EXHIBIT 16.1
SALES AGENT AGREEMENT
This AGENT AGREEMENT (the "Agreement") is made and entered into this 29th
day of March, 2005, by and between NeoMedia Micro Paint Repair, Inc., a Nevada
corporation (hereinafter referred as the "Company"), and Restex, Inc., a Texas
corporation, or, a sole proprietorship (in either case, hereinafter referred to
as the "Agent").
WHEREAS, the Company is engaged in the development, manufacture,
production, sale and distribution of chemicals and paints for use in application
on automobiles and accessories related thereto;
WHEREAS, the Company has developed methods, procedures, processes and
specifications for the application of chemicals and paints (the "System");
WHEREAS, the Agent realizes that the System represents a unique
proprietary process and desires to market and sell the System and related
products, and the Company desires to engage the Agent to market and sell the
System and related products, subject to the territorial and other restrictions
contained in this Agreement; and
WHEREAS, concurrent with and in consideration of the execution of this
Agreement, Agent has signed a Confidentiality and Non-Competition Agreement in
the form attached hereto as Exhibit B (the "Confidentiality and Non-Competition
Agreement").
NOW, THEREFORE, in consideration of the premises contained herein and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Representative
Subject to the terms and conditions contained in this Agreement, the
Company appoints the Agent as the Company's Sales Representative and Agent
accepts the appointment.
2. Territory and Products
a) Agent will represent the Company on a non-exclusive basis in
the territory described on Exhibit C attached hereto (the
"Territory.")
b) Agent will have the right to receive orders for the Company
in the Territory for the System at the prices described on
Exhibit A, which prices may be changed in the sole judgment
of the Company by written communication to Agent.
-2-
3. Commissions
a) Commissions will be paid on all sales of the System to
customers (other than the Agent) in the Territory, provided
that the Company has first received payment in full for the
System.
b) The commission rates applicable to sales of the System will
be determined in accordance with the rates set forth in
Exhibit D attached hereto (the "Commission Schedule"). The
Commission Schedule shall apply only to sales of the System
at then-current retail list prices.
c) Commissions payable to Agent pursuant to Section 3(b) shall
be paid as outlined Exhibit E attached hereto. Commissions
are payable only on amounts actually collected from a
customer. Commissionable revenue shall not include: (i) taxes
paid or owed; (ii) any customer discount, credit or allowance
(unless for prepayments); (iii) transportation and shipping,
and (iv) all related charges.
d) If returns, cancellations, allowances or refunds are made
with respect to a System on which commissions have been paid
to the Agent, the Company may deduct from future commissions
payable to Agent the commissions paid on the returned System
or allocable to the cancelled, allowed or refunded amount.
In the event of any termination of this Agreement prior to
any such set-off, Agent shall be provided with written
notice by the Company within five (5) business days of
termination of any amount due and shall pay such amount to
the Company within five (5) business days of the receipt of
such notice.
4. Duties of Agent
The Agent shall, subject to the terms and conditions of this
Agreement:
a) Use its best efforts to promote the sale of the System in
the Territory, using appropriate and pre-approved marketing
and adverstising campaigns, and to devote such time and
resources as is necessary to cover the market properly in
the Territory. The Agent may use, without prior written
approval of the Company, any advertising material
distributed to the Agent by the Company provided such
material is used in an unaltered manner.
b) Furnish the Company with such forecasts of anticipated System
sales as the Company may request from time to time.
-3-
c) Use its best efforts prior to making contacts with
prospective customers, but in any event as soon as
thereafter, to register all such prospective customers with
the Company by providing written notice containing the name
of the prospective customer.
d) During the term of this Agreement and for three (3) years
thereafter, Agent shall keep all usual and proper entries
and records relating to each System or related product
ordered at the address specified on the signature page
hereto. Upon three (3) days notice and during business
hours, the Company may make inquiries, copies of such
entries and records and conduct inspections to ensure
compliance by the Agent with the terms and conditions of
this Agreement.
e) Agent may employ third parties to meet its obligations
hereunder; provided, however, Agent shall be solely
responsible for any payments owed to such third parties and
hereby agrees to indemnify and hold the Company harmless
from any and all claims against the Company and expenses
incurred by the Company caused by Agent in this regard,
including, but not limited to, any claims for a commission,
fee or expense by an individual or entity alleging a
relationship with Agent. This provision shall survive any
termination or expiration of this Agreement.
f) During the term of this Agreement, Agent agrees that it
shall not offer or sell any goods which are competitive
with, the same as, or similar to any of the System or
products related to the System, or promote or advertise any
such System or goods without the Company's prior written
consent, which may be withheld for any reason in the
Company's sole discretion. Agent hereby represents and
warrants that neither Agent, nor its principals or
employees, is a party to any non-compete, confidentiality or
non-disclosure agreement that is inconsistent with Agent's
duties under this Agreement. Agent shall ensure full
compliance with any such agreements and hereby agrees to
indemnify and hold the Company harmless from any and all
claims or damages it may suffer resulting from Agent's
breach or alleged breach of any such agreement. This
provision shall survive any expiration or termination of
this Agreement.
g) Agent shall solicit orders and complete contracts for
signature by the Company, at the Company's then-current
retail list price described in Exhibit A, which may be
changed from time to time. The Company shall have the
absolute right to establish the prices, charges, terms and
conditions governing the sale or licensing of the System.
