U.s. Stocking Distributor Five-year Agreement

EXHIBIT 10.18


U.S. STOCKING DISTRIBUTOR
FIVE-YEAR AGREEMENT


BETWEEN


FLUOROWARE, INC.
3500 LYMAN BOULEVARD
CHASKA, MN 55318


AND


KYSER COMPANY
2621 RIDGEPOINT DRIVE, SUITE 230
AUSTIN, TX 78754


1. APPOINTMENT. Fluoroware, Inc. ("Fluoroware" or "we") hereby appoints Kyser
Company stocking distributor ("Distributor" or "you") for the marketing and
sale of those Fluoroware gas and liquid handling products set forth on
Schedule A, attached.


2. TERM. Subject to the provisions of Section 17, the term of this Agreement
shall be for a period of five years commencing September 1, 1997, and
ending August 31, 2002, renewing automatically for successive five-year
terms thereafter, unless terminated by either party: (a) without cause, at
the expiration of any five-year term upon one year written notice to the
other party; or (b) for cause, at any time, as provided herein.


3. AREA OF PRIMARY RESPONSIBILITY. Your area of primary responsibility will be
the following territory ("territory"): states of Washington, Oregon, Idaho,
Montana, Wyoming, Colorado, New Mexico, Utah, the mid-portion of Texas and
northeastern Nevada. A copy of the territory map is attached.


4. FLUOROWARE OBLIGATIONS. Fluoroware will make reasonable efforts to
accomplish the following on behalf of distributor:


(a) Deliver to you with reasonable diligence all products, price lists and
other literature reasonably required for performance of your
obligations under the Agreement.


(b) Refer inquiries received by us from your primary area of
responsibility for our gas and liquid handling products.


(c) Perform its duties within a reasonable time unless prevented by
circumstances beyond our control.


(d) Conduct necessary training programs to aid distributor sales personnel
to better understand and market Fluoroware products.


(e) Provide historical sales data by major product group and industry as
an aid in forecasting.


(f) Prepare final plans and forecasts, and establish corrective action
plans.


(g) Provide a quarterly performance report based on categories shown in
Section 6 and 7. Quarters are based on Fluoroware's fiscal year,
commencing September 1 of each year.


(h) Fairly and promptly provide all rewards earned by meeting or exceeding
performance standards as described in Section 8 and 9.


5. DISTRIBUTOR OBLIGATIONS.


You, as distributor, represent and warrant to Fluoroware that you will:


(a) Perform as a stocking distributor or manufacturer's representative as
specified below and use your best efforts to stock, market and sell
products within your Area of Primary Responsibility.


(b) Refer to us all inquiries received by you for the sale of the products
outside your Area of Primary Responsibility and otherwise refrain from
facilitation of sales through you outside of your territory.


(c) Not enter into any contracts or other commitments binding us without
our prior written consent.


(d) Not make any representation or give any warranty relating to the
products other than those expressly stated in Fluoroware's written
sales documents. You will be exclusively liable for any other
representations and warranties and will indemnify and hold Fluoroware
harmless from any claims (including, without limitation, Fluoroware's
attorney fees) arising from any unauthorized representations and
warranties.


(e) With reasonable notice make yourself available for instruction or
discussion as deemed necessary by Fluoroware.


(f) Subject to the terms of Section 17(c), during the term of this
Agreement and for a period of two years following its expiration or
termination (whichever is earlier), you will refrain from selling, and
refrain from having any involvement or connection with the sale of,
any products competitive with those of Fluoroware. Fluoroware shall be
entitled to enforce the provisions of this Section by a temporary
restraining order and temporary and permanent injunctions
(collectively, "specific performance").


(g) Not make any purchase on our behalf or pledge our credit.


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(h) Sell our products under the Fluoroware(R), Inc. label.


(i) Keep your account current: Net 30 days from date of invoice. If during
a quarter the distributor becomes delinquent in its payment to
Fluoroware, without approval, the distributor will be subject to a
discount penalty. The penalty will be calculated as a 2% reduction in
the distributor's discount for all of distributor's purchases during
the subsequent quarter ("subsequent quarter"). If at the end of the
subsequent quarter the distributor's payment performance is current,
the standard discount will be reactivated for the next succeeding
quarter.


If distributor's account is not brought current by the end of the
subsequent quarter, the distributor may be terminated immediately.


(j) Report distributor sales monthly. Reports must be submitted to
Fluoroware on or before the 20th day of the subsequent month.
Subsequent to Fluoroware's right to revise the reporting requirements
at any time, the reports will contain the following information for
each of distributor's customers: ship-to-address; part number; and
quantity for each customer. Each customer is to be assigned to either
microelectronic (ME) or process and instrumentation (PI) markets.


(k) Report inventory value monthly, submitted to Fluoroware by the 20th
day of the subsequent month, and reported on a distributor cost basis.


(l) Provide Fluoroware proposed annual forecast by April 15th. Twelve
month sales forecasts for September through the following August are
to be reported separately for microelectronic ("ME") and process and
instrumentation ("P&I") sales. In each market, the total sales are to
be divided into major product groups; i.e., fittings, valves, tubing
and all others. Forecasts are to be based on distributor cost.


6. DISTRIBUTOR PERFORMANCE EVALUATION PROGRAM.


(a) All distributors will participate in a Performance Evaluation Program.
The Performance Evaluation Program will consist of two areas:
Recognition and Award. Distributors must meet the following
performance prerequisites in order to be eligible for either the
Recognition or Award aspect of the program:


(1) Must be a Fluoroware distributor at the beginning of the fiscal
year period.


(2) Must provide 100% of the required reports on time


- Monthly sales/inventory reports
- Annual forecast report


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(3) Must make 100% of payments to Fluoroware on time, according to
the terms of this Agreement.


(4) On a quarterly basis, must maintain inventory between 10% and 35%
of distributor's average annual sales to its customers during the
preceding four quarters.


(5) Must not currently be subject to corrective action in any given
category.


7. DISTRIBUTOR PERFORMANCE EVALUATION


(a) Distributor performance will be measured in the following three
categories:


(1) Overall sales volume


(2) Percent sales growth; Microelectronics


(3) Percent sales growth; Process and Instrumentation


(b) All distributors will be expected to meet a performance standard of
85% within each of the listed categories.


(c) The following definitions apply to the performance measurement system;


(1) Sales amounts refer to the volume of product sold to a
distributor calculated by the actual purchase price.


(2) Overall sales volume is defined as the ratio of the annualized
total reported sales to the distributor to the sales plan,
expressed as a percent.


(3) Microelectronics sales growth is the ratio of the annualized
reported microelectronic sales to the microelectronic sales plan,
expressed as a percent.


(4) Process and instrumentation sales growth is the ratio of
annualized reported process and instrumentation sales to the
process and instrumentation sales plan, expressed as a percent.


(5) The Inventory Level is defined as the ratio of the distributor
reported inventory value to the annualized sales, expressed as a
percent. The annualized sales includes sales from product(s) sold
as a sales representative.


8. DISTRIBUTOR RECOGNITION PROGRAM


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(a) Distributors will be measured in three areas of performance: overall
sales volume, sales growth in microelectronics, and sales growth in
process and instrumentation. All areas of performance will be
evaluated against the Forecast Plan established for each distributor.


(b) Distributors who meet or exceed 96% of their Forecast Plan in each
category, and meet the performance prerequisites, will be eligible for
the Recognition Program. Distributors' scores in each category will be
the percentage, to plan, that they achieve in each category.
Distributors' rank in each category will be the place number in which
they finish in that given category. The ranking scores in each
category wil ...