Document:

exv10w2

 

Exhibit 10.2

CARRIAGE SERVICES, INC.

PERFORMANCE UNIT AWARD AGREEMENT

Name

 

Grantee

	 	 	 	 	 
	Award Date:

	 	January 1, 2008
	 	 
	Performance Unit Value:

	 	$1.00	 	 
	Number of Performance Units Awarded:
	 	 	 	 
	 

	 	 
	 	 

AWARD OF PERFORMANCE UNITS

     The Compensation Committee (the “Committee”) of the Board of Directors of Carriage Services,
Inc., a Delaware corporation (the “Company”), pursuant to the Carriage Services, Inc. 2006
Long-Term Incentive Plan (the “Plan”), hereby awards to you, the above-named Grantee, effective as
of the Award Date set forth above, that number of Performance Units set forth above (each, a
"Performance Unit”, and collectively, the “Performance Units”), on the terms and conditions set
forth in this Performance Unit Award Agreement (this “Agreement”).

     One-half of the Performance Units awarded under this Agreement (the “Peer Group 1 Performance
Units”) provide you an opportunity to earn a cash payment based upon the Total Shareholder Return
achieved by the Company for the period beginning January 1, 2008, and ending December 31, 2010 (the
"Performance Period”) as compared with the Total Shareholder Return achieved by the companies
constituting the Russell Microcap Index as reported by Russell Investment Group (Russell). The
Russell Microcap Index is reconstituted annually to add or eliminate stocks according to Russell’s
microcap segment criteria. For purposes of the Plan, the Shareholder Return reported by Russell
for each period shall be used to calculate cash payments without adjustment for changes in the
companies constituting the Microcap Index. The other one-half of the Performance Units awarded
under this Agreement (the “Peer Group 2 Performance Units”) provide you an opportunity to earn a
cash payment based upon the Total Shareholder Return achieved by the Company for the Performance
Period as compared with the Total Shareholder Return achieved by Service Corporation International
and Stewart Enterprises, Inc. The Committee may not increase the amount payable under this
Agreement.

     “Total Shareholder Return” shall mean the difference between (i) the per share closing price
on the last trading day of the Performance Period of the common stock of the entity with respect to
which such computation is being made as reported by the principal stock exchange on which such
entity’s common stock is traded, and (ii) the per share closing price of such common stock on
December 31, 2007, as reported by the principal stock exchange on which the entity’s common stock
is traded, calculated assuming all cash and other dividends paid on such common stock during the
Performance Period are immediately reinvested in shares of such common stock.

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     As soon as reasonably practicable after the end of the Performance Period, the Committee will
calculate the Total Shareholder Returns for the Performance Period of the Company and each of the
members of Performance Peer Group 1 and Performance Peer Group 2. If the following conditions
exist with respect to the Performance Period:

     (1) your employment with the Company and all of its Affiliates has not
terminated on or before the last day of the Performance Period; and

     (2) a Corporate Change does not occur on or before the last day of the
Performance Period;

then you shall receive a cash payment under this Agreement equal to the sum of (i) the Peer Group 1
Performance Payment and (ii) the Peer Group 2 Performance Payment.

     The Peer Group 1 Performance Payment shall be equal to:

     (A) multiplied by (B) multiplied by (C)

where (A) is the number of Peer Group 1 Performance Units, (B) is the Peer Group 1 Earned Award
Factor (as that term has been defined by the attached table) and (C) the Performance Unit Value set
forth above.

     The Peer Group 2 Performance Payment shall be equal to:

     (X) multiplied by (Y) multiplied by (Z)

where (X) is the number of Peer Group 2 Performance Units, (Y) is the Peer Group 2 Earned Award
Factor (as that term has been defined by the attached table) and (Z) is the Performance Unit Value
set forth above.

     If the Peer Group 1 Earned Award Factor and the Peer Group 2 Earned Award Factor for the
Performance Period are both zero and a Corporate Change of the Company has not occurred on or
before the last day of the Performance Period, then the award pursuant to this Agreement shall
lapse and be forfeited as of December 31, 2010.

     The Committee’s determination of Total Shareholder Return for the Company and each member of
Performance Peer Group 1 and Performance Peer Group 2 for the Performance Period for purposes of
this Agreement shall be binding upon all persons.

     Any amount payable to you pursuant to this Agreement will be paid to you by the Company on
March 15, 2011, unless otherwise provided as hereinafter otherwise set out. Such payment will be
made to you in exchange for the Performance Units and thereafter you shall have no further rights
with respect to such Performance Units or this Agreement.

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     The following provisions 1.1 to 1.5 will apply in the event a Corporate Change of the Company
occurs, or your employment with the Company and all Affiliates (collectively, the “Company Group”)
terminates, before the last day of the Performance Period.

1.1 Termination Generally. If your employment with the Company Group terminates on
or before the last day of the Performance Period for any reason other than one of the
reasons described in Sections 1.2 through 1.5 below, all of your rights in this Agreement,
including all rights to the Performance Units awarded to you, will lapse and be completely
forfeited on the date your employment terminates.

