SALES REPRESENTATIVE AGREEMENT
THIS SALES REPRESENTATIVE AGREEMENT ("AGREEMENT") is made this 15th day of
August, 2003 by and between Petters Consumer Brands, LLC, a limited liability
company organized under the laws of Delaware, having its principal offices at
0000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, X.X.X. ("PRINCIPAL") and GSI
Technologies USA Inc., a corporation organized under the laws of Delaware and
having its principal offices at 000 Xx-Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx
Xxxxxx X0X-0X0 ("REPRESENTATIVE").
WHEREAS, Principal has a license with Polaroid Corporation whereby
Principal has the right to manufacture and sell certain electronic consumer
products utilizing the "POLAROID" trademark; and
WHEREAS, Representative possesses the skill and experience necessary to
promote and solicit offers and orders for consumer products from certain
customers; and
WHEREAS, Principal is willing to appoint Representative, and Representative
is willing to accept such appointment, as Principal's sales and purchase
representative for Polaroid products with respect to certain customers in the
Field, as further set forth below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, Principal and Representative agree as follows:
1) Definitions. For purposes of this Agreement, the following words and
-----------
phrases, where written with an initial capital letter, shall have the
meanings assigned to them below unless the context otherwise requires:
a) "CUSTOMERS" shall mean customers, potential customers or prospects in
the Territory, in the Field.
b) "FIELD" shall mean the out-of-home digital signage market,
broadcasting solutions principally for media operators, advertisers
and others seeking to reach the greatest number of "viewers per day"
at the street level by the strategic placement of digital signage that
is readily visible to pedestrians and motorists.
c) "INTELLECTUAL PROPERTY" shall mean any and all patents (and
applications therefore), trademarks (and applications therefore),
trade names, trade dress, copyrights and other intellectual property
rights or proprietary rights of Principal and/or Polaroid Corporation.
d) "MINIMUM SALES REQUIREMENTS" shall mean those annual targets for unit
quantities of Products as provided on Exhibit A for the initial term
of this Agreement and as revised by mutual agreement of the parties
for each year thereafter.
e) "NET SELLING PRICE" shall mean the amount received by Principal for
Products sold to Customers.
f) "PRINCIPAL INFORMATION" shall mean all information, other than
information that is in published form or expressly designated by
Principal as nonconfidential, which is directly or indirectly
disclosed to Representative by Principal, relating in any way to
Principal's business, including, without limitation, information
relating to Principal's markets, customers, products, patents,
trademarks, trade names, other intellectual property rights,
inventions, procedures, methods, designs, plans, organization, assets,
liabilities, costs, revenue, employees or business in general.
g) "PRODUCTS" shall mean those "POLAROID" products sold by Principal and
listed on the attached Exhibit B, as amended by Principal in writing
---------
from time to time in its sole discretion, and all improvements,
modifications or replacements of such products; however,
Representative acknowledges that Principal may produce and/or acquire
certain products that Principal may not include on Exhibit B.
---------
h) "TERMS AND CONDITIONS" shall mean Principal's Terms and Conditions for
the sale of Products, as provided to Representative from time to time.
i) "TERRITORY" shall mean the United States, Canada and Mexico.
2) Appointment.
-----------
a) Scope. Principal hereby appoints Representative, and Representative
------
hereby accepts appointment, as Principal's non-exclusive sales
representative solely with respect to Customers in the Territory, in
the Field, for the purpose of soliciting and obtaining orders for
Products subject to the terms of this Agreement. Principal reserves
the right to sell Products directly to Customers. Representative shall
use its best efforts to do the following:
i) diligently seek business from the Customers for the purchase of
Products;
ii) negotiate for the sale of Products to Customers under the Terms
and Conditions and in accordance with instructions from Principal; and
iii) cooperate with Principal to the fullest extent in implementing
the programs, policies, directions, requests and instructions of
Principal.
b) Exclusivity. Representative shall not represent, distribute for, act
-----------
as agent for, use, engage or work with any other supplier,
manufacturer, distributor or other provider of Products in the
Territory, in the Field during the Term of this Agreement. However,
Representative has the right to sell its own products in the event a
particular project does not require products from Principal (e.g., if
a purchaser would already have screens, Representative may sell
software only).
