Exhibit 10.5
DOMESTIC NON-EXCLUSIVE DISTRIBUTION
AGREEMENT
between
CIRALIGHT GLOBAL, INC.
and
[NAME OF DISTRIBUTION COMPANY]
DATED: _________________
TABLE OF CONTENTS
Article 1 -Appointment of Distributor....................................... 3
Article 2 - Products........................................................ 4
Article 3 - Territory....................................................... 4
Article 4 - Prices and Payment Terms........................................ 4
Article 5 - Security Interest............................................... 5
Article 6 - Duties of Distributor........................................... 6
Article 7 - Duties of Corporation........................................... 8
Article 8 - Minimum Purchases............................................... 10
Article 9 - Exclusivity..................................................... 10
Article 10 - Warranty....................................................... 11
Article 11 - Term and Termination........................................... 12
Article 12 - Manufacturing.................................................. 14
Article 13 - Distributor Fee................................................ 14
Article 14 - Confidentiality................................................ 15
Article 15 - Trademarks..................................................... 15
Article 16 -Indemnification................................................. 17
Article 17 - Insurance...................................................... 18
Article 18 - Force Majeure.................................................. 18
Article 19 - General Provisions............................................. 19
Exhibit A - Products & Trademarks
Exhibit B - Company Price List
Exhibit C - Warranty
Exhibit D - Letter of Appointment
Exhibit E - Exclusions
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[CIRALIGHT GLOBAL, INC. LOGO]
DISTRIBUTION AGREEMENT
(NON-EXCLUSIVE TERRITORY)
THIS AGREEMENT made as of ____________ (The "EFFECTIVE DATE")
BETWEEN:
CIRALIGHT GLOBAL, INC., a corporation incorporated under the laws
of Nevada with its principal place of business at 2603 Main
Street, Suite 1150, Irvine, California 92614
(the "Corporation")
- and -
[Name and address of distribution company]
(the "Distributor").
WHEREAS:
(A) The Corporation produces and sells active and passive Daylighting
products, as more fully described in Article 2.1 below (the
"Products") bearing the trademarks listed on Exhibit "A" hereto;
(B) The Distributor desires to obtain the non-exclusive right to,
distribute and sell, the Products in the Territory (as hereinafter
defined) subject to such limitations as are set forth herein (if any);
(C) The Distributor has assured the Corporation that it possesses the
necessary technical and commercial competence and the ability to
structure the organization necessary to ensure efficient performance
of its contractual obligations hereunder and this agreement is entered
into in substantial reliance on the Distributor's representation of
that competence;
(D) The Corporation is willing to sell the Products to the Distributor to
market, promote, distribute, sell, service and install in the
Territory (as hereinafter defined) under the terms and conditions of
this Agreement;
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NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 -APPOINTMENT OF DISTRIBUTOR
1.1 APPOINTMENT. Subject to the terms and conditions of this Agreement,
the Corporation grants to Distributor the non-exclusive right to
distribute and sell the Products in the Territory. The Distributor
hereby accepts such non-exclusive appointment and agrees to use its
best efforts in the performance of its contractual obligations and
privileges during the Term and in the Territory, in accordance with
the terms and conditions of this Agreement.
1.2 LICENSE. Subject to the provisions of Article 15 hereof, the
Corporation hereby grants to Distributor the non-exclusive and
revocable right and license to use the trademarks set forth on Exhibit
A hereto in the Territory, only for so long as this Agreement is in
force, as it may be amended from time to time (the "Trademarks"), and
for the sole purpose of promoting and selling the Products in the
Territory, and for no other purpose.
1.3 DISCONTINUATIONS; NEW PRODUCTS Nothing in this Article 1 or elsewhere
in this Agreement shall preclude the Corporation from discontinuing
the sale of any Product which the Corporation reasonably concludes is
no longer profitable or otherwise feasible for the Corporation to
sell, provided the Corporation gives the Distributor at least ninety
(90) prior written notice of such discontinuation. If the Corporation
shall desire the Distributor to sell additional products in the
territory, the Corporation shall so advise the Distributor in writing,
and the Distributor shall have thirty (30) days from the date of such
notice to determine whether it wishes to have such new product, added
to Exhibit "A" as a Product. If the Distributor so declines, the
Corporation may distribute the new product itself or through another
distributor or commission agent in the Territory.
1.4 LIMITATIONS. The Distributor shall buy and sell the Products in its
own name and for its own account. Each Party is an independent
contractor, and not an employee, agent, joint venturer or partner of
the other. Each Party and its employees shall identify themselves as
such, and shall make clear the limitations of their authority to any
potential or actual customers of the Products. Neither party may, in
any manner, accept any obligation, incur any liability, promise any
performance or pledge any credit on behalf of, or for the account of,
the other except those expressly permitted under this Agreement, if
any. Each party shall pay any and all expenses and charges relating to
their performance of contractual obligations hereunder.
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Article 2 - PRODUCTS
2.1 PRODUCTS. The Products covered by this Agreement shall include
Ciralight active and passive Daylighting products manufactured by or
at the direction of the Corporation, as more specifically set forth on
Exhibit "A" attached hereto, as it may be amended from time to time in
accordance with the terms of this agreement.
Article 3 - TERRITORY
3.1 TERRITORY. Subject to the provisions of Articles 7 & 8 and the
conditions therein and herein, Distributor is appointed as a
non-exclusive Distributor for the United States (the "Territory").
3.3 Distributor shall also have the right to sell products to National
Accounts and other National Distribution/Partnership arrangements that
Distributor shall establish from time to time throughout North
America.
Article 4 - PRICES AND PAYMENT TERMS
4.1 The selling price to the Distributor for the Products will be the
Corporation's list price for Domestic Distributors in effect at the
time of the Distributor's order. The Distributor shall submit purchase
orders for the Products to the Corporation in writing, which purchase
orders shall set forth, at a minimum: identification of the Products
ordered, quantity pricing and requested delivery dates. Unless stated
otherwise, prices, shipments and risk of loss are FOB Corporation's
warehouse facilities. Title and risk of loss pass to Distributor in
accordance with the definition of FOB Shipping Point. The current list
prices to be charged to Distributor for Products are set forth in
Exhibit "B" attached hereto and Distributor agrees to sell the
Products in accordance with Corporation's pricing and discount
policies.