1.2 Potential or Actual Corporate Change.

(i) Termination Without Cause or for Good Reason in Connection With a Potential
Corporate Change on or Before the Last Day of the Performance Period. If (a)
the Company Group terminates your employment without Cause on or before the last day
of the Performance Period prior to a Corporate Change of the Company (whether or not
a Corporate Change ever occurs) and such termination is at the request or direction
of a person who has entered into an agreement with the Company the consummation of
which would constitute a Corporate Change of the Company or is otherwise in
connection with or in anticipation of a Corporate Change of the Company (whether or
not a Corporate Change ever occurs) or (b) you terminate your employment with the
Company Group for Good Reason on or before the last day of the Performance Period
prior to a Corporate Change of the Company (whether or not a Corporate Change ever
occurs) and such termination or the circumstance or event which constitutes Good
Reason occurs at the request or direction of a person who has entered into an
agreement with the Company the consummation of which would constitute a Corporate
Change of the Company or is otherwise in connection with or in anticipation of a
Corporate Change of the Employer (whether or not a Corporate Change ever occurs),
then the Company will pay to you in cash an amount determined under the following
formula in lieu of any other amounts under this Agreement:

(1) multiplied by (2)

where (1) is the Performance Unit Value set forth in this Agreement and (2) is the
number of Performance Units that were awarded to you under this Agreement. Any
amount payable to you pursuant to this Section 1.2(i) will be paid by the Company to
you ten (10) business days after the date of your Separation From Service if you are
not a Specified Employee or on the date that is six months following your Separation
From Service if you are a Specified Employee. Such payment will be made to you in
exchange for the Performance Units and thereafter you shall have no further rights
with respect to such Performance Units or this Agreement and the Company Group will
have no further obligations to you pursuant to the Performance Units or this
Agreement. For purposes of this Agreement, “Separation From Service” has the
meaning ascribed to that term in Section 409A and “Specified Employee” means a
person who is, as of the date of the person’s Separation From Service, a “specified
employee” within the meaning of Section 409A, taking into account the elections made
and procedures

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established in resolutions adopted by the Board of Directors of the Company. For
purposes of this Agreement, “Section 409A”
means section 409A of the Internal Revenue Code of 1986, as amended and the Department of Treasury rules and
regulations issued thereunder.

(ii) Employment Not Terminated Before a Corporate Change on or Before the Last
Day of the Performance Period. If a Corporate Change of the Company occurs on
or before the last day of the Performance Period and your employment with the
Company Group does not terminate before the date the Corporate Change of the Company
occurs, then the Company will pay to you in cash an amount determined under the
following formula in lieu of any other amounts under this Agreement:

(1) multiplied by (2)

where (1) is the Performance Unit Value set forth in this Agreement and (2) is the
number of Performance Units that were awarded to you under this Agreement. Any
amount payable to you pursuant to this Section 1.2(ii) will be paid by the Company
to you (a) ten (10) business days after the date the Corporate Change of the Company
occurs if the Corporate Change of the Company qualifies as a change in the ownership
or effective control of the corporation, or in the ownership of a substantial
portion of the assets of the corporation, within the meaning of Section 409A, or (b)
on March 15, 2011, if the Corporate Change of the Company does not so qualify. Such
payment will be made to you in exchange for the Performance Units and thereafter you
shall have no further rights with respect to such Performance Units or this
Agreement and the Company Group will have no further obligations to you pursuant to
the Performance Units or this Agreement.

1.3 Disability. Notwithstanding any other provision of this Agreement to the
contrary, if you become permanently disabled on or after the date that is one month after
the Award Date and is before the last day of the Performance Period, while in the active
employ of one or more members of the Company Group, then the Employer will pay to you in
cash an amount determined under the following formula in lieu of any other amounts under
this Agreement:

(1) multiplied by (2) multiplied by (3) divided by (4)

where (1) is the Performance Unit Value set forth in this Agreement, (2) is the number of
Performance Units that were awarded to you under this Agreement, (3) is the number of days
from (and including) the first day of the Performance Period to (and including) the day you
become permanently disabled, and (4) is the number of days during the Performance Period.
Any amount payable to you pursuant to this Section 1.3 will be paid by the Company to you
ten (10) business days after the date you become permanently disabled. Such payment will be
made to you in exchange for the Performance Units and thereafter you shall have no further
rights with respect to such Performance Units or this Agreement and the Company Group will
have no further obligations to you pursuant to the Performance Units or this Agreement. For
purposes of this Section 1.3, you will be “permanently disabled” if you (a) are unable to
engage in any substantial gainful activity

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by reason of any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not less than 12
months, or (b) are, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan covering
employees of the Company Group.

1.4 Death. Notwithstanding any other provision of this Agreement to the contrary,
if you die before the last day of the Performance Period and while in the active employ of
one or more members of the Company Group, then the Employer will pay to your estate in cash
an amount determined under the following formula in lieu of any other amounts under this
Agreement:

(1) multiplied by (2) multiplied by (3) divided by (4)

where (1) is the Performance Unit Value set forth in this Agreement, (2) is the number of
Performance Units that were awarded to you under this Agreement, (3) is the number of days
from (and including) the first day of the Performance Period to (and including) the date of
your death, and (4) is the number of days during the Performance Period. Any amount payable
to your estate pursuant to this Section 1.4 will be paid to your estate by the Employer ten
(10) business days after the date of your death. Such payment will be made in exchange for
the Performance Units and thereafter your estate and heirs, executors, and administrators
shall have no further rights with respect to such Performance Units or this Agreement and
the Company Group will have no further obligations pursuant to the Performance Units or this
Agreement.