c) Independent Contractors. The relationship of Principal and
------------------------
Representative shall be that of independent contractors and nothing
contained in this Agreement shall be construed to (i) give either
party the power to direct and control the day-to-day activities of the
other, (ii) constitute the parties as partners, joint venturers,
co-owners or otherwise as participants in a joint or common
undertaking, or (iii) constitute Representative or its agents or
employees as the agents or employees of Principal or to grant to them
any power or authority to act for, bind or otherwise create or assume
any obligation on behalf of Principal for any purpose whatsoever.
d) Product Changes. Principal shall be under no obligation to
----------------
Representative to continue its business or to continue to sell or
supply any of the Products.
e) Samples. Principal shall provide Representative with reasonable
-------
quantities of Product samples at Principal's then current cost of such
Product samples. All samples shall be used solely for demonstration
purposes and shall not be sold, leased or otherwise disposed of by
Representative to any third party.
2
3) Solicitation And Acceptance of Orders or Offers to Sell.
---------------------------------------------------------------
a) Solicitation. All of Representative's solicitations will be conducted
------------
in accordance with such procedures, prices, terms and conditions as
Principal may specify from time to time. All quotations and orders for
Products must be submitted under Principal's then current Terms and
Conditions and using such forms as Principal may from time to time
provide to Representative.
b) Acceptance. All purchase orders solicited by Representative hereunder
----------
are subject to acceptance or rejection by Principal at its offices in
Minnetonka, Minnesota, U.S.A., which approval or rejection shall, in
all cases, be given in writing to the customer. No such order or offer
shall be binding upon Principal until so accepted. Principal shall
have the right to refuse to enter into any sales transaction for any
other reason which, in the sole judgment of Principal, is reasonable
grounds for refusal. Representative shall not be entitled to any
compensation on any rejected orders or offers.
c) No Solicitation. Representative shall limit its promotional activities
---------------
with respect to Products to Customers and refrain from soliciting any
sales of Products to persons or entities other than Customers.
4) General Obligations of Representative.
----------------------------------------
a) Informing Customers. Representative agrees fully to inform all persons
-------------------
and entities with which it has dealings that (i) Representative is a
representative of Principal and not a representative of Polaroid
Corporation; (ii) Representative has no authority to vary, alter,
enlarge or limit Principal's then current Terms and Conditions as
provided to Representative by Principal from time to time, nor to make
any allowances or adjustments in accounts or authorize the return of
any Products, without first obtaining, in each and every instance,
Principal's prior written authorization; and (iii) Representative has
no right, power or authority to accept any order to purchase, or to
assume or create any obligation, express or implied, on behalf of
Principal.
b) Personnel. Representative shall employ or retain an adequate
---------
organization of well-trained and qualified personnel to effectively
perform its obligations hereunder. Representative shall comply fully
with its obligations under applicable labor, tax and social welfare
laws with respect to its personnel and shall keep at its expense full
and accurate books and records documenting such compliance.
c) Customer Support and Cooperation with Principal. Representative shall
------------------------------------------------
(i) respond promptly to any reasonable request by Principal for market
or other relevant information; (ii) forward promptly to Principal any
inquiry or other communication concerning the Products; (iii)
cooperate fully with Principal in dealing with any customer complaints
concerning the Products and to take such action to resolve such
complaints as may be reasonably requested by Principal; and (iv)
cooperate fully with Principal in regard to all sales and customer
support activities related to the Products.
d) Promotional Materials. Principal will furnish Representative with a
----------------------
reasonable quantity of Principal's advertising, marketing and
promotional materials for use by Representative. Representative may
not use promotional, marketing or advertising materials other than
those materials supplied by Principal unless (i) it has received
Principal's prior written approval to use such materials and (ii) any
copyright or other Intellectual Property notice on the original
Principal text has been accurately reproduced on Representative's
materials.
