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EXHIBIT 10.12
ARIEL CORPORATION DISTRIBUTOR AGREEMENT
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THIS AGREEMENT, made and entered into by and between Ariel Corporation, having
its registered office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
(hereinafter referred to as the Company or Ariel) and Hanover Maintech, Div.
Hanover Co. having its registered office at ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇▇ (hereinafter referred to as the Distributor or Buyer).
1. PURPOSES OF THIS AGREEMENT
The general purposes of this Agreement are to establish the Distributor as one
of Ariel's distributors of the products of the Company covered by this
Agreement, and to govern the full and complete relationship between the
Distributor and the Company in promoting the sales of those products, in their
purchase and sale by the Distributor, and in providing service for their users.
1.1 MUTUAL BENEFITS
The Company and Distributor both recognize that mutually beneficial
sale of Ariel products and the proper application and service of such
equipment are dependent not only upon the highest standards of
manufacture by Ariel but also the highest standards of sales and
service performance by the Distributor.
1.2 DEFINITIONS
Authorized Ariel Distributor - Promotes and offers for sale only Ariel
products, provides parts, service, and product support for compression
equipment. (See Section 8.1.4 of this Agreement.)
Rental Fleet Operator purchases Ariel products for his own use.
CNG OEM promotes and offers only Ariel equipment as a component of his
product for use in his compressed natural gas systems for NGV.
Special Fabricator purchases Ariel products for special applications,
niche markets, and select customers on an occasional basis.
Domestic Sale: Products and/or services originating in the
Distributor's domestic territory with substantial value added by the
Distributor's support infrastructure located within the destination
domestic territory.
Export Sale: Products and/or services originating in Distributor's
domestic territory for destination and use outside Distributor's
domestic territory.
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ARIEL CORPORATION DISTRIBUTOR AGREEMENT
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International Sale: Products and services originating in the
Distributor's domestic territory with substantial value added by the
Distributor's destination support infrastructure located outside the
Distributor's domestic territory.
1.3 BUSINESS CAPABILITIES
The Company has elected to enter into this Agreement with Distributor
in reliance upon the business ability of the Distributor to meet and
perform the operating requirements hereof. The Company requires of
the Distributor, and the Distributor by entering into this Agreement,
acknowledges that the Distributor shall at all times use all
reasonable, commercial efforts to develop business in, to promote the
sale of, and to sell the products covered by this Agreement, to
customers in the area of sales responsibility described in Paragraph
2.1 hereof and will furnish prompt, efficient and courteous service to
the users of Ariel products. Where applicable, the Distributor will
assist and support the Company's efforts for joint market development
of defined products and/or applications. The Distributor agrees that
it will conduct its business in a manner which will reflect most
favorably not only upon the Distributor but also the Company and which
will preserve and continue the product goodwill created by the
manufacture and sale of Ariel products of the highest quality and
design.
The Distributor, on its part, has elected to enter into this Agreement
with the Company because of its knowledge of the Ariel reputation for
integrity and fair business practices and of the customer's acceptance
of Ariel products. The Distributor expects of the Company, and the
Company acknowledges, that the Company will produce and provide
product, parts and accessories which are saleable in the Distributor's
area of sales responsibility, and which are of a quality and design
that under normal conditions and when properly installed, adjusted and
maintained will give satisfactory performance for their owners.
Insofar as possible, the Company will make such products available in
quantities to meet the Distributor's reasonable requirements in the
Distributor's area of sales responsibility. The Company will assist
in creating a demand for such products by advertising in various
advertising media; and will assist the Distributor in the sale of such
products by making available to Distributor sales assistance,
engineering and application advice, advertising material and campaigns
and instructions in sales and service, and business methods.
2. CONSIDERATIONS
IN CONSIDERATION of the foregoing and of the promises hereinafter made by the
parties to each other, it is agreed as follows:
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ARIEL CORPORATION DISTRIBUTOR AGREEMENT
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2.1 TERMS, DISCOUNTS, MARKETS, AND PRODUCTS
Subject to the terms and conditions hereof, the Company will sell and
Distributor will buy Ariel products, parts and accessories provided in
the "MULTIPLIER SCHEDULE", "EXHIBIT A" of this Agreement with
Distributor having the obligation to develop properly the sale
thereof, in the domestic territories set forth in "SALES TERRITORIES,
MARKETS, PRODUCTS AND AFFILIATES", "EXHIBIT B" of this Agreement.
Sales in all other territories will be considered Export or
International. Resale of frames and cylinders to other packagers
shall be in accordance with "EXHIBIT H", "ARIEL CORPORATION COMPRESSOR
RESALE POLICY."
