<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
- ---
Act of 1934
For the Fiscal Year Ended: September 30, 1997
____ Transaction report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No. 33-24464-NY
IMTEK OFFICE SOLUTIONS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 11-2958856
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(State of Incorporation) (IRS Employer Identification)
2111 Van Deman St., Baltimore, MD 21224
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(Address of principal executive offices) (Zip code)
Registrant's Telephone No. including area code: (410) 633-5700
--------------
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to file such reports); and, (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
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State the aggregate market value of the voting stock held by non-affiliates of
the Registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.
There is currently no market for the issuer's stock.
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as the latest practicable date. 7,538,361 shares, as of January
7, 1998.
Documents Incorporated by Reference
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NONE
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Imtek Office Solutions, Inc.
Table of Contents
Page No.
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Part I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition
And Results of Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Part III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Item 13. Certain Relationships and Related Transactions
Part IV
Item 14, Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
<PAGE>
Item 1. Business
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Introduction
Imtek Office Solutions Inc., (the Company), formerly Spectrum Equities
Inc., effectively commenced operations on April 22, 1997 and engages in the
retail and wholesale of copiers and facsimiles, servicing of office equipment,
rebuilding and rental of high volume copiers and duplicators, providing
commercial printing, duplicating and document outsourcing services, and to a
lesser extent, the retail sale of office supplies. The Company operates in the
Mid-Atlantic region, consisting of Baltimore, Maryland, Washington, D.C.,
Richmond, Virginia, and the Tidewater area of Southeastern Virginia.
History
The Company was organized as a Delaware corporation in 1987 under the
name Vision Capital, Inc. On March 31, 1989, it completed a public offering of
10,000 units at a price of $5.00 each, which units were included in a
registration statement filed with the Securities and Exchange Commission. On May
31, 1990, Vision entered into an agreement of merger with Wilmoth's Color Lab,
Inc., ("Wilmoth"), a Tennessee Corporation, to acquire all of the issued and
outstanding shares of common stock of Wilmoth in exchange for a total of
15,340,000 newly issued shares of Vision common stock, which merger resulted in
a change in the voting control, principal business, and management of Vision. By
September 1, 1990, the merger of Wilmoth into Vision was consummated and Vision
changed its name to Diversified Photographic Industries, Inc., and continued the
operations of Wilmoth, a photo finishing laboratory in Memphis, Tennessee.
Wilmoth conducted operations in that location through the date of the merger.
The Company continued its operations as a photo finishing laboratory, processing
and printing film for commercial photographers and photographic studios ,
including portrait studio operations, up until the time that the Company ceased
operations on March 15, 1992. At that time, the secured creditors foreclosed
upon the principal assets of the Company and the remaining unsecured assets were
sold to United Color Lab, Inc. on August 21, 1992 for the sum of $85,000.00.
From that time the Company has been dormant. The Company filed for
reorganization under Chapter 11 of the Bankruptcy Code in U.S. Bankruptcy Court
for the Northern District of Texas and its Plan of Reorganization was approved
in 1995 and the Company emerged as a corporate shell with no liabilities
relating to its prior business ventures. Subsequently, the Company changed its
name to Spectrum Equities, Inc. on February 26, 1996. In April, 1997, the
Company acquired all of outstanding stock of Imtek Corp.
<PAGE>
and changed its name to Imtek Office Solutions, Inc.
The Company is a supplier of equipment, products, technologies and
services used in offices to manage information and documents including copier
and printing systems, integrated computer networking and document management
services. The Company also generates revenues and earnings from merchant banking
and specialty finance activities including equipment leasing, accounts
receivable financing and factoring, and viatical settlements.
Management envisions that the Company will become the preferred single
source provider of office solutions and a leader in select finance and merchant
banking business within certain geographic regions.
Acquisition Strategy
- --------------------
The company intends to expand its business through the strategic
acquisition of companies with similar products and services in additional
geographic areas. Additionally, the Company anticipates acquiring other
companies that would provide the Company with expanded or additional products
and services. Acquisitions of companies with similar product lines and
services, management believes, would benefit from the Company's centralized
management, systems of internal control, additional financing sources, and the
Company's marketing efforts.
Management believes that adequate acquisition opportunities exist.
The Company anticipates that significant acquisitions would be funded
principally from the issuance of capital stock. However, to a lesser extent,
acquisitions may be funded by cash generated from operations of the acquired
company or the issuance of long term debt obligations.
Competition
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The Company's business is highly competitive with numerous competitors
in its geographic area. The Company is in direct competition with local,
regional and national equipment suppliers and dealers, mass merchandisers, and
to a lesser extent, wholesale buying clubs. Principal areas of competition
focus on quality and response time of after-the-sale service, parts
availability, product capability, rental agreements and financing, and price.
The Company competes with companies that have greater financial strength and
marketing resources.
<PAGE>
Customers
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The Company focuses its office solutions marketing efforts primarily
on small and mid-size businesses, regional offices of large companies,
professional service firms, hospitals, educational institutions and governmental
agencies located in or near the areas where the Company maintains offices. Sales
representatives and sales management are compensated based on a combination of
gross sales revenue and point-of-sale profits. A key element of the Company's
operating philosophy is to provide all sales representatives and managers with
an ongoing program of training and education. These sales education programs
consist of in-house training, manufacturer provided training and other
educational courses and seminars. The Company holds weekly sales meetings to
reinforce the consistent application of its procedures and sales strategies.
Additionally, the Company intends to market its proposed financial
services programs through its existing direct sales force, brokers, print media,
and mass communication media, such as radio.
At September 30, 1997, no one customer accounted for more than 5% of
gross sales.
Vendors and Suppliers
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Products purchased by and distributed by the Company may be acquired
from numerous domestic and international suppliers. The Company has not
experienced, and does not anticipate experiencing, any significant difficulty in
obtaining these products and supplies.
The Company's primary products are photocopiers, facsimile equipment,
computers and office products, technologies and services used in offices to
manage information and documents. Management believes it is in the Company's
best interest to maintain a close working relationship with a number of
equipment manufacturers as to allow the Company to purchase equipment and
related parts and supplies at competitive prices. The inability of the Company
to maintain these key relationships could result in disruptions of Company
operations.
Since the Company's business is dependent upon its vendors and
suppliers, the Company has identified MITA Corporation, the world's third
largest manufacturer of photocopiers and facsimile machines, as its preferred
office equipment vendor. Additionally, the Company has selected JP Richards,
the second largest office supply wholesaler in the U.S., as its primary vendor
of office supplies for resale.
Management believes that these strategic alliances will provide the
Company with sufficient product for
<PAGE>
sale at competitive prices.
Employees
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As of September 30, 1997, the Company employed 72 persons, none of
which were covered by a collective bargaining agreement. Management believes
that its employee relations are good.
The Company relies heavily on its senior management and the loss of
any one of them could have a material adverse effect on the financial condition
of the Company. Additionally, the Company's ability to successfully grow and
implement its strategic acquisition policy, which is extremely important to the
Company and its ongoing operations, would be impaired upon the loss of key
personnel.
Technology
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The Company believes that the office equipment markets will
continually change with the advent of digital technology, which provides for one
piece of office equipment to directly communicate with another. Management
believes that this technology may result in fewer stand alone units being sold.
Additionally, management believes that this shift to multi-functioning equipment
may result in increased training costs for the Company's service technicians.
The advent of the color photocopier, management believes, will become
a greater component of the Company's sales. The Company anticipates expanding
its efforts and product line in this area, since these color copiers can accept
digital output from computers, thus increasing the functionality of the copier.
Environmental Regulation
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The Company's business and product lines generally do not generate
significant hazardous waste. Federal, state, and local regulations have not
had, and are not expected to have, a material adverse affect upon the Company or
its financial condition.
<PAGE>
Forward Looking Information
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The report includes or incorporates by reference certain statements
which are "forward looking statements" within the meaning of the Private
Securities Litigation Act of 1995. Forward-looking statements are based on
various factors and assumptions that include known and unknown risks and
uncertainties, changes in economic conditions, increases in raw material,
subcontract, labor costs, and general competitive factors may cause actual
results to differ materially.
