Exhibit 10.15
Xxxxx Xxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxxxxx
Xxxxxxx Machinery Corp.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Re: Distributor Agreement dated January 10, 1996
Originals - Via Overnight Courier
Copies - Via Certified Mail, Return Receipt Requested #Z 702 447 281
Gentlemen:
We are enclosing two (2) executed originals of a Distributor
Agreement between M&R Sales and Service, Inc. and Clinton Machinery Corp. dated
January 10, 1996 (the "Agreement"). We are delivering the enclosed executed
originals of the Agreement on the condition and understanding that you will, no
later than January 31, 1996, in addition to any required deposits to be made on
orders to be placed between now and January 31, 1996, wire transfer to us at the
account set forth below the sum of $1,973,000. If, for whatever reason, we do
not receive said sum on or before January 31, 1996, our execution of the
Agreement shall be deemed to be revoked and the Agreement, and all of the terms
and conditions set forth therein, shall be of no force and effect
Please wire-transfer the funds to the following account:
Bank of America, Illinois
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
ABA# 000000000
A/C # 75-02141
A/C Name: MR ACQUISITION, INC
Please call me with any questions.
Very truly yours,
/s/ Xxxx X. Major
------------------------
Xxxx X. Major
Vice President - Finance
DISTRIBUTOR AGREEMENT
THIS AGREEMENT made and entered as of the 10th day of January, 1996,
between M&R SALES AND SERVICE, INC., a Delaware corporation, with a principal
place of business in Glen Ellyn, Illinois (hereinafter referred to as "M&R"),
and Clinton Machinery Corp., with a principal place of business in Miami Lakes,
Florida (hereinafter referred to as "DISTRIBUTOR").
WITNESSETH:
I
GRANT OF DISTRIBUTORSHIP
1.01 Appointment. M&R hereby appoints DISTRIBUTOR as its
distributor for its line of Products (other than Excluded Equipment and
Custom Equipment (all as defined in Paragraph 1.02 below)) manufactured by
M&R Printing Equipment, Inc. and Precision Screen Machines, Inc.
(collectively, "Manufacturers") in the Exclusive Territory and the
Non-Exclusive Territory (as defined in Paragraph 2.01 below).
1.02 Products. As used herein, Products shall mean all standard
textile and graphic screen printing and drying equipment and parts manufactured
by the Manufacturers. All equipment and parts designed to customers'
specifications and not of M&R's standard design are hereinafter referred to as
"Custom Equipment".
1.03 Efforts. DISTRIBUTOR agrees to use its best efforts to promote
and sell Products in the Territory. DISTRIBUTOR shall, at its cost and expense,
hire, develop, and supervise its own personnel under such terms and conditions
as DISTRIBUTOR may deem appropriate. Under no circumstances shall any employee,
agent, independent contractor or subcontractor of DISTRIBUTOR be deemed to be a
third party beneficiary of this Agreement. All expenses and disbursements
incurred in the solicitation of orders for Products shall be borne by
DISTRIBUTOR. DISTRIBUTOR shall not incur any liability for the account of M&R,
and shall indemnify and defend M&R against and hold M&R harmless from all
claims, expenses and disbursements in connection with the sale of Products.
DISTRIBUTOR shall, at its own cost and expense, comply with all federal, state
and local laws, including but not limited to all licensing and permitting laws,
statutes or ordinances which may be required in connection with its business.
II
TERRITORY
2.01 Definition. As used herein the terms "Exclusive Territory" and
"Non-Exclusive Territory" shall mean the states listed on Exhibit "A" The
Exclusive Territory and the Non-Exclusive Territory is sometimes hereinafter
collectively referred to as the "Territory".
2
Subject to M&R's right to market Products to those parties listed on Exhibit "B"
or their affiliates which are collectively hereinafter referred to as "House
Accounts" and the provisions of this Agreement, DISTRIBUTOR shall have the
exclusive right to market Products (other than Excluded Equipment and Custom
Equipment) in the Exclusive Territory and shall have the right, together with
M&R and other distributors, to market Products in the Non-Exclusive Territory.
2.02 Inquiries. M&R agrees to refer to DISTRIBUTOR all inquiries and
orders received from customers or prospective customers in the Exclusive
Territory, except those inquiries and orders received from House Accounts.
