EXHIBIT 10.12
AIRTECH INTERNATIONAL GROUP, INC.
Distributor Agreement
This Agreement made on this date of March 15, 2001 by and between Airtech
International Group, Inc., having its principal place of business at 15400 Knoll
Trail, Suite 200, Dallas, Texas, 75248, ("AIRTECH INTERNATIONAL GROUP, INC.")
herein, and Southern Therapy, Inc., having its principal place of business at
Austin Texas, ("Distributor") herein, collectively the "Parties" herein,
mutually agree as follows:
1. Relationship
AIRTECH INTERNATIONAL GROUP, INC. grants and the Distributor accepts:
1.1. The right to purchase AIRTECH INTERNATIONAL GROUP, INC's.
Product Model 950 brand name labeled as "Airsopure" directly
from AIRTECH INTERNATIONAL GROUP, INC., at the price and terms
outlined in the most current published AIRTECH INTERNATIONAL
GROUP, INC. distributor price pages.
1.2. The right to stock, display, promote and aggressively sell the
Products to customers who are within the distributor's normal
marketing area.
2. Distributor Duties and Obligations
The Distributor shall:
2.1. Arrange for Airtech training for Distributor owners, sales
managers, sales staff, sales associates and technical staff to
occur within 45 days of signing this Agreement.
2.2. Develop and implement a proactive business plan, which
Distributor and Airtech International Group, Inc. will agree
upon.
2.3. Actively promote the Product to potential customers through
periodic mailings, promotions or other accepted marketing
practices. Product marketing and support from Airtech when
requested.
2.4. Assign the responsibility for the success of the Product to at
least one sales person who will be the specialist and champion
for these products. Airtech to assist as needed.
2.5. Maintain a reasonable inventory of the Product including
replacement filters, to facilitate customer satisfaction.
Services and support to be handled through Airtech.
2.6. Not sell Product for shipment out of the United States of
America without first written approval of Airtech
International Group, Inc.
2.7. Comply with all federal, state, and local laws, regulations,
statues, etc., affecting the performance of business and this
Agreement.
2.8. Follow up all leads to the disposition phase. This includes
any and all leads referred by Airtech International Group,
Inc.
2.9. Keep copies of lead dispositions for review by Airtech
International Group, Inc. Weekly sales reports and lead sheet
reviews to be delivered to Airtech.
2.10. Distributor shall pay for all Airtech invoices when they are
paid by purchaser. Distributor shall use all means available
to accelerate payments. Ultimate collection lies with
Distributor and they will be responsible for payment.
3. AIRTECH INTERNATIONAL GROUP, INC. Duties and Responsibilities
AIRTECH INTERNATIONAL GROUP, INC. shall:
3.1. Support the distributor efforts through various marketing
initiatives, Product brochures, Product trend and technology
correspondence, in-house training and other efforts deemed
beneficial to the growth of the distributor business.
3.2. Ship direct from plant based upon sales orders approved by
STI, Distributor.
3.3. Furnish reasonable quantities of brochures and other support
and marketing materials as needed, Distributor shall be
responsible for prudent dissemination of support materials.
3.4. Provide technical and sales training and field sales support
as required.
3.5. Maintain reasonable levels of standard Product stock to
facilitate prompt deliveries.
3.6. Keep abreast of market and Product trends and inform the
distributor of new opportunities.
3.7. Notify Distributor of policy, pricing and other changes or
practices that may affect business, markets and the customer,
etc., sixty (60) days prior to the change, whenever practical.
3.8. Comply with all applicable federal, state and local laws,
regulations, statute, etc., affecting the performance of
business and this Agreement.
4. Cost and Expenses
Each party shall be solely responsible for all costs and expenses
incurred by it in performing its duties under this Agreement,
including, but not limited to, salaries, employee commissions,
advertisements, promotions, travel, delays, etc., unless otherwise
stated and agreed to by all parties involved. Airtech has agreed under
separate cover to supplement Distributor costs and expenses.
5. Patents and Trademarks
Distributor agrees not to contest the validity of any licenses,
patents, trademarks and/or rights thereto now or hereafter used or
claimed by AIRTECH INTERNATIONAL GROUP, INC. and to notify AIRTECH
INTERNATIONAL GROUP, INC. promptly of any infringement thereof by
others whenever such acts come to the attention of the Distributor.
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6. Indemnification
Distributor shall defend, indemnify and hold harmless AIRTECH
INTERNATIONAL GROUP, INC., its representatives, agents and employees
from and against all claims, damages, losses and expenses arising out
of the Distributor's sale or use of the Product, except gross
negligence of Airtech International Group, Inc. Airtech International
Group, Inc. shall defend, indemnify and hold harmless Distributor, its
representatives, agents and employees from and against all claims,
damages, loses, and expenses arising out of the sale of Airtech
International Group, Inc. Product, except gross negligence of
Distributor.