Item 2. Properties
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As of January 7, 1998, the Company leases eight locations from
independent landlords as follows:
Location Square Footage Type of Operation Lease Expiration
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Hampton, VA 11,000 Office Equipment Month to Month
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Virginia Beach, VA 3,500 Office Equipment January 1999
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Washington, DC 3,300 Copy Services April 1999
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Alexandria, VA 3,988 Copy Services Month to Month
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Richmond, VA 2,633 Office Equipment October 1998
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Hopewell, VA 10,000 Office Supplies February 1999
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Baltimore, MD 8,400 Financial Services May 1999
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Lanham, MD 1,500 Warehouse Month to Month
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Baltimore, MD 800 Copy Services December 1999
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Richmond, VA 1,500 Office Equipment January, 1999
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Capitol Heights, MD 2,000 Office Equipment Month to Month
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All buildings are of brick or block construction and management
considers that all properties are well maintained and sufficient for its
operations.
Item 3. Legal Proceedings
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As previously reported, the Company filed a voluntary petition for
reorganization pursuant to Chapter 11
<PAGE>
of the Bankruptcy Code on January 5, 1994 with the U.S. Bankruptcy Court for the
Northern District of Texas. Its Plan of Reorganization was approved by the Court
of October 5, 1995.
The Company is not a party to any legal proceedings and management is
unaware of any threatened or pending litigation.
Item 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of security holders during the
fourth quarter of the year ended September 31, 1997.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
- --------------------------------------------------------------------------
Matters
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There is no known market for the Company's common stock. As of
January 7, 1998, there were 149 holders of record of the Company's common stock.
The Company has not paid any dividends during 1997, and does not
anticipate paying dividends in the near future.
Item 6. Selected Financial Data
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The following data have been derived from financial statements that
have been audited by Rosenburg, Rich, Baker, Berman & Company for the year ended
September 30, 1997 and Grant-Schwartz Associates, CPA's, for the years ended
September 30, 1996, 1995, 1994 and 1993 and should be read in conjunction with
such statements appearing herein:
<TABLE>
<CAPTION>
Year Ended September 30, 1997 1996 1995 1994 1993
- ------------------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Sales $2,094,972 -0- -0- -0- -0-
Operating Income $ 72,433 -0- -0- -0- -0-
Net Income (Loss) $ 58,367 -0- -0- -0- -0-
Per Share .02 -0- -0- -0- -0-
</TABLE>
<PAGE>
Balance Sheet Data
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Total Assets 1,007,339 -0- -0- -0- -0-
Stockholders Equity 774,072 (37,991) (616,432) (616,432) (616,432)
The Company was inactive for the years ended September 30, 1993 through 1996.
PART I - FINANCIAL INFORMATION
Item 7. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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Imtek Office Solutions Inc., (the Company), formerly Spectrum
Equities, Inc. effectively commenced operations on April 22, 1997 engaging in
the retail and wholesale sale of copiers and facsimiles, servicing of office
equipment, rebuilding and rental of high volume copiers and duplicators,
providing commercial printing and duplicating services, and to a lesser extent,
the retail sale of office supplies. The Company provides servicing of office
equipment principally through the use of subcontractors. The Company also
intends on providing specialty finance and merchant banking services. The
Company operates in the Mid-Atlantic region, consisting of Baltimore, Maryland,
Washington, D.C., Richmond, Virginia, and the Tidewater area of Southeastern
Virginia.
ACQUISITION STOCK ISSUANCE
On April 22, 1997, the shareholders of Spectrum Equities, Inc.,
(Spectrum) a Delaware Corporation, executed a 400 for 1 reverse stock split.
After the stock split, Spectrum had 625,161 shares of common stock, all one
class, issued and outstanding. Furthermore, on April 22, 1997 Spectrum's
shareholders authorized and approved the acquisition of Imtek Corporation by the
issuance of 4,374,839 shares of Spectrum stock for all 50,000 issued and
authorized shares of Imtek Corporation. Subsequently, the shareholders approved
the corporation's name to be changed to Imtek Office Solutions, Inc. The
acquisition and name change have been reported on Form 8-K of April 22, 1997,
which is hereby incorporated by reference.
RESULTS OF OPERATIONS
The Company, as discussed above and reported on Form 8-K, effectively
commenced operations on April 22, 1997. Prior to this date, the Companys'
predecessor, Imtek Corporation, was a development stage company with no
operations.
<PAGE>
During the year ended September 30, 1997, the Company generated gross
revenue of $2,094,972. Approximately 33.6% of gross revenue was derived from
the sale of equipment servicing and supplies. The remaining 66.4% of gross
revenue was derived from the sale, both retail and wholesale, of equipment.
Cost of goods sold for the year ended September 30 1997 was
$1,868,703, or approximately 89.2% of gross revenue. The cost of goods sold
that relate to equipment servicing was 656,439 (35.1% of cost of goods sold),
while the cost of goods sold for equipment sales was approximately $1,212,264
(64.9% of cost of goods sold).
The Company's gross profit for the year ended September 30, 1997 was
$226,264, or approximately 10.8% of gross revenue.
General and Administrative, and selling expenses for the year was
$153,836, or approximately 7.3% of gross revenue. The Company's Officers
elected not to receive or defer remuneration during this period. This election
of non-compensation may not be continued in the future, and thus general and
administrative expenses could increase in subsequent periods.
Income from operations and before taxes and interest was $72,433, or
approximately 3.5% of gross revenue.
During the year, the Company received $6,534 in interest income which
was principally derived from notes receivables. The Company does not anticipate
significant interest income in subsequent periods.
The Company's effective income tax rate for the year was 26.1%.
Because of the tax impact of special transactions and depending upon the
Company's income or loss level in a given period, these rates may vary
dramatically.
The net earnings of the Company for the year ended September 30, 1997
was $58,367, or 2.8% of gross revenue.
The Company anticipates revenue growth in subsequent periods such that
period to period comparisons may not provide meaningful analysis. The Company
anticipates that the core business of sales and servicing if copiers will
generate growth in line with general economic conditions within the Mid-Atlantic
region. However, the Company anticipates expanding its operations in the
wholesale equipment sales market by means of increased marketing efforts. The
Company believes that it has a thorough understanding of the wholesale market,
with experience and an established network. Additionally, the Company
anticipates the expansion of its services with its
<PAGE>
copy services operations. By becoming a cost effective and responsive provider
of copier services to certain business segments, the Company anticipates that it
can more fully expand this component of its operations. The Company also intends
to generate substantial future revenues and earnings from merchant banking and
specialty finance services including equipment leasing, accounts receivable
financing and factoring , and viatical settlements.
The Board of Directors of the Company have authorized the issuance of
a $7,500,000, 9% convertible preferred stock through a private placement
memorandum. As of January 7, 1998 this offering memorandum was not yet complete
and the offering was not open. The Company anticipates further expansion by
means of acquisition, which may be funded by either the issuance of additional
capital stock, long term debt, or use of the proceeds generated from the private
placement memorandum.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities resulted in positive cash flow of
$105,631 for the year. Cash flow of $75,740 was used in investing activities,
consisting of the purchase of equipment ($35,740) and the down payment on
certain computer software ($40,000). In April, 1997 the Company issued 4,374,839
shares of common stock to acquire Imtek Corporation. The value of the assets
acquired were $710,563, which consisted of inventory ($353,954) and accounts
receivable ($356,609).
Consistent with the commencement of operations, the Company
experienced fluctuations in certain balance sheet accounts. The cash flow from
operations was primarily in response to net earnings and the decrease in
accounts receivable and inventory, with the increase in accounts payable and
other liabilities providing a lesser impact. The Company recognized an decrease
in accounts receivable, net of allowance for doubtful accounts, over the amount
purchased from Imtek Corporation, of $36,210. The inventory decreased $131,950
from the amount purchased from Imtek Corporation. During the year, the Company
expended $35,740 for fixed assets, which are being depreciated over their
estimated useful lives. Additionally, the company recognized total trade
accounts payable of $154,875 at September 30,1997.
