AMENDED AND RESTATED
SALES REPRESENTATIVE AGREEMENT
This Amended and Restated Sales Representative Agreement (this
"Agreement") is made and entered into this 15th day of August, 1997,
effective as of January 1, 1996, between XXXXX-XXXXXXX ELECTRONICS
CORPORATION, an Illinois corporation (the "Company"), XXXXX INDUSTRIES,
INC., an Illinois corporation (the "Representative"), and XXXXX X.
XXXXXXX, XX. ("Xxxxxxx").
WHEREAS, the Company designs, manufactures and markets electronics
video products consisting primarily of video monitors;
WHEREAS, the Company and the Representative entered into a Sales
Representative Agreement dated January 1, 1996, whereby the Company
appointed the Representative as its sales representative for certain
products of the Company and the Representative accepted such position
as sales representative of such products (the "Old Sales Representative
Agreement");
WHEREAS, the Representative has executed a Promissory Note in favor
of the Company of even date herewith (the "Note"); and
WHEREAS, the Company and the Representative desire to amend and
restate the Old Sales Representative Agreement in connection with the
Note, all in accordance with the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements contained herein, the parties agree as follows:
1. Definitions.
"Markets" shall mean the Traditional Markets and the Video Wall
Markets.
"Products" shall mean all products produced or assembled and/or
sold by the Company, including, but not limited to, spare and
replacement parts and the service of such products.
"Traditional Markets" shall mean the following markets and uses in
which and for which the Products may be sold: amusement, leisure,
gaming, automotive, and shall also include the data display market but
only for the customers listed on Exhibit A attached hereto and shall
exclude the Video Wall Markets.
"Video Wall Markets" shall mean the following markets and uses in
which and for which the Products may be sold: video walls, presentation
monitors, transportation monitors and kiosk monitors shall exclude the
Traditional Markets and shall exclude all sales to the customers listed
on Exhibit B.
2. Appointments. The Company hereby appoints the Representative,
and the Representative hereby accepts appointment by the Company, as
sales representative for the Products in the Markets, under the terms
and conditions contained herein. The Representative hereby agrees to
engage actively and diligently in the promotion and sale of the
Products, to use its best efforts to fully develop the Markets for the
Products, and to render prompt and complete sales and servicing to its
customers at its sole cost and expense.
3. Exclusivity. The Representative shall be the Company's
exclusive sales representative for the Products in the Markets in the
United States of America, Canada and Mexico (the "Territory") and shall
be the Company's sales representative for the Products in the Markets on
a non-exclusive basis in all other areas.
4. Sales Invoicing. The Company shall do all invoicing on sales
of Products to customers, except as mutually agreed upon in writing.
The Company shall furnish the Representative with a summary of the
following invoices on a monthly basis: (i) invoices of Products sold in
the Territory for use in the Markets; and (ii) invoices of other
Products, if any, sold by the Company and for which the Representative
is entitled to a commission pursuant to this Agreement.
5. Commissions.
(a) Monthly Commission. On the 40th day after the end of each
month, the Company shall pay to the Representative a commission (the
"Monthly Commission") consisting of:
(i) a commission as listed on Exhibit C of the Company's Net Sales
in the Territory of Products in the Video Wall Markets for such month;
plus
(ii) a commission of such percentage of the Company's Net Sales in
the Territory of Products in the Traditional Markets for such month
equal to the Commission Percentage (as hereinafter defined); plus
(iii) commissions, at the rates set forth in (i) and (ii)
above, for sales of Products in the Markets outside the Territory for
such month, which sales are generated by the Representative.