DISTRIBUTOR shall receive commissions, finder's fees and other compensation in
connection with sales of Products to House Accounts if agreed in writing with
M&R prior to such sales.
2.03 Exclusivity. If, in the reasonable opinion of M&R, DISTRIBUTOR
fails to maintain a sales force, showroom and technical personnel necessary to
perform all of its obligations to promote sales in the Exclusive Territory, upon
written notice to DISTRIBUTOR, M&R may convert all or part of the Exclusive
Territory into a Non-Exclusive Territory.
III
TERM
3.01 Initial Term. The term ("Term") of this Agreement shall be for
three years from the date hereof and shall expire on December 31, 1998, unless
terminated in accordance with the early termination provisions set forth in
Article X. The Term shall be automatically renewed for successive one year terms
unless on or before July 1 of the year in which the Term is due to expire, M&R
or DISTRIBUTOR delivers a written notice to the other party electing to
terminate this Agreement as of December 31 of that year.
IV
SALES GOALS
4.01 Minimum Sales. If DISTRIBUTOR fails to meet its Sales Goal (as
hereinafter defined) for the Territory for any fiscal year (October 1 to
September 30) commencing October 1, 1995, M&R may terminate this Agreement upon
written notice to DISTRIBUTOR. If DISTRIBUTOR shall meet its Sales Goal for the
entire Territory, but shall fail to meet its Sales Goal with respect to the sale
of textile Products in any particular state in the Exclusive Territory, at M&R's
sole and absolute discretion and upon written notice from M&R, DISTRIBUTOR shall
lose its exclusive status in such state for which it did not meet its Sales Goal
and such state shall thereafter be deemed to be a Non-Exclusive Territory. If
DISTRIBUTOR shall meet its Sales Goal for the entire Territory, but shall fail
to meet its graphic or textile Sales Goal in any state in the Non-Exclusive
Territory, at M&R's sole and absolute discretion and upon written notice from
M&R, DISTRIBUTOR shall no longer have the right to sell that category of
Products in the state in which its Sales Goal was not met. DISTRIBUTOR shall be
deemed not to have met its Sales Goal for a fiscal year if the List Price (as
defined in Section 5.01 ) for new Products shipped by M&R during such fiscal
year, net of
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discounts, warranty claims, service charges, crating, freight, insurance, taxes
and returns fails to equal or exceed the applicable Sales Goal set forth on
Exhibit "C" attached hereto.
4.02 Renegotiation of Standards. The Sales Goal for the Territory,
together with the Sales Goal for each state in the Territory, shall be
renegotiated by the parties annually for the following fiscal year and shall be
agreed to by the parties not later than September 15 of each year during the
Term. In renegotiating the new Sales Goal, the parties shall consider additions
to or deletions from M&R's list of Products, changes in prices charged by M&R,
planned marketing promotions and other relevant factors. In the event that the
parties fail to agree upon a new Sales Goal prior to the date set forth above,
either party may terminate this Agreement as of a date at least six months after
written notice is delivered to the other party of such party's election to
terminate this Agreement. During the period from the delivery of the notice to
terminate until the termination of this Agreement, all Exclusive states shall be
deemed Non-Exclusive states and, for the purposes of determining discounts
pursuant to Schedule 1, the then existing Sales Goals shall remain in effect.
V
PRICES, DISCOUNTS AND SECURITY INTEREST
5.01 Prices. Applicable prices for any Products ordered by
DISTRIBUTOR for resale shall be the price for said Products as set forth in
M&R'S then current published list of prices for the particular model or part
ordered ("List Price") less the discounts, if any, referred to in 5.02 below.