4.2 Any increase in prices shall be effected by giving Distributor at
least ninety (90) days prior written notice. Any increase in prices
shall not affect any orders placed by Distributor prior to the
expiration of said period of ninety (90) days provided that if
Distributor fails to make timely payment for such existing orders
after receiving notice of the price increase, the cost thereof shall
adjust to the increased price. Corporation shall not increase prices
more than once during each period of 6 (six) months commencing
initially on 1 January 2010.
4.3 All payments due to Corporation hereunder (including interest) shall
be made in US Dollars. Payment pertaining to any and all orders placed
by Distributor according to this Agreement will be executed by
Distributor through payment by Check, Money Order, Credit Card or wire
transfer. For units purchased from Corporation the payment terms shall
be made in two installments as follows:
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a) Distributor will effect payment of 50% of the purchase price of
any order no later than ten (10) days of the date in which
Corporation has accepted in writing such order and prior to the
shipment of any order.
b) Distributor will effect payment 50% of the purchase price of any
order no later than thirty (30) days after the date of when the
order has been shipped.
4.4 In the event of any delay in payment of any amounts due to the
Corporation hereunder, the Corporation shall have the right to suspend
deliveries and may, at its option, terminate the order, as well as any
and all other orders and contracts with the Distributor. In the event
that the Corporation does not receive any payment when due, the
Distributor shall pay to the Corporation, on any delay in excess of
ten (10) days, as a late charge and not as a penalty, interest on the
unpaid balance from the due date until payment is actually received by
the Corporation, at the varying prime (sometimes called base)
announced by the Corporation's banker. The Corporation's right to such
interest shall be in addition to and not in lieu of all other rights
and remedies arising by reason of such non-payment. Any payment
received by the Corporation may be applied by the Corporation first to
any outstanding interest due and then to any outstanding balance owed
by the Distributor to the Corporation, as the Corporation in its sole
discretion shall determine. The Distributor shall make all payments in
accordance with the terms of this Agreement notwithstanding any claim
for any alleged fault, defect or irregularity in the Products. In the
event of any delay in payment, the Corporation may, at its option,
terminate the order and hold the Distributor liable for damages, and
apply any deposits received against such amounts due the Corporation.
Article 5 - SECURITY INTEREST
5.1 SECURITY INTEREST. The Corporation shall retain title to the Products
and shall have a security interest in the Products sold to the
Distributor and all accounts receivable arising from the sale of such
Products, including their respective proceeds (for purposes hereof,
the "Collateral") until paid in full. The Distributor, upon the
Corporation's request, shall give, execute, file and/or record any
notice, financing statement, continuation statement, instrument or
document which the Corporation shall consider necessary to create,
preserve, continue, effect or validate the security interest in the
Collateral granted hereunder or to enable the Corporation to exercise
or enforce its rights hereunder. The Distributor hereby authorizes the
Corporation to file any financing statements, continuation statements
or other documents in any jurisdiction at any time it deems necessary
to protect and maintain the Corporation's interest in the Collateral,
with or without the Distributor's signature, and the Distributor
hereby specifically authorizes the Corporation as the Distributor's
attorney-in-fact to execute and file such statements on the
Distributor's behalf. In the event the Distributor intends to utilize
other warehouse facilities, change its business address or in any
other way to transfer the Products, or any records relating to such
Products, including accounts receivable, to any location other than
the address set forth above, the Distributor shall notify the
Corporation in writing at least thirty (30) days prior to such change
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or transfer. The Corporation agrees to promptly release its lien on
all such products as have been paid for in full.
Article 6 - DUTIES OF DISTRIBUTOR
6.1 The Distributor, at its own cost and expense, shall use all reasonable
commercial efforts to develop and promote the sales of the entire line
of Products in the Territory. This covenant to use all reasonable
commercial efforts shall include without limitation the following
obligations:
(a) SALES ORGANIZATION. Distributor shall actively build a network of
sales reps within Distributor's territory who are fully trained
and knowledgeable about the Products.
(b) INVENTORY. The Distributor, in regular consultation with the
Corporation, shall maintain an adequate selection and stock of
the Products as is necessary to fulfill customers' orders as
determined by the Distributor based upon its prior business
operations and experience and upon the fixed delivery times.
Furthermore, Distributor shall maintain sufficient excess
inventory parts within its inventory to guarantee prompt
replacement for products under warranty. Subject to the
provisions of Article 10, Warranty, of this Agreement, and the
terms of the actual Warranty, Corporation shall replace inventory
parts used to satisfy warranty issues within 30 days after
Distributor replaces said problem part provided that Distributor
shall promptly return the problem part as a condition thereof.
(c) MONTHLY REPORTS. Distributor shall deliver to the Corporation no
later than the tenth (10th) day after the end of each calendar
month a written report in regard to operations of the Distributor
for the preceding calendar month.
(d) ADVERTISING AND PROMOTION. The Distributor agrees to conduct, at
its own expense, reasonable advertising and public relations
campaigns for Products, and to attend trade shows and maintain
website awareness for Products, and include Products in
catalogues and institutional advertising for Distributor.
Distributor agrees to consult with and cooperate with Corporation
in developing and implementing effective ways to market the
Products Distributor will have the option to purchase pre-printed
promotional materials prepared and printed by the Corporation or
to create and print Distributor's own promotional material using
approved product images, text, slogans, logos, videos and other
promotional items in an approved manner. New advertising and
promotional materials created by Distributor shall be submitted
to the Corporation for its written approval prior to the use of
any such material.
(e) LICENSES AND PERMITS. The Distributor agrees that it shall obtain
any and all licenses and permits which may be required under all
applicable law in order to perform the duties and obligations
hereunder.
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6.2 Unless otherwise agreed in writing, Distributor shall purchase all
components related to the installation and operation of the Products
from Corporation and shall use only official and approved parts for
the Products. This shall include without limitation the domes,
mirrors, lenses, frames, lightwells (in the event Customer purchases
lightwells from distributor), mid-trays and sun tracking controllers.
