paid by the Distributor for such Trex Products, provided
the Trex Products have been properly stored in accordance with Trex's storage
guidelines and are in a good and saleable condition.
(f) Return of Company Property. Upon termination of this Agreement
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for any reason, the Distributor shall promptly return to the Company any
property of the Company, including, without limitation, all sales and marketing
documents, manuals and other records and proprietary information of the Company,
as well as any samples in the Distributor's possession or control. The
Distributor agrees that it will not make or retain any copy of, or extract from,
such property or materials. The Company agrees to compensate the Distributor for
the cost of any returned sales materials that were authorized by the Company and
purchased by the Distributors within twelve (12) months of the date of
termination.
12. General.
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(a) Waiver. Failure of either party at any time to require
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performance by the other party of any provision hereof shall not be deemed to be
a continuing waiver of that provision, or a waiver of its rights under any other
provision of this Agreement, regardless of whether such provision is of the same
or a similar nature.
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(b) Complete Agreement. This Agreement (including the exhibits
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hereto and all documents and papers delivered pursuant hereto and any written
amendments hereof executed by the parties to this Agreement) constitutes the
entire agreement, and supersedes all prior agreements and understandings, oral
and written, among the parties to this Agreement with respect to the subject
matter hereof. This Agreement may be amended only by written agreement executed
by all of the parties hereto. No purchase order or sales form will be applicable
to any sales pursuant to this Agreement and only the terms of this Distributor
Agreement shall govern such sales.
(c) Applicable Law; Jurisdiction and Venue. This Agreement shall
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be construed under, and governed by, the laws of the Commonwealth of Virginia.
The parties agree that jurisdiction and venue for any legal proceedings arising
from or in any way connected to this Agreement will lie in the United States
District Court, Western District of Virginia or Xxxxxxxxx County, Virginia, and
both parties hereby submit and consent to the jurisdiction and venue of said
courts.
(d) Severability. If any provision of this Agreement is
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unenforceable or invalid, the Agreement shall be ineffective only to the extent
of such provisions, and the enforceability or validity of the remaining
provisions of this Agreement shall not be affected thereby.
(e) Assignment. This Agreement may not be transferred or assigned
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in whole or in part by operation of law or otherwise by the Distributor without
the prior written consent of the Company. Upon thirty (30) days prior written
notice to the Distributor, the Company may assign its rights, duties and
obligations under this Agreement. Without written notice, the Company may assign
its rights, duties and obligations under this Agreement to any parent,
subsidiary or other affiliated corporation of the Company.
(f) Notices. Any notice or other communication related to this
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Agreement shall be effective if sent by first class mail, postage prepaid, to
the address set forth in this Agreement, or to such other address as may be
designated in writing to the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
Trex Company, LLC ________________________
By:______________________________ By:________________________________
Its:_____________________________ Its:_______________________________
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SCHEDULE A
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Distributor Location(s) and Territory
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Distributor Location(s)
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Territory
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Initials: Company ______
Distributor ______
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