5.02 Discounts. DISTRIBUTOR will receive discounts from the List
Price pursuant to and subject to the conditions set forth on Schedule 1 attached
hereto. Notwithstanding anything contained herein or on Schedule 1, if payment
in full for Products ordered by DISTRIBUTOR is received by M&R more than thirty
(30) days but less than sixty (60) days after the shipping date of the Product
by M&R, no Bonus Discount or 1% Discount (as described on Schedule 1 ) will be
earned by DISTRIBUTOR and if payment in full for Products ordered DISTRIBUTOR is
not received by M&R within sixty (60) days after the shipping date of the
Product by M&R, DISTRIBUTOR shall earn no Base Discount, Bonus Discount or 1%
Discount on such Product; provided however with respect to payments due from the
date hereof through September 30, 1996, DISTRIBUTOR shall not lose its Bonus
Discount or 1% Discount if payment is made within forty-five (45) days after the
shipping date of the Product by M&R. All Base Discounts shall be deductible only
from the List Price of the Products for which the Base Discount is given. So
long as DISTRIBUTOR is not in default hereunder, the Bonus Discounts and 1%
Discounts may be credited, at DISTRIBUTOR's option, against any open invoice due
M&R by DISTRIBUTOR. If DISTRIBUTOR is in default hereunder, M&R may credit the
Bonus Discount and 1% Discount against any invoice of its choice. No discounts
shall be payable by M&R to DISTRIBUTOR in cash. Schedule 1 may be modified or
amended by M&R on an annual basis, as of the first day of October of each year
during the Term. Notwithstanding any of the foregoing, DISTRIBUTOR shall not
receive any Bonus Discount or
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1% Discount for products shipped during the period October 1, 1995 through
December 31, 1995 even though such Bonus Discount or 1% Discount would otherwise
be receivable hereunder.
5.03 Security Interest. If M&R believes in good faith that it would
not be prudent for M&R to sell a Product without obtaining a first lien security
interest in the Product, upon written notice to DISTRIBUTOR, M&R may sell the
Product directly to the buyer of the Product identified by DISTRIBUTOR without
first selling the Product to DISTRIBUTOR, so long as M&R pays or credits to
DISTRIBUTOR the profit that DISTRIBUTOR would have made if such sale was made to
DISTRIBUTOR pursuant to the terms of this Agreement and then resold to the
ultimate buyer of the Product for the price and on the terms of the direct sale
by M&R to such ultimate buyer, considering all discounts to which DISTRIBUTOR
would otherwise have been entitled pursuant to this Agreement.
5.04 Terms of Payment. Payment in good funds of one-third of the
List Price, net of the Base Discount, of ordered Products shall accompany all
orders of Products and no Products will be shipped without receipt by M&R of
such one-third payment; provided, however, leased equipment shall be subject to
terms negotiated by M&R and DISTRIBUTOR on a case-by-case basis prior to
shipping. The remainder of the List Price, net of any applicable discounts, for
the ordered Products shall be due not later than thirty (30) days after shipment
of the Products by M&R. Notwithstanding the foregoing, if DISTRIBUTOR disputes
the validity of an invoice and M&R determines in its sole and absolute
discretion that the basis for the dispute was justified and caused by the fault
of M&R, for purposes of this Agreement, DISTRIBUTOR's obligation to pay such
invoice shall be suspended until actions deemed appropriate by M&R are taken
with respect to such dispute.
5.05 Excluded Equipment; Custom Equipment. If during the Term,
DISTRIBUTOR introduces to M&R a customer in the Territory who purchases Excluded
Equipment from M&R, DISTRIBUTOR shall be eligible to receive a finder's fee upon
the sale of the Excluded Equipment and receipt by M&R of the entire purchase
price thereof, in the amount and subject to the conditions set forth in Schedule
1. All finder's fee or other arrangements with respect to sales of Custom
Equipment in the Territory shall be subject to mutual agreement between M&R and
DISTRIBUTOR, provided that absent an express prior agreement with respect to the
sale of such Custom Equipment, no commission, finder's fee or other
consideration shall be payable to DISTRIBUTOR based on the sale of Custom
Equipment.
VI
INDEPENDENT PARTIES
6.01 No Agency. It is acknowledged that DISTRIBUTOR and its
employees shall not be deemed and shall under no circumstances represent
themselves to be agents or representatives of M&R, and, further, that
DISTRIBUTOR shall have no right to enter into any contracts and/or commitments
of any type on behalf of M&R.
6.02 Independent Contractors. DISTRIBUTOR and M&R understand that,
except as specifically set forth herein, the provisions of this Agreement are
not intended to give
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M&R any substantial control over DISTRIBUTOR'S method of operation. DISTRIBUTOR
shall be solely responsible for its conduct, direction, operation and
activities, including, but not limited to, the conduct, direction, operation and
activities of its employees and subcontractors in connection with its business
and the performance of its obligations under this Agreement. This Agreement is
not intended to grant a franchise to DISTRIBUTOR.