The Company has financed its cash flow requirements from either
operations or through the issuance of capital stock and to a lesser extent,
short-term credit arrangements through related parties, see item 13. As of
January 7, 1998, the Company has not entered into a revolving credit arrangement
with any financial institutions. The Company believes that should external
financing become necessary, it will be able to obtain sufficient resources
<PAGE>
at market values.
Item 9. Changes in and Disagreements With Accounting and Financial Disclosures
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In October, 1997, the Company dismissed Grant - Schwartz Associates,
CPA's, the independent accountant engaged to audit the Company's financial
statements for at least the fiscal years ended September 30, 1996 and 1995 as
reported on Form 8-K dated October 24, 1997, which is hereby incorporated by
reference. This decision was approved by the Company's Board of Directors. There
were no disagreements between the Company and Grant -Schwartz Associates, CPA's
on any matter of accounting principles or practices, financial disclosure or
Auditing scope of procedure.
The accountants report issued by Grant - Schwartz Associates for the
years ended September 30, 1996 and 1995 dated October 15, 1996 and May 16, 1996
respectively were qualified as to "going concern".
On October 24, 1997, the Company appointed Rosenberg, Rich , Baker,
Berman and Company as its new accountants as reported on Form 8-K dated October
24, 1997, which is hereby incorporated by reference.
PART III
Item 10. Directors and Executive Officers of the Registrant
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The directors, executive officers and key management employees of the Company
are:
<TABLE>
<CAPTION>
Name Age Position
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<S> <C> <C>
Edwin C. Hirsch 49 Chairman of the Board of Directors, President and Chief Executive Officer
Michael L. Lowe 42 Director, Chief Operating Officer
Robert J. Brown 52 Director, Senior Vice President
Brad C, Thompson 41 Director, Chief Financial Officer
Andrew J. Walter 34 Director, Senior Vice President
Robert W. Hoover 51 Director, Executive Vice President
</TABLE>
EDWIN C, HIRSCH, JR., has been the Company's Chief Executive Officer
and Chairman of the Board since April 1997. From August 1995 through the
October, 1997, Mr. Hirsch was the President of CMS, Inc. From 1990 through
1996, Mr. Hirsch served as the President of Reptech, a US-China joint venture
company specializing in the
<PAGE>
production and sale of high-energy magnets. Mr. Hirsch currently serves as a
member on Reptech's Board of Directors and is a member of the State of
Maryland's Sister Committee - China. From 1984 through 1989, Mr. Hirsch was a
principal in Commonwealth Financial Associates, a merchant banking company.Mr.
Hirsch holds a BS in Engineering from the U.S. Military Academy at West Point.
After completing his military obligation he began his professional career in
sales and sales management with IBM and Commercial Credit Company.
MICHAEL L. LOWE, has been the Company's Chief Operating Officer since
April 1997. From 1991 through 1995 Mr, Lowe was a senior manager and Divisional
Vice President at Danka Business Systems. After graduating from West Liberty
College he began his professional career in sales and management positions with
Northwestern Insurance prior to starting-up a Canon photocopier business in
Charleston, West Virginia.
ROBERT J. BROWN, has served as a Senior Vice President since April
1997. Mr. Brown currently serves as finance committee chairman of the Anne
Arundel County Economic Development Corporation. From 1983 through October,l
1997, Mr. Brown owned and managed several equipment leasing and financial
services companies, including American Banking Services which managed equipment
lease portfolios for the RTC and banks. From 1967 through 1982, Mr. Brown was
employed by Commercial Credit Company where he held a variety of credit,
marketing and portfolio management positions. Mr. Brown is a graduate of the
University of Baltimore.
ROBERT W. HOOVER, is the Company's Executive Vice President and
responsible for the Company's strategic planning and business development. From
1995 through September 1997, Mr. Hoover was the President of Beneficial
Assistance, Inc., which was acquired by the Company in October, 1997. From 1984
through 1994, Mr. Hoover was a principal in the merchant banking firm of
Commonwealth Financial Services, where he served as the company's president.
From 1977 through 1983, Mr. Hoover was employee by the Commercial Credit Company
where he held a variety of senior positions. Mr. Hoover holds a BA degree from
the University of Maryland.
ANDREW J. WALTER, Senior Vice President. From 1994 Mr. Walter was a
principal in Beneficial Assistance, Inc., which was acquired by the Company in
October 1997. Previously, he was a principal in several
<PAGE>
insurance brokerage companies.
BRAD C. THOMPSON, CPA, has been the Company's Chief Financial Officer
since October 1997. From 1993 until September 30, 1997, Mr. Thompson was a
senior partner with the accounting firm of Schiller, Holinsky and Gardyn. From
1980 through 1993, Mr. Thompson was a senior manager with the international
accounting firm of Grant Thornton. Mr. Thompson is a 1978 graduate of Loyola
College in Baltimore.
All directors hold office until the next annual meeting of
shareholders of the Company and until their successors are elected and
qualified. Officers hold office until the first meeting of directors following
the annual meeting of shareholders and until their successors are elected and
qualified, subject to earlier removal by the Board of Directors.
Misters Hoover, Walter, and Thompson were elected officers and
directors of the Company, and have agreed to serve in such capacity, effective
October 1, 1997.
<PAGE>
Item 11. Executive Compensation
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATIONS
AWARDS PAYOUTS
(A) (B) (C) (D) (E) (F) (G) (H) (I)
NAME OTHER RESTRTED. SECURTS. LTIP ALL
AND SALARY ANNUAL STOCK UNDER-LYING PAYOUTS OTHER
PRINCIPAL YEAR ($) BONUS COMPEN- AWARDS OPTIONS/ COMPEN-
POSITION SATION ($) ($) SAR (#) SATION
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EDWIN C. 1997 - - - - - - -
HIRSCH,
CEO
</TABLE>
(1) Employment began October 1, 1997
The Company intends to compensate officers during the fiscal year 1998 at an
annual salary of $110,000 for Edwin Hirsch and $100,000 for Robert J. Brown,
Michael L. Lowe, Andrew J. Walter, Robert W. Hoover and Brad C. Thompson.
<PAGE>
Item 12. Security Ownerships of Certain Beneficial Owners and Management
- -------------------------------------------------------------------------
The following table shows the amount of common stock owned as of
January 7, 1998 by each director, and by all directors and officers as a group
consisting of six persons. Each individual has beneficial ownership of the
shares and each individual has sole voting and investment power with respect to
the number of shares beneficially owned. In addition, the table also shows
those persons or entities which beneficially was known to own more than 5% of
the outstanding common stock as of January 7, 1998.
Name and Address Amount and Nature Percent of
of Beneficial Owner of Beneficial Ownerships Class
Edwin C. Hirsch, CEO, Director 1,043,000 shares 13.84
704 Severnside Ave.
Severna Park, MD 21146
Michael L. Lowe, COO, Director 463,325 shares 6.15
12205 Renwich Ct.
Glen Allen, VA 23060
Robert J. Brown, V.P., Director 1,043,000 shares 13.84
1210 Lorene Dr.
Pasadena, MD 21122
Brad C. Thompson, CFO, Director 123,000 shares 1.63
8348 Fairwood Ct.
Pasadena, MD 21122
Andrew J. Walter, VP, Director 369,500 shares 4.90
11851 Drawbridge Rd.
Princess Anne, MD 21853
Robert W Hoover, EVP, Director 179,000 shares 2.37
2593 Lawnside Rd.
Timonium, MD 21093
All officers and directors as a group 3,220,825 shares 42.73
(6 Persons)
Walega Family, L.P. 602,303 shares 7.99
1510 N. Colonial Ct.
Arlington, VA 22209
Bison Financial, LLC 875,000 shares 11.61
915 Stubblefield Lane
Baltimore, MD 21201
<PAGE>
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
The company has a servicing agreement with CMS Holdings, Inc. (CMS),
an entity owned 50% by Edwin Hirsch and 50% by Robert J. Brown, officers and
directors of the registrant. Under terms of the agreement, CMS performed
certain maintenance, repair marketing and administrative tasks for the Company.
