1
EXHIBIT 10.27
This expresses the agreement of Think Laboratory Co. LTD (Think) and Multi-Color
Corporation (MCC) to form a joint venture to supply rotogravure engravings to
the United States market. Both parties have agreed to the following:
1. The joint venture will be 80% owned by MCC and 20% owned by Think
Laboratory. The venture will have total capital of $3,000,000. Each
party may make a cash contribution 50% of its investment in the form of
cash or may make its investment in the form of equipment. The remaining
50% will be in the form of leases or bank borrowings. Capital will be
invested into the project as necessary to fund the project.
2. The project will proceed in 2 phases. The initial selling effort
will be to develop 1 or 2 customers who can be supplied using MCC's
existing Boomerang Line and a new Laserstream and Coating Machine
capable of handling Shafted Bases. This will demonstrate the projects
feasibility. In addition, MCC will install an upgraded Barco system to
provide the prepress capability to handle the increased volume. Costs
and expenses for sales, production, administration and installation
(working capital) during this period will be the responsibility of MCC
and will be considered a capital contribution by Multi-Color.
3. The next phase of the project will be to expand the building and
install the Xxxxxx Boomerang line. Costs and expenses during this phase
of the project will be shared on a prorata basis by the two companies
based on their respective equity contributions.
4. Think agrees to not sell its Laserstream and Boomerang Line to trade
engravers (service houses) or to any U.S. based printers during the
term of this agreement. MCC and Think agree to discuss opportunities
for Think to sell equipment in the United States and MCC agrees
permission to sell equipment in the United States to U.S. printers will
not be unreasonably withheld.
5. Listed as Attachment A. is the capital required by the joint venture
to establish the joint venture.
6. A royalty of 5% will be paid beginning after 12 months or when the
operation becomes profitable whichever comes sooner.
7. The term of this agreement will be for five years. The agreement may
be terminated by either party by providing 90 days notice prior to the
end of the original contract term or any extensions. By mutual
agreement, this agreement may be extended for additional 3 year
periods.
Agreed Agreed
By /s/ XXXX X. COURT By /s/ X. XXXXXXXXX
-------------------------- -------------------------------
Multi-Color Corporation Think Laboratory Co. LTD.
2
Capital Requirements
Phase 1. YEN $
Laserstream 68,000,000 600,000
Coater 1. 9,000,000 80,000
Proof Press 13,000,000 120,000
Grinder 12,000,000 110,000
Prepress 20,000,000 180,000
Working Capital & 25,500,000 250,000
Installation Costs
Phase 2
Building Expansion 55,000,000 500,000
Xxxxxx Line 100,000,000 1,000,000
Coater 2 9,000,000 80,000