1.5 Retirement. Notwithstanding any other provision of this Agreement to the
contrary, if your employment with the Company Group terminates as a result of your
Retirement before the last day of the Performance Period, then the number of Performance
Units issued to you under this Agreement shall automatically be reduced (without further
action by you and/or the Company) on the date your employment relationship with the Company
Group terminates to that number of Performance Units determined under the following formula
(the “Retirement Adjusted Performance Units”):

(1) multiplied by (2) divided by (3)

where (1) is the number of Performance Units that were originally awarded to you under this
Agreement, (2) is the number of days from (and including) the first day of the Performance
Period to (and including) the day before the date your employment relationship with the
Company Group terminates due to Retirement, and (3) is the number of days during the
Performance Period. Your Peer Group 1 Performance Units and Peer Group 2 Performance Units
under this Agreement shall be reduced accordingly to reflect the Retirement Adjusted
Performance Units and the excess of the Performance Units that were originally awarded to
you under this Agreement over the Retirement Adjusted Performance Units shall be immediately
forfeited on the date of the termination of your employment relationship with the Company
Group due to Retirement. Any amount payable to you pursuant to this Agreement will be paid
on March 15, 2011. For purposes of this Section 1.5, the term “Retirement” means the
voluntary termination of
your employment relationship with the Company Group on or after the date on which the sum of
your age and years of service with the Company Group equals 65.

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     PROHIBITED ACTIVITY. Notwithstanding any other provision of this Agreement, if you engage in
a “Prohibited Activity,” as described below, while employed by one or more members of the Company
Group, during the Performance Period or within two years after the date your employment with the
Company Group terminates, then your right to receive payment under this Agreement, to the extent
still outstanding at that time, shall be completely forfeited. A “Prohibited Activity” shall be
deemed to have occurred, as determined by the Committee in its sole and absolute discretion, if you
divulge any non-public, confidential or proprietary information of the Company or of its past,
present or future affiliates (collectively, the “Carriage Services Inc. Group”), but excluding
information that (a) becomes generally available to the public other than as a result of your
public use, disclosure, or fault, or (b) becomes available to you on a non-confidential basis after
your employment termination date from a source other than a member of the Carriage Services Inc.
Group prior to the public use or disclosure by you, provided that such source is not bound by a
confidentiality agreement or otherwise prohibited from transmitting the information by a
contractual, legal or fiduciary obligation.

     TAX WITHHOLDING. To the extent that the receipt of the Performance Units or any payment
pursuant to this Agreement results in income, wages or other compensation to you for any income,
employment or other tax purposes with respect to which the Company or any other member of the
Company Group has a withholding obligation, you shall deliver to the Company at the time of such
receipt or payment, as the case may be, such amount of money as the Company Group may require to
meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the
Company is authorized to withhold from any payment under this Agreement or from any cash or stock
remuneration or other payment then or thereafter payable to you any tax required to be withheld by
reason of such taxable income, wages or compensation.

     NONTRANSFERABILITY. This Agreement is not transferable by you otherwise than by will or by the
laws of descent and distribution.

     CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The existence of the Performance Units shall not
affect in any way the right or power of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in its capital structure or its business, engage
in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or
sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage
in any other corporate act or proceeding.

     PERFORMANCE UNITS DO NOT AWARD ANY RIGHTS OF A STOCKHOLDER. You shall not have the voting
rights or any of the other rights, powers or privileges of a holder of the stock of the Company
with respect to the Performance Units that are awarded hereby.

     EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, you shall be considered to be in the
employment of the Company Group as long as you have an employment relationship with the Company
Group. The Committee shall determine any questions as to whether and when there has been a
termination of such employment relationship, and the cause of such termination, under the Plan and
the Committee’s determination shall be final and binding on all persons.

     NOT AN EMPLOYMENT AGREEMENT. This Agreement is not an employment agreement, and no provision
of this Agreement shall be construed or interpreted to create an employment relationship between
you and the Company or any Affiliate or guarantee the right to remain employed by the Company or
any Affiliate for any specified term.

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     LIMIT OF LIABILITY. Under no circumstances will the Company or an Affiliate be liable for any
indirect, incidental, consequential or special damages (including lost profits) of any form
incurred by any person, whether or not foreseeable and regardless of the form of the act in which
such a claim may be brought, with respect to the Plan.

     EMPLOYER LIABLE FOR PAYMENT. Except as specified in Section 1.2, the legal entity that is a
member of the Company Group and that is classified by the Company Group as your employer (the
"Employer”) is liable for the payment of any amounts that become due under this Agreement.

     MISCELLANEOUS. This Agreement is awarded pursuant to and is subject to all of the provisions
of the Plan, including amendments to the Plan, if any. In the event of a conflict between this
Agreement and the Plan provisions, the Plan provisions will control. The term “you” and “your”
refer to the Grantee named in this Agreement. Capitalized terms that are not defined herein shall
have the meanings ascribed to such terms in the Plan.

     The Performance Units that are hereby awarded to you shall be subject to the prohibitions and
restrictions set forth herein with respect to the sale or other disposition of such Performance
Units and the obligation to forfeit and surrender such Performance Units.

     The Performance Units and your rights under this Agreement may not be sold, assigned, pledged,
exchanged, hypothecated or otherwise transferred, encumbered or disposed of (other than by will or
the applicable laws of descent and distribution). Any such attempted sale, assignment, pledge,
exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall
be void and the Company Group shall not be bound thereby.

     In accepting the award of Performance Units set forth in this Agreement you accept and agree
to be bound by all the terms and conditions of the Plan, and this Agreement.

	 	 	 	 	 
	 

	 	CARRIAGE SERVICES, INC.
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

Tables to follow:

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PERFORMANCE GOALS

FOR PERFORMANCE UNIT AWARDS GRANTED IN 2008 UNDER

THE CARRIAGE SERVICES, INC. 2006 LONG-TERM INCENTIVE PLAN

     Peer Group 1 Earned Award Factor

     For Performance Units granted by the Company under the Plan, the Peer Group 1 Earned Award
Factor shall be the factor specified in the table below; provided, however, that if the Company’s
Total Shareholder Return for the Performance Period is zero or less than zero the Peer Group 1
Earned Award Factor for the Performance Period shall be zero.