VII
M&R'S LIABILITY
7.01 Non-Liability. M&R shall not be liable for any injury, loss or
damage to any individual, person or property, which injury or damage was caused
directly or indirectly by the negligence of DISTRIBUTOR or its employees. M&R
shall not be liable for any injury, loss or damage, unless the same was directly
caused by the negligence of M&R, its agents or employees. M&R assumes no
liability for any damages, including incidental or consequential damages for
loss of goodwill, production or income which results from the use or misuse of
its Products by DISTRIBUTOR or others.
VIII
DISTRIBUTOR'S RESPONSIBILITIES
8.01 Sales Organization. DISTRIBUTOR will establish and maintain a
trained, conscientious and effective sales organization to assure representation
of M&R'S Products in the Territory at a level to achieve the highest level of
sales possible.
8.02 Reporting. DISTRIBUTOR will report promptly in writing to M&R
any complaint or customer requirements which DISTRIBUTOR cannot immediately
remedy, any recurring complaint regarding Products and all incidents involving
Products which result in personal injury or property damage.
8.03 Confidential Information. All materials provided to DISTRIBUTOR
by M&R which are not generally known in the trade are confidential (including
price lists) and furnished solely for DISTRIBUTOR'S use in performing
DISTRIBUTOR'S obligations under this Agreement. DISTRIBUTOR agrees to return
such materials to M&R upon request and, in any event, upon termination of this
Agreement.
8.04 Showroom. DISTRIBUTOR shall maintain on its premises a
showroom to demonstrate Products.
8.05 Product Inventory. DISTRIBUTOR agrees to keep in inventory
a representative grouping of Products.
8.06 Technical Support. DISTRIBUTOR agrees to provide technical
support to customers in its Territory after sale to ensure that the Products
are properly installed and operating.
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8.07 Competitive Equipment. As partial consideration for this grant
of a distributorship, DISTRIBUTOR agrees that it will not carry or offer for
sale any equipment competitive with Products offered for sale by M&R as of the
date hereof or Products offered for sale by M&R hereafter; provided that M&R
agrees that DISTRIBUTOR may carry and offer for sale small manual presses and
screen washers that may be competitive with the Products. If at the time a new
Product is added to those offered by M&R, DISTRIBUTOR then has in inventory or
has ordered products competitive with M&R's Products, DISTRIBUTOR shall be
permitted to dispose of the competitive equipment within eighteen months after
the introduction of the competitive Product by M&R, but DISTRIBUTOR shall not
place orders for such new competitive equipment after the date of M&R'S
introduction of its Product.
8.08 Sales Tax. DISTRIBUTOR shall be solely responsible for the
collection, reporting and payment of all sales, use and other similar taxes
payable to DISTRIBUTOR hereunder. DISTRIBUTOR shall provide M&R with all
documents (including certificates of resale, exemption etc.) necessary pursuant
to the various states' laws to ensure that if M&R has not collected sales tax
from DISTRIBUTOR in connection with a sale hereunder, such sale of Products
pursuant to this Agreement is exempt from such taxes. DISTRIBUTOR hereby
indemnifies and holds M&R harmless from all liability and expense in connection
with such taxes.
IX
ORDER ENTRY
9.01 Order Procedures. All orders from DISTRIBUTOR are subject to
acceptance by M&R at its offices in Glen Ellyn, Illinois, according to M&R'S
policies and procedures and shall not be deemed accepted for any purpose unless
accompanied by a completed purchase order on M&R's approved form and (except for
leased Products which shall be subject to prior agreement between M&R and
Distributor) a one-third down payment. DISTRIBUTOR understands that M&R may
reject or withhold acceptance and shipment of orders if DISTRIBUTOR fails to
comply with this Agreement, M&R's credit or other policies, or if DISTRIBUTOR'S
credit standing becomes impaired. M&R reserves the right to determine in its
sole and absolute discretion in which sequence orders from DISTRIBUTOR and from
other customers will be filled.