The Company may adjust the retail prices of its System and
related products at any time, and will endeavor to so notify
Agent. Agent shall not deviate from the then-current retail
list price of the System, without the prior written consent
of the Company setting forth a revised Commission Schedule.
It shall be the responsibility of Agent to ensure that a
Commission Schedule is agreed upon in writing prior to
offering the System at prices which deviate from the
then-current retail list price.
-4-
h) Orders for the System solicited by Agent shall be promptly
forwarded to the Company. No order will be binding upon the
Company until accepted by the Company in writing and Agent
shall so advise all customers prior to taking the order.
i) Within fifteen (15) days after the end of each calendar
month, Agent shall provide the Company with a report
describing all aspects of Agent's efforts during such month,
including the prospective customers contacted.
j) Agent shall make such filings and take such action as may be
required to qualify to do business under all applicable state
and local laws in order to perform the services contemplated
by this Agreement on behalf of Company.
k) Agent shall place all orders with the Company on such forms,
using such contacts and in accordance with such procedures
as the Company shall establish from time to time. The
Company shall have the right for any reason in its sole
discretion to reject any order placed by Agent, including,
without limitation, orders placed by customers which the
Company in its judgment deems financially or otherwise
unsuitable. Agent agrees that it shall advise prospective
customers of the Company's said right to reject orders and
shall not purport to bind the Company prior to the Company's
acceptance of such orders. The Company agrees that it shall
notify and consult with Agent regarding proposed
rejections. Payment terms for any sales of the System or
related products pursuant to this Agreement shall be as
described on Exhibit E atttached hereto.
l) Keep confidential and treat as trade secrets all information
disclosed to the Agent by the Company concerning the System
and any training techniques.
5. Authority
Agent has no authority to make any warranties or representations on
behalf of, or in the name of, the Company or to enter into contracts or to
create obligations binding on the Company.
6. Liability Insurance
Agent will, during the term of this Agreement, maintain public liability
insurance and motor vehicle insurance in amounts and with companies satisfactory
to the Company and will from time to time, as requested by the Company, furnish
to the Company certificates of insurance evidencing such coverage.
-5-
7. Indemnification; Limitation of Liability
Agent agrees to indemnify the Company against, and to hold the Company
harmless from, any and all damages, costs and expenses, or any kind whatsoever,
including, but not limited to, attorney fees, brought against the Company as a
result of any and all claims, proceedings, suits or causes of action
(collectively, the "Claims") brought or alleged by any party or parties arising
out of the acts or ommissions of Agent, other than:
a) acts or ommissions expressly authorized or ratified by the
Company in writing;
b) claims with respect to a breach of any warranty, if any, made
by the Company with respect to the System or any related
products; and
c) claims that the Products as manufactured and identified in
commerce by the Company infringe a trademark or patent.
Whether such Claims are based on contract, negligence, tort, strict
liability, product liability or otherwise, the Company may enforce its indemnity
rights through the withholding of commissions as well as through any other
remedies available at law or in equity. The Company agrees to indemnify the
Agent against, and hold the Agent harmless from, any and all damages, costs and
expenses including attorney's fees, caused to the Agent as a result of any of
the matters described in Sections 7(a) through (c) above. The Company shall not
be obligated or liable for any injury or death of any person or damage to any
property caused by the Agent's or its affiliate's action, failure to act,
negligence or willful conduct, nor for any liability of the Agent or its
affiliates, whether or not the same be covered by insurance arranged pursuant to
this Agreement. REGARDLESS OF THE BASIS OF RECOVERY CLAIMED, WHETHER UNDER ANY
CONTRACT (INCLUDING CONTRACTUAL INDEMNIFICATION OBLIGATIONS HEREUNDER),
WARRANTY, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), BREACH OF ANY
STATUTORY DUTY, PRINCIPLES OF CONTRIBUTION OR ANY OTHER THEORY OF LIABILITY, OR
WHETHER THE COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, IN NO
EVENT WILL THE COMPANY BE LIABLE TO THE AGENT OR ANY OTHER PARTY FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, INDIRECT, OR SIMILAR DAMAGES,
INCLUDING, WITHOUT LIMITATION, ANY LOSS OF DIRECT OR INDIRECT PROFITS, REVENUE
OR ECONOMIC LOSS ARISING OUT OF THE PROVISION (OR FAILURE TO PROVIDE) THE
PRODUCTS OR THE SYSTEM PURSUANT TO THIS AGREEMENT. IN NO EVENT SHALL THE
COMPANY'S LIABILITY EXCEED THE AGGREGATE AMOUNT OWED OR PAYABLE AS A COMMISSION
TO AGENT BY THE COMPANY HEREUNDER. THE AGENT ACKNOWLEDGES THAT THE COMPANY
RELIES ON THE FOREGOING LIMITATION OF LIABILITY IN ITS OVERALL ECONOMIC
ASSESSMENT OF ENTERING INTO RELATIONSHIPS SUCH AS THAT CONTEMPLATED BY THIS
AGREEMENT AND THAT IT CONSTITUTES A MATERIAL INDUCEMENT FOR THE COMPANY'S
ABILITY TO PROVIDE THE PRODUCTS AND THE SYSTEM TO CUSTOMERS LOCATED BY AGENT AS
SET FORTH HEREIN.
