INDEPENDENT SALES AGREEMENT
Multimedia Disk Duplicators II
THIS INDEPENDENT CONTRACTOR SALES AGREEMENT (this "agreement") is made and
entered into as of the 27th day of July, 1993, between Applied Data
Communications, Inc. ("Client"), and Market Winning Strategies, Inc.
("Contractor"), with respect to the following facts:
A. Contractor proposes to offer to a limited number of selected
persons meeting specific criteria an aggregate of 70 units ("Units") each
of interest in a limited partnership known as Multimedia Disk Duplicators
II (the "Partnership") to be formed for the purposes of purchasing various
items of equipment from the Client that will compose the elements to
duplicate and produce an expansion system for the duplication, and
reproduction of digial magnetic tape, floppy disks, C. D. ROM disks and
various other media used for digital storage. The Units will be sold for
$6,110.65 each for a total of $427,745.00 .
B. The Client will, after the purchase of the aforementioned equipment
by the Partnership, lease back the equipment under the terms and conditions
of a separate lease agreement
C. Contractor proposes to form a NEWCO as the general partner of the
Partnership.
D. Client desires to engage Contractor, and Contractor desires to
represent Client, in the funding through the proposed Partnership of the
lease of the equipment as detailed in Appendix A to this agreement.
NOW THEREFORE, the parties agree as follows:
1. ENGAGEMENT, Client hereby engages Contractor to solicit subscriptions to
units, and Contractor agrees to use its best efforts to solicit such
subscriptions, all in accordance with the terms of this agreement and the
offering materials prepared by the Contractor after the execution of this
agreement (the "Materials") . Contractor accepts such engagement and agrees that
at all times it will faithully, industriously
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and to the best of its ability, experience an talents perform to the reasonable
satisfaction of the Client all of the duties which may be assigned to it in
accordance with this agreement. Client agrees to cooperate with Contractor in
the performance of Contractors duties under this agreement, to comply with all
reasonable requests for support in the placement of the Units and other support
as may be reasonably requested by Contractor and to provide access to all
pertinent documents and financial information as is reasonably necessary to the
performance of Contractors duties.
2. TERM, The term of this agreement shall commence as of the date hereof and
shall expire on December 31, 1993 or unless sooner terminated as provided in
paragraph 7 below.
3. SALES, No sale of units shall be regarded as effective unless and until
equipment is delivered to partnership and lease is executed by Client. Client
reserves the right to refuse the sale of a Unit or Units at any time for any
reason.
4. COMPENSATION TO CONTRACTOR, As full compensation for Contractors services
under this agreement, Client agrees to pay Contractor a commission of 15% of the
full sales price (including purchase price, freight, taxes and all other costs)
of equipment purchased by the Partnership from the Client. The commission shall
be paid by the Client concurrently with payment by the Partnership. Contractor
represents that the commission is sufficient to support all costs and normal
expenses required to effect the funding and offering of Units of the
Partnership.
5. REPRESENTATIONS OF THE CONTRACTOR, Contractor represents, warrants and
covenants to Client as follows:
5.1 Contractor is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was formed, with all
requisite power and authority to enter into this agreement and carry out its
obligations hereunder, and this agreement is valid and binding upon the
Contractor.
5.2 Contractor shall provide potential purchasers of Units only
with copies of the Materials and any other sales literature approved in
advance by Client. Contractor by way of the offering document the level
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of risk that the purchase of limited partnership Units may carry.
5.3 Contractor shall make no representation, guarantee or
promise to any potential purchaser which is not contained in
Materials. To the extent violation of the previous sentence any
representations are made to prospective purchasers other than those
contained in the Materials, Contractor will refrain from making any
untrue statement of a material fact or omit to state a material fact
necessary to prevent any statement made from being misleading as to
the offering of Units or any or any matters set forth in or
contemplated by the Materials.
5.4 Contractor will refrain from offering or selling any Units
by means of any form of general solicitation or advertisement,
including any communication published in any newspaper, magazine, or
similar medium, any computer on line service, or any radio or
television broadcast; and
5.5 Prior to the sale of any Units to prospective purchaser,
Contractor shall have reasonable grounds to believe and shall in
fact believe that such purchaser meets the suitability standards set
forth in the Materials.
6. INDEMNITY, Client shall indemnify and hold harmless Contractor,
the Partnership and all of their representative agents and
representatives (collectively, the "Indemnitees") from and against
any and all loss, cost, expense, obligation and liability
whatsoever, including but not limited to reasonable attorneys" fees
and costs, which may be incurred by any indemnitee arising out of or
resulting from, or in any way connected to (i) any breach of any
representation, warranty or covenant of Client made in this
agreement, or (ii) any purported violation of any federal or state
securities laws, rules or regulations.
7. TERMINATION, This agreement shall be terminated on the occurrence
of any of the following events;
7.1 If the contractor or Client shall cease to maintain a going
business, becomes insolvent or bankrupt, makes an assignment for the
benefit of the creditors, files a petition bankruptcy, or a petition
is filed seeking Contractor's adjudication as a bankrupt, or
7.2 If Contractor fails to perform any obligation or
discharge any
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duties arising hereunder or fails to adhere to Client's standards of
professional ethics and practices, as determined by Client in the sole but good
faith discretion.
Termination under this paragraph shall be effective immediately upon receipt of
written notice from the terminating party stating the cause of such termination.