X
TERMINATION
10.01 Early Termination. M&R may terminate this Agreement upon six
months prior written notice to DISTRIBUTOR in the following events; provided
that during such six (6) month period all states which constitute Exclusive
Territories under Section 2.01 hereof shall instead be deemed to be
Non-Exclusive Territories:
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(a) failure by DISTRIBUTOR to remit payments for Products to M&R
when due pursuant to the terms of this Agreement, when such failure continues
for sixty (60) days after written notice of such failure is given to
DISTRIBUTOR;
(b) repeated failure by DISTRIBUTOR to cooperate with M&R's
management in the promotion and sale of Products, when such failure continues
for sixty (60) days after written notice of such failure is given to
DISTRIBUTOR;
(c) failure by DISTRIBUTOR to maximize the market potential of
Products in the Territory by (i) failing to cooperate with M&R's management in
coordinating sales and marketing efforts in order to maximize their effect,
and/or (ii) continuing to take actions which M&R's management reasonably
believes, and has advised DISTRIBUTOR it believes, do not enhance the reputation
of Products and/or do not contribute to maximizing the market potential of the
Territory, when such failure or action continues for sixty (60) days after
written notice of such failure or action is given to DISTRIBUTOR;
(d) breach by DISTRIBUTOR of a material provision in this Agreement
including, without limitation, the obligations set forth in Paragraph 8.07
hereof, when such breach continues for sixty (60) days after written notice of
such failure is given to DISTRIBUTOR;
(e) six (6) months following written notice to DISTRIBUTOR stating
the failure of DISTRIBUTOR to meet at least 80% of its Sales Goals for the
Territory;
(f) if DISTRIBUTOR owns an interest in or control a graphics or
textile printing business which uses equipment similar to the Products and does
not dispose of such interest within sixty (60) days after written notice from
M&R. This paragraph shall not apply if DISTRIBUTOR acquires such ownership or
control rights upon foreclosure of security for a trade account. In such event,
DISTRIBUTOR shall give written notification to M&R within thirty (30) days of
acquiring such interest and divest itself of such business as soon as possible,
and in all events within ninety (90) days after acquisition.
10.02 Bankruptcy. This Agreement shall be deemed to be immediately
terminated upon written notice to DISTRIBUTOR if proceedings are initiated by or
against DISTRIBUTOR in bankruptcy, or under any insolvency laws, or for
reorganization, receivership, dissolution or liquidation, an assignment for the
benefit of creditors or if a change occurs in the ownership, form of
organization or working capital position of DISTRIBUTOR which reasonably causes
M&R to believe DISTRIBUTOR cannot fulfill its obligations under this Agreement;
and
10.03 Actions on Termination. Upon the termination of this
Agreement for any reason:
(a) M&R or any of its agents, representatives or other designees,
including any successor DISTRIBUTOR, shall have the right, immediately upon
termination, to sell
8
Products directly or indirectly to any customer developed or dealt with by
DISTRIBUTOR without incurring any liability or accountability to DISTRIBUTOR;
(b) M&R may, at is option, repurchase from DISTRIBUTOR for the price
actually paid to M&R by DISTRIBUTOR (exclusive of any amounts attributable to
any freight, insurance or forwarding charges, or any taxes or other governmental
charges), all or any portion of the salable, unused and undamaged Products
purchased by DISTRIBUTOR from M&R prior to termination that remain in
DISTRIBUTOR's inventory; provided, however, that DISTRIBUTOR may sell Products
for which it has accepted orders from customers prior to the date of
termination, or for which M&R does not exercise its right of repurchase.
DISTRIBUTOR shall return all repurchased Products to M&R at DISTRIBUTOR's cost
and expense (including, without limitation, freight, insurance and forwarding
charges);
(c) All unpaid amounts owing from either party to the other
hereunder shall be paid, including amounts owing for Products purchased by
DISTRIBUTOR prior to termination but for which an invoice has not yet been
submitted;
(d) DISTRIBUTOR shall cease promoting or marketing the Products or
making any use of M&R's or Manufacturer's trademarks and shall return promptly
to M&R all promotional and sales materials provided to it; and
(e) Neither party shall have any continuing duty, liability or
obligation to the other hereunder, except that the DISTRIBUTOR's obligations
relating to confidentiality and all undertakings hereunder by DISTRIBUTOR to
indemnify and defend M&R shall survive such termination.
XI
PRODUCT MARKINGS; TRADEMARKS
11.01 Serial or Machine Numbers. Manufacturers shall identify each
Product with a serial number or machine number, which number shall not be
removed, altered or transferred to any other machine or piece of equipment at
any time.