-6-
8. No License
The Agent acknowledges and agrees that no rights are granted to it by the
Company herein or hereby for the use of any of the Company's proprietary marks
and that no goods or services, including, but not limited to, the System and
related products, will be sold pursuant to any such license or in connection
with the license to the Agent of any of the Company's proprietary marks.
9. Independent Contractor
a) The Agent is and will at all times remain an independent
contractor and is not and shall not represent itself to be
the agent, franchisee, joint venturer, partner or employee
of the Company, or to be related to the Company other than
as an independent contractor. The Agent shall make no
representations and shall not take any actions which could
establish any apparent relationship of agency, franchise,
joint venture, partnership or employment, and the Company
shall not be bound in any manner whatsoever by any
agreements, warranties or representations made by the Agent
to any other person nor with respect to any other action of
the Agent. The Agent shall not establish any bank account,
make any purchase, apply for any loan or credit or incur or
permit any obligation to be incurred in the name or on the
credit of the Company.
b) All expenses and disbursements incurred by Agent in
connection with this Agreement will be borne wholly and
completely by the Agent. Agent will have the right to
appoint and will be solely responsible for Agent's own
salesmen, employees, agents and representatives, who will be
at Agent's own risk, expense and supervision and who will
not have any claim against the Company for compensation or
reimbursement.
c) Agent will be responsible for payment of all taxes, including
federal, state and local taxes arising out of Agent's
activities in connection with this Agreement, including,
without limitation, federal and state income tax, social
security tax, unemployment insurance taxes and any other
taxes or business license fees required.
10. Term and Termination
The term of this Agreement shall be for a period of one (1) year,
commencing on the date of the full execution of this Agreement. If not
terminated as set forth below, this Agreement shall automatically renew and
remain in effect on a year to year basis. The Agreement may be terminated
earlier as follows:
-7-
a) The Company may terminate this Agreement at any time for any
reason upon giving at least thirty (30) days prior written
notice to the Agent, and this Agreement will terminate on the
date (hereinafter, the "Termination Date") set forth in the
written notice of termination.
b) The Agent may terminate this Agreement for any reason upon
giving at least sixty (60) days prior written notice to the
Company, and this Agreement will terminate on the Termination
Date.
c) The Company may terminate this Agreement without notice if:
(i) Agent is in default of any of its obligations and duties
under this Agreement; or (ii) Agent files bankruptcy, becomes
insolvent or makes an assignment for the benefit of
creditors.
11. Commissions Upon Termination
On termination, commissions will be paid to Agent (on the Company's
receipt of payment by the applicable customer) for the sale of all Systems and
related products for which orders were shipped by the Company prior to the
Termination Date, subject, however, to the Company's right to apply unpaid
commissions due Agent to damages, costs or expenses suffered by the Company as a
result of Agent's conduct. If a blanket order is existing, the Agent shall
receive commissions on sales made pursuant to such an order only if such orders
are actually paid to the Company on or before the termination of this Agreement.
12. Return of Company Books and Records
Documents given to or prepared by Agent which pertain to the Company's
business or to the System and related products remain the property of the
Company, irrespective of whether such documents relate to or contain
Confidential Information (as defined in the Confidentiality and Non-Competition
Agreement). Upon any termination of this Agreement, Agent agrees: (a) to return
all such documents to the Company; (b) not to make or take copies thereof
without the prior written consent of the Company; and (c) within ten (10) days
after the written request of the Company, Agent shall certify in writing that,
except as set forth in this Agreement, all of the Confidential Information of
the Company has been delivered to such party or has been destroyed or rendered
unusable.