Notwithstanding the foregoing, it is agreed that Distributor shall be
allowed to purchase security bars, light shades and curbs from third
party sources provided that these parts comply with and follow all the
specifications provided by the Corporation and are submitted to
Corporation for its written approval, not to be unreasonably withheld
or delayed.
6.3 Distributor shall install Products in accordance with the
Corporation's official installation manual and instructions furnished
to the Distributor by the Corporation. Installations performed by
unauthorized/uncertified personnel, not installed in accordance with
the official installation manual and instructions, or otherwise
improperly installed, may result in voiding all or a portion of the
Corporation's warranty for such Product.
6.4 Distributor will provide Corporation with timely reports of closed and
pending sales on a regular basis to assist Corporation with
forecasting product demand. Distributor will provide copies of signed
contracts, pictures of installations and other such reasonable
documentation related to sale and installation of products requested
by Corporation.
6.5 Distributor agrees to observe high standards of ethical conduct and
honestly represent the capabilities of Products. Distributor
undertakes to comply with the rules of fair competition and all other
applicable laws and regulations prevailing in the Territory. Failure
to do so shall be cause for termination.
6.6 Distributor is authorized to appoint resellers referred to as Dealers
and Sales Reps within the Territory under this Agreeement. Dealers
have no rights or recourse to the Corporation. The Corporation
requires that Distributor provide all pertinent information such as:
Name, address, and contact information of appointed Dealers and Sales
Reps. The Corporation agrees that information provided by Distributor
shall be used for record keeping purposes and held confidential for so
long as this agreement remains in effect and Distributor is not
otherwise in material breach hereof.
6.7 Distributor will provide product support to its Dealers and Sales Reps
and Distributor shall have exclusivity as the source of Corporations
Products to its appointed Dealers and Sales Reps within Distributor's
non-Exclusive Territory.
6.8 Except as expressly provided by this Agreement, any and all expenses
and /or charges connected with the fulfillment of the Distributor's
obligations and activity pertaining to this Agreement shall be
exclusively borne by the Distributor.
6.9 The Corporation's representatives may, upon prior written
notification, visit the Distributor's offices at any reasonable time
during normal business hours, in order to assist in the improvement of
the sales and marketing of the Products.
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6.10 Corporation shall consult the Distributor in regard to setting resale
pricing levels for Dealers and Consumers and compensation for Sales
Reps within the Territory. Distributor acknowledges that the
Corporation has a legitimate interest in establishing consistency in
such matters including a right to terminate this agreement in the
event that Distributor fails to adhere to retail price and volume
discount policies reasonably established by the Corporation after
taking into account factors distinctive of the territory.
6.11 The Distributor agrees to provide the Corporation with regular
information as is necessary to keep the Corporation up to date
regarding sales of the Products, market trends, and the products and
advertising of competitors. Upon the Corporation's request and at the
Corporation's expense, the Distributor shall furnish the Corporation
with brochures, advertising, illustrations and samples of competitors'
products.
Article 7 - DUTIES OF CORPORATION
During the term of this Agreement, the Corporation shall provide Distributor
with the following:
7.1 Provide Distributor with branding and marketing material in English,
including artwork, logos, photos, written copy, product specifications
and other materials that can be used by Distributor to create
materials necessary to promote the Products.
7.2 Assist Distributor with sales and installation training. Corporation
will provide Distributor with the most current installation materials
and updated Product information on a timely basis.
7.3 Provide Distributor with a listing as a Distributor for the Territory
and non-exclusive source for the Trial Territory on the Corporation's
website.
7.4 Provide Distributor with ongoing communications regarding market
intelligence and other relevant information pertaining to the
Corporation's Products.
7.5 Provide a warranty for the products in accordance with Article 10
herein. Corporation shall provide Distributor with 90 days advance
notice of any changes in the warranty terms and conditions offered by
the Corporation. In the event Corporation changes the warranty,
Distributor shall have 45 days from said notice to determine whether
to continue this agreement or at its option may elect to discontinue
this agreement upon 45 days notice to Corporation. In the event the
warranty provisions are changed, the changes shall only apply to
future purchases made after the effective date of the change, and
shall not be retroactive to prior purchases.
7.6 Corporation shall at all times have the right to contact purchasers of
the products wherever located to determine their satisfaction with the
product, the service and to make repairs to the products as required
pursuant to applicable warranty terms. And to exercise its lien and
security interest in effect with respect to any product sold but
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unpaid for. Distributor shall maintain and provide contact information
for purchasers as requested by Corporation and in accordance with
policies set by corporation.
7.7 Corporation shall, in its sole discretion, as it deems necessary and
appropriate, defend its patents and rights against infringements and
violations within Distributor's territory.
7.8 Corporation shall maintain sufficient Inventory of product and parts,
and/or capacity, to timely fulfill Distributor's orders which it has
received and confirmed and for which, Distributor has paid and
Corporation has accepted payment of any amount required on account.
Subject to the terms and conditions of this Agreement, Corporation
shall undertake to accept, confirm and fulfill all Products-orders
placed by Distributor ("Distributor Purchase Orders") during any
period during the term of this Agreement commencing on the Effective
Date of this Agreement.
7.9 Lead time for the shipment of Distributor Purchase Orders shall be 15
days from the date of placement by Distributor of the Distributor
Purchase Order and acceptance by the Corporation. Corporation shall
submit to Distributor a written Sales Order as acknowledgement and
written acceptance of each Distributor Purchase Order within two (2)
business days of the receipt by Corporation of the relevant order and
after first establishing a payment and delivery schedule therefore and
Distributor shall counter sign each sales order to confirm
Distributor's acceptance of the terms of the sale and delivery
schedule once agreed upon.
7.10 Unless otherwise agreed prices, shipments and risk of loss for any
product purchased by Distributor from Corporation are FOB the
Corporation's facilities. Subject to the conditions of Article 5, risk
of loss passes to Distributor in accordance with the definition of FOB
Shipping point.