3
e) Other Marketing Materials. Representative shall be allowed to display
--------------------------
Products and their respective specifications (excluding any pricing)
on its website for the sole purpose of advertising, promoting, selling
and distributing such Products.
f) Reports. No later than 15 days after the close of each calendar month
-------
during each year of this Agreement, or at any other time upon the
written request of Principal, Representative shall provide Principal
with a report summarizing Representative's activities under this
Agreement for the month just ended (or other requested period),
including, without limitation, progress on marketing and promotion and
future plans related thereto. Representative shall also provide any
reasonable additional data Principal requires to evaluate
Representative's performance.
g) Custody of Products. During the term of this Agreement, unless
---------------------
otherwise approved in advance in writing by Principal, Representative
shall keep the Products and any copies of or ancillary materials
related to the Products in secure and suitable storage and shall, at
its own expense, maintain adequate security and insurance for any
Products, Principal Information and related materials in
Representative's possession. Representative shall not make any
modifications to the Products and shall not alter or remove any
trademarks, trade names or other identifying marks attached to or
contained in the Products or Product packaging.
h) Minimum Sales Requirement. Representative understands and agrees that
--------------------------
the establishment and achievement of the Minimum Sales Requirement is
the essence of this Agreement, and that failure by Representative to
satisfy its Minimum Sales Requirement shall constitute a material
breach of this Agreement, entitling Principal to terminate this
Agreement. As a result, Representative agrees that it will obtain
third-party orders, which total at least the quantities specified in
Exhibit A for each of the time periods specified therein. The parties
hereto acknowledge and agree that any amendment or modification to
Exhibit A must be in a writing signed by both parties.
5) Compensation.
------------
a) General. Subject to the provisions hereof, Principal shall quote
-------
Representative a net price for each Product. Representative shall be
entitled to any margin received from customers over and above such
quoted net price as the sole and exclusive compensation to
Representative for any and all services hereunder performed with
regard to the solicitation or obtaining of orders for the Products. By
way of example, if Principal quotes a certain Product to
Representative at $2,400 and Representative sells such Product to a
customer for $2,700, Representative shall receive compensation of
$300.
b) Payment of Compensation. Principal shall make payment of such margin
-------------------------
to Representative only on Products as to which full payment is
received from or on behalf of customers. Where such payments received
by Principal only partially fulfill the entire obligation to
Principal, the compensation payable thereon shall be limited to the
pro rata portion of the amount of the Net Selling Price actually
received by Principal. Payment of compensation shall be made on or
about the 15th day of the month following the month that full payment
has been received from customers by Principal.
c) Returns. Principal shall charge against Representative's compensation
-------
account the amount of any compensation already credited or paid in
connection with adjustments for returned goods and refunds. Any net
amounts due from Representative to Principal after such adjustments
shall be paid to Principal upon demand.
4
d) Sales to Customers. Representative will be compensated only for sales
-------------------
made by Principal to Customers. A sale shall be deemed made to a
Customer when an order for the Products is placed or received from a
Customer and the Product is delivered to such Customer.
e) Participation Required. Representative shall be compensated for sales
-----------------------
made by Principal to Customers only if and to the extent that
Representative has directly and materially participated in soliciting
or obtaining such sales.
f) Assignment. During the term of this Agreement, Representative shall
----------
not have the right to assign compensation hereunder prior to the time
such compensation has been earned and may be rightfully claimed by
Representative, but all compensation properly due shall in any event
inure to the benefit of Representative's legal successors.
g) Orders Received. Notwithstanding any other provision of this Section
----------------
5, upon termination of this Agreement by either party, Principal will
continue to pay compensation as provided in this Section 5 on all
sales with respect to which orders or offers to sell to Principal are
received and accepted by Principal as of the date of such termination,
provided that Representative shall have participated directly and
materially in the solicitation or obtaining of such orders.
h) Collection. All invoices to Customers shall be rendered by Principal
----------
directly to the customers. It is expressly understood that full power
and authority for all collections rests with Principal, which shall
exercise complete control over the approval of all customers credits,
orders and contracts. Representative agrees to cooperate with and
assist Principal in such collections and to report to Principal any
available credit information with respect to Customers.