11.02 Equipment Identification. All equipment sold under the terms
of this Agreement as well as all proposals forwarded to any prospective
customers by DISTRIBUTOR shall clearly identify the equipment being sold as
being manufactured by the Manufacturer and shall carry the Manufacturer's
trademarks. Under no circumstances shall DISTRIBUTOR, its agents or employees,
represent Products furnished by the Manufacturer as being manufactured by
DISTRIBUTOR or by anyone other than the Manufacturer, directly or indirectly.
11.03 Trademarks. DISTRIBUTOR expressly understands and acknowledges
that M&R has developed and will develop considerable goodwill in connection with
its and Manufacturer's names and marks (the "marks") and that DISTRIBUTOR will
not by virtue of this Agreement or performance under it acquire any interest in
the marks. In order to more fully protect M&R's and the Manufacturer's interest
in the marks, it is agreed that, except on literature
9
provided by M&R, any use by DISTRIBUTOR of the marks, either alone or in
conjunction with DISTRIBUTOR's name, whether for purposes of advertising or
otherwise, will be subject to prior submission to M&R and receipt of written
approval of use as submitted. Under no circumstances will DISTRIBUTOR use any of
the marks in the absence of such prior written approval from M&R, and
unauthorized use may, at M&R's election, result in immediate termination of this
Agreement. DISTRIBUTOR shall not use the names "M&R Sales and Service, Inc.",
"M&R Printing Equipment" or "Precision Screen Machines" nor any other name
confusingly or deceptively similar to it in or in conjunction with the trade
name of DISTRIBUTOR or in connection with the sale or distribution of any
Products other than those manufactured by the Manufacturers. Upon and after
termination of this Agreement, DISTRIBUTOR shall not use said names or the marks
or similar names or marks in any shape or form. DISTRIBUTOR will, insofar as it
is or becomes aware of same, immediately bring to the attention of M&R any
improper or wrongful or confusing use of Manufacturers' names, marks, emblems,
designs or packages, or confusingly similar names, marks, emblems, designs or
packages or other similar industrial or commercial rights on products which come
to his notice or attention, together with such information as will enable M&R to
identify the sources of such improper or wrongful or confusing use, and will
cooperate with M&R in causing such improper or wrongful or confusing use to be
discontinued.
XII
FORCE MAJEURE
12.01 Relief of M&R. It is further acknowledged by and between the
parties that M&R'S obligation to deliver any equipment or parts ordered is
subject to the availability of raw materials, to prior commitments, fires,
strikes, acts of God, governmental regulations, decrees, actions, and any other
cause beyond its control, which may delay or prevent performance by M&R.
XIII
WARRANTY
13.01 Individual Warranties of Products. Products are supplied with
a statement of warranty. No other warranties, express or implied, are made by
M&R or the Manufacturers, and DISTRIBUTOR cannot and will not attempt to commit
or bind M&R or the Manufacturers to any other warranty without M&R'S written
consent.
XIV
M&R POLICIES
14.01 Policies. DISTRIBUTOR shall at all times conform to all
policies and guidelines from time to time promulgated by M&R in connection with
the performance of DISTRIBUTOR's duties under this Agreement.
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14.02 Product Changes. M&R or the Manufacturers may change the
design or composition of any Products without obligation to DISTRIBUTOR. M&R
will, however, give DISTRIBUTOR reasonable notice of all significant
changes.
14.03 Non-Assignability. DISTRIBUTOR has been selected as a
distributor based on its particular sales and service ability, and this
Agreement contemplates significant personal services by DISTRIBUTOR. No rights
under this Agreement may be assigned by DISTRIBUTOR without M&R'S prior written
consent, which may be given or withheld in M&R's sole and absolute discretion.
14.04 Benefit. This Agreement shall obligate and benefit the
successors and assigns of M&R and the permitted successors and assigns of
DISTRIBUTOR.
14.05 Severability. The provisions of this Agreement are severable
and any invalidity, unenforceability or illegality in any provision or
provisions in this Agreement shall not affect the remaining provisions of this
Agreement.
14.06 Counterparts. This Agreement is legally binding on the parties
and shall inure to the benefit of the parties hereto. It may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement represents
the entire understanding between the parties and supersedes any and all prior
agreements.
14.07 Governing Law. This Agreement shall be deemed made and
construed under the laws of the State of Illinois and venue for resolution of
all controversies arising out of this Agreement or the subject matter hereof
shall only be proper in the Circuit Court of DuPage County, Illinois or the
federal court in the Northern District of Illinois.