The Company paid $937,771 for these services during the year ended September 30,
1997. This contract was terminated October 1, 1997.
During the course of the year, the Company had advanced funds to CMS.
CMS entered into an unsecured demand note receivable ( $20,466 outstanding at
September 30, 1997) to the Company which bears interest at 10%, payable
quarterly.
The Company also used the trade credit facilities of CMS throughout
the year. At September 30, 1997, the Company owed CMS $73,063. The Company
purchased approximately $225,000 worth of supplies and equipment during the year
under this arrangement.
The Company purchased certain equipment for resale through AmeriLease,
Inc. (AI), a company owned equally by Edwin Hirsch, Robert J. Brown, Robert W.
Hoover and Andrew J. Walter, officers and directors of the Company. Equipment
purchased under this arrangement amounted to $105,047 during the year. The
company owed AI $22,368 at September 30, 1997.
On June 1997, the Company entered into a lease with AI for three high
volume Xerox copiers. These copiers are rented by the Company on a month to
month basis with a thirty day notification required to terminate the lease.
Monthly lease payments are computed based upon $.01 per copy. Equipment rent
expense under this agreement was $7,674 for the t\year ended September 30, 1997.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this Report.
(1) Financial Statements
The following financial statements of the Registrant are included
herewith:
(i) Balance Sheets as of September 30, 1997 and 1996
(ii) Statements of Income for the years ended September 30, 1997,
1996 and 1995
(iii)Statements of Shareholder's Equity for the period from
September 30, 1995 to September 30, 1997
(iv) Statements of Cash Flows for the years ended September 30,
1997, 1996 and 1995
(v) Notes to Financial Statements
(vi) Independent Auditors' Report
(2) Financial Statement Schedules - None
(3) Exhibits
The following exhibits are incorporated by this reference to Registrant's
Registration Statement on Form S-18, File No. 33-244464-NY:
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.0 Certificate of Incorporation of the Registrant
2.1 Bylaws of the Registrant
The following exhibits are incorporated by reference to Registrant's report on
Form 8-K reporting event of April 22, 2997:
<PAGE>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1 Certificate of Amendment to
Certificate of Incorporation
2 Acquisition Agreement with
Shareholders of Imtek Corporation
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.1 MITA Dealer LVC Sales Agreement between Imtek
Corporation and MITA Copystar America, Inc. dated
November 26, 1997
10.2 MITA Dealer Agreement for Special Products between
MITA Copystar America, Inc. dated November 26, 1997
10.3 MITA Dealer Agreement for Business Facsimile Equipment
between MITA Copystar America, Inc. and Imtek Corporation
dated November 26, 1997
10.4 MITA Dealer HVC Sales Agreement between MITA Copystar
America, Inc. and Imtek Corporation dated November 26, 1997
10.5 MITA Customer Assurance (MCA) Dealer Agreement between
MITA Copystar America, Inc. and Imtek Corporation dated
November 26, 1997
10.6 MITA Dealer Agreement for Integrated Document Imaging
Equipment between MITA Copystar America, Inc. and
Imtek Corporation dated November 26, 1997
11 Computation of Net Income per Share
21 Subsidiaries
23.1 Consent of Independent Auditor
27 Financial Data Schedule
(b) Reports on Form 8-K - There were no reports on Form 8-K for the quarter
ended September 30, 1997.
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
INDEX TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
Page
Independent Auditors' Report................................... 1
Financial Statements
Balance Sheets............................................ 2
Statements of Income...................................... 3
Statements of Shareholders' Equity........................ 4
Statements of Cash Flows.................................. 5-6
Notes to the Financial Statements......................... 7-11
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
-------------------------
1997 1996
---------- ----------
<S> <C> <C>
Assets
Current Assets
Cash $ 29,118 $ -
Accounts receivable (less allowance
for doubtful accounts of $4,000) 393,062 -
Inventory 485,661 -
Notes receivable - related parties 20,466 -
Notes receivable - other 5,075 -
Deposit on equipment 40,000 -
---------- ----------
Total current assets 973,382 -
Property and Equipment - at cost 35,740 -
Less: Accumulated depreciation 1,783 -
---------- ----------
33,957 -
Intangible assets - net - 2,142
---------- ----------
Total assets $1,007,339 $ 2,142
========== ==========
Liabilities
Current Liabilities
Accounts payable - trade $ 81,825 $ -
Accounts payable - related party 73,063 -
Accrued expenses 35,411 -
Income taxes payable 20,600 -
Notes payable - related party 22,368 -
---------- ----------
Total liabilities 233,267 -
Stockholders' Equity
Common stock - par value $.000001,
shares authorized 250,000,000
shares issued and outstanding
5,000,000 (243,901,667 at September
30, 1996) 5 244
Paid in capital 792,415 78,613
Retained deficit (18,348) (76,715)
---------- ----------
Total stockholders' equity 774,072 2,142
---------- ----------
Total liabilities and stockholders'
equity $1,007,339 $ 2,142
========== ==========
</TABLE>
See notes to the financial statements.
2
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Sales
Equipment and supplies $ 1,390,606 $ - $ -
Services 704,366 - -
------------ ------------ ------------
2,094,972 - -
Cost of Sales
Equipment and Supplies 1,212,264 - -
Services 656,439 - -
------------ ------------ ------------
Total Cost of Sales 1,868,703 - -
------------ ------------ ------------
Gross Profit 226,269 - -
Selling and general expense 153,836 - -
------------ ------------ ------------
72,433 - -
Interest income 6,534 - -
------------ ------------ ------------
Income before income taxes 78,967 - -
Income taxes 20,600 - -
------------ ------------ ------------
Net Income $ 58,367 $ - $ -
============ ============ ============
Net Income Per Share
Primary $ 0.02 $ - $ -
============ ============ ============
Fully Diluted $ 0.02 $ - $ -
============ ============ ============
Weighted Average Shares Outstanding $ 2,447,916 $181,157,501 $ 19,275,000
============ ============ ============
</TABLE>
See notes to the financial statements.
3
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
----------------------------- Paid In Retained Shareholders
Shares Amount Capital Deficit Equity
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance September 30, 1995 19,275,000 $ 19,275 $ 19,449 $ (76,715) $ (37,991)
Retired shares (12,323,500)
Shares issued by court order 38,725,167
Change in par value of common stock to $.000001 (19,229) 19,229
Sale of common stock 178,075,000 178 178
Sale of common stock 13,950,000 14 14
Conversion of loans payable to paid in capital 39,013 39,013
Sale of its common stock 6,200,000 6 6
Contribution to paid in capital 922 922
------------- ------------- ------------- ------------- -------------
Balance September 30, 1996 243,901,667 $ 244 $ 78,613 $ (76,715) $ 2,142
Additional shares issued of common stock 6,098,333 6 2,994 - 3,000
1 for 400 share reverse stock split (249,375,000) (249) 249 - -
Exchange of stock for Imtek Corp. Stock 4,375,000 4 710,559 - 710,563
Net income for the year - - - 58,367 58,367
------------- ------------- ------------- ------------- -------------
Balance September 30, 1997 5,000,000 $ 5 $ 792,415 $ (18,348) $ 774,072
============= ============= ============= ============= =============
</TABLE>
See notes to the financial statements.
4
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Income $ 58,367 $ - $ -
Adjustments to Reconcile Net Earnings to Net Cash
Provided (Used) by Operating Activities:
Depreciation and amortization 3,925 - -
Changes in Assets and Liabilities
Increase in accounts receivable (36,210) - -
Increase in inventory (131,950) - -
Increase (Decrease) in accounts payable 154,888 (37,991) -
Increase in accrued expenses 35,411 - -
Increase in income taxes payable 20,600 - -
------------ ------------ ------------
Net cash provided (used) by operating activities 105,031 (37,991) -
------------ ------------ ------------
Cash Flows From Investing Activities -
Cash paid for property and equipment (35,740) - -
Cash deposit paid (40,000) - -
------------ ------------ ------------
Net cash (used) by investing activities (75,740) - -
Cash Flows From Financing Activities
Cash paid for intangible asset - (2,142) -
Cash paid for paid in capital 2,994 922 -
Cash received for issuance in common stock 6 198 -
Proceeds from borrowing 22,368 39,013 -
Notes receivable advances (25,541) - -
------------ ------------ ------------
Net cash (used) provided by financing activities (173) 37,991 -
------------ ------------ ------------
Increase In Cash 29,118 - -
Cash - Beginning - - -
------------ ------------ ------------
Cash - Ending $ 29,118 $ - $ -
============ ============ ============
</TABLE>
See notes to financial statements.