6) Intellectual Property. Representative shall have no right, license or
----------------------
interest in or to any Intellectual Property. Nothing contained in this
Agreement shall be deemed to grant Representative any right, license or
interest in or to any Intellectual Property.
7) Term and Termination.
----------------------
a) Term. This Agreement shall enter into force as of the date first above
----
written and shall continue in force for an initial period of one year.
Thereafter, this Agreement shall be renewed for additional periods of
one year each unless either of the parties shall have given the other
party written notice of its termination of this Agreement no later
than 30 days prior to the end of the initial or any renewal term
hereof.
b) Additional Termination Provisions. Notwithstanding the provisions of
-----------------------------------
Section 7(a) above, this Agreement may be terminated earlier as
follows:
i) immediately by Principal if Principal's right or ability to
license, manufacture, sell, distribute or otherwise supply any of
the Products is terminated or revoked for any reason;
ii) by either party upon written notice to the other party if
Principal or Representative so elects, in its sole discretion and
for any reason, and provides at least 30 days' written notice
prior to such termination;
iii) by either party upon written notice to the other party if the
other party is in material breach of this Agreement and has
failed to cure such breach within 15 days of receipt of written
notice thereof from the first party;
5
iv) by either party upon written notice to the other party if the
other party files a petition of any type as to its bankruptcy, is
declared bankrupt, becomes insolvent, makes an assignment for the
benefit of creditors, goes into liquidation or receivership, or
otherwise loses legal control of its business involuntarily;
v) by Principal upon written notice to the Representative if
Representative fails to achieve its Minimum Sales Requirement for
any year during the term of this Agreement;
vi) by Principal upon written notice to the Representative in the
event of any material change in the management, ownership or
control of Representative; and
vii) by either party upon written notice to the other party if an
event of Force Majeure (as defined below) continues for more than
60 days.
c) Termination Rights and Obligations. Upon termination of this Agreement
----------------------------------
for any reason, the parties shall have the following rights and
obligations:
i) Representative shall have no further right to solicit or obtain
orders for Product or use any Intellectual Property in any
manner.
ii) Neither party shall be released from the obligation to make
payment of all amounts then or thereafter due and payable, except
that Principal shall have the right to withhold any amounts owed
to it by Representative from amounts payable to Representative.
iii) Representative shall cooperate with Principal (A) to transfer
Customer contracts, existing contracts, goodwill and other
aspects of Principal's business to Principal or to one or more
representatives appointed by Principal and (B) to transfer to
Principal or to one or more representatives designated by
Principal all other property of Principal in the possession of
Representative or its agents or employees.
8) Force Majeure.
--------------
a) Definition. "FORCE MAJEURE" shall mean any event or condition beyond
----------
the reasonable control of either party that prevents, in whole or in
material part, the performance by one of the parties of its
obligations hereunder or which renders the performance of such
obligations so difficult or costly as to make such performance
commercially unreasonable, including, without limitation, acts of
State or governmental action, riots, disturbance, war, strikes,
terrorism, lockouts, slowdowns, prolonged shortage of energy or other
supplies, epidemics, fire, flood, hurricane, typhoon, earthquake,
lightning or explosion.
b) Notice; Suspension of Performance. Upon written notice to the other
------------------------------------
party, a party affected by an event of Force Majeure shall be
suspended without any liability on its part from the performance of
its obligations under this Agreement, except for the obligation to pay
any amounts due and owing hereunder. Such notice shall include a
description of the nature of the event of Force Majeure, and its cause
and possible consequences. The party claiming Force Majeure shall also
promptly notify the other party of the termination of such event.
During the period that the performance by one of the parties of its
obligations under this Agreement has been suspended by reason of an
event of Force Majeure, the other party may likewise suspend the
performance of all or part of its obligations hereunder to the extent
that such suspension is commercially reasonable.
6
9) Confidential Information.