(b) Annual Commission. As soon as practicable, but in no event
later than April 1 each year, the Company shall calculate the
Representative's annual commission for the preceding calendar year (the
"Annual Commission") in the following manner:
(i) a commission as listed on Exhibit C of the Company's Net Sales
in the Territory of Products in the Video Wall Markets for the preceding
calendar year; plus
(ii) a commission of such percentage of the Company's Net Sales in
the Territory of Products in Traditional Markets for the preceding
calendar year equal to the Commission Percentage; plus
(iii) commissions, at the rates set forth in (i) and (ii)
above, for sales of Products in the Markets outside the Territory for
the preceding calendar year, which sales are generated by the
Representative.
If the Annual Commission is greater than the sum on Monthly
Commissions paid for the preceding calendar year (the "Aggregate Monthly
Commission"), the Company shall, no later than ten (10) business days
after such calculation, pay to the Representative the difference between
the Annual Commission and the Aggregate Monthly Commission.
(c) Definitions
(i) "Net Sales" shall mean the aggregate amount of the Company's
net sales of Products in the Traditional Markets or Video Wall Markets,
as the case may be. For purposes of determining Monthly Commissions,
Net Sales shall be calculated at the end of each month by annualizing
year-to-date Net Sales. For purposes of determining Annual Commissions,
Net Sales shall equal the Company's net sales of Products in the
Traditional Markets or Video Wall Markets, as the case may be, for the
preceding calendar year.
(ii) "Profits" shall mean year-to-date net income after taxes.
(iii)"Loss" shall mean year-to-date net loss after taxes.
(iv) The "Commission Percentage" for any month or year shall be (1)
the Applicable Rate set forth in Column B of Exhibit D if the Company
has operated at a Loss, year-to-date, through the end of such month or
year as the case may be, or the Applicable Rate set forth in Column C of
Exhibit D if the Company has operated at a Profit, year-to-date, through
the end of such month or year as the case may be. The "Applicable Rate"
for any month or year shall be based upon the Net Sales calculated as
provided herein.
(d) All commissions to be paid to the Representative hereunder
shall be based upon the Company's invoice price to customers for its
Products, excluding amounts invoiced for taxes, freight, C.O.D.
charges or insurance.
(e) Notwithstanding anything herein to the contrary, the
Representative shall not be entitled to any commission on Products sold
for use in markets other than the Markets, on orders canceled or refused
for any reason whatsoever by the Company or by any customer, or on
Products returned for credit upon the Company's authorization. In the
event that the Company accepts Products for return or is not paid by a
customer within ninety (90) days of invoicing, the Company may charge
back against the Representative commission which have been paid or which
are due to the Representative as a result of the underlying sale of such
Products; provided, however, that once the Company has been paid in full
by such customers, the Representative shall be entitled to receive
commissions thereon at the rate set forth herein. The Representative
assumes responsibility for the accuracy of all matters on all orders
taken by the Representative.
(f) In the event that the Representative fails to notify the
Company of any disagreement within one hundred eighty (180) days after
receiving a statement of commissions due in accordance with the Section
5, such statements shall be conclusively deemed to be correct and
binding upon the Representative.
(g) In the event that the Company fails to notify the
Representative of any disagreement within one hundred eighty (180) days
after receiving a statement of commissions due in accordance with the
Section 5, such statements shall be conclusively deemed to be correct
and binding upon the Company.
6. Sales Terms. All orders submitted by the Representative to
the Company shall be on the Company's regular terms and conditions then
in effect and shall be made expressly subject to the approval of the
Company at the home office of the Company at 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000. The Company reserves the right to reject, for
any reason whatsoever, any order submitted by the Representative to the
Company under this Agreement, all without any liability whatsoever to
the Company. The Company also reserves the right, for any reason
whatsoever, to change its quoted priced of Products form time to time
and to discontinue at any time or times the production, assembly, design
and/or sales of Products.
7. Sample and Product Information. The Company shall furnish the
Representative with such samples, sales bulletins, product brochures,
instruction manuals, and technical guidance as may from time to time be
available; provided, however, that this Section 7 shall not obligate the
Company to furnish any other such material or any financial assistance
to the Representative.