5
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
STATEMENTS OF CASH FLOWS
CONTINUED
Non-Cash Transactions
- ---------------------
During the year ended September 30, 1996, $39,013 of outstanding debt was
converted to additional paid in capital.
During the year ended September 30, 1997, $249 was transferred from common stock
to additional paid in capital as a result of the 1 for 400 share reverse stock
split.
Also the Company issued 4,375,000 shares of stock in exchange for the adjusted
assets of Imtek Corporation as follows:
Inventory $ 353,954
Accounts Receivable 356,609
----------
$ 710,563
==========
See notes to the financial statements.
6
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
NOTES TO THE FINANCIAL STATEMENTS
NOTE A - SUMMARY OF ACCOUNTING POLICIES
- ---------------------------------------
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
1. NATURE OF BUSINESS
The Company is in the business of selling and servicing copiers, facsimiles
and printers, sales of office supplies, rebuilding and renting high volume
copiers and duplicators and commercial printing and copying. The Company
conducts business in the Baltimore, Washington, DC, Richmond and Tidewater,
Virginia metropolitan areas and grants credit to customers in those regions.
The Company changed its name from Spectrum Equities, Inc. to Imtek Office
Solutions, Inc. during 1997.
2. CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents.
3. INVENTORY
Inventories consist of copy machines, facsimiles, duplicators and parts and
supplies used in the maintenance of office machines and consumable supplies.
Inventories are stated at lower of cost or market using the first-in, first-
out (FIFO) method.
4. PROPERTY, PLANT AND EQUIPMENT
The Company provides depreciation for financial statement and income tax
purposes over the estimated useful lives of the fixed assets using the
straight-line method. Expenditures for maintenance and repairs are charged to
income in the period the charge is incurred. Depreciation expense for the
year was $1,783.
The annual rates of depreciation range from 2.5% for buildings, 10.00% for
machinery and equipment, and 10% to 33.33% for furniture, fixtures and
transportation equipment. These rates correspond to useful lives that range
from 40 years for buildings, 10 years for machinery and equipment, and from 3
to 10 years for furniture and transportation equipment.
5. INTANGIBLE ASSETS
Intangible assets consisted of costs incurred to maintain the corporate
charter for 1995 and 1996, a period when the Company did not have operations.
The Company recommenced operations in April, 1997 and expensed $2,142 the
unamortized portion of these costs.
6. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
7
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
NOTE A - SUMMARY OF ACCOUNTING POLICIES- (continued)
- ----------------------------------------------------
7. INCOME TAXES
The Company provides for income taxes based upon income reported for
financial reporting purposes. For the year end September 30, 1997 there were
no charges to expenses or earnings which differed as to the timing of their
reporting for income tax purposes.
8. EARNINGS PER SHARE
Primary earnings per share of approximately $0.02 are based on the weighted
average number of shares outstanding.
There is no fully diluted earnings per share because there were no
convertible debentures, stock options or warrants outstanding during that
period.
NOTE B - BUSINESS ACQUISITION
- -----------------------------
On April 22, 1997, the Company purchased all of the common stock of Imtek
Corporation for 4,375,000 of its common stock in a transaction accounted for as
a pooling of interest. Imtek Corporation was a development stage company, which
was incorporated on April 1, 1997.
The balance sheet of Imtek Corporation consisted of:
Assets
Inventory $ 353,954
Trade Notes receivable 356,609
----------
$ 710,563
==========
NOTE C - NOTES RECEIVABLE
- -------------------------
The Company advanced monies to CMS Holdings, Inc. (CMS) an entity controlled by
certain of the Company's officers. These funds were advanced in anticipation of
performance in connection with a service agreement entered into by the Company
and CMS (see footnote G). This note of $20,466 is unsecured, due on demand with
interest at an annual rate of 10%, receivable quarterly.
The other notes receivable is unsecured and due on demand with interest at an
annual rate of 10%.
NOTE D - ACCOUNTS PAYABLE - RELATED PARTY
- -----------------------------------------
The Company used the trade credit facilities of CMS Holdings, Inc. an entity
owned by certain of the Companys' officers. The balance payable at September 30,
1997 was $73,063.
8
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
NOTE E - LEASES
- ---------------
The Company conducts its operations in leased facilities. These facilities are
leased on a month to month basis at an aggregate monthly rental of approximately
$5,400. Total rent expenses for facilities for the year ended September 30, 1997
was $28,371.
In June 1997, the Company entered into a lease agreement for three high volume
Xerox copiers from a related party. These copiers are rented on a month to month
basis with a thirty day notification period required to terminate the lease.
Monthly lease payments are computed based upon $.01 per copy. Equipment lease
expense for the year ended September 30, 1997 was $7,674.
NOTE F - STOCKHOLDERS' EQUITY
- -----------------------------
On April 21, 1997 the Company effected a reverse split of its common stock from
250,000,000 shares outstanding to 625,000 shares outstanding.
On April 22, 1997, the Company purchased all of outstanding shares of the common
stock of Imtek Corporation in exchange for 4,375,000 shares of its common stock.
NOTE G - RELATED PARTY TRANSACTIONS
- -----------------------------------
The Company has a servicing agreement with CMS Holdings, Inc. (CMS) an entity
controlled by certain of the Company's officers. Under the terms of the
agreement, the servicing entity performs certain maintenance, repair, marketing
and administrative tasks for the Company. Total service expense for the year to
CMS was approximately $977,000. This contract was terminated October 1, 1997.
The Company also engaged in business transactions with Amerilease, a company
owned by certain of the Company's officers. The total expense for the year to
Amerilease was approximately $107,000.
NOTE H - DEPENDANCE ON MAJOR VENDORS
- ------------------------------------
The Company purchased copiers, facsimiles and other office equipment primarily
from one manufacturer. The cost of the equipment purchased from this
manufacturer was approximately $744,000.
NOTE I - SUBSEQUENT EVENTS
- --------------------------
In November 1997 the Company's Board of Directors approved the issuance of a
private placement memorandum for an offering of up to $7,500,000 in convertible
preferred stock. The Company intends to use most of the proceeds to finance
acquisitions.
In October 1997, the Company acquired 100% interest in three other corporations
in a stock for stock exchange and purchased certain assets of two others.
The Company exchanged 1,000,000 shares of its common stock for all of the
outstanding common stock of Thompson Business Products, Inc. (Thompson).
Thompson is a financial services company specializing in viatical settlements.
The Company exchanged 465,000 shares of its common stock for all the outstanding
common stock of Office Supply Lines Holding, Inc. (OSLHI). OSLHI is a retailer
of office supplies.
9
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
The Company exchanged 1,010,611 shares of its common stock for all the
outstanding common stock of Capital Prepress Holdings, Inc. (CPHI). CPHI is a
provider of digital imaging services.
Summary financial data is set forth below:
<TABLE>
<CAPTION>
Thompson OSLHI CPHI
----------- --------- ---------
<S> <C> <C> <C>
Total Assets $ 90,000 $ 25,000 $ 30,000
Total Liabilities - - -
Equity $ 90,000 $ 25,000 $ 20,000
</TABLE>
The Company acquired certain assets of two office equipment retailers, Richmond
Business Systems, Inc. (RBS) and Bohanon Business Systems, Inc. (BBS).
Summary financial data is set forth below:
<TABLE>
<CAPTION>
RBS BBS
--------- ---------
<S> <C> <C>
Assets Purchased
Accounts Receivable $ 17,000 $ 17,000
Inventory 11,000 12,000
Furniture & Fixtures 9,500 5,000
--------- ---------
$ 37,500 $ 34,000
========= =========
Purchase Funded By:
Cash $ 37,500 $ -
Trade Payable Assumed - 27,000
Note Payable - 7,000
--------- ---------
$ 37,500 $ 34,000
========= =========
</TABLE>
In November, 1997 the Company acquired 100% interest in GLS Holdings, Inc.,
(GLS) a provider of copy litigation support services. The Company exchanged
56,250 shares of its common stock for all of the common stock of GLS.