13. Remedies
Notwithstanding any other provision of this Agreement, the parties hereto
understand and agree that the remedy of indemnity payments provided herein and
other remedies at law would be inadequate in the case of any breach of the
provisions of the Confidentiality and Non-Competition Agreement or this
Agreement, and the parties hereto agree that any party hereto will be entitled
to equitable relief, including the remedy of specific performance, without
posting of bond or other security, with respect to any breach or attempted
breach of such provisions. Each party will be entitled to all remedies available
at law or in equity for the other party's default in the performance of this
Agreement. The rights and remedies of each party shall be cumulative and not
mutually exclusive.
-8-
14. Severability
If any clause or provision herein is judged invalid or unenforceable by a
court of competent jurisdiction or by operation of any applicable law, it will
not affect the validity of any other cause or provision which will remain in
full force and effect.
15. Governing Law
This Agreement and all matters concerning its interpretation, performance
and enforcement hereof shall be governed in accordance with the laws of the
State of Florida without regard to the conflict of law principles thereof. The
Company and Agent irrevocably submit to the jurisdiction of federal and state
courts of Florida with respect to any action arising out of this Agreement and
waive any objection they may have to either the jurisdiction of or venue in such
courts.
16. Complete Agreement; Counterparts
This Agreement constitutes the entire Agreement between the parties
hereto relating to the specific subject matter hereof. There are no agreement
terms, obligations, covenants, representations, statements or conditions other
than those contained herein. No variation or modification of this Agreement or
waiver of any of the terms or provisions hereof will be deemed valid unless in
writing and signed by both parties. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which,
taken together, shall be considered one and the same Agreement. This Agreement
shall become effective when one or more sets of counterparts have been signed,
including by facsimile signature, by each of the parties hereto and delivered to
the other party hereto, it being understood that both parties need not sign the
same counterpart. For purposes hereof, delivery shall be deemed effective upon
exchange of signed copies of this Agreement by facsimile. Each party hereto
agrees to deliver promptly thereafter originally signed counterparts of this
Agreement to the other party.
17. Waiver
The failure by any party to exercise or enforce any of the terms or
conditions of this Agreement will not constitute or be deemed to waive that
party's rights hereunder to enforce each and every term and condition of this
Agreement.
18. Assignment
Neither this Agreement nor any rights or obligations hereunder may be
assigned by Agent without first receiving prior written consent of the Company.
The Company may freely assign this Agreement and any rights or obligations
hereunder without first receiving prior written consent of the Agent.
-9-
19. Notices
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by overnight courier or
telecopier with proof of delivery or mailed by registered or certified mail
(return receipt requested) to the parties hereto at the addresses specified on
the signature page hereto (or at such other address for a party hereto as shall
be specified by like notice). Any notice that is delivered personally shall be
deemed to have been duly given to the party to whom it is directed upon receipt
by such party. Any notice that is delivered by overnight courier or facsimile in
the manner provided herein shall be conclusively presumed to have been given to
the party to whom it is addressed at the close of business, local time of the
recipient, on the next business day after delivery to the courier or
transmission. Any notice that is addressed and mailed in the manner herein
provided shall be conclusively presumed to have been given to the party to whom
it is addressed at the close of business, local time of the recipient, on the
fourth day after the day it is so placed in the mail.
20. Confidentiality and Non-Competition Agreement
Within seven (7) business days of the execution of this Agreement, Agent
shall require any and all of its managers, employees, agents, directors,
officers, partners, members, affiliates or independent contractors having access
to any Confidential Information of the Company or to the System to (a) execute a
copy of the Confidentiality and Non-Competition Agreement, and (b) provide such
Confidentiality and Non-Competition Agreement to the Company. Failure to comply
with this Section 20 shall constitute breach of this Agreement and shall allow
the Company to terminate this Agreement immediately with no consequences to the
Company whatsoever.
21. No Reverse Engineering
The Agent acknowledges that the formula of each of the products and of
all of the chemicals used in connection with the System is a trade secret and
covenants and agrees that it shall not, directly or indirectly, during the term
of this Agreement or at any time thereafter, take any steps to reproduce,
reverse engineer or otherwise ascertain the formulas for such chemicals and
paints and products, nor shall it attempt to manufacture or produce such
chemicals, paints and roducts or to obtain such chemicals, paints and roducts
from any person whatsoever other than a person authorized to sell such
chemicals, paints or roducts to the Agent pursuant to this Agreement. No tests
of the chemicals, paints or roducts shall be performed by the Agent, whether
during the term of this Agreement or at any time thereafter.
[The next page is the signature page]
-10-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NEOMEDIA MICRO PAINT REPAIR, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxx Xxxxxx
Title: President & CEO Title: Owner/CEO
#0-000 Xxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx, Xxxxxx X0X0X0
Attention: Xxxxxxx Xxxx, Director of Operations
Facsimile: (000) 000-0000 Facsimile: (___) ___-____
and
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President
Facsimile: (000) 000-0000
-11-