14.08 Amendments. The terms and conditions of this Agreement cannot
be terminated, modified, or amended, except in writing, signed by both parties
hereto.
14.09 Enforcement. Should it be necessary for M&R to initiate legal
proceedings to enforce its rights under this Agreement and M&R is the prevailing
party in such proceedings (whether or not such proceeding result in a court
order or judgment), DISTRIBUTOR agrees to pay and discharge all costs,
attorney's fees and expenses that are incurred by M&R in enforcing the
provisions and agreements contained herein.
DISTRIBUTOR: CLINTON MACHINERY CORP. M&R SALES AND SERVICE, INC.
By: /s/ Xxxx Xxxxxxxxxx By: /s/ Xxxx Xxxxxxx
----------------------- ----------------------------
Title: President Title: Vice President of Sales
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Schedule 1
M&R Sales & Service, Inc.
Discounts
1. All capitalized terms not otherwise defined in this Schedule 1 shall have
the same meanings as set forth in the attached Distributor Agreement.
2. This schedule of Discounts shall be effective from October 1, 1995
through September 30, 1996.
3. DISTRIBUTOR shall receive a discount ("Base Discount") equal to twenty
percent (20%) of the List Price of all Products (other than Excluded
Equipment and Custom Equipment) sold to DISTRIBUTOR for resale in the
Territory during the Term.
4. In addition to the Base Discount, DISTRIBUTOR shall receive a discount
("Bonus Discount") from the List Price of Products sold to DISTRIBUTOR for
resale in the Territory during the Term based on the following:
(a) If DISTRIBUTOR meets or exceeds its aggregate Sales Goal for the
Territory during a fiscal quarter, DISTRIBUTOR shall earn a Bonus
Discount equal to four percent (4%) of the aggregate purchase price,
net of Base Discount of Products sold in the Territory during such
fiscal quarter (hereinafter "Net Sales");
(b) If DISTRIBUTOR achieves at least ninety percent (90%) but less than
one hundred percent (100%), of its aggregate Sales Goal for the
Territory during a fiscal quarter, DISTRIBUTOR shall receive a Bonus
Discount of three percent (3%) of Net Sales;
(c) If DISTRIBUTOR achieves at least eighty-five percent (85%), but less
than ninety percent (90%), of its aggregate Sales Goal for the
Territory during a fiscal quarter, DISTRIBUTOR shall receive a Bonus
Discount equal to two percent (2%) of its Net Sales; and
(d) If DISTRIBUTOR achieves less than eighty-five percent (85%) of its
aggregate Sales Goal for the Territory during a fiscal quarter,
DISTRIBUTOR shall receive no Bonus Discount.
Nothing contained in this Schedule 1 should be deemed to detract from M&R's
rights to terminate the Agreement or terminate DISTRIBUTOR's exclusivity or
right to sell Products in a state or Territory in the event any Sales Goal is
not met, all as set forth in Articles IV and X of the Agreement.
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If DISTRIBUTOR exceeds the aggregate Sales Goal for the Territory during a
fiscal year, DISTRIBUTOR shall receive an additional discount ("1% Discount")
equal to 1% of all Net Sales in excess of DISTRIBUTOR's annual Sales Goal for
the Territory in such fiscal year.
6. The granting of all discounts hereunder is subject to and contingent upon
meeting the payment requirements set forth in Section 5.02 of the
Agreement.
7. All Excluded Equipment shall be sold by M&R directly to buyer in the
Territory and shall not be sold to DISTRIBUTOR for resale. However,
DISTRIBUTOR shall receive as a finder's fee the following percentages of
the purchase price paid and received by M&R from purchasers of the
following equipment (other than House Accounts) in the Territory who are
introduced to M&R by Distributor
(a) Conquest and HST Transfer Press - ten percent (10%);
(b) VOF Glass Printers - three percent (3%);
(c) Processor - two percent (2%).