Summary financial data is set forth below:
Assets $ 35,000
Net worth $ 35,000
10
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
(FORMERLY SPECTRUM EQUITIES, INC.)
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
In November, 1997 the Company acquired the inventory of Office Supply Line, Inc.
(OSL) for $237,000. The Company paid $75,000 cash, assumed $70,000 in trade
payables and issued a note for $92,000 payable in installments of $9,626
including interest at an annual rate of 10%. This note matures August 1998.
During the year the Company paid a deposit of $40,000 towards the purchase of
computer software. Subsequent to the financial statement date, the Company has
paid an additional amount of approximately $60,000 for computer hardware. The
above systems are expected to give the Company greater communication
capabilities among its locations.
11
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders of
Imtek Office Solutions, Inc.
We have audited the accompanying balance sheet of Imtek Office Solutions, Inc.
as of September 30, 1997 and the related statements of income, shareholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of Imtek Office Solutions, Inc. as of September 30, 1996 and 1995
were audited by other auditors whose report on those statements dated October
15, 1996 included an explanatory paragraph that described the financial
statements as having been prepared assuming that the Company will continue as a
going concern.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1997 financial statements referred to above present fairly,
in all material respects, the financial position of Imtek Office Solutions, Inc.
as of September 30, 1997, and the results of their operations and their cash
flows for the year then ended in conformity with generally accepted accounting
principles.
Bridgewater, New Jersey
December 19, 1997
1
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
IMTEK OFFICE SOLUTIONS, INC.
January 22, 1998 By: /s/ EDWIN C. HIRSCH
------------------------------------
Edwin C. Hirsch, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Edwin C. Hirsch Chairman (Principal Executive
- ------------------------- Officer), President and Director January 22, 1998
Edwin C. Hirsch
/s/ Brad C. Thompson Chief Financial Officer (Principal
- ------------------------- Financial Officer) and Director January 22, 1998
Brad C. Thompson
/s/ Michael J. Lowe Director January 22, 1998
- -------------------------
Michael J. Lowe
/s/ Robert J. Brown Director January 22, 1998
- -------------------------
Robert J. Brown
/s/ Andrew J. Walter Director January 22, 1998
- -------------------------
Andrew J. Walter
/s/ Robert W. Hoover Director January 22, 1998
- -------------------------
Robert W. Hoover
</TABLE>
<PAGE>
EXHIBIT 10.1
MITA DEALER LVC SALES
AGREEMENT
MITA COPYSTAR AMERICA, INC.
AND
IMTEK CORPORATION, d/b/a
IMTEK OFFICE SOLUTIONS
<PAGE>
MITA DEALER LVC SALES
AGREEMENT
THIS AGREEMENT is made and entered into by and between MITA COPYSTAR
AMERICA, INC., a corporation, having its principal place of business located at
225 Sand Road, Fairfield, New Jersey 07004 (hereinafter referred to as "Mita"),
and Imtek Corporation, d/b/a Imtek Office Solutions, having its principal office
located at 2800 Build America Drive, Hampton, VA 23666 (hereinafter referred to
as "Dealer"). This Agreement will only be binding and effective after it has
been accepted and signed by Mita.
SECTION I. APPOINTMENT.
(1) Mita hereby appoints Dealer as a nonexclusive dealer for certain
business equipment, and related accessories and supplies, specified in the
attached Schedule "A" (herein referred to as the "Products"), and Dealer accepts
such appointment in accordance with the terms, conditions and covenants set
forth in this Agreement. The appointment of Dealer to sell any other Mita
products not contained in Schedule "A" must be agreed upon, and acknowledged in
writing, by Mita.
(2) Dealer shall use its best efforts to promote and sell the Products
in the territory set forth in the attached Schedule "B" (herein referred to as
the "Area of Prime Responsibility").
(3) Dealer shall sell and market the Products only to retail end-users,
and shall not sell or market the Products to third parties for resale.
(4) If Mita intends to appoint any new dealers in the Area of Prime
Responsibility. Mita will notify Dealer of its intention, in writing, at least
thirty (30) days before any such appointments become official.
(5) Mita reserves the right to make modifications and improvements to
the products at any time, and discontinue the manufacture and sale of any model
without incurring any liability to Dealer.
SECTION 2. MINIMUM SALES GOALS
(1) Within the Area of Prime Responsibility. Dealer will be required to
achieve certain minimum sales goals as indicated on the attached Schedule "C"
(herein referred to as "Minimum Sales Goals").
(2) The Minimum Sales Goals shall be established by Mita based upon its
evaluation of the sales potential of the Area of Prime Responsibility, taking
into consideration the Area's size and population. Dealer's previous sales
record, estimated total prior sales of copiers and Products in the Area, and
other economic and market factors pertaining to the Area. Mita shall review the
sales performance of Dealer periodically as the need arises. Mita will consult
with Dealer regarding all goals established by Mita under this Agreement, but
Mita shall have final authority in setting the Minimum Sales Goals. Any changes
in Dealer's Minimum Sales Goals shall be reflected in a new Schedule "C" sent to
Dealer by Mita.
SECTION 3. LOCATION OF DEALER.
(1) Once Dealer has established facilities in the Area of Prime
Responsibility at one or more locations mutually satisfactory to Mita and
Dealer. Dealer shall be designated as an Authorized Mita Dealer and shall
thereafter be authorized to sell the Products only at or from such locations.
(2) Dealer shall not move to or establish a new or different location
for the sale of the Products from those locations designated herein without the
prior written approval of Mita.
(3) If Dealer has branch offices located outside the Area of Prime
Responsibility. Dealer shall not show, sell, lease, rent, or otherwise market
any of the Mita Products from those branch locations or any other locations
outside its Area of Prime Responsibility.
SECTION 4. DEALER OPERATING MANUAL.
Mita shall provide Dealer with its current Mita Dealer Policy and
Procedures Manual (hereinafter referred to as the "Dealer Manual"). The
provisions of the Dealer Manual may be amended, changed, or revised by Mita,
from time to time, at its own discretion.
SECTION 5. PURCHASE.
Mita shall sell the Products to Dealer and Dealer shall purchase the
Products from Mita in accordance with the terms and conditions set forth herein
and in the Dealer Manual. Mita reserves the right to allocate the Products in a
manner deemed appropriate by Mita when such allocation may be necessary for any
reason whatsoever.
SECTION 6. PRICE.
Dealer shall pay to Mita the price for the Products set forth in Mita's
price schedule, issued from time to time, which is in effect at the time of the
acceptance of Dealer's order.
SECTION 7. PAYMENT.
All payments shall be made in accordance with the procedures set forth
in the Dealer Manual.
<PAGE>
SECTION 8. SECURITY INTEREST.
Dealer hereby grants Mita, as security for all amounts which it now
owes Mita and all amounts it may owe Mita in the future, a continuing security
interest in all of the Mita Products, now owned or hereafter acquired, and the
proceeds thereof, as may be granted under the Uniform Commercial Code in the
jurisdiction where Dealer is located. Dealer agrees to execute a standard
security agreement, financing statements, and any and all other documents
necessary to perfect Mita's security interest herein granted by Dealer.
SECTION 9. SHIPMENT.
All shipments shall be made pursuant to procedures set forth in the
Dealer Manual.
SECTION 10. SALES PROMOTION.
(1) Dealer shall use its best efforts to promote the sale, lease and
rental of the Products through marketing programs that include thoroughly
trained sales personnel who are familiar with the Products. Dealer shall conform
with and carry out the marketing programs and policies of Mita as announced by
Mita in writing from time to time.
(2) Dealer shall make no statement which contains representations with
respect to the Products which exceed the specifications approved in writing by
Mita. Dealer shall not make any false, misleading or deceptive representations
to anyone or engage in any unfair trade practices. Dealer shall be solely
responsible for the actions of its sales personnel and representatives. Dealer
shall indemnify and hold Mita harmless from any and all liability or damages
that may result from a breach of this Section.