	 	 	 
	Percentile Rank of the Company’s Total Shareholder Return for	 	 
	the Performance Period as Compared to the Total Shareholder	 	Peer Group 1
	Returns of the Other Members of Performance Peer Group 1 for	 	Earned Award
	the Performance Period.	 	Factor
	Less than 50th
	 	0.0%
	50th
	 	50.0%
	51st
	 	55.0%
	52nd
	 	60.0%
	53rd
	 	65.0%
	54th
	 	70.0%
	55th
	 	75.0%
	56th
	 	80.0%
	57th
	 	85.0%
	58th
	 	90.0%
	59th
	 	95.0%
	60th
	 	100.0%
	61st
	 	102.5%
	62nd
	 	105.0%
	63rd
	 	107.5%
	64th
	 	110.0%
	65th
	 	112.5%
	66th
	 	115.0%
	67th
	 	117.5%
	68th
	 	120.0%
	69th
	 	122.5%
	70th
	 	125.0%
	71st
	 	127.5%
	72nd
	 	130.0%
	73rd
	 	132.5%
	74th
	 	135.0%
	75th
	 	137.5%
	76th
	 	140.0%
	77th
	 	142.5%
	78th
	 	145.0%
	79th
	 	147.5%
	80th and above
	 	150.0%

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     The Committee shall have the discretion to calculate Total Shareholder Returns for the Company
and each company included in Performance Peer Group 1 and to determine the formula to achieve such
calculations.

     1. Peer Group 2 Earned Award Factor

     For Performance Units granted by the Company under the Plan, if the common stock of both of
the members of Performance Peer Group 2 Earned Award Factor shall be the factor specified in the
table below; provided, however, that (a) if the Company’s Total Shareholder Return for the
Performance Period is zero or less than zero then the Peer Group 2 Earned Award Factor for the
Performance Period shall be zero and (b) if the common stock of either or both of the members of
Performance Peer Group 2 is not publicly traded on the last day of the Performance Period then the
Peer Group 2 Earned Award Factor shall be the amount of the Peer Group 1 Earned Award Factor for
such Performance Period.

	 	 	 
	Rank of the Company’s Total Shareholder Return for the	 	 
	Performance Period as Compared to the Total Shareholder	 	Peer Group 2
	Returns of the Other Members of the Performance Peer	 	Earned Award
	Group 2 for the Performance Period	 	Factor
	First
	 	150.0%
	Second
	 	100.0%
	Less than Second
	 	    0.0%

     The Committee shall have the discretion to calculate Total Shareholder Returns for the Company
and each company included in Performance Peer Group 2 and to determine the formula to achieve such
calculations.

9exv10w25

 

Exhibit 10.25

Distributor Agreement

  THIS AGREEMENT, effective as of this                      day of      ,       (hereinafter “Effective
Date”), is by and between
                     (hereinafter “the Company”), a wholly owned
subsidiary of                      organized and existing under the laws of the state of Delaware,
United States of America, having it’s principal place of business at 20550 Nordhoff Street,
Chatsworth, CA 91311 and,
                     (hereinafter “the Distributor”), a corporation organized
and existing under the laws of                     , having it’s principal place of business at
                    
(jointly referred to as “the parties”).

BACKGROUND

The Distributor is an authorized distributor of fiber optic component products with one or more
locations engaged in the business of purchasing fiber optic component products for eventual resale
to its customers; and the Parties desire to establish the terms and conditions of their
relationship whereby the Company will sell fiber optic component products to the Distributor and
the Distributor will be an authorized distributor of such products to its customers,

IN CONSIDERATION of the above the Company and the Distributor hereby agree as follow:

1. General Rights and Duties of the Distributor

	1.1	 	Appointment as distributor; Authorized Territories: subject to the terms and conditions
hereof, Company hereby appoints the Distributor to be an exclusive distributor of products as
define in Schedule A, (a copy of which is attached hereto and incorporated hereby hereinafter
“the products”) for those territories which are set forth in Schedule B, ( a copy of which is
attached hereto and incorporated hereby (hereinafter “Authorized Territories”) and the
Distributor accepts such appointment
	 
	1.2	 	  Specific Duties of the Distributor: The Distributor agrees to:

	 	1.2.1	 	Use all reasonable means and diligence to further the sale of Products in the
Authorized Territories;
	 
	 	1.2.2	 	Carry such stock of the Products in the Authorized Territories as may be necessary to
meet demand for the same in the Authorized Territories;
	 
	 	1.2.3	 	Assist Company and its representatives in every reasonable manner including
obtaining information useful in expanding usage of the Products, data concerning
customer requirements, and to participate, after reasonable notice, in training
activities sponsored by Company; and
	 
	 	1.2.4	 	Generally do all things necessary or proper to further and preserve the good will and
reputation of Company and the Products.

1.3    Maintenance of Records; Reports:

	 	1.3.1	 	The Distributor shall maintain complete, current and accurate records of
purchases from Company, inventory of the Products and sales of the Products,
including sales to Individual customers
	 
	 	1.3.2	 	Within twenty (20) days after the end of each accounting month the Distributor
shall provide Company a written report setting forth;

 

 

	 	a.	 	For those items of the Products in the Distributor’s inventory at the end
of each such month, showing part number, quantity and purchase cost
	 
	 	b.	 	For those items of Products sold by the Distributor during each such
month, information regarding Point of Sale — showing end customer, part number,

quantity and selling price.

	1.4	 	Independent Contractor: the Distributor is an independent contractor, and is not and
shall not be deemed to be the legal representative or agent of Company for any purpose
whatsoever, and the Distributor is not authorized by Company to transact business, incur
obligations (express or implied), bill goods, or otherwise act in any manner in the name or on
behalf of Company, or to make any promise, warranty or representation with respect to the
Products or any other matter in the name or on behalf of Company. the Distributor shall not
represent state or imply that it is a division, subsidiary, affiliate or agent of Company.