7.11 Corporation shall have the right to recruit, screen and qualify
Dealers to be appointed within the Territory. Dealers within the
Territory shall be required to comply with Corporation's policies
covering pricing, commissions and other business matters and must
purchase product through Distributor. Dealers appointed within the
Territory by Corporation or other Distributors within their Exclusive
geographic territory shall not be obligated to purchase Product from
Distributor. With regard to Dealers appointed by Distributor, in the
event of the termination of this agreement for good cause and/or to
exercise its lien and security interest in products sold but unpaid
for, Corporation shall have the right to deal directly with Dealers
without any obligation to Distributor.
7.12 Corporation agrees not to hire employees of Distributor during the
term of this Agreement and for a period of one year after the
expiration of this Agreement.
7.13 Corporation agrees not to circumvent Distributor or to sell directly
or indirectly to an existing or prospective customer of Distributor
during the term of this Agreement and for a period of one year after
the expiration of this Agreement provided that such restriction shall
not apply if this agreement is terminated for good cause such as, by
way of example, but not limitation, if Distributor shall undertake to
sell competing products.
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Article 8 - MINIMUM PURCHASES
8.1 The minimum purchases orders to be placed by Distributor during each
year during the term of this Agreement, are as follows:
(a) During the initial 12 month term, accepted and paid for orders
totaling at least four hundred (400) units.
(b) Accepted and paid for orders for Five Hundred (500) units during
the second year of the Term.
(c) Accepted and paid for orders for six hundred (600) units during
the third year of the Term.
(d) During each year thereafter, the minimum number of accepted and
paid for orders shall be required to increase by five (5%)
percent over the immediately preceding year.
8.2 Either party shall be entitled to terminated this agreement as
provided herein in the event that the quantity of Products ordered
from Corporation by Distributor has not reached the target as set
forth above during each period, provided that any such termination
shall be effected by a written notice of sixty (60) days, to be
delivered to the other party, within thirty (30) days after the
expiration of the relevant year, as foresaid.
8.3 For the sake of clarity, it is agreed and understood that the
Corporation shall not be entitled to any damages and/or compensation
whatsoever, in the event that the Distributor fails to purchase the
minimum purchase quantities pursuant to the terms of this Article 8
and that the only remedy available to the Corporation with respect to
any such failure is the right to terminate this Agreement in
accordance with the terms set forth herein.
Article 9 - EXCLUSIVITY
9.1 During the Term of this Agreement, the Distributor shall not, directly
or indirectly (by equity or management participation, beneficial
ownership, rendering of advice or consultation, contractual
arrangement or otherwise), solicit orders for, sell, distribute or
otherwise deal in, any products competitive with the Corporation's
Products. Corporation agrees that passive skylights shall not
presently be considered as competitive products but in the event
Corporation introduces new products, whether passive or active, which
are added to the Products to be carried by Distributor, then this
provision shall apply to all such products, whether they be active or
passive.
9.2 EXCEPTIONS TO EXCLUSIVITY. Notwithstanding anything to the contrary in
this agreement, Corporation may designate house customers which shall
be excluded from this agreement. House Customer shall mean a
subsidiary, franchisee or company owned facility of a multinational
company that operates in at least three countries or a national
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company with at least one hundred locations within the United States.
Where the Corporation enters into an agreement to provide Products to
a multi-national company or national company, referred to herein as
House customers, Corporation or the Distributor that secured the House
Customer shall be allowed to sell to such House Customer within any
territory including Distributors. In addition, Corporation may at its
option enter into an agreement with a Multi-national company to
Private label the products covered by this agreement for sale in any
territory as an exclusion to this agreement provided the products are
promoted and sold under a different name and trademark. Corporation
shall maintain a list of House Customers and Private Label Companies
and notify Distributor as changes occur. In addition to House
Customers and private label companies, a list of pre-existing
exclusions to this Agreement are listed in Exhibit E.
9.3 SHARED TRANSACTIONS. In the event that an order or contract originates
in one Territory but is shipped into or provided in the territory of
another Distributor, unless otherwise mutually agreed between the
parties, the fees or profit from the transaction shall be split using
the following formula:
(a) 80% of the applicable commission is payable to the party(ies)
responsible for initiating the transaction from outside the
Territory
(b) 20% of the applicable commission is retained by the Distributor
for allocation to the Party(ies) in the Territory in which the
product or service is to be delivered.
(c) 100% of the installation fees shall be retained by the entity
that installs the product unless agreed otherwise between the
parties involved.
Article 10 - WARRANTY
10.1 THE CORPORATION WARRANTS TO THE DISTRIBUTOR EACH PRODUCT SOLD BY IT TO
BE FREE FROM DEFECTS IN MATERIAL AND WORKMANSHIP, WHEN PROPERLY
INSTALLED AND MAINTAINED UNDER NORMAL USE AS MORE SPECIFICALLY
PROVIDED IN THE WARRANTY, A COPY OF WHICH IS ATTACHED AS EXHIBIT "C"
CORPORATION SHALL NOT BE LIABLE UNDER WARRANTY IF THE PROBLEM IS
CAUSED BY IMPROPER INSTALLATION.
10.2 PRODUCTS WHICH DO NOT CONFORM TO THEIR DESCRIPTION OR WHICH ARE
DEFECTIVE IN MATERIAL OR WORKMANSHIP WILL, BY THE CORPORATION'S
DECISION, BE REPLACED OR REPAIRED, OR, AT THE CORPORATION'S OPTION,
CREDIT FOR THE ORIGINAL PURCHASE PRICE MAY BE ALLOWED PROVIDED THAT
DISTRIBUTOR NOTIFIES THE CORPORATION IN WRITING OF SUCH DEFECT WITHIN
THIRTY (30) DAYS OF DISCOVERY AND DISTRIBUTOR RETURNS SUCH PRODUCTS IN
ACCORDANCE WITH THE CORPORATION'S INSTRUCTIONS. NO PRODUCTS MAY BE
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RETURNED BY THE DISTRIBUTOR WITHOUT THE CORPORATION'S PRIOR WRITTEN
AUTHORIZATION.