8. Adjustments, Compromises and Collections. The Representative
has no authority, without prior written agreement by the Company, to
represent the Company in making any adjustments or compromises and the
Representative has no authority to make any connections for or on behalf
or the Company.
9. Intellectual Property Rights and Use. Ownership and all
right, title and interest in and to any trademarks, trade names, service
marks or copyrights, whether or not registered, relating to any Product
are and shall remain vested solely in the Company. The Representative
may not utilize any of the Company's trademarks, trade names, service
marks or copyrights, whether or not registered, without the Company's
prior written consent and shall immediately modify or discontinue such
if, when and as requested by the Company.
10. Product Warranty. It is understood and agreed that the
Company's product warranty with respect to the Products shall be limited
to the provisions set forth in the standard warranty of the Company in
effect at the time of delivery thereof. The Representative shall have
no authority to alter or enlarge upon such warranties.
11. Independent Contractor. It is expressly understood and agreed
by the parties:
(a) that the Representative is an independent contractor and shall
not in any way obligate or create liability on the party of the Company;
and
(b) that the Representative at no time shall represent itself as
the "owner of Xxxxx-Xxxxxxx";
(c) and that no contracts, commitments, statements or
representations made by or only behalf of the Representative shall be
binding in any binding in any respect on the Company. The Company shall
not be liable at any time for any payments to the Representative or on
behalf of the Representative not specifically set forth in this
Agreement.
12. Facilities Provided. The Company agrees to provide to the
Representative office space, at its sole option, within the Company's
premises at not cost to the Representative, and any costs incurred by
the Company of the Representative in connection with the
Representative's use of such facilities shall be borne by the
Representative.
13. Representative Debt. If the Company receives written notice
from any customer of the Company that the Representative or any
Representative Affiliate (as hereinafter defined) is indebted to such
customer for goods purchased from such customer and the amount (the
"Representative Debt") is more that sixty (60) days past due, then:
(a) the Company may notify the Representative of such written
notice from such customer; and
(b) if the Representative does not pay, or otherwise
negotiate an acceptable payment plan for, the Representative Debt within
thirty (30) days after receiving the notice from the Company set forth
in (a) above, the Company shall have the right, in its discretion, to
either (i) apply to the Representative Debt any and all Monthly or
Annual Commissions then or thereafter due to the Representative
hereunder or (ii) terminate this Agreement. For purposes of this
Section 13, "Representative Affiliate" shall mean any entity, at least
50% of the voting power or the equity of which is beneficially owner,
directly or indirectly by the Representative, Xxxxxxx, and Xxxx X.
Xxxxxx.
14. Term and Termination.
(a) The term of this Agreement shall be from January 1, 1996, to
December 31, 2000; provide, however, that this Agreement will be
automatically renewed for successive periods of one (1) year.
Notwithstanding the above, this Agreement may be terminated by any party
upon twelve (12) months prior written notice to the other party.
(b) As long as any amounts remain outstanding under the Note, in
the event of a material breach or default of any of the terms or
conditions of either this Agreement or the Note by the Representative,
the Company may immediately withhold any and all commissions due and
owing to the Representative under this Agreement. If such breach or
default continues uncured for fifteen (15) days, the Company may (i)
terminate this Agreement and/or (ii) apply any withheld commissions to
the amounts outstanding under the Note. Neither the exercise nor the
failure to exercise the right subsection (ii) shall constitute an
election of remedies or limit the Company in any manner in the
enforcement of other remedies that might be available to it.
(c) Subject to Section 14(b), in the event of a material breach or
default of any of the terms or conditions of this Agreement by one
party, the other party may terminate this Agreement; provided, however,
that if the breach or default is capable of being cured, the
nonbreaching party must provide the breaching party with written notice
thereof and if cured within sixty (60) days of such notice, such breach
or default may not be grounds for termination hereunder.