8. DELIVERY OF MATERIALS, On the expiration or earlier termination of this
agreement, Contractor shall immediately turn over all Materials and information
in Contractor's possession or under its control relating to the performance of
his responsibilities under this agreement, whether delivered to Contractor by
Client or developed by Contractor itself, including but not limited to all video
tapes, audio tapes, films, notebooks, analyses, reports, designs, drawings,
models, samples, layouts, customer lists, business plans, financial statements
and proposals to clients and all other materials and information.
9. ASSIGNMENT, The rights granted herein to Contractor shall not be assigned by
Contractor under any circumstances whatsoever without the prior written consent
of the Client.
10. INDEPENDENT CONTRACTOR, This agreement shall in no way be construed as an
appointment of Contractor as an employee of the Client for any purpose
whatsoever, nor as a partnership or joint venture between Client and Contractor.
Client shall not be liable for (and Contractor shall indemnify, defend, save and
hold harmless Client from and against) any liability incurred by Contractor.
Contractor is an independent contractor engaged in its own and entirely separate
business. Contractor shall be responsible for the payment of all of its own
expenses (including but not limited to income taxes, franchise taxes, license
fees, wages, payroll taxes and costs of services, materials, supplies, rent and
overhead). Contractor shall not be entitled to any wages, fringe benefits or
other compensation which Client may provide to its own employees. Contractor
shall not be entitled to be covered by or entitled to the benefit of any laws or
agreements regarding employment, unemployment benefits, workers' compensation,
disability insurance or medical insurance in connection with its engagement by
Client pursuant to this agreement. Except as provided in this agreement,
Contractor is under the contract of client as to the result of the contractor's
work only and not as to the means by which such result is accomplished.
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11. NOTICES, Any and all notices, demands or other communications required or
permitted to be given hereunder by a party (any of which a "Notice") shall be in
writing and shall be validly given or made to the other party if served either
personally, by telecopy, by deposit in the United States mail, certified or
registered, first class postage prepaid, returned receipt requested, or by
overnight delivery service to any address in the United States or Canada. If
such notice be served personally, by telecopy or overnight delivery service,
service shall be conclusively deemed made at the time of receipt. If such notice
is made by mail, such notice shall be conclusively deemed given forty-eight (48)
hours after deposit thereof. Any such notice shall be addressed to the recipient
party at the address of the party set fourth bellow. Any party may change its
address for the purpose of receiving notices or may designate additional persons
to receive notices by written notice given in the manner aforesaid to the other
party.
12. ATTORNEYS' FEES. In the event any legal action or proceeding is brought by
any party to enforce, defend or construe such party's obligations hereunder, the
prevailing party shall be entitled to its reasonable costs and expenses
including legal fees incurred in connection with such action or proceeding.
13. APPLICABLE LAW. This Agreement shall be subject to and governed by the laws
of the State of California.
14. ARBITRATION Any dispute arising under or by virtue of this Agreement or any
difference of opinion between the parties hereto concerning their rights and
obligations under this Agreement, shall be finally resolved through binding
arbitration by a single party arbitrator to be mutually selected by both parties
to the dispute. Such arbitration proceedings shall take place in Irvine,
California in accordance with the applicable rules of the American Arbitration
Association. The decision of the arbitration proceedings shall be final and
binding upon both parties.
15. SEVERABILITY. Every provision in this Agreement is intended to be severable.
If any term or provision hereof is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the validity of the remainder
hereof.
16. CAPTIONS. The captions or headings in this Agreement are inserted for
convenience and identification only and are in no way intended to describe,
interpret,
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define, or limit the scope, extent, or intent of this Agreement or any
provisions hereof.
16. INVALID PR0VISI0NS. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions herein, and
this Agreement shall be construed as if such invalid or unenforceable
provisions were omitted.
17. ENTIRE AGREEMENT, This instrument contains the entire agreement of the
parties with respect to this subject matter, and may not be amended without
the prior written agreement of both parties.
WHEREFORE, this Agreement is executed by and between the parties hereto as of
the date first above-written in the City of Tustin, County of Orange, State
of California.
APPLIED DATA COMMUNICATIONS INC. MARKET WINNING STRATEGIES, INC.
(Client) (Contractor)
By /s/ ▇▇▇▇▇▇ ▇. "▇▇▇" ▇▇▇▇ By
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Its President Its President
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Date 7/27/93 Date 7-27-93
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EXHIBIT "A"
EQUIPMENT for MULTIMEDIA DISK DUPLICATORS I
Equipment for Sale/Leaseback
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Unit
Item Qty Model # Description Price Ext.
1 4 ADC DL2-1/LLP Four channel 3.5" diskette $46,850 $187,400
duplicator with 2 LLP's
2 2 ADC DL2-1/RDH 8/5 Four channel 51/4" diskette 41,850 $ 82,700
duplicator with 2 RDH 8/5
3 2 ADC CD2500 Multiple Spindle Tape 82,750 $165,500
Cartridge Duplicators
4 1 ADC DDQ-100 Duplication Diskette 15,995 $ 15,995
Qualifier with Printer
5 1 ▇▇▇▇▇▇▇▇ System Automatic Labeler 17,000 $ 17,000
900
6 1 Macintosh Label Maker/Printer 4,995 4,995
Image Writer II
7 1 ADC C7500 Dual Position Diskette 15,000 15,000
Certifier
8 1 Auto-Package Line Automatic Packaging Line 100,000 100,000
with Conveyor
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Total: $610,515
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