So long as DISTRIBUTOR is not in default under the Agreement, such finder's fee
shall be credited against any outstanding invoice owed by DISTRIBUTOR to M&R at
DISTRIBUTOR's choice. Upon a default by DISTRIBUTOR under the Agreement, the
finder's fee shall be credited against outstanding invoices at M&R's choice. The
sales price paid and received by M&R for any of the foregoing Excluded Equipment
shall be included in the calculation of DISTRIBUTOR's Net Sales for the purpose
of determining whether DISTRIBUTOR has met its Sales Goal, but no Bonus
Discounts or 1% Discounts shall be granted to DISTRIBUTOR based on the purchase
price received by M&R for Excluded Equipment; (for example, if DISTRIBUTOR's
Sales Goal was $1,000,000, DISTRIBUTOR had prior Net Sales of $900,000 and
$100,000 was received by M&R as the purchase price for Excluded Equipment,
DISTRIBUTOR shall be deemed to have met its Sales Goal and shall receive a four
percent (4%) Bonus Discount on the $900,000 of Net Sales, but shall not receive
any Bonus Discount on the $100,000 received from the sale of the Excluded
Equipment.)
8. Custom Equipment shall be sold directly by M&R to buyers in the Territory
and not sold to DISTRIBUTOR for resale. All compensation, credits,
discounts and other consideration, if any, receivable by DISTRIBUTOR based
on the sale of Custom Equipment shall be negotiated by M&R and DISTRIBUTOR
in writing prior to the sale.
9. If DISTRIBUTOR reasonably believes that because of the reduced purchase
price negotiated by a prospective buyer of Products in the Territory,
it is not economically feasible for DISTRIBUTOR to purchase the
Products for resale to such buyer, DISTRIBUTOR may request that M&R
sell the Products directly to the buyer. If M&R in its sole and
absolute discretion decides to directly sell Products to such buyer,
M&R will credit DISTRIBUTOR's account with an amount equal to the
excess, if any, of the price actually received by M&R from such buyer
over the List Price of the Product, less the Base Discount. In such
event, as with Excluded Equipment, the sales price of the
13
Product will count toward fulfillment of DISTRIBUTOR's Sales Goal, but
shall not be the basis of the receipt by DISTRIBUTOR of Bonus Discounts or
1% Discounts.
14
Exhibit "A"
THE TERRITORY
"Exclusive Territory"
Textile Graphics
------- --------
Florida None
Georgia
Alabama
South Carolina
Tennessee
"Non-Exclusive Territory"
Textile Graphics
------- --------
Mississippi Florida
Kentucky Georgia
Alabama
South Carolina
Mississippi
Kentucky
Tennessee
15
Exhibit "B"
HOUSE ACCOUNTS
Logo 7 - Indianapolis, IN Gullwing - Winston-Salem, NC
Oats - Cape May Courthouse, NJ Blue Sky Graphics - Marion, IN
Oats 11- Bethlehem, PA Art Venture - Chattanooga, TN
A.V.I. - Gardena, CA Spectra - Chattanooga TN
Nutmeg Xxxxx - All Locations Kel-Tex - Cape May Courthouse, NJ
Shirt Shed, Inc. - Wabash, IN Sony - All Locations
Nike - All Locations New Age Graphics - Anaheim, CA
X.X. Xxxxxx - All Locations Transcolor - All Locations
Four Seasons - Conway, SC Creative Silk Screen - Rockford, IL
Giant - Commerce, CA Xxxxxx/Xxxx - Atlanta, GA
Printworks - Franklin, WI Xxxxxx Rug - Xxxxxx, SC
Xxxxx & Dryfuss - All Locations R.C. Screen Print - Xxxxxxxxx, NJ
Changes - Middle Village, NY Garan - All Locations
Spumoni - San Francisco, CA Oshkosh - Liberty, KY
Sun Sportswear- Xxx, WA Monroe Prints - Monroe, NC
Pageland - All Locations Sunrise Sportswear - Clarksville, IN
Fruit Of The Loom - All Locations
M&R reserves the rights to add new House Accounts to this Exhibit "B" upon
written notice to DISTRIBUTOR.
16
Exhibit "C"
SALES GOALS
Aggregate Sales Goal in Territory = $6,700,000
Exclusive Territory
------------------- Textile
-------
Florida $2,600,000
Georgia $800,000
Alabama $600,000
South Carolina $500,000
Tennessee $500,000
Non-Exclusive
Territory
------------- Textile Graphics
------- --------
Mississippi $50,000 $50,000
Kentucky $200,000 $50,000
Tennessee N/A $150,000
Florida N/A $350,000
Georgia N/A $500,000
Alabama N/A $150,000
South Carolina N/A $200,000