2.2 SALES GOALS
The Distributors and Ariel shall mutually develop, monitor and review
sales goals in accordance with "ARIEL CORPORATION SALES GOALS",
"EXHIBIT F".
2.3 TERMS AND CONDITION OF SALE
The terms and conditions set forth in the attached "ARIEL CORPORATION
TERMS AND CONDITIONS OF SALE", "EXHIBIT D", which may be amended or
modified from time to time, are hereby made a part of this Agreement.
2.4 PRICE BOOK
"Ariel Corporation Price Book" shall mean the most recent version of
same and as such shall be in full force and effect as and when the
same shall be amended and deposited in the U.S. Mail addressed to the
Distributor at the address set forth in Paragraph 16.0 herein.
2.5 CONFIDENTIALITY
The Company and Distributor shall mutually treat as confidential and
safeguard all information, reports and records pertaining to this
distributorship.
2.6 EXECUTION OF THE AGREEMENT
This Agreement shall not be effective or binding on the Company until
signed on its behalf by an Executive Officer of the Company.
3. PACKAGER STANDARDS
The Distributor shall implement and comply with various criteria and standards
as set forth by the Company to maintain quality, reputation and integrity of
both the Ariel compressor and the finished compressor package. These shall
include, but not be limited to "ARIEL CORPORATION PACKAGER STANDARDS", "EXHIBIT
C". The Distributor shall agree to periodic (annually as a minimum) review,
survey, audit and rating of operation relative to established criteria.
Distributor agrees to maintain acceptable rating based on "ARIEL CORPORATION
PACKAGER SURVEY," "EXHIBIT G", to continue as an "Authorized Ariel
Distributor".
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4. USE OF TRADEMARKS AND SIGNS
The Distributor shall not use directly, or indirectly, in whole or in part, the
Company's name, "Ariel", or any other trademark or name that is now or may
hereafter be owned by the Company as part of the Distributor's corporate or
business name, or in any way in connection with the Distributor's business,
except in the manner, and to the extent that the Company may specifically
consent in advance of such use in writing. If any such trademarks or names are
used in any way by the Distributor with the express written consent of the
Company, the Distributor on the termination of this agreement, shall cease,
desist and otherwise discontinue all such use and shall not thereafter use any
name, title, or expression in connection with any business in which the
Distributor may thereafter be engaged which, in the judgement of the Company,
so nearly resembles any trademark or name, or imparts confusion or uncertainty
on the part of users of the manufactures of Ariel Corporation.
5. RIGHT TO CHANGE PRICES
The Company shall at all times, and from time to time, have the right to change
prices, discounts, and conditions applicable to the purchase of its products
and to change the discounts payable under this Agreement as set out from time
to time in the "MULTIPLIER SCHEDULE", "EXHIBIT A". Any change in discounts
hereunder shall be made by furnishing the Distributor with new or superseding
discount schedules in writing. The Company shall likewise at all times, and
from time to time, have the right to withdraw or supersede any one or more of
the individual models of products specified in the "ARIEL CORPORATION PRICE
BOOK", EXHIBIT C".
6. WARRANTY
The Warranty on new Ariel products, parts and accessories is as set forth in
the "ARIEL CORPORATION TERMS AND CONDITIONS OF SALE", "EXHIBIT D" Warranty
claims procedures are as set forth in the "ARIEL CORPORATION PACKAGER
STANDARDS", "EXHIBIT C".
7. SALE OF EQUIPMENT
7.1 SERVICE TO OWNERS
Both the Company and Distributor realize that it is of primary
importance to maintain the goodwill of ultimate user and that this can
be best achieved by rendering prompt and efficient service at a
reasonable cost. Distributor shall at all times maintain a staff of
application engineers and salespersons adequate to take care of the
sales potential and shall employ or have available under contract a
sufficient number of competent service personnel to adequately meet
the service requirements of the owners of Ariel products in the
Distributor's area of sales and service responsibilities.
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7.1.1 SERVICE AND SERVICE RECORDS
In furtherance of the purposes, objectives and obligations
provided for in this Agreement, Distributor shall keep and
maintain complete and up-to-date records regarding the sale
and service of new Ariel products and shall upon ten ( 10)
days written notice permit Ariel Corporation at all reasonable
times in business hours to inspect such records.
7.1.2 OWNER COMPLAINTS
For merchandise sold by Distributor, Distributor shall
receive, investigate and otherwise respond to all complaints
received from owners of Ariel products with a view to securing
and maintaining the goodwill of the user toward the
Distributor, and the Company.
7.1.3 CARE OF OWNER
All complaints received by Distributor or of which the
Distributor has knowledge which cannot be readily remedied
shall be promptly reported in detail and in writing to the
Company.