	1.5	 	Indemnity by the Distributor: the Distributor shall be responsible for all the acts of its
branches (whether in Authorized Territories or not), dealers agents employees, or contractors,
and shall indemnify and protect Company against all claims, damage loss, cost or expense made
against or sustained by Company by reason of any act the Distributor, its branches (whether in
Authorized Territories or not), dealers, agent, employee, or contractors. the Distributor
shall have no responsibility with respect to claim based on defect in materials, design
manufacture or workmanship of the Product except for modifications, alterations or changes
requested by distributor or made by or on behalf or the Distributor. The obligations of this
Section 1.5 shall survive the expiration or termination of this Agreement.

	1.7	 	Propriety Information: the Distributor acknowledges that during the course of its
performance hereunder, it may come into possession of confidential or proprietary information
of Company. the Distributor agree that it will not disclose any such proprietary information,
which has been identified to it as such, except to employees and to potential purchasers of
the Products with a genuine need to know the information disclosed, and that in every such
case distributor shall take appropriate action to ensure that those to whom proprietary
information is disclosed will not make further disclosure of such information. Section 1.7
shall not apply to any proprietary information, which becomes a matter of public Knowledge
through no fault of the Distributor. The obligations of this Section 1.7 shall Survive the
expiration or termination of this Agreement.

	1.8	 	Compliance with Export and Other Laws: the Distributor shall comply with all applicable
United States laws and regulations relating to exportation of the products and with all
Applicable foreign laws and regulations relating to the Products and to this Agreement.

2. General Rights and Duties of Company

	 	2.1	 	Training of the Distributor Personal: At the Distributor request, Company will furnish
such technical and commercial training of the Distributor sales personnel in the use,
selling and maintenance of the Products as Company may reasonably deem necessary to support
the purpose of this Agreement.
	 
	 	2.2	 	Specific Duties of Company: Company agrees to:

	 	2.2.1	 	Encourage use and industry acceptance of the Products through national and
international advertising.

 

 

	 	2.2.2	 	Sell the Products to the Distributor at the prices set forth in then current price list
(hereinafter “the Distributor Price List”).
	 
	 	2.2.3	 	Use its best efforts fulfill all orders accepted by it, but it all shall not be liable to
the Distributor for any liability imposed upon, or damage suffered by, the Distributor
because Company fails to fulfill an order for any reason.

3. Purchase of Products by the Distributor

	 	3.1	 	Orders for the products:

	 	3.1.1	 	the Distributor shall order the Products on forms acceptable to company,
stating Company’s part number for each item ordered.
	 
	 	3.1.2	 	No order shall be binding on Company until accepted by an authorized
employee of Company
	 
	 	3.1.3	 	After an order has been accepted by Company, the Distributor may not modify
or cancel such order except by delivering written notice to Company at least thirty
(90) days prior to the scheduled shipment date for the affected Products.

	 	3.2	 	Price for Products:

	 	3.2.1	 	Company shall sell to the Distributor, without right of return except as
expressly provided herein, at the price established by Company and published in the
Distributor’s Cost Price List upon execution of this Agreement, such of the Product as
Company has available for distribution, and resale. Company reserves the right at any
time, following 45 days notice of intent, and from time to time to change its prices
for any of the Products, and shall from time to time publish a revised the
Distributor’s Cost Price List or supplement thereto and provide a copy of same to
distributor, specifying the effective date of such price change. Such changed prices
will apply to all orders previously accepted by Company but remain unshipped 6 months
after the effective date of such price change.
	 
	 	3.2.2	 	Company retains the right to approve reduced price for sales to be made
through
the Distributor to a specific customer. In such case, Company shall issue a Special
Pricing Authorized Number to the Distributor. Company will invoice the Distributor
for affected item of the Products at the price shown in then-current the
Distributor’s Cost Price List, and the Distributor may claim a debit back for
Company. Company agrees to honor such debit claim when accompanied by the Special
Pricing Authorization Number, a copy of the Distributor’s invoice covering sale of
such Product to specific customer, and when a copy of the Distributor ‘s inventory
report is on file with Company

	 	3.3	 	Terms of Payment:

	 	3.3.1	 	the Distributor shall make payment for the Product purchase hereto not later
than forty five (45) days after the date of the respective invoice.
	 
	 	3.3.2	 	Payment for any Products purchased or services rendered pursuant to the
terms of this Agreement shall be made in lawful currency of the United States of
America, at the office of Company in Chatsworth, California.
	 
	 	3.3.3	 	If, at any time and in the sole judgment of Company, any condition or
conduct of the Distributor business renders the terms of payment stated herein

 

 

	 	 	 	inappropriate, Company may, after notice to the Distributor, alter such terms as
Company deems proper, including requiring payment prior to any shipment of
products, whether or not ordered before the date of such notice.

	 	3.4	 	Transportation Charges, Risk of Loss of Damaged and Delivery of Products: the
Distributor assumes all risks of loss and damage to the Products purchased by or from
company hereunder after the same is delivered to a carrier F.O.B. Company’s place of
business for shipment to the Distributor or it’s nominee, which shall constitute
delivery to the Distributor to the same extent as if delivery had been made directly
to the Distributor. Company may, at its option, prepay transportation charges and add
them to its invoice. Company reserves the right to refuse to make drop shipments to
the Distributor’s customers.