SECTION 11. SERVICE OBLIGATION.
(1) The Dealer shall provide prompt, professional, willing, and
courteous service to the end-users of the Products in the Area of Prime
Responsibility. Dealer's service duties shall include after-sale inspection;
repairs; warranty and special service requirements; furnishing parts, supplies
and accessories; and providing operating and maintenance instructions to end-
users of the Product.
(2) The Dealer shall: a) establish and maintain a qualified service
staff trained for the Products; b) send its maintenance personnel to such
schools as Mita shall offer from time to time; c) maintain an adequate inventory
of Mita brand spare parts and supplies to perform its service obligation; d)
purchase Mita parts kits when Dealer makes its initial purchase of a copier
model; and e) not sell parts and supplies which do not work properly in the Mita
copiers or which fail to meet Mita's specifications. Dealer agrees to make
annual contract service available at industry--wide competitive rates for the
products sold by Dealer, Mita, or other Authorized Dealers for use within the
Area of Prime Responsibility.
(3) Dealer shall not alter or remove any serial numbers or labels from
the Products, and Dealer shall not alter any copy counter found in the Products.
SECTION 12. WARRANTIES.
(1) The Products, parts and accessories are warranted to Dealer and
end-users only to the extent of and in accordance with the conditions set forth
in any current applicable warranty statement which may be published by Mita with
respect to any particular model, unit or item as to Dealers and end-users. Mita
shall make its current applicable warranty statement available to Dealer in
connection with Dealer's purchase of the products. There are no warranties on
any Products, parts or accessories beyond those set forth in the current
applicable warranty statement published by Mita in the Dealer Manual.
(2) Dealer agrees to incorporate the Mita Limited Warranty packaged with
certain Products, in each of its agreements for sale to the end-user. As an
integral part of its obligation. Dealer will perform without charge to the
end-user or to Mita, such service as may be required to fulfill the provisions
of Mita's warranties. For performing such service. Mita will credit Dealer's
parts account for the parts returned which are covered under Mita's warranty in
accordance with the then existing warranty policies and procedures. Dealer's
labor and labor costs are expressly excluded. Further, Dealer will perform such
reasonable, mandatory or special service programs for the Products as Mita may
request from time to time.
(3) ANY CURRENT WARRANTY PUBLISHED BY MITA IS IN LIEU OF ANY AND ALL
OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, MITA
SHALL IN NO EVENT BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
IN CONNECTION WITH THE SALE OF ANY ITEM, TO DEALER, OR OTHERWISE.
(4) Mita's liability, if any, shall in all events be limited to repair
or replacement of any defective Products, parts or accessories, all to the
extent set forth in any current applicable warranty statement, and Dealer's
rights to obtain repair or replacement pursuant to any such warranty statement
shall be the Dealer's sole and exclusive remedy. Without limiting any of the
foregoing, Mita shall incur no liability to Dealer or any customer of Dealer
arising out of any contract or arrangement between Dealer and any of its
customers, unless Mita shall expressly and in writing agree to the contrary.
SECTION 13. INTERTERRITORIAL TRANSACTIONS.
In the Event that Dealer sells any Products for use outside the area
where Dealer can adequately provide installation and warranty service. Dealer
shall immediately make appropriate arrangements to have such service provided
by another authorized dealer. Dealer shall pay such other dealer an
interterritorial allowance as set forth in the Dealer Manual. This allowance is
designed to give the recipient dealer reasonable compensation for services to
be performed.
SECTION 14. NATIONAL AND GOVERNMENT ACCOUNTS.
If Mita requests, Dealer will service Mita's National and Government
Accounts located in the Area of Prime Responsibility, and Mita agrees to
compensate Dealer for such service, and Dealer accepts the compensation and
terms and conditions of Mita's National Account Representative Program, as
amended from time to time. Further, Mita in its sole discretion reserves the
right to add or remove Dealer's name from Mita Dealer Service Locations listed
in Mita's Federal Supply Schedule with the General Services Administration
Federal Supply Service (GSA Schedule).
<PAGE>
SECTION 15. TRADEMARK LICENSE.
(1) Mita grants to Dealer, during the term of this Agreement, a
non-exclusive license to use the trademarks "Mita" and the "MITA" logo and the
words "Authorized Mita Dealer." Dealer shall not use Mita's trademarks as part
of its corporate, trade, or other business name; or in any manner not approved
or authorized by Mita: or in any manner in which Mita concludes, in its sole
judgment, is confusing or misleading, or reflects negatively on the quality or
goodwill associated with the trademarks or Mita.
(2) Dealer acknowledges the validity of the Mita trademarks and other
trade names affixed to the Products and that such trademarks and trade names are
exclusively owned by Mita or its parent company. Dealer further acknowledges
that considerable time and money have been expended to create the goodwill
associated with the Mita trademarks and that such goodwill belongs to Mita.
Nothing contained herein shall give Dealer any interest or right in the
trademarks or other trade names affixed to the Products except as is expressly
granted herein.
(3) Dealer shall not alter or remove the Mita trademarks from any of the
Products or affix any other name or marks to the Products.
SECTION 16. SCOPE OF AUTHORITY.
(1) Dealer shall not assume obligations in the name of or on account of
Mita or accept payment for any part of an obligation due to Mita, except such as
are expressly authorized by Mita. Dealer shall indemnify and hold Mita harmless
from and against any and all liabilities or obligations not authorized by Mita.
(2) It is expressly understood that the sole relationship of the parties
hereto is that of principal and independent contractor, and that Dealer has not
been granted a franchise.
SECTION 17. TERMINATION.
(1) Dealer may terminate this Agreement at any time by giving Mita not
less than thirty (30) days prior written notice.
(2) Notwithstanding anything herein to the contrary, this Agreement may
be terminated by Mita for any of the following reasons upon giving Dealer not
less than thirty (30) days prior written notice:
(a) Failure of Dealer to fulfill or perform any one or more of its
convenants obligations, duties,or responsibilities described
in this Agreement or in the Dealer Manual.
(b) Any substantial change in the operating management of Dealer, or
any sale, transfer or relinquishment of any substantial interest
in the direct or indirect ownership of Dealer or its business.
(3) This Agreement shall automatically terminate in the event Dealer
shall suffer or assume any bankruptcy, arrangements, reorganization or
insolvency proceeding or make a general assignment for the benefit of creditors;
or Dealer shall fail in making payments when due to Mita, or Dealer shall
attempt any transfer in violation of Section 21 hereof.
(4) Termination of this Agreement shall not relieve Dealer from its
obligations which shall have accrued pursuant to the provisions of this
Agreement, or release the parties hereto from any obligations which may have
been incurred as a result of operations conducted under this Agreement.
(5) Upon termination of this Agreement, if Dealer's account with Mita is
current, Mita will continue to sell to Dealer parts and supplies for the
Products for three years from date of Dealer's last purchase of the copier model
the parts and supplies are related to, at Dealer prices in effect at the time of
the order.
(6) Upon termination of this Agreement. Dealer, at its expense shall
immediately discontinue the use of, and remove from its business locations
vehicles, stationery, advertisements, etc., any Mita trademarks licensed under
this Agreement.
SECTION 18. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement or
breach thereof shall be settled by arbitration in Bergen County, New Jersey, in
accordance with the Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction. The arbitration proceeding shall be conducted by a panel of three
persons, one chosen by Mita, one chosen by Dealer, and the two so chosen shall
choose a third. The costs of arbitration shall be borne equally by Mita and
Dealer. Discovery in the arbitration proceeding shall be in accordance with the
U.S. Federal Rules of Civil Procedure.
SECTION 19. COMPLIANCE WITH LAWS.
Dealer shall conduct and maintain, at all times, its activities and
business operation in strict compliance with all federal and state laws and
regulations, county and city ordinances and regulations, or ordinances
applicable thereto. Dealer shall be responsible for and shall pay promptly when
due any and all taxes, levies, and assessments upon any Products in Dealer's
inventory, whether paid for or not.