7.1.3.1 STOCK OF PARTS
The Distributor shall carry in stock during the terms
of this Agreement an inventory of parts and
accessories, as mutually agreed upon between
Distributor and the Company, to render proper
service to owners of Ariel products in the
Distributor's area of sales and service
responsibility.
7.1.3.2 REPRESENTATION AS TO PARTS
Distributor shall not sell, offer for sale, or use in
the repair of Ariel products as "new Ariel parts",
any part or parts which are not in fact new Ariel
parts.
7.1.3.3 START-UP AND COMMISSIONING OF NEW PRODUCTS,
AND AFTERMARKET SERVICE.
Distributor shall provide start-up and commissioning
service of each new complete machine unless waived
in writing by the ultimate user. Service personnel
engaged shall meet Ariel criteria required for the
service to be performed.
7.1.3.4 CUSTOMER RELATIONSHIP
The Distributor shall furnish to owners and ultimate
users of Ariel products in the Distributor's area of
sales responsibilities prompt, efficient and
courteous service and shall establish and maintain
regular contact either by
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ARIEL CORPORATION DISTRIBUTOR AGREEMENT
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correspondence or personal interview with all persons
or companies purchasing Ariel products from the
Distributor.
8. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective as of the date hereof and shall remain in
effect for a period of one (1) year from such date. This agreement shall be
automatically continued for one year periods beginning on the anniversary date
of the original agreement unless either party notifies the other of termination
in writing prior to sixty (60) days of said anniversary date.
8.1 DURATION
Distributor agrees that occurrence of any of the following events
shall constitute cause for termination and that upon the happening of
any of same, the Company may terminate this Agreement by giving
written notice of termination to Distributor, effective immediately or
as otherwise hereinafter indicated:
8.1.1 COMPLIANCE WITH AGREEMENT
Distributor has failed to comply with any material part of
this Agreement and has not remedied such failure within ninety
(90) days after the Company gives notice of such failure.
8.1.2 FAILURE TO FUNCTION AS A GOING CONCERN
Distributor ceases to function as a going concern, or a
petition under any bankruptcy or corporate reorganization law,
other than the Federal Bankruptcy Law, is filed by or against
it, or it makes an assignment for the benefit of creditors.
8.1.3 CHANGE IN UPPER MANAGEMENT OR CONTROL
There is a change in upper management or control of
Distributor, whether caused by a sale, transfer or assignment
of equity, shares or other ownership interest, or whether
caused by death or incapacity of a principal officer, owner or
stockholder, or otherwise. To assist Distributor to realize
the value of its investment in the Ariel distributorship, the
Company may, at its sole option, cancel the Agreement
immediately or agree to continue the term of this Agreement
for a period of ninety (90) days after the Company is given
notice of a change in management or control or otherwise
learns of such change to enable Distributor to find a
successor who is acceptable to the Company. The Company at
its sole discretion may extend, this period for an additional
ninety (90) day period, provided Distributor requests the
extension in writing and provides evidence that Distributor is
diligently attempting to locate a successor on commercially
acceptable and realistic terms.
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8.1.4 SALE OF COMPETITIVE PRODUCTS
Distributor promotes and offers for sale or represents a
product or line of products that is competitive with the Ariel
products and fails to discontinue such representation within
ninety (90) days after the Company gives notice.
Distributor to furnish a list of existing compression products
and upon acceptance by Ariel, these products shall be deemed
non-competitive. These products are defined in "SALES
TERRITORIES, MARKETS, PRODUCTS AND AFFILIATES", "EXHIBIT B".
8.2 RIGHT OF TERMINATION
Upon the occurrence of any of the above events which gives the
Company the right to terminate this Agreement, the Company and
Distributor agree that they will in good faith negotiate
within the time limits set forth above, to reach a mutual
agreement for the orderly termination of or transfer of this
Agreement and the Distributorship in such a manner that will
be least disruptive to both parties. The Company shall be
deemed to have discharged its duty to act in good faith and
its duty of fair dealing by granting any further extension of
time hereunder, particularly with respect to termination
pursuant to 8.1.3 above.
8.3 TERMINATION BY COMPANY
In the event of termination by the Company, Distributor may return new
unused current model complete machines, and parts in Distributor's
stock, which are unsold on the effective date of the termination for
credit in an amount not to exceed 25% of Distributor's net purchases
from Ariel in the twelve (12) month period immediately preceding the
effective date of termination, less 15% restocking charge of list
price less discount. Only current production items in new, unused,
current and resalable condition will be considered for return. All
returns must first be authorized in writing and are subject to
inspection upon return. Distributor shall also return all documents,
computer software, instruments and other writings, including but not
limited to plans, specifications, performance data, promotional and
marketing materials and data, and Ariel customer lists and data.