4. Warranty of Products

	 	4.1	 	Disclaimer of Warranty: EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION IV,
COMPANY MAKES NO REPRESENTATION OR WARRANTIES WITH RESPECT TO
THE PRODUCTS SOLD UNDER THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABLITY OF FITNESS FOR A
SPECIFIC PURPOSE OR FUNCTION OUTSIDE OF THE TECHNICAL DATA SUPPLIED. THE COMPANY
UNDERTAKES TO SUPPLY ALL RESONABLE TECHNICAL INFORMATION IN SUPPORT OF THE PRODUCTS, BUT
IS NOT RESPONSIBLE FOR THE PRODUCTS FINAL APPLICATION.
	 
	 	4.2	 	Warranty; Warranty Procedures: Company warrants all
items of the Products against defects in material and workmanship for a period of twelve (12) months from the date of
shipment from Company’s inventory of each such item. Company liability under this
warranty is limited, solely at Company’s option to:

	 	(i)	 	replacement
	 
	 	(ii)	 	repair, or
	 
	 	(iii)	 	issuance of a credit for the Net Cost of such item, if
already paid by the Distributor for such items as were defective at the time
delivered to the Distributor; provided, however, that Company will not be
liable under this warranty unless:

	 	4.2.1	 	Company is promptly notified in writing upon discovery of defects by the
Distributor pursuant to Company’s RMA procedures for such notice as amend from time
to time by Company.
	 
	 	4.2.2	 	The defective item is returned to Company, transportation charges
prepaid by
	 
	 	 	 	the Distributor, accompanied by RMA Forms as prescribed by Company;
	 
	 	4.2.3	 	The defective item is received by Company for adjustment no later than
sixty (60) days following the date on which such item was returned to the
Distributor form the Distributor’s customer; and.
	 
	 	4.2.4	 	Company’s examination of such item shall disclose, to Company’s
satisfaction that such defects existed at the time such item was delivered to the
Distributor and have not been caused by misuse, neglect, improper installation,
repair, alteration accident.

 

 

	 	4.3	 	Additional limitations on Warranty and Liability: IN NO EVENT SHALL
COMPANY BE LIABLE TO DISTRIBUTOR FOR LOSS OR PROFITS,
LOSS OF USE, CONSEQUENTAIL DAMAGE OR DAMAGES OF ANY
KIND BASED ON A CLAIM FOR BREACH OF WARRANTY. COMPANY’S
WARRANTIES SHALL NOT BE ENLARGED, OR AFFECTED, BY AND NO
OBLIGATIONS OR LIABILITY SHALL ARISE OR GROW OUT OF, COMPANY’S
RENDERING OF TECHNICAL ADVICE OR SERVICE IN CONNECTION WITH
DISTRIBUTOR’S ORDER OF THE PRODUCTS FURNISHED HEREUNDER. Neither NIETHER DISTRIBUTOR NOR
ANY OTHER PERSON, FIRM, OR CORPORATION IS AUTHORIZED TO ASSUM FOR COMPANY ANY OTHER
LIABILITY IN CONNECTION WITH THIS AGREEMENT, OR THE SALE OF THE PRODUCTS HEREUNDER. NO
OTHER AFFIRMATION OF FACT OR PROMISE MADE BY COMPANY, OR ANY OF ITS EMPLOYEES OR AGENTS,
WHETHER OR NOT IN THIS AGREEMENT, BY WORKS OR ACTION SHALL CONSTITUTE A WARRANTY.

5. Term of Agreement; Termination

Termination: This agreement may be terminated for any reason by either party upon Thirty
(30) days written notice. This agreement will automatically renew each year unless either
party advises a change in writing at least THIRTY (30) days before the end of the prior
term. The Company also undertakes to provide THIRTY (30) days notice of both Customers and
/or product exclusion to the Distributor and ONE terminate this Agreement immediately upon
written notice to the Distributor for any one or more of the following reasons:

	 	5.1.1	 	the Distributor is adjudicated a bankrupt, or instituted against it, any
proceeding under federal bankrupt or state insolvency laws or the Distributor make an
assignment for benefit of creditors, or a receiver or liquidator is appointed with
respect to any substantial part of the Distributor’s assets or business; or
	 
	 	5.1.2	 	Upon any breach of this Agreement if such breach is not cured within THIRTY
(30) days of notice thereof from Company; or
	 
	 	5.1.3	 	If the condition of the Distributor’s business shall in the sole judgment
of Company, be or become such as to endanger the ability of the Distributor to perform
its obligations hereunder, or

	 	5.2	 	Rights and Duties Upon Expiration or Termination:

	 	5.2.1	 	The expiration or termination of this Agreement shall not affect any right
of company to payment for item of the Products ordered by the Distributor hereunder
prior to such expiration or termination, any obligation of the Distributor.
	 
	 	5.2.2	 	Upon the expiration of this Agreement, or upon the giving by Company or the
Distributor of notice of election to terminate this Agreement, Company agrees to
accept orders on C.O.D. terms, or such other terms as may be mutually agreed, for item
of the Products, which the Distributor has become contractually, obligated prior to
expiration or termination of this Agreement furnishes evidence to Company’s
satisfaction of the existence of the contracted obligation; and provided further that
Company has a sufficient number of the item of the Products in stock and available for
distribution to supply the same to the Distributor.

 

 

	 	5.2.3	 	the Distributor acknowledges that in the event of the expiration or
termination of this Agreement it shall have no right to damages or indemnification of
any nature, whether by way of loss of future profits, on account of expenditures,
investments, leases or commitments in connection with the business or good will the
Distributor, or otherwise.
	 
	 	5.2.4	 	Any future or forbearance by Company to exercise its right of termination
upon the accrual of a cause for termination hereunder shall not operate as a waiver by
Companies to exercise such a right at a later date upon continued or further
default.
	 