10.3 THIS WARRANTY DOES NOT APPLY TO ANY PRODUCT WHICH HAS BEEN SUBJECTED
TO MISUSE, ABUSE, NEGLIGENCE OR ACCIDENT BY THE DISTRIBUTOR OR THIRD
PARTIES. THE WARRANTY SHALL BE VOID IF THE SEAL OF THE GPS CONTROLLER
UNIT IS BROKEN.
10.4 EXCEPT AS SET FORTH ABOVE AND WITHOUT DEROGATING FROM THE PROVISIONS
OF ARTICLE 16 BELOW (INDEMNIFICATION), THE CORPORATION MAKES NO OTHER
WARRANTY OR REPRESENTATION OF ANY KIND WITH RESPECT TO THE PRODUCTS,
EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THAT OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE. FAILURE TO MAKE ANY
CLAIM IN WRITING, OR WITHIN THE WARRANTY PERIOD SET FORTH IN EXHIBIT
C, SHALL CONSTITUTE AN IRREVOCABLE ACCEPTANCE OF THE PRODUCTS AND AN
ADMISSION BY THE DISTRIBUTOR THAT THE PRODUCTS FULLY COMPLY WITH ALL
TERMS, CONDITIONS AND SPECIFICATIONS OF DISTRIBUTOR'S PURCHASE ORDER.
THE CORPORATION SHALL NOT BE LIABLE UNDER THIS WARRANTY FOR DIRECT,
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, UNDER ANY
CIRCUMSTANCES, INCLUDING, BUT NOT LIMITED TO, DAMAGE OR LOSS RESULTING
FROM INABILITY TO USE THE PRODUCTS, INCREASED OPERATING COSTS OR LOSS
OF SALES, OR ANY OTHER DAMAGES. TO MAKE A CLAIM UNDER THIS WARRANTY,
DISTRIBUTOR MUST NOTIFY THE CORPORATION IN WRITING WITHIN THE WARRANTY
PERIOD.
10.5 THE FOREGOING CONSTITUTES THE DISTRIBUTOR'S SOLE AND EXCLUSIVE REMEDY
AND THE CORPORATION'S SOLE OBLIGATION WITH RESPECT TO PRODUCTS
FURNISHED HEREUNDER.
Article 11 - TERM AND TERMINATION
11.1 The duration of this Agreement shall be for an initial period of Three
Years from the Effective Date. Thereafter, this agreement shall be
automatically renewed, at the same terms and conditions, for
additional successive periods of one (1) year each, unless terminated
by either party in accordance with the provisions of Article 11.2-11.4
below and so long as Distributor is not in material breach of this
Agreement..
11.2 This Agreement may also be terminated at any time by the Corporation
immediately upon written notice to the Distributor in the event that
after the date hereof:
(a) Distributor breaches its covenants of exclusivity set forth in
Article 9 hereof;
(b) The Distributor fails to comply with the applicable laws and
regulations of the Territory, pursuant to section 6.7 above, and
such failure has or may have a material adverse affect on the
distribution and sale of the Products pursuant to this Agreement.
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(c) The Distributor fails to achieve the minimum purchase
requirements set forth in Article 8 hereof (and subject to the
terms of said Article);
(d) The Distributor fails to comply with the price and payment term
provisions set forth in Article 4 hereof, unless such failure has
been remedied by Distributor with a period of 14 days following
receipt of a written notice from the Corporation; or
(e) A change in control of Distributor. For the purposes of this
agreement, "control" shall mean possession, directly or
indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities
or partnership or other ownership interest, by contract or
otherwise);
11.3 Anything in section 11.1 or 11.2 above to the contrary
notwithstanding, in the event that the Corporation breaches any of its
delivery obligations herein contained, the Distributor shall be
entitled to forthwith terminate the relevant order/s and any other
outstanding order/s or this Agreement as a whole.
11.4 Anything in section 11.1 or 11.2 above to the contrary
notwithstanding, this agreement may also be terminated at any time by
either party immediately up written notice to the other party in the
event that after the date hereof:
(a) Either party shall suspend or discontinue its business, or shall
make an assignment for the benefit of, or composition with,
creditors, or shall become insolvent or be unable or generally
fail to pay its debts when due, or either becomes in any
jurisdiction a party or subject to (voluntarily or involuntarily)
any liquidation or dissolution action or proceeding with respect
to itself, or to any bankruptcy, reorganization, insolvency or
other proceeding for the relief of financially distressed debtors
is commenced with respect to it, or a receiver, liquidator,
custodian or trustee shall be appointed for it, or a substantial
part of its assets (and with respect to any involuntary action or
proceeding, an order entered in the proceeding is not dismissed
within thirty (30) days) or it shall take any action to effect or
which indicates its acquiescence in any of the foregoing;
(b) Either party attempts to assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
other party unless to an entity substantially owned or controlled
by such party; or
(c) Either party materially breaches any provision of this Agreement
and fails to cure such default within twenty (20) days of receipt
of written notice thereof, with the exception of the reasons for
default, the occurrence of which give the Corporation the right
of immediate termination.
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11.5 PROCEDURE UPON TERMINATION. Upon termination of this Agreement, by the
Corporation in accordance with the terms hereof, the Corporation is
entitled to restrict or cease deliveries of the Products to the
Distributor, including deliveries on orders already received at the
time of the notice of termination but may fulfill Dealer or direct
customer orders. Also upon termination of this Agreement, the
Distributor shall cease to have any rights, liabilities or obligations
hereunder, with the exception of the Distributor's obligations under
Article 10 and Article 15, which obligations shall survive termination
and with the exception of the Distributor's rights under Articles 14
and Article 16, which shall survive termination. Notwithstanding the
foregoing, except in the event of termination by the Corporation
pursuant to Section 11.4(a) above, the Corporation is required to make
the Products available to the Distributor in such quantities so as to
enable the Distributor to maintain the Distributor's own delivery
commitments existing before the effective date of termination, subject
to proof being given by the Distributor to the Corporation that it was
under unconditional contractual obligations at the time it received
notice of termination to make deliveries which it cannot fulfill from
its inventory. After any notice of termination is given, the
Corporation may modify the terms of payment for any subsequent
shipment.