7. Sales Territory
7.1. The Distributor may market the Product within the geographical
area considered to be the Distributor's normal marketing area,
("Sales Territory") including branch operations, The Sales
Territory is the United States market for medical equipment
(Medical Market). The Medical Market is but not limited to the
DMEs, HMEs and medical equipment distributors that carry other
medical supplies for sale to persons with a physician's
prescription. The Sales Territory will be exclusive to the
Distributor. Any land areas not included will be expressly
noted in an appendix attached to this Agreement. This
Agreement assumes that a HCPCS Code application will be
submitted and pursued with best efforts (Airtech International
Group, Inc. does not guarantee that a code will be received)
and that the Medicare Code for the Product will be pursued at
the sole discretion of Airtech International Group, Inc.
7.2. The Distributor understands and accepts that other
wholesalers, distributors, retail merchandiser or other
channels of distribution including the Internet or catalogues
may be utilized by Airtech International Group, Inc. for the
sale of Product and other Airtech International Group, Inc.
products within the same geographic Sales Territory. These
other means of distribution will not target the Medical Market
of Distributor.
7.3. Airtech International Group, Inc. may expand Distributor's
Sales Territory based on area potentials, previous agreements,
marketing policy, and the effectiveness of current
distributors. The Distributor will not participate in the
sales efforts of other channels of distribution, or receive
commission or payments of any kind from sales to or by other
channels of distribution.
7.4. The Distributor may not sell Airtech Product through the
Internet, catalogues or direct sales efforts outside of the
Sales Territory without written consent of Airtech
International Group, Inc.
8. Performance Expectations
8.1. A three year goal for net purchases of these Product, expected
of and agreed to by the distributor, is as follows:
Net Purchases of $1,000,000 from 04/01/2001 to 03/31/2002 Net
Purchases of $2,000,000 from 04/01/2002 to 03/31/2003 Net
Purchases of $3,000,000 from 04/01/2003 to 03/31/2004 Terms of
purchase are ninety (90) days payment is due in full.
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8.2. The Distributor understands and accepts that if these agreed
upon goals are not achieved, and it is determined that the
Distributor has not implemented the actions required to
achieve these goals, the following actions may be taken:
a) This Agreement may be terminated by Airtech International
Group, Inc. (see 9.2, c.)
b) This Agreement will continue and additional distribution
channels may be established. (This statement is not
intended to imply that the distributor has an exclusive
agreement or sales territory).
c) Taking any action or failure to take any action allowed
under this Agreement does not restrict Airtech from taking
or not taking any action in the future. It is not required
for the three years to occur in order to invoke this
paragraph.
9. Term and Termination
9.1. This Agreement shall be binding for a period of three years
from the date of execution and shall automatically renew and
extend for consecutive one year terms if notification to the
contrary is not given thirty (30) days before the anniversary
date.
9.2. This Agreement may be terminated or modified as follows:
a) Prior to the end of the three-year period by either party
without cause, and without time to cure, upon ninety (90)
days written notice to the other party.
b) Immediately by AIRTECH INTERNATIONAL GROUP, INC. upon
written notice to Distributor in the event Distributor is
adjudicated as bankrupt, becomes insolvent or makes an
assignment for the benefit of creditors.
c) By either party upon ninety (90) days written notice if the
other party is in material breach of any of the terms of
this Agreement or any joint business plans or Distributor's
failure to reach agreed upon market penetration goals
measured by annual purchases of AIRTECH INTERNATIONAL
GROUP, INC. products.
d) In the event of termination of this Agreement by either
party, AIRTECH INTERNATIONAL GROUP, INC. shall have the
option to repurchase all Products purchased hereunder of
current design, unused and in saleable condition, which are
in Distributor's inventory at the time of termination. If
the termination is by AIRTECH INTERNATIONAL GROUP, INC.,
AIRTECH INTERNATIONAL GROUP, INC. shall pay the original
purchase price as substantiated by the invoice or, if an
invoice is unavailable, the published price prevailing at
the time of manufacture. If the termination is by the
Distributor, a handling charge of fifteen percent (15%)
shall be deducted from the purchase price.
e) Upon termination, Distributor shall return all books and
records of Airtech International Group, Inc. to Dallas
headquarters via prepaid freight.
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10. Additional Provisions
10.1. Changes in Design. AIRTECH INTERNATIONAL GROUP, INC. may make
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reasonable changes of any kind without notice and deliver
revised designs or models of the Products against any order
accepted by AIRTECH INTERNATIONAL GROUP, INC. AIRTECH
INTERNATIONAL GROUP, INC. will not be responsible to the
Distributor in any way for any inventory in the Distributor's
possession of prior models of the Product or manufactured
under prior design or specifications.
10.2. Force Majeure. AIRTECH INTERNATIONAL GROUP, INC. shall not be
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liable for any delay in the delivery of any Products if such
delay is due to any cause beyond the reasonable control of
AIRTECH INTERNATIONAL GROUP, INC. In the event of any such
delay, the dates for performance by AIRTECH INTERNATIONAL
GROUP, INC. shall be extended for a period equal to the time
lost by reason of such delay.