	 	5.2.5	 	Upon the expiration or termination of this Agreement, and failure of the
Parties to
establish a successor agreement for the distribution of the Products within thirty
(30) days of such expiration or termination, then Company shall purchase from the
Distributor, and the Distributor shall sell to Company, the Distributor’s entire
inventory of the Products, on and subject to the following terms and conditions.

	 	a.	 	Company shall be obligated accept and pay for return items of
the
Products in accordance with Agreement only if such items are (i)
received by company unused and undamaged in the original package
(as determined solely by Company), (ii) shipped to Company freight
prepaid, (iii) accompanied by a Company authorization issued by
Company, and (iv) received by Company within thirty (30) days
following issuance of the Company authorization.
	 
	 	b.	 	Company shall not be obligated to repurchase any item of the
Products which have been reported previously by the Distributor as sold;
	 
	 	c.	 	The repurchase price shall be calculated as a percentage of
the Net
cost for each item of the Products in the Distributor’s inventory; the
percentage shall be eight-five percent (85%) if this Agreement has
been terminated at the request of the Distributor, or one hundred percent
(100%) if this Agreement has either expired or has been terminated at
the request of Company.

	 	5.3	 	Final Accounting: Upon the expiration or termination of this Agreement, there shall
be a
final accounting. Within forty-five (45) days after the date upon which this Agreement
has either expired or been terminated, Company shall prepare and send to the Distributor
a final statement of account, setting forth the amount due from the Distributor to
Company, or vice versa as the case may be, in payment for Products purchased by the
Distributor from Company. the Distributor shall have thirty (30) days to object in
writing to Company as to such final statement of account. If no objection received by
Company within thirty (30) day period, or, if there has been an objection received, as to
the undisputed portion thereof, the Distributor shall be deemed to have agreed to the
accuracy of the final statement of accounts, or undisputed portion thereof, and waived
any other or further objection to it.
	 
	 	5.4	 	Sales after Expiration of Termination: The acceptance by Company of any order for
sale of any item of the Products to the Distributor after the expiration or termination of
this Agreement shall not be construed as a renewal or extension hereof, not as waiver of
termination, but in the absence of a new written agreement signed on behalf of Company all
such transactions shall be governed by provisions identical with the
provisions of this Agreement insofar as they relate to orders placed with Company by the
Distributor.

 

 

	6.	 	Miscellaneous Provisions

	 	6.1	 	Limitation of Company Liability; Force Majeure: Company shall not be liable
for failure perform any part of this Agreement, including any orders issued by the
Distributor hereunder, in any instance where, in Company’s sole judgment, such
performance is rendered commercially impracticable, or where such failure to perform
is on account of an act of God, act of governmental authorities, fire, earthquake or
other natural disaster, labor disputes of any nature, accident insurrection, or other
cause beyond the reasonable control or without
the fault of Company.
	 
	 	6.2	 	Continuation of Business: Nothing in the Agreement constitution a
representation or warranty that company will continue to sell the Products and it
shall be free to discontinue its business at any time. In any such case, Company shall
use its best effort to give the Distributor reasonable notice of its intention in this
respect but Company shall not be liable to the Distributor in any way its inability or
failure to do so.
	 
	 	6.3	 	Independent Contractor: The parties mutually understand and agree that the
Distributor is and at all times shall remain an independent contractor in performing
its duties as an exclusive, independent sales agent of Company. The Distributor, its
employees, and agents shall have no authority to enter into any contract or commitment
on behalf of Company. All employees and agents or the Distributor, are and shall
remain employees of the Distributor, and shall under any circumstances be, or hold
themselves out as being, employed by Company or as an agent of Company. Neither the
Distributor nor anyone on the Distributor’s behalf, shall enter into any written oral
agreement, or make any commitments or make or receive payment, on behalf, or for the
account, of Company.
	 
	 	6.4	 	Proprietary Information: the Distributor, its employees, and agents shall
retain all Proprietary information in strictest confidence.
	 
	 	6.5	 	Assignment: This Agreement and the Distributor’s obligations hereunder are
nonassignable and nontransferable by the Distributor without the prior written consent
of an authorized executive officer of Company.
	 
	 	6.6	 	Sales Assistance: In event the Distributor desires to utilize the service of
a third party of any kind in the territory, the Distributor shall so advise Company,
furnished full details concerning the entity and services to be rendered by the
entity, the same names of the principal of said entity and, if it is a corporation,
the names of its shareholders directors, and officers. If Company gives it consent to
the Distributor’s use of such third party; the Distributor shall in its agreement with
said party obtain the same undertakings, which the Distributor gives to Company under
this Agreement. Any compensation payable to said party shall be payable by the
Distributor.
	 
	 	6.7	 	Governing Law: This Agreement shall be construed in accordance with the laws
of the State of California, United States of America, except as to its provision
relating to the conflicts of laws of choice of law. The parties here to consent and
agree that the United States court for the Central District of California will have
primary exclusive jurisdiction over any suit or proceeding arising out of or relating
to this Agreement. In

 

 

	 	 	 	event such suit or proceeding fails to meet the jurisdiction limits of the United
States District Court for the Central California, then parties here to consent and
agree that Superior Court of the State of California for the County of Los Angeles, or
Municipal Court of California for The County of Los Angeles, as applicable depending
upon the amount in Controversy, will have secondary exclusive jurisdiction over any
suit or proceeding arising out of or relating to this Agreement. The parties hereby
consent to the jurisdiction and venue of such courts and agree to remove this
Agreement from any applicability of the U.N. Convention on Contracts
for the International Sale of Goods.
	 