11.6 EFFECT OF TERMINATION. Upon termination or expiration of this
Agreement, all of the Distributor's rights with respect to the
Trade-marks shall immediately cease, provided, however, that the
Distributor may utilize the Trademarks to sell any Products remaining
in inventory or otherwise delivered after the said expiration or
termination for a period of six (6) months from the date of
termination.
Article 12 - MANUFACTURING
12.1 Distributor shall not manufacture or produce Products covered by this
Agreement unless otherwise agreed in writing. Notwithstanding the
aforesaid, For the sake of clarity, "CURBS" as well as security bars
and lightshades, may be acquired from third party sources provided
that these parts comply with and follow all the specifications
provided by the Corporation and samples thereof are submitted to the
Corporation for its written approval which shall not be unreasonably
withheld or delayed. Nothing in this Agreement shall preclude the
Corporation from contracting with manufacturers in the Territory to
supply components to Distributor or to other Territories.
Article 13 - DISTRIBUTOR FEE
13.1 In consideration for being granted the non-exclusive right as the
Distributor for the Territory, Distributor shall pay to Corporation a
Distributor Fee in the amount of $15,000.00.
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Article 14 - CONFIDENTIALITY
14.1 CONFIDENTIAL INFORMATION. During the term hereof and thereafter, each
party agrees to keep secret all Confidential Information of the other
and to take all steps and institute any internal secrecy procedures
which may be necessary to maintain the secrecy of the Confidential
Information of the other and further agrees that it shall not use the
Confidential Information except in connection with the performance of
its obligations under this Agreement. Upon termination of this
Agreement, each party shall immediately cease to use the Confidential
Information of the other and shall return to the other all documents
and copies in its possession or control which in any way embody or
evidence the Confidential Information. As used herein, the term
"Confidential Information" shall mean all information disclosed to a
party or otherwise acquired by a party in connection with the other
party Agreement, concerning or relating in any way to the markets,
customers, Products, procedures, plans, operating experience,
marketing strategies, organization, employees, financial conditions or
plans or business of the other party, its subsidiaries or Affiliates,
provided that same is marked as "Confidential" at the time of
disclosure or should otherwise reasonably ought to be treated as
confidential given its nature and the circumstances of its disclosure,
except for such knowledge or information which: (i) is or later
becomes publicly known under circumstances involving no breach of this
Agreement by the receiving party; (ii) was already known to the
receiving party at the time it received the information or knowledge;
(iii) is made available to the receiving party by a third party
without secrecy obligation and without breach of its obligations to
the disclosing party; or (iv) the receiving party is required by law
to divulge.
Article 15 - TRADEMARKS
15.1 During the term of this Agreement, the Distributor shall have the
limited, non-exclusive , royalty-free right to use the Trademarks in
connection with the promotion and sale of Products in the Territory,
provided however that the Distributor obtain the Corporation's prior
written consent to use the Trademarks in catalogues, promotional
materials, and advertising materials, a mock up or example of which is
first submitted to the Corporation and provided further that failure
of the Corporation to reply to any request for its consent within a
period of 7 days after receipt of the request and the mock-up or
sample shall be deemed as an approval for the relevant use included in
such request.
15.2 Use of the Trademarks shall conform to the following requirements:
(a) The Distributor shall not use the Trademarks in any manner other
than as set forth in Section 15.1 above without the prior written
approval of the Corporation.
(b) The Distributor shall not put or retain the Trademarks in the
Distributor's own name or any business name;
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(c) The Distributor shall not use the Trademarks in any manner which
suggests an affiliation with the Corporation other than that of
distributor of the Products;
(d) The Distributor shall not add to, or use with, the Trademarks,
any other trade name, trademark, symbol or device without the
prior written approval of the Corporation, except for
Distributor's own trademarks and subject to (c) above.
(e) The Distributor shall employ any symbol or notice with the
Trademarks which the Corporation advises is necessary, from time
to time, to identify and protect the interest of the Corporation
in the Trademarks.
(f) The Distributor shall apply no other trade name or trade name,
nor any labels, signs or markings of any kind to the Products
without the prior written consent of the Corporation. The above
shall not be interpreted as preventing the Distributor from
applying its own trade name and markings to the packages or any
other materials distributed by it together with the Products in a
manner that is not misleading.
15.3 The Distributor hereby acknowledges that the Corporation claims that
it (or Licensors of the Corporation) is the sole owner of the
Trademarks and the goodwill pertaining thereto and that nothing
contained herein shall constitute an assignment of the Trademarks or
grant to Distributor any right, title or interest therein, except the
right to use it as set forth in this Article 15. The Distributor
agrees that it will not contest the Corporation's (or the
Corporation's Licensors') ownership of the Trademarks, either during
or after the Term of this Agreement.
15.4 The Distributor shall notify the Corporation in writing of any
infringement of the Trademarks in the Territory, of any applications
or registrations for the Trademarks or marks similar to the Trademarks
within the Territory, of any suit or proceeding or action of unfair
competition involving the Trademarks in the Territory, promptly after
it has notice thereof.
15.5 The Distributor agrees that, upon the termination of this Agreement,
it shall have no interest in or right to use the Trademarks in any
manner or for any purpose whatsoever, except for the limited right to
sell its then remaining inventory of Products bearing the Trademarks.
15.6 If the Distributor acquires any rights to the Trademarks for any
reason, it undertakes to promptly return such rights to the
Corporation immediately and without expense to the Corporation.
15.7 The Corporation represents and warrants to the Distributor that (i) it
is the registered owner of the Trademarks and/or is the sole
authorized licensee of such Trademarks in the Territory, pursuant to
valid license agreements and (ii) it has the right, power and
authority to enter into this Agreement and to grant to the Distributor
the rights granted hereby; and (iii) that the promotion, marketing,
distribution and sale of the Products by the Distributor herein shall
17
not infringe or violate the intellectual property or other rights of
any third party.
