EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement is entered into as of October , 1998 (the "Effective
Date") between, a Texas limited liability company ("Manufacturer") and A a California limited
liability company ("Distributor").
A. Manufacturer has developed and manufactures certain products, including a product
line known as,” (which, along with all improvements thereof and replacements therefor, and related
products, are referred to herein as the “Products”);
B. Distributor is engaged, among other things, in the design, development and
manufacture of advanced technology railroad ties throughout the world, and has developed
applications of the Products relating to railroad ties; and
C. Manufacturer and Distributor desire to arrange for the purchase of the Products by
Distributor for use with respect to railroad ties, and certain other matters, upon the terms and subject
to the conditions of this Agreement.
IN CONSIDERATION of the covenants set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Manufacturer and
Distributor agree as follows:
Appointment as Exclusive Distributor. Manufacturer hereby grants to Distributor the
exclusive worldwide right to market, distribute and sell the Products for application to railroad ties,
including newly manufactured railroad ties and existing railroad ties, and for sale to customers in the
railroad industry or who principally service the railroad industry (the “Exclusive Market”). During
the term of this Agreement Manufacturer shall not (i) appoint or engage any other distributor, agent
or sales representative to sell or distribute the Products to the Exclusive Market, or (ii) sell, distribute
or otherwise deliver Products to customers in the Exclusive Market or who are likely to re-sell the
Products in the Exclusive Market. Manufacturer shall use its best efforts to prevent its distributors or
sales agents from selling or distributing Products in or to the Exclusive Market, directly or indirectly.
Terms of Sale.
2.1 Pricing. The price for the Products during the term of this Agreement shall be the
lower of (i) Manufacturer’s published wholesale prices for the Products, or (ii) the most recent price
at which Manufacturer has sold the Products at wholesale.
2.2 Ordering and Delivery. Distributor shall place orders for the Products on its
standard written form of purchase order at least 30 days in advance of expected Delivery (as that
term is defined below). Manufacturer shall fill orders by delivery of the Products within 20 days of
receipt of a valid purchase order. Manufacturer shall notify Distributor as soon as practicable of any
anticipated delays in scheduled product deliveries. Payment for all orders shall be made by
Distributor to Manufacturer within 45 days of the receipt by Distributor of Delivery. Title and risk of
loss shall pass to Distributor upon delivery of the Products to a common carrier designated by
Distributor (the “Delivery”). All taxes and duties arising from the sale of the Products to Distributor
shall be for the account of Distributor, and Distributor shall bear the sole responsibility for the
collection and payment of any sales, use or other taxes payable in connection with the resale of the
2.3 Forecasts. At 90 day intervals during the term of this Agreement Distributor
shall furnish Manufacturer with a good faith written estimate of projected purchases during the
ensuing 90 days. Such estimates shall be for the sole purpose of allowing Manufacturer to schedule
manufacturing and purchases of raw materials, and shall not obligate Distributor in any way.
Manufacturer shall use its best efforts to meet each order for the Products placed by Distributor on or
before the requested shipment date.
2.4 Product Rejection. Any Products delivered to Distributor by Manufacturer
which do not conform to the specifications furnished by Manufacturer shall be promptly replaced by
Manufacturer. If replacement cannot be accomplished within 60 days of the original requested
delivery date, any prepayments made toward the original order will be promptly refunded by
3. Duties and Covenants of Distributor.
3.1 Promotion. Distributor shall use its best efforts to actively and diligently promote
the sale of the Products in the Exclusive Market.
3.2 Compliance. Distributor shall comply in all material respects with all applicable
laws, regulations or orders of any and all governmental authorities with respect to the marketing and
distribution of the Products. Distributor agrees that it will not directly or indirectly do any act or
thing which will constitute a violation by Distributor or Manufacturer of any applicable laws or
3.3 Assistance. Distributor shall furnish such assistance as Manufacturer may
reasonably request, at Manufacturer's expense, to enable Manufacturer t