-------------------------
a) Confidential Information. Representative acknowledges and agrees that
-------------------------
all Principal Information is confidential and proprietary to Principal
and Representative shall not use any Principal Information during the
term of this Agreement, and for a period of five years thereafter, for
any purpose other than as permitted or required for performance by
Representative of its obligations under this Agreement. Representative
further agrees not to disclose or provide any Principal Information to
any third party and to take all necessary measures to prevent any such
disclosure by its employees, agents and affiliates during the term
hereof and for a period of five years thereafter. Nothing herein shall
prevent Representative from disclosing information that is, or
hereafter becomes, part of the public domain through no fault of
Representative.
b) Return of Confidential Information. Upon termination hereof,
-------------------------------------
Representative shall return to Principal all Principal Information,
including without limitation, all brochures, company reports, customer
lists and the like. The return of any and all such items shall be a
condition of Principal's obligation to pay any compensation otherwise
due; provided, however, that such condition shall not be an exclusive
remedy to Principal, but shall be in addition to all other rights and
remedies of Principal hereunder.
10) Governing Law; Dispute Resolution. This Agreement and any disputes arising
----------------------------------
under this Agreement shall be governed by and interpreted in accordance
with the laws of the State of Minnesota, excluding any conflict of law
rules or principle therein contained under which any other law would be
made applicable. The parties stipulate to the exclusive jurisdiction and
venue of the courts of Minnesota to resolve any dispute relating to this
Agreement, or arising hereunder, or by virtue of the relationship of the
parties. The prevailing party in any proceeding brought to enforce the
provisions of this Agreement or to seek a remedy for any breach (including
an arbitration action or administrative proceeding) shall be entitled to
receive reimbursement of its reasonable attorney and paralegal fees as well
as court costs, litigation expenses, and other disbursements incurred in
connection with such proceeding, including fees and expenses incurred in
any appellate proceeding.
11) General.
-------
a) Assignment. The Company's rights under this Agreement shall be
----------
assignable, and its duties may be delegated. Representative's rights
under this Agreement shall not be assignable nor shall
Representative's duties be delegated. Nothing contained in this
Agreement, expressed or implied, is intended to confer upon any person
or entity other than the parties any rights or remedies resulting from
this Agreement unless so stated to the contrary. Any prohibited
assignment shall be null and void.
b) Disclosure of Information. In addition to the provisions of Section 9,
-------------------------
each of the parties to this Agreement hereby agrees with the other
parties hereto that no press release or similar public announcement or
communication will be made or caused to be made concerning the
execution or performance of this Agreement unless specifically
approved in advance by all parties hereto.
c) Notices. Notices permitted or required to be given hereunder shall be
-------
deemed sufficient if given (i) by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed
to the respective addresses of the parties as first above written or
at such other addresses as the respective parties may designate by
like notice from time to time, or (ii) by facsimile to the facsimile
number provided by each party. If given by overnight courier or by
registered or certified mail, notices shall be effective upon receipt
by the party to which notice is given, or on the 10th day following
the date such notice was sent in the case of overnight courier or
posted in the case of mail,
7
whichever occurs first. If given by facsimile, notices shall be
effective upon the earlier of receipt by the party to which notice is
given or the first business day following dispatch of the notice.
d) Waiver. No failure by either party to take any action or assert any
------
right hereunder shall be deemed to be a waiver of such right in the
event of the continuation or repetition of the circumstances giving
rise to such right.
e) Indemnity. Representative shall indemnify and hold harmless Principal
---------
and its officers, directors, employees, agents, successors and assigns
(collectively, "AFFILIATES") from any claim, demand, liability, cause
of action, loss, damage or expense (including, without limitation,
reasonable attorneys fees, cost of suit or cost of settlement) that
arises out of or is related to the acts or omissions of Representative
or any of its directors, officers, employees or agents, including,
without limitation, any (i) breach of this Agreement, (ii) promotion,
solicitation, sale or distribution of the Products or use of any
Intellectual Property, (ii) negligence or other tortuous conduct,
(iii) representations or statements not specifically authorized by
Principal herein or otherwise in writing or (iv) violation by the
Representative or any of its directors, officers, employees or agents
of any applicable law, regulation or order.