(d) This Agreement shall terminate upon an assignment for the
benefit of creditors by the Representative or by or against the
Representative or Xxxxxxx, or the institution of proceedings by or
against the Representative or Xxxxxxx in bankruptcy or under any
insolvency laws or for reorganization, receivership or liquidation,
provided such proceeding is not dismissed within sixty (60) days of the
institution thereof.
(e) In the event of the death, legal incapacity or permanent
disability of Xxxxxxx, or the termination of his full-time employment by
the Representative, then, in any such event, the Company and the
Representatives shall negotiate the terms on which this Agreement shall
continue, and if the parties fail to reach an agreement, this Agreement
shall forthwith terminate.
(f) The Company agrees that in the event of the termination of
this Agreement for any reason (other than a termination by the
Representative under Sections 14(a) or (c)), it will not employ any
person employed by the Representative or Xxxxxxx at any time during the
twelve (12) months preceding the date of such termination for a period
of one (1) year following such termination except as mutually agreed
upon by the parties.
(g) In addition to its other rights, the Company shall, on or
before the effective termination date of this Agreement, have the right
to inspect and make copies of all or any portion of the books and
records of the Representative which pertain to the Company's business
and to the fulfillment of the Representative's obligations under this
Agreement.
(h) Subject to Section 14(b), the Representative shall be entitled
to receive commissions hereunder on Net Sales made after termination of
this Agreement if any to the extent orders therefor were received by the
Company prior to the effective date of termination of this Agreement,
subject to all other conditions hereof.
15. Remedies. It is agreed that each party shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and
to specifically enforce the terms and provisions thereof in any action
instituted in any court of the United States or any stated thereof
having subject matter jurisdiction, in addition to and not in lieu of,
any other remedy to which such party may be entitled, at law or in
equity.
16. Confidential Information.
(a) The Representative acknowledges that, in the course of
promoting and selling the Products and performing its duties under this
Agreement, it may obtain information relating to the Company and its
products which the Representative knows or has reason to know is of a
confidential and/or proprietary nature ("Confidential Information").
Such Confidential Information may include, but is not limited to, price
guidelines, future products releases, trade secrets, know-how,
inventions, methods of manufacture, techniques, processes, programs,
data, pricing and discount lists and schedules, customer lists,
financial information and sales and marketing plans. The Representative
shall at all times, both during the terms of this Agreement and at all
times thereafter, keep and hold such Confidential Information in the
strictest confidence, and shall not use or disclose such Confidential
Information for any purpose, other than as may be reasonably necessary
for the performance of its duties as a representative pursuant to and
during the term of this Agreement. The Representative shall not use or
disclose any Confidential Information to any person or entity, other
than the Representative's employees with a need to know such
Confidential Information. The Representative warrants that the
Representative's principals, employees, agents and representatives,
included, but not limited to, Xxxxx X. Xxxxxxx, Xx., shall be advised of
the provisions of this Agreement relating to Confidential Information as
set forth in this Section 16 and shall abide by the terms of this
Section 16 to the same extent as the Representative is required to do
so.
(b) Promptly upon the termination of this Agreement, the
Representative shall on its own initiative turn over to the Company all
Confidential Information and all other information and material,
including, without limitation, all and any Product samples, pamphlets,
catalogs, booklets and other advertising data and literature concerning
the Company and/or the Products, and all copies thereof, in the
possession, custody or control of the Representative.
17. Noncompetition.
(a) The Representative and Xxxxxxx agrees that during the term
hereof and, if, but only if, the Representative or Xxxxxxx voluntarily
terminates this Agreement under Section 14(a), or the Company terminates
this Agreement under Section 14(a), 14(b) or 14(c), then for a period of
one (1) year after notice of such termination, they will not, directly
or indirectly, be in any manner engaged in, connected with (as a
shareholder, employee, independent contractor or otherwise) or employed
by (or act as an independent contractor or other representative for) any
person, firm or corporation which is engaged in a business which,
anywhere inside or outside the Territory, (i) is competitive with the
Company or a successor affiliate thereof of (ii) promotes, sells,
markets, licenses, distributes, or advertises products whether existing
or under development, which are similar to or competitive with the
Products anywhere; provided, however, that this subsection shall not be
deemed to limit the Representative's and Robert's right to own less than
10% of the common stock of a publicly held corporation whose shares are
traded on a recognized stock exchange or over-the-counter), and
provided, further, that the Representative and Xxxxxxx may so compete in
Xxxxxxx County, Illinois.