Article 16 -INDEMNIFICATION
16.1 Distributor shall indemnify, defend, and hold harmless the
Corporation, its employees, officers, directors, agents, and
representatives (each of the foregoing hereinafter referred to as
"Indemnified Party") of, from, and against any and all claims,
penalties, demands, causes of actions, damages, losses, liabilities,
costs, and expenses including reasonable attorneys' fees, of any kind
or nature whatsoever, arising out of or in any manner directly or
indirectly related to Distributor's breach of any of its obligations
under this Agreement, except to the extent attributable to the
negligence or willful misconduct of the Corporation, its employees,
officers, directors, agents, and representatives.
16.2 The Corporation shall indemnify, defend, and hold harmless
Distributor, its employees, officers, directors, agents, and
representatives (each of the foregoing hereinafter referred to as
"Indemnified Party") of, from, and against any and all claims,
penalties, demands, causes of actions, damages, losses, liabilities,
costs, and expenses including reasonable attorneys' fees, of any kind
or nature whatsoever, arising out of or in any manner directly or
indirectly related to the Corporation's breach of any of its
obligations or warranties under this Agreement except to the extent
attributable to the negligence or willful misconduct of Distributor,
its employees, officers, directors, agents, and representatives.
16.3 Notwithstanding anything contained herein, the Corporation or
Distributor, as the case may be (hereinafter referred to as
"Indemnifying Party") shall not have any liability under the indemnity
provisions of this Agreement with respect to a particular matter
unless a notice setting forth in reasonable detail the breach or
default which is asserted has been given to Indemnifying Party within
the applicable statute of limitations and, in addition, if such matter
arises out of a suit, action, investigation, claim or proceeding, such
notice is given reasonably promptly after the Indemnified Party shall
have been given notice of the commencement of a suit, action,
investigation, claim or proceeding.
16.4 Upon receipt of notice of any suit, action, investigation, claim or
proceeding for which indemnification might be claimed by an
Indemnified Party, Indemnifying Party shall be entitled promptly to
defend, contest or otherwise protect against any such suit, action,
investigation, claim or proceeding at its own cost and expense.
Indemnifying Party shall have the right to settle or compromise any
such suit, action, investigation, claim or proceeding, without the
consent of the Indemnified Party; provided that such settlement or
compromise does not require Indemnified Party to pay any money and
requires the claimant to unconditionally release Indemnified Party
from all liability with respect to such claim or litigation.
Indemnified Party shall have the right, but not the obligation, to
participate at its own expense in a defense thereof by counsel of its
own choosing, but Indemnifying Party shall be entitled to control the
defense unless Indemnified Party has relieved Indemnifying Party from
18
liability with respect to the particular matter. In the event
Indemnifying Party undertakes the defense of such matters, Indemnified
Party shall not be entitled to recover from Indemnifying Party any
legal or other expenses incurred by Indemnified Party in connection
with the defense thereof.
16.5 For the sake of clarity, it is further agreed that any termination of
this Agreement by Corporation, other than pursuant to the provisions
of Sections 11 above, shall be deemed a material breach of this
Agreement by Corporation, and shall entitle Distributor, without
derogating from any other or additional remedy available to
Distributor pursuant to this Agreement and/or any applicable law, to
receive from Corporation full compensation for any and all damages,
expenses and losses incurred by Distributor, directly or indirectly,
including loss of profits, as a result of such termination
Article 17 - INSURANCE
17.1 Corporation and Distributor shall each obtain and keep in force, at
its sole expense, liability insurance providing adequate insurance
against any claims and suits involving product liability arising out
of, or with respect to, the transactions contemplated by this
Agreement, in an amount not less than One million dollars
($1,000,000.00) combined single limit on bodily injuries and/or
property damage. Within thirty (30) days after the date of this
Agreement, each party shall submit to the other a certificate of
insurance naming each other as an additional insured and providing
that any cancellation or material change or alteration which reduces
coverage or any benefits accruing to the other party shall become
effective only upon thirty (30) days prior notice to the other party.
The requirements of this Article are acknowledged by each party to be
a material term of this Agreement.
Article 18 - FORCE MAJEURE
18.1 Neither party hereto shall be liable to the other for delay in any
performance or for the failure to render any performance under this
Agreement when such delay or failure is a direct result of any present
or future statute, law, ordinance, regulation, order, , act of God,
earthquake, epidemic, explosion, lockout, boycott, general strike,
general labor unrest, riot, war, or similar catastrophic occurrence.
Any such event may be relied upon by either party only if: (i) it
directly prevents such party from fulfilling its material obligations
under this Agreement; and (ii) it arises without the fault or
negligence of such party; and (iii) such party could not have
reasonably foreseen such event at the time of signature of this
Agreement; and (iv) such party made all reasonable efforts to avoid or
overcome the effect of the event on it fulfillment of said obligations
under this Agreement.
18.2 In the event of any such delay or failure, the affected party shall
send written notice by telefax or telex of the delay or failure and
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the reason thereof to the other party within fourteen (14) calendar
days from the time the affected party knew or should have known of the
Force Majeure in question.
18.3 The provisions of this Article shall not be applicable to any
obligation involving the payment of money.
Article 19 - GENERAL PROVISIONS
19.1 GOVERNING LAW. This Agreement and all sales and commission
transactions pursuant hereto shall be governed by the laws of , but
without reference to the choice of law provisions thereof.
19.2 NOTICES. Any notice, request, demand, waiver, consent, approval or
other communication required to be given pursuant to this Agreement
(each, a "Notice") shall be in writing to the Party's respective
addresses as set forth in the Preamble of this Agreement, or to any
other address, if to Corporation to the Attention of Mr. Jeff Brain
and if to Distributor to the Attention of ______________, as either
Party may designate by giving a written notice to the other, and be
deemed effectively delivered as well as notice to counsel as set forth
below:
If to Corporation's Counsel:
Jeffrey S. Miles, Esq., PO Box 1001, Ojai, CA 93024
If to Distributor's Counsel:
-------------------------
(a) If delivered personally, upon the date of delivery;
(b) If by registered mailed, within 7 working days from the dispatch
thereof;
(c) If delivered by Federal Express or other similar services 3
working days from the dispatch thereof;
(d) If delivered by facsimile, within 24 working hours from the
dispatch thereof.