	 	6.8	 	Compliance with Law: The parties agree that in carrying out their duties and
responsibilities under this Agreement, they will neither undertake nor cause, nor
permit to be undertaken, any activity which either (i) is illegal under any law
decrees, rules, or regulations in effect the United States or applicable countries; or
(ii) would have the effect of causing the other party to be in violation of any laws,
decrees, rules, or regulations in effect of in either the United States of applicable
countries. The parties agree that in connection with this Agreement or with ant
resultant contract or subcontract, they will not directly or indirectly, give offer,
or promise, or authorize or tolerate to be given, offered, or promised, anything of
value to any government official or employee with intent to (i) influence any official
act or decision of such official or employee, or (ii) induce such official or employee
to use influence to affect or influence any act or decision of a government or of any
subdivision thereof, in order to assist either Party in obtaining or retaining
business or in
directing business to any person. Each Party agrees to notify the other Party
immediately of any extortive solicitation, demand, or request for anything of value,
by or on behalf of any official or employee of any government or of any subdivision
thereof, relating to the subject matter of this Agreement.
	 
	 	6.9	 	Export Laws: The Parties acknowledge that Company’s ability to perform under
the terms of this Agreement or of any contact resulting there from is subject to
compliance with U.S. export Licensing and all other legal and regulatory requirements,
including those governing the transfer of U.S. origin technology. Company shall be
relieved of all obligation and liability if, despite Company’s best efforts, U.S.
government regulatory approvals, including any requisite export control
authorizations, are not obtained within a reasonable time at Company’s discretion.

	 	6.10	 	Notice: Any notice or other communication required or permitted to be given under or
in connection with this Agreement shall be in writing and shall be deemed to have been duly
given upon receipt at the following addresses:

	 	 	 	 	 
	 

	 	If to Company:
	 	If to the Distributor:
	 

	 	LuminentOIC, Inc.
	 	                                    
                        
	 

	 	20550 Nordhoff Street
	 	                                    
                        
	 

	 	Chatsworth, Ca 91311
	 	                                    
                        
	 

	 	Attn: Mr. Roger E. Bannister	 	 
	 

	 	Director of Sales & Customer Service
	 	Attn:                                  
                            
	 

	 	Fax:(818) 576-9486
	 	Fax:                                    
                          
	 
	 	 	 	 
	 	 	Or such other address as each party may hereafter specify in writing to the other
party.

	 	6.11	 	Separability of Provisions: Each provision of this agreement shall be
considered separable and if for any reason any provision or provisions herein are
determined to be invalid or contrary to any existing or future law, such invalidity
shall not impair the operation of the Agreement or affect those portions of this
Agreement, which are valid.

 

 

	 	6.12	 	Background, Enumerations, and Headings: The “background,” enumerations, and
headings contained in this Agreement are for convenience of reference and are not
intended to have any substantive significance in interpreting this Agreement.
	 
	 	6.13	 	Legal Relief: In the event the Distributor breaches, or threatens to breach,
any of the covenants expressed herein, the damages to Company will be great and
irreparable and difficult to quantify; thereof, Company may apply to a court of
competent jurisdiction for injunctive or other equitable relief to restrain such
breach or threat of breach, without disentitling Company from any other relief in
either law or equity. In the event that any or all of the covenants expressed herein
shall be determined by a court of competent jurisdiction to be invalid or
unenforceable, by reason of its geographic or temporal restriction being too great, or
by reason that the range of activities covered are too great, or for any other reason,
these covenants shall be interpreted to extend over the maximum geographic area,
period of time, range of activities, or other restrictions to which they may be
enforceable.
	 
	 	6.14	 	English Language: The English language version of this Agreement shall
control in the event any discrepancy shall arise over the interpretation of the
wording of this Agreement. Furthermore, all communications between Company and the
Distributor as well as the ongoing relationship shall occur in the English language.
	 
	 	6.15	 	Change of Law: The parties hereto agree that in the event laws hereinafter
enacted make performance of this Agreement in whole or in part illegal, the parties
shall at that time make good-faith efforts to amend the Agreement so as too conform to
then-current laws. In the event that the parties, despite their good-faith efforts,
are unable to amend the agreement, this Agreement shall be terminated and Company
shall be required to pay all commissions due and owing as of the date of termination
to the extent permitted by the law of the applicable country or countries, including
the United States of America.
	 
	 	6.16	 	Indemnification: the Distributor agrees to indemnify and to hold harmless
Company, its officers, employees, and agents from and against any claims, demands,
causes of actions, loss, cost, and expense, including, but not limited to, attorneys’
fees and court costs, arising from, in connection with based upon the actions or
omissions of the Distributor, its of this Agreement for any reason.
	 
	 	6.17	 	Entire Agreement: This Agreement and any documents referenced herein,
supersedes any and all prior agreements, discussions, and negotiations between the
Distributor and Company. It set forth the entire agreement and understandings between
the parties as to the subject matter of this Agreement. Neither of the parties shall
be bound by any terms, conditions, definitions, waivers, warranties, or
representations with respect to the subject matter of this Agreement, other than as
expressly provided in this Agreement or duly set forth on or subsequent to the date
hereof in a writing signed by a proper and duly authorized the Distributor of
whichever of the parties is to be bound hereby.

 

 

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed this
Agreement under seal, effective the date first written above.

     LuminentOIC, Inc:

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

the Distributor:

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

 

 

SCHEDULE A

PRODUCTS

     All products manufactured by the company made available under the LuminentOIC brand label.

PRICES

     Prices as in current Authorized the Distributor Price List.

     LuminentOIC, Inc:

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

     the Distributor:

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

 

 

SCHEDULE B

TERRITORIES

     LuminentOIC, Inc.

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

     DISTRIBUTOR:

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

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