(b) In the event of a breach, violation or attempted breach or
violation of any of the provisions of this Section 17, the Company shall
be entitled to an injunction or restraining order immediately upon the
commencement of any suit therefor by the Company and without notice.
Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedy available to it for any such breach of
violation for the recovery of damages, including punitive damages by
reason thereof.
(c) The necessity of protection against the competition of the
Representative and the Representative's principal and the nature and
scope of such protection has been carefully considered by the parties
hereto. The parties hereby agree and acknowledge that the duration,
scope and geographic area applicable to the restrictions set forth in
this Section 17 are fair, reasonable and necessary. The consideration
provided for herein is sufficient and adequate to compensate for
agreeing to the restrictions contained in this Section 17. IF, however,
any court determines that the foregoing restrictions are not reasonable,
such restrictions shall be modified, rewritten or interpreted to include
as much of their nature and scope as will render them enforceable.
18. Limitation of Remedy. The Representative shall have no claim
against the Company for compensation or otherwise with regard to this
Agreement or the representation created hereby, whether in contract, in
tort, under any warranty or otherwise, either during the term of this
Agreement or after its termination, for any termination or nonrenewal in
accordance with this Agreement. The Company shall not, by any reason of
this termination of this Agreement, for sale or use of Products, for
negligence, or otherwise, be liable to the Representative for any
special, incidental of consequential damages or similar relief,
including but not limited to, property damage, personal injury,
compensation or damages for loss of present or prospect profits or
revenues, loss of goodwill or expenditures, investments or commitments
made in entering to this Agreement or in connection with the performance
of obligations hereunder.
19. Waiver. No change in, addition to, or waiver of any of the
provisions of this Agreement shall be binding upon any party hereto
unless in writing signed by each party except as otherwise provided
herein. No failure of a party to exercise any right given to it
hereunder, or to insist upon strict compliance with any obligation
hereunder, an not custom or practice of the parties at variance with the
terms hereof shall constitute a waiver of the party's rights to demand
exact compliance with the terms hereof. Waiver by a party of any
particular default shall not affect or impair its rights in respect to
any subsequent default of the same or of a different nature, nor shall
nay delay or omission of a party to exercise any rights arising form
such default affect or impair the party's rights as to such default or
any subsequent default.
20. Notices. All notices required or permitted by the terms of
this Agreement shall be in writing and shall be sent by certified or
registered mail, postage prepaid, addressed as follows:
If to the Company:
Xxxxx-Xxxxxxx Electronics Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Representative or Xxxxxxx:
Xxxxx Industries, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
or such other address as any party may designate in a notice to the
others.
21. Assignments. This Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns. This
Agreement shall not be assignable by the Representative without the
prior written consent of the Company. Upon any assignment by the
Representative that is not consented to in writing by the Company, the
Company may terminate this Agreement at its option.
22. Survival. Notwithstanding any termination of this Agreement,
any duty or obligation which has been incurred by the terms hereof or
which has not been fully observed, performed or discharged, shall
survive termination until such duty or obligation has been fully
observed, performed or discharged. The rights or remedies hereunder are
cumulative to any other rights or remedies which may be grant by law.
23. Severability. If any covenant or other provisions of this
Agreement is invalid, illegal, or incapable of being enforced, by reason
of any rule of law, administrative order, provisions of this Agreement
shall, nevertheless, remain in full force and effect, and no covenant or
provision shall be deemed dependent upon any other covenant or provision
unless so expressed herein.
24. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
25. No Third Party Beneficiaries. No persons other than the
Company and the Representative shall have any rights, to commissions or
otherwise, by virtue of or under this Agreement, and the Representative
shall not acquire, by virtue of this Agreement, any rights to
commissions or otherwise under any other agreement that the Company may
execute with any other sales representative.
26. Integration/Modification/Entire Agreement. This Agreement
constitutes the entire agreement and final understanding of the parties
with respect to the subject matter hereof and supersedes and terminates
any and all prior distributorship agreements, prior and/or
contemporaneous communications and/or agreements between the parties,
whether written or verbal, express or implied, direct or indirect,
relating in any way to the subject matter hereof including, but not
limited to the Old Sales Representative Agreement and the Agreement
dated March 1, 1991, as subsequently amended, by and between the parties
hereto. This Agreement is intended by the parties to be a complete and
wholly integrated expression of their understanding and agreement, and
it may not be altered, amended, revised, modified or otherwise changed
in any way except by a written instrument, which specifically identifies
the intended alteration, amendment, revision, modification or other
change and clearly expresses the intention to so change this Agreement,
signed by an officer of the Representative and by an officer of the
Company.
27. Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
28. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but both of
which constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date of first written above.
XXXXX-XXXXXXX XXXXX INDUSTRIES, INC.:
ELECTRONICS CORPORATION:
By: Xxxxxxx Xxxxx By: Xxxxx Xxxxxxx Jr.
Title: CEO Title: CEO
Xxxxx X. Xxxxxxx Xx.
XXXXX X. XXXXXXX, XX.
EXHIBIT A
CUSTOMERS IN DATA DISPLAY MARKET
1. Polaroid
2. North American Xxxxxx
3. Xxxxxxx Electronics
4. Optelec
5. Telesensory
6. Simrad
7. Xxxxxx
8. Future new accounts must be mutually agreed
EXHIBIT B
CURRENT HOUSE ACCOUNTS FOR THE COMPANY
FOR SALES TO THE VIDEO WALL MARKETS - EXCLUDED CUSTOMERS
1. Business Television Video Systems
2. Dynatouch Corporation
3. Elo Touchsystems, Inc.
4. Image Holding
5. Innovative Design Technology
6. Music Vending
7. Neighborhood Box Office
8. Quick Tag
9. Touch Controls, Inc.
10. Micrin Software
11. Local Infoservices, Inc.
12. Xxx Xxxx & Associates
13. SCA Unlimited
14. Acrobatic Muffin Works
15. Adwall Advertising Systems
16. AEI Music
17. Bayside Controls
18. Contact Media Corporation
19. Diversified Video
20. Electrosonic Systems, Inc.
21. Hibino USA, Inc.
22. I.S.T.S./Telav
23. Intech Corporation
24. Xxxxxx International
25. Lanetco Company
26. Milanese Associates
27. MPO Videotronics, Inc.
28. Multivision Electrosonic Ltd.
29. MVP Communications
30. Rent Com, Inc.
31. Telav
32. Video Vision
33. Vision Control Association of Nevada Inc.
34. Customers developed internally by the Company
EXHIBIT C
COMMISSION SCHEDULE
VIDEO WALL MARKETS
SALES DATE COMMISSION RATE
July 1, 1997-June 30, 1998 4.00%
July 1, 1998-June 30, 1999 2.00%
After July 1, 1999 0.00%
EXHIBIT D
COMMISSION SCHEDULE
TRADITIONAL MARKETS
COLUMN A COLUMN B COLUMN C
NET SALES LOSS PROFIT
Under $27.5 million 3.00% 3.25%
$27.5 million to $29.99 million 3.25% 3.50%
$30.0 million to $37.49 million 3.50% 3.75%
$37.5 million to $42.49 million 4.00% 4.00%
$42.5 million to $47.49 million 4.50% 4.50%
$47.5 million and over 5.00% 5.00%