8.4 TERMINATION BY DISTRIBUTOR
Distributor shall have the right to terminate this agreement upon
ninety (90) days written notice. In the event of termination by the
Distributor, no equipment or parts will be accepted for return or
credit by the Company without prior written agreement.
9. EXPORT CONTROLS
No products shall be shipped by the Company, pursuant to orders procured by the
Distributor, that are prohibited by the Foreign Assets Control Regulations of
the United States Treasury
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Department, nor will such shipments contravene the prohibitions of the rules
administered by the Office of Export Control of the United States Commerce
Department.
10. AGREEMENT PERSONAL IN CHARACTER
This Agreement is personal in character and any assignment hereof by either
party, unless the Company and Distributor have entered into a prior written
Agreement to the contrary, shall automatically terminate this Agreement as of
the date of the assignment. The Company agrees to make every reasonable effort
to avoid any newspaper publicity or electronic media relative to this Agreement
and agrees not to divulge or disclose to persons outside this relationship the
details of this Agreement, provided, however, that in the event newspaper
publicity or electronic media does occur or the Company is lawfully required to
disclose the details of this Agreement to any regulatory agency or governmental
authority in the United States which is lawfully entitled to such information,
Distributor hereby consents to such disclosure and acknowledge that such does
not give rise to any claim or legal action by Distributor against the Company
or its Representatives.
11. DISTRIBUTOR INDEPENDENT CONTRACTOR
It is understood and agreed that for the purpose of this Agreement the
Distributor is, and shall at all times be and remain, an independent
contractor, and that the Company shall have no liability for any suits or
claims brought against Distributor by virtue of the relationship of Buyer and
Seller contemplated herein.
12. AGREEMENT SUPERSEDES
This Agreement may not be modified, changed or amended unless and until such
time as such modification, change or amendment has been stated in writing and
signed by the duly authorized representatives of both of the parties hereto.
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Ohio, in the United States of America, and
this Agreement also constitutes the entire Agreement between the Parties.
There are no understandings and/or oral representation upon which the
Distributor has relied which have not been stated in writing and included in
this Agreement.
14. CORPORATE ORGANIZATION
This agreement is specific in nature with the named Distributor only, who must
fully comply with the terms of this Agreement. Arms length relationships must
be maintained between Distributor's subsidiaries, joint ventures, parent
corporations or other organizations that may handle products competitive to
Ariel. The company may exercise the provisions of Clause 8.1.4, if, in the
Company's sole opinion, the Distributor is violating arms length relationships.
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The terms, conditions, rights, and responsibilities of this agreement are
applicable to other companies related to the named Distributor as defined in
"EXHIBIT B", SALES TERRITORIES, MARKETS, PRODUCTS AND AFFILIATES.
15. EXHIBITS
The following "Exhibits" are attached and made a part of this Agreement:
"EXHIBIT A" - MULTIPLIER SCHEDULE
"EXHIBIT B" - SALES TERRITORIES, MARKETS, PRODUCTS and AFFILIATES
"EXHIBIT C" - ARIEL CORPORATION PACKAGER STANDARDS
"EXHIBIT D" - ARIEL CORPORATION TERMS AND CONDITIONS OF SALE
"EXHIBIT E" - ARIEL CORPORATION PRICE BOOK
"EXHIBIT F" - SALES GOALS
"EXHIBIT G" - ARIEL CORPORATION PACKAGER SURVEY
"EXHIBIT H" - ARIEL CORPORATION COMPRESSOR RESALE POLICY
16. NOTICES
Any, all and every notice required by this Agreement shall be deemed given out
by the party giving such notice and received by the party for whom such notice
is intended when such notice is deposited in the United States Mail, postage
paid, and addressed as follows:
AS TO COMPANY: Ariel Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
AS TO DISTRIBUTOR: Hanover Maintech, Div. Hanover Co.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ (Bo) ▇▇▇▇▇▇
The foregoing shall be and remain in full force and effect for the purpose of
giving notice provided for herein, unless and until such time as a new mailing
address shall be provided to the other party and shall have, in fact, been
received by the other party.
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ARIEL CORPORATION DISTRIBUTOR AGREEMENT
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MADE AND EXECUTED THIS _____ DAY OF ___________, 1995.
COMPANY: Ariel Corporation
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇,
President
WITNESS:
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Subscribed to before me and subscribed in my presence this ____ day of
____________, 1995.
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Notary Public
DISTRIBUTOR: Hanover Maintech, Div. Hanover Co.
By:
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▇▇▇▇ ▇▇▇▇▇▇
Its:
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WITNESS:
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Subscribed to before me and subscribed in my presence this ____ day of
________________, 1995.
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Notary Public
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