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EXHIBIT 10.11
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
July 25, 1997
Xx. Xxxxx Xxxxxx
DAKOTA GRANITE CO., INC.
PO Box 1351
Milbank, SD 57252
Dear Xxxxx
This letter will outline our agreement that Dakota Granite Co., Inc.
(DGC) will purchase from Rock of Ages Corporation (ROA) its requirements for
Barre granite monuments, either blank or sandblasted as DGC requests, and that
ROA will purchase from DGC its requirements of Dakota Mahogany granite
monuments, either blank or sandblasted as ROA requests, on the following terms
and conditions.
1. EXCLUSIVE SOURCING. XXX agrees that it will source its blocks, slabs
and finished monuments of Dakota Mahogany granite exclusively from DGC, and DGC
agrees that it will source its blocks, slabs, and finished monuments of Barre
Gray exclusively from ROA during the term of this agreement. Both DGC and ROA
retain the right to manufacture monuments from each other's blocks or slabs in
their own plants during the term of this agreement. DGC and ROA agree to supply
the other with blocks, slabs and finished monuments of the highest quality
available in the requested grade of granite. ROA and DGC will also supply the
other with finished monuments made of other granites manufactured by them if
adequate supplies of that granite are available.
2. MINIMUM REQUIRED INVENTORIES OF FINISHED MONUMENTS. ROA agrees to
purchase and maintain in its Barre, Elberton or Canada facilities a minimum
required inventory of finished Dakota Mahogany monuments manufactured by DGC of
a cost basis of $*** F.O.B. Milbank, and DGC agrees to purchase and maintain a
minimum required inventory in its Milbank facilities finished unbranded Barre
Gray monuments manufactured by ROA of a cost basis of $*** F.O.B. Barre. The
said monuments will be of a size, design and quantity determined solely by ROA
with respect to its required inventory of Dakota Mahogany monuments and by DGC
with respect to its inventory of Barre Gray monuments. The initial required
inventories of ROA and DGC will be shipped, billed and paid within the same
month.
3. ADDITIONAL INVENTORIES OF FINISHED MONUMENTS. ROA and DGC agree that
ROA may ship at its expense and store at DGC an
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CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Xx. Xxxxx Xxxxxx
July 25, 1997
Page 2
additional inventory of finished monuments and that DGC may ship at its expense
and store at ROA in Barre an additional inventory of finished monuments. These
additional inventories shipped for storage shall remain the inventory of the
shipper. In such case, DGC and ROA agree they will store such inventory
segregated from their own inventory at no charge and expense. Such additional
inventory shall be available for sale by the shipper to its customers or for
transfer to the xxxxxx on the xxxxxx'x request to purchase units from the
additional inventory.
4. PRICES OF FINISHED MONUMENTS. The price for finished monuments sold
from ROA to DGC and from DGC to ROA will be ********. DGC and XXX agree that
neither will provide the other with their branded monuments and both ROA and DGC
agree they are not authorized to apply any seal or use any trademark of the
other in regard to the resale of the monuments. The resale price of the
monuments purchased by DGC from ROA or by ROA from DGC when sold to retailers
shall be determined and set in the sole discretion of the reselling party.
5. SALES TO RETAILERS. ROA and DGC agree that DGC may sell Barre Gray
monuments purchased by it from ROA and ROA may sell Xxxxxx Xxxxxxxx monuments
purchased by it from DGC to any retail customer located anywhere in North
America. Neither DGC nor ROA will resell monuments purchased from the other
outside North America without the prior written consent of the other.
6. MANUFACTURING ACCOMMODATIONS. DGC and XXX understand and agree that
their respective sales forces may sell finished monuments manufactured by the
other party to this agreement that are not in the required or additional
inventory. DGC and ROA agree that in such case they will use their best efforts
to provide a delivery date to meet the requirements of the sale upon receipt of
the order for that unit.
7. SHIPPING ACCOMMODATIONS. ROA and DGC understand that the DGC sales
force may sell a Barre Gray monument to a customer in closer proximity to Barre
than to Milbank and the ROA sales force may sell a Dakota Mahogany monument to a
customer in closer proximity to Milbank than Barre. Likewise, their respective
sales forces may sell monuments owned by them but stored at the other's location
as additional inventory in accordance with paragraph 3. In such cases, DGC and
ROA agree to accommodate the other by either
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Xx. Xxxxx Xxxxxx
July 25, 1997
Page 3
manufacturing the unit and invoicing the other therefor, or removing the unit
from the other's additional inventory and shipping it directly to the retailer
as mutually agreed on a case by case basis to reduce the shipping expense and
the delivery time. A handling charge of $10 will be applied to monuments shipped
from the others additional inventory. Freight will be paid by the retailer.
8. BLOCKS AND SLABS. It is understood and agreed that from time to
time DGC may purchase such number of Barre Gray blocks and slabs from ROA and
ROA may purchase such number of Dakota Mahogany blocks and slabs from DGC as
they deem appropriate. Prices for blocks and slabs shall be *******. XXX and
DGC agree that ROA may manufacture monuments of Dakota Mahogany and DGC may
manufacture monuments of Barre Gray in their own plants during the term of this
agreement.
9. INVOICING AND PAYMENTS. Each party will invoice the other for any
charges during a particular month within ten days of the close of the month. All
payments shall be due 30 days from the invoice date.
10. AGREEMENT REPRESENTATIVES. To assure the agreement is mutually
beneficial to both parties and to create a clear line of communication, ROA
names Xxxxx Xxxxxxx and DGC names Xxxx Xxxxx as their representatives and
contacts with responsibility for implementing and maintaining the terms of this
agreement.
Any customer of either DGC or ROA which sells primarily at retail will
not be considered a distributor or wholesaler and a resale between a parent
company and its subsidiary companies will not be considered a wholesale sale or
a sale by a distributor.
11. EFFECTIVE DATE AND TERMINATION. This agreement shall commence August
1, 1997 and may be terminated by either party at any time on 180 days prior
written notice. Upon termination, any required inventory owned by DGC and ROA at
their locations will remain their property. Any additional inventory under
paragraph 3 owned by ROA and stored at DGC or owned by DGC and stored at ROA
will be shipped from the other's property within the 180 day notice period prior
to termination. In the event the owner of the additional inventory fails to ship
it out of the xxxxxx'x facility prior to termination, it shall become the
property of the xxxxxx free and clear of any claim of the owner.
If this letter correctly sets forth our understanding, please sign on the
line indicated and return one copy to me. We look forward to working together to
make this agreement successful for
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Xx. Xxxxx Xxxxxx
July 25, 1997
Page 4 both parties.
Sincerely,
ROCK OF AGES CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
AGREED:
DAKOTA GRANITE CO., INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