f) Books and Records. Representative shall keep accurate books of account
-----------------
and records covering all transactions and legal obligations relating
to the subject matter herein. Principal and its authorized
representatives and agents, upon giving 3 days prior written notice,
shall have the right at all reasonable business hours to freely and
fully examine such books of account and records in Representatives
possession or under its control with respect to the subject matter and
terms of this Agreement, including the right, at Principal's expense,
to make copies and extracts therefrom. All such books of account and
records shall be kept available for at least one year after the
termination or expiration of this Agreement.
g) Entire Agreement. This Agreement, including all Exhibits attached
-----------------
hereto and incorporated as an integral part of this Agreement,
constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all previous agreements by and
between principal and representative as well as all proposals, oral or
written, and all negotiations, conversations or discussions heretofore
had between the parties related to this Agreement. Representative
acknowledges that it has not been induced to enter into this Agreement
by any representations or statements, oral or written, not expressly
contained herein.
h) Modification. No modification of this Agreement shall be binding on
------------
either party unless it is in writing and signed by both parties.
i) Severability. The illegality or unenforceability of any provision of
------------
this Agreement shall not affect the validity and enforceability of any
legal and enforceable provisions hereof.
j) Limitation of Damages; Remedies. IN NO EVENT SHALL PRINCIPAL BE LIABLE
-------------------------------
TO REPRESENTATIVE, A CUSTOMER OR ANY OTHER PARTY FOR (1) LOSS OF
PROFITS, GOODWILL OR OTHER FINANCIAL LOSS, OR INDIRECT, SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES ARISING OUT OF THIS
AGREEMENT, WHETHER OR NOT FORSEEABLE AND EVEN IF PRINCIPAL SHALL HAVE
BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE BY
REPRESENTATIVE OR REPRESENTATIVE'S CUSTOMERS; OR (2) ANY CLAIM THAT
AROSE MORE THAN ONE YEAR PRIOR TO THE INSTITUTION OF SUIT THEREON. TO
THE FULLEST EXTENT ALLOWED BY LAW, THE WARRANTIES AND REMEDIES SET
FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES OR
8
CONDITIONS, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE AND BOTH
PARTIES HEREBY WAIVE ANY OTHER REMEDY, WHETHER IN LAW OR AT EQUITY.
k) Survival. Upon any termination or expiration of this Agreement, the
--------
following provisions shall survive according to their terms: Sections
6, 7, 9, 10 and 11.
l) Copies; Counterparts. The parties shall sign two copies of this
---------------------
Agreement, one of which shall be retained by the Representative and
one to be retained by the Principal, each of which shall be deemed an
original. Each copy of this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties have executed this Sales Representative
Agreement as of the day and date set forth above.
PETTERS CONSUMER BRANDS, LLC GSI TECHNOLOGIES USA INC.
By: By:
--------------------------- -----------------------------
Name: Cord Xxxxxxxxxxx Name: Xxxxx El-Ahmar Eid
--------------------------- -----------------------------
Its: President Its: Director and Secretary
--------------------------- -----------------------------
9
EXHIBIT A
---------
Minimum Sales Requirements
Representative shall sell a minimum of 5,000 42" plasma screens within 12 months
of the date of this Agreement (the initial term of this Agreement).
EXHIBIT A - INITIALS: DATE:
--------------- --------------- ------------
PRINCIPAL REPRESENTATIVE
EXHIBIT B
---------
Products
----------------------------------------------------------------
Product Description UPC
----------------------------------------------------------------
42" Plasma PLA-4200 826219000163
----------------------------------------------------------------
17" HDTV LCD-1750 826219000378
----------------------------------------------------------------
20" HDTV LCD-2050 826219000385
----------------------------------------------------------------
Unless provided otherwise, Products also include those items set forth on the
most recent price sheet distributed to Representative by Principal.
EXHIBIT B - INITIALS: DATE:
--------------- --------------- ------------
PRINCIPAL REPRESENTATIVE