(e) All Notices are to be given or made to the parties at the
addresses appearing on the first page hereof, or to such other
address as any party may designate by a Notice given in
accordance with the provisions of this Section 19.2.
19.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with Exhibits
hereto, contains the entire agreement and understanding of the parties
hereto with respect to the matters herein set forth, and all prior
negotiations and understandings relating to the subject matter of this
20
Agreement are merged herein and are superseded and canceled by this
Agreement. This Agreement may not be modified except in writing,
signed by both of the parties hereto.
19.4 TIME OF ESSENCE. Time is of the essence for the performance of each
and every covenant and the satisfaction of each and every condition of
this Agreement.
19.5 WAIVER. The failure by the Corporation to require the performance of
any term of this Agreement or the waiver by the Corporation of any
breach under this Agreement shall not operate or be construed as a
waiver of any subsequent breach by the Distributor hereto.
19.6 ASSIGNMENT. Neither party shall assign its rights nor delegate the
performance of its duties or other obligations under this Agreement,
including any claims arising out of or connected with this Agreement,
without the prior written consent of the other party.
19.7 ARBITRATION. Except with respect to equitable remedies provided
herein, including, without limitation, injunction relief, all claims,
demands, disputes, controversies, differences or misunderstandings
arising out of or relating to this Agreement, or the failure or
refusal to perform the whole or any part thereof, shall be referred to
and finally resolved by arbitration to be administered by the American
Arbitration Association ("AAA"), in accordance with its Commercial
Arbitration Rules then obtaining (the "AAA Rules"). The arbitration
shall be conducted before one arbitrator to be selected by agreement
of the parties or, if no agreement can be reached, in accordance with
the AAA Rules. The arbitration shall be conducted using the English
language for all purposes. Either party hereto may initiate the
arbitration by serving a written demand for arbitration on the other
party, which demand shall contain a description of the nature of the
dispute. All hearings of the arbitration shall take place in Orange
County, California, United States of America.
The initial fees and costs of the arbitration shall be borne equally
and paid timely by each party hereto. Failure by a party to pay said
fees and costs to the AAA timely shall constitute a material default
under this Agreement. The award shall be final and binding upon the
parties, and the parties agree to be bound by the terms of the award
and to act accordingly. The judgment upon any award may be entered in
and enforceable by any court having jurisdiction over the party
against whom the award has been rendered or wherever the assets of the
party are located. Any award shall include reasonable attorney's fees
and costs to the prevailing party, and attorney's fees and costs shall
also be recoverable in any action to enforce the award.
The parties hereto, and each of them, hereby submit themselves to the
jurisdiction of the state courts of the State of California and the
United States Federal District Court in California in any proceeding
for the enforcement of the award rendered by the arbitrator, and agree
that judgment upon such award may be entered in any court, in or out
of the State of California, having jurisdiction thereof. The
arbitrator shall rule in accordance with the laws of California,
without giving effect to the rules of conflict of laws thereof. The
21
parties to the proceeding shall have reasonable rights of discovery in
accordance with the Civil Rules of Federal Procedure used in the
United States District Court.
Nothing contained herein shall prevent either party from applying to
any court of law in order to obtain injunctive relief or any
equivalent remedy, against any other party, in order to restrain the
breach of any restrictive covenants pursuant to this Agreement.
19.8 LETTER OF APPOINTMENT. A Letter of Appointment, in the form attached
hereto as Exhibit "D" shall be furnished by Corporation to Distributor
concurrently with the signature of this Agreement. Distributor shall
be entitled, at its sole discretion, to show such letter to any person
in order to evidence Distributor's appointment hereunder. Upon the
termination of this Agreement, the Letter of Appointment shall
automatically terminate forthwith and shall not be utilized any
further by Distributor.
19.9 The terms and conditions herein contained, constitute the entire and
only contract between the Parties hereto with respect to the subject
matter hereof and shall supersede all previous communications,
representations and/or agreements, either written or oral, between the
Parties in respect of such subject matter. No modification of terms
and conditions of this Agreement shall be binding unless agreed upon
in writing and signed by both Parties.
19.10 Each Party hereby warrants, confirms and undertakes that:
(a) It has the corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated
therein;
(b) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action and this
Agreement constitutes a valid, legal and binding agreement of
such party, enforceable against it in accordance with its terms;
(c) Neither the execution and delivery of this Agreement by it nor
the consummation of the transactions contemplated hereby will (i)
violate, or result in a default under any note, agreement,
contract, understanding, arrangement, restriction or other
instrument or obligation to which it is a party or by which it
may be bound; or (ii) violate any order, award, injunction,
judgment or decree to which it is subject.
19.11 SEVERABILITY. In case any one or more provisions contained in this
Agreement or any application thereof shall be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and other
applications thereof shall not in any way be affected or impaired
thereby.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
CIRALIGHT GLOBAL, INC.
By: /s/ Randall Letcavage
----------------------------------------
Name: Randall Letcavage
Title: CEO
NAME OF DISTRIBUTION COMPANY
By:
----------------------------------------
Name:
Title:
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EXHIBIT "A"
PRODUCTS AND TRADEMARKS
PRODUCTS:
SuntrackerOne(TM) & related componenTS
SuntrackerTwo(TM) & related componenTS
TRADEMARKS AND SLOGANS
Ciralight(TM)
Ciralight Global(TM)
Leading the Daylighting Revolution(TM)
Daylight on, lights off(TM)
SuntrackerOne(TM)
SuntrackerTwo(TM)
Smart Skylight(TM)
Intelligent Skylight(TM)
EXHIBIT "B"
PRICE LIST
(ATTACHED)
EXHIBIT "C"
PRODUCT WARRANTY
(Attached)
EXHIBIT "D"
LETTER OF APPOINTMENT
(Attached)
EXHIBIT "E"
EXCLUSIONS
Ikea
Firestone Building Products
Staples
Ikea