10.3. Distributor Not Agent. Distributor is an independent
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contractor and shall not be considered in any respect an agent
or representative of AIRTECH INTERNATIONAL GROUP, INC. and the
Distributor shall not represent or hold out itself or its
agents or representatives as the agents or representatives of
AIRTECH INTERNATIONAL GROUP, INC., nor shall it allow others
to do so.
10.4. Assignability. This Agreement may not be assigned or otherwise
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transferred by the Distributor without prior written consent
by AIRTECH INTERNATIONAL GROUP, INC. Any purported attempt to
assign or transfer this Agreement without AIRTECH
INTERNATIONAL GROUP, INC.'s prior written consent shall be
null and void and shall, at Airtech International Group,
Inc.'s option immediately terminate this Agreement.
10.5. Change in Control. Transfer of a controlling interest in
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Distributor to a party not in control at the time of execution
of this Agreement shall be deemed an assignment without
Airtech International Group, Inc.'s consent.
10.6. Use of Trade Name. The Distributor shall not use in it's
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corporate, firm or individual name, or allow to be used by
others in their corporate, firm or individual names, insofar
as the Distributor has any power to prevent such use, the
words Airtech International Group, Inc., Airsopure, and/or any
other name, logo or trademark adopted by AIRTECH INTERNATIONAL
GROUP, INC. for products or service or any words or names or
combinations of words or names closely resembling any of them.
10.7. Warranty. The warranty for the Products is set forth in the
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Product Literature and Installation, Operation and Maintenance
manuals.
THE WARRANTY SET FORTH IN THE PRODUCT LITERATURE AND
INSTALLATION, OPERATION AND MAINTENANCE MANUALS CONSTITUTES
THE ENTIRE WARRANTY OF AIRTECH INTERNATIONAL GROUP, INC. WITH
RESPECT TO THE PRODUCTS SOLD HEREUNDER AND IS IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY
WARRANTY AGAINST INFRINGEMENT, ALL OF WHICH ARE HEREBY
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EXPRESSLY DISCLAIMED. DISTRIBUTOR SHALL NOT CHARGE AIRTECH
INTERNATIONAL GROUP, INC. FOR ANY WARRANTY LABOR.
10.8. Disclaimers. IN NO EVENT SHALL AIRTECH INTERNATIONAL GROUP,
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INC. BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM ANY PERFORMANCE OR
FAILURE TO PERFORM UNDER THIS AGREEMENT, OR ANY PURCHASE ORDER
ISSUED HEREUNDER, OR THE USE OR PERFORMANCE OF THE PRODUCTS
SOLD HEREUNDER, WHETHER DUE TO BREACH OF CONTRACT, BREACH OF
WARRANTY, NEGLIGENCE OR OTHERWISE.
10.9. Notices. Any notice required or permitted hereunder shall be
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sufficient if sent by first-class mail, postage prepaid to the
other party at the address specified herein, except that any
notice of termination or other pertinent responsibilities, may
be by certified mail, return receipt requested. Either party
may designate a new address for the purposes of notice by
certified mail, return receipt requested.
10.10. Governing Law. This Agreement shall be construed and the
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relations between the parties determined in accordance with
the laws of the State of Texas.
10.11. Entire Agreement. This Agreement contains the entire agreement
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between the parties and supersedes all prior agreements,
representations, promises and understandings, whether written
or oral, which have been made in connection with the subject
matter hereof. Any terms and conditions on any purchase order
or other document issued by the Distributor shall be
inapplicable to any sale of Products pursuant to this
Agreement.
10.12. Binding Effect. This Agreement shall be binding upon, inure to
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the benefit of, and be enforceable by and against the parties
hereto and their respective heirs, successors, personal
representatives, legal representatives and assigns.
10.13. Captions. The headings used in this Agreement are for
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illustrative purposes only, the wording in the paragraphs will
control.
10.14. Arbitration. The Parties agree to submit any disputes arising
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from this Agreement to binding Arbitration in lieu of other
legal means of resolutions. The Parties agree that the
Arbitration will be held in Dallas Texas under the control of
the American Arbitration Association or equivalent, if not
available.
10.15. Confidentiality Agreement. The Parties agree to enter into a
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Mutual Confidentiality Agreement that is incorporated by
reference herein.
10.16. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
ACCEPTED BY: (DISTRIBUTOR)
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Print or Type Name Title Print or Type Name Title
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Signature Date Signature Date
Notice to:
Southern Therapy, Inc.
Austin TX
Additional notice to:
ACCEPTED BY: AIRTECH INTERNATIONAL GROUP, INC.
C.J. Comu Address for notice:
Chief Executive Officer 15400 Knoll Trail, Suite 200
Dallas, Texas 75248
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Signature Date
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