SECTION 20. NONDISCLOSURE.
During the period of this Agreement, Dealer agrees not to divulge the
names of any customers of Mita or any trade secrets which Mita has disclosed to
Dealer. Within thirty (30) days after the termination of this Agreement. Dealer
shall deliver to Mita all documents materials and samples Mita may have
furnished to Dealer relating to its business; provided that Dealer may retain
technical bulletins and service manuals for as long as Dealer is providing
service to persons who have purchased the products from Dealer in a manner that
is satisfactory to Mita.
SECTION 21. ASSIGNMENT.
This Agreement shall not be assignable or transferrable in any manner
whatsoever without the consent in writing of Mita.
SECTION 22. FORCE MAJEURE.
Mita shall not be liable for any failure to perform any part of this
Agreement arising out of compliance with any law, ordinance, regulation,
ruling, orders or other governmental action or arising out of acts of God,
fire, flood, war, sabotage, accidents, labor disputes, shortage, or failure of
supply of materials or equipment, interruption of or delay in transportation,
or any other circumstances of like nature beyond its control.
<PAGE>
SECTION 23. NOTICES.
All notices required or permitted to be given or made under this
Agreement may be effected by personal delivery in writing or by registered or
certified mail, postage prepaid, return receipt requested, and shall be deemed
communicated three (3) days from the mailing thereof. Mailed notices shall be
addressed to the parties as their addresses appear above, but each party may
change his address by written notice in accordance with this paragraph.
SECTION 24. NONWAIVER OF RIGHTS.
Failure of either party hereto to enforce any of the provisions of this
Agreement or any rights with respect thereto or failure to exercise any
election provided for herein shall in no way be considered to be a waiver of
such provisions rights or elections or in any way affect the validity of this
Agreement.
SECTION 25. ENTIRE AGREEMENT.
This Agreement supersedes any and all other agreements, either oral or
written, between the parties hereto with respect to the Products and contains
all of the covenants and agreements between the parties with respect to said
matter. This Agreement may not be altered amended or modified except by written
instrument signed by the parties hereto.
SECTION 26. MISCELLANEOUS.
(1) This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey.
(2) Under no circumstances shall Dealer sell or market the Products
outside the United States.
(3) If any term, provision, covenant, or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remainder of the provisions shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated.
(4) This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their respective permitted successors in interest and permitted
assigns.
(5) In the event any action is necessary to enforce any of the terms
and conditions of this Agreement, Dealer shall pay to Mita all costs and fees
incurred, including reasonable attorney's fees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
MITA COPYSTAR AMERICA, INC.
Imtek Corporation /s/ Robert Magrino
- ------------------------------------ ----------------------------------------
(legal name of Dealer) (signature)
/s/ Michael L. Lowe Robert Magrino, Executive V.P. of Sales
- ------------------------------------ ---------------------------------------
(signature) (name and title)
Michael L. Lowe President, COO Accepted November 26, 1997
- ------------------------------------ ---------------------------------------
(name and title) (date of acceptance)
<PAGE>
SCHEDULE "A"
The Products to be sold by Dealer are the copiers listed below, and their
related accessories, parts and supplies.
(related toners and developers)
DC-3060
DC-4085
DC-4056
DC-409
DC-4086
DC-4585
DC-4585F
<PAGE>
SCHEDULE "B"
The Area of Prime Responsibility for the Dealer shall be the area designated
below.
COUNTIES IN THE STATE OF DELAWARE:
Kent
New Castle
Sussex
COUNTIES IN THE STATE OF MARYLAND:
Caroline Somerset
Dorchester Talbot
Kent Wicomico
Queen Anne's Worcester
COUNTIES IN THE STATE OF NORTH CAROLINA:
Camden
Currituck
Dare
Pasquotank
COUNTIES IN THE STATE OF VIRGINIA:
Accomack New Kent
Charles City Norfolk
Essex Northampton
Gloucester Northumberland
Isle of Wight Rappahannock
James City Richmond
King and Queen Surry
Lancaster Sussex
Mathews York
Middlesex
BRANCH OFFICE LOCATION:
5604 B Virginia Beach Blvd. #103
Virginia Beach, VA 23462
<PAGE>
SCHEDULE "C"
The Minimum Sales Goals for the Dealer in the Area of Prime Responsibility are
listed below.
DEALERSHIP: IMTEK CORPORATION, d/b/a IMTEK OFFICE SOLUTIONS
6 MONTH QUOTAS:
--------------
LVC Copiers & Accessories: $265,373
LVC Parts, Supplies &
Other Related Products: $271,262
<PAGE>
EXHIBIT 10.2
[MITA LETTERHEAD APPEARS HERE]
MITA DEALER AGREEMENT FOR SPECIAL PRODUCTS
This agreement is made and entered into by and between Mita Copystar
America, Inc.("Mita") a corporation with its principal place of business at 225
Sand Road, Fairfield, New Jersey 07004, and IMTEK CORPORATION, d/b/a IMTEK
-------------------------------
OFFICE SOLUTIONS ("Dealer"), a Corporation, with its principal place of business
- ----------------- ------------
at 2800 Build America Drive, Hampton, VA.
--------------------------------------
This Agreement will only be binding and effective after it has been accepted and
signed by Mita.
1. APPOINTMENT. Dealer will be appointed as a non-exclusive Mita Special
Products Dealer to market and service only the equipment ("Equipment") and
related products reflected on Exhibit A, for which Dealer must meet Mita's
training requirements. Both the Equipment and related products are referred to
as "Products" in this Agreement. Mita may, in its sole discretion, amend, modify
or discontinue any or all of the Products on Exhibit A, upon thirty days written
notice to the Dealer. Dealer agrees that it will only market the Products in the
United States where it can provide proper service and from the above location,
and the branch location(s) reflected on Exhibit A, unless otherwise authorized
by Mita in writing.
2. TERM. This Agreement will commence on the date of acceptance by Mita, and
will continue on a year-to-year basis unless terminated as provided herein.
3. PRICE AND TERMS OF PAYMENTS. The Purchase prices for the Products and terms
of payment will be set forth, from time to time, on the Mita Dealer Price List
for Special Products. Mita will provide Dealer with thirty days written notice
of any changes in the prices of the Equipment. Mita's terms of shipment are in
writing and will be provided to Dealer. Mita reserves the right to allocate the
Products in a manner deemed appropriate by Mita when such allocation may be
necessary for any reason whatsoever.
4. MINIMUM SALES GOALS. Dealer will be required to achieve certain minimum sales
goals as indicated on the attached Exhibit A ("Minimum Sales Goals"). The
Minimum Sales Goals shall be established by Mita based upon its evaluation of
the sales potential of the Dealer, taking into consideration the size and
population surrounding Dealer's location(s), Dealer's previous sales record,
estimated total prior sales of copier and facsimile equipment, and related
products in Dealer's area, and other economic and market factors considered
pertinent by Mita. Mita shall review the sales performance of Dealer
periodically as the need arises. Mita will consult with Dealer regarding all
goals established by Mita under this Agreement, but Mita shall have final
authority in setting Minimum Sales Goals. Mita will notify Dealer in writing of
any changes in Dealer's Minimum Sales goals.
5. SALES PROMOTION. Dealer shall use its best efforts to promote the sale, lease
and rental of the Products in areas where it can provide proper service. Dealer
shall use marketing programs that include thoroughly trained sales personnel
who are familiar with the Products. In addition, Dealer shall conform with and
carry out the marketing programs and policies of Mita as announced by Mita in
writing from time to time.
6. SERVICE OBLIGATION AND AREA OF SALES. The Dealer may market the Equipment
anywhere it can provide prompt, professional, willing, and courteous
maintenance, repair, and warranty service.
The Dealer shall: a) establish and maintain a qualified service staff
trained for the Products; b) send its maintenance personnel to such schools as
Mita shall offer from time to time; c) have its maintenance personnel complete
<PAGE>
video training programs offered by Mita; d) maintain an adequate inventory of
Mita brand spare parts and supplies to perform its service obligations; e)
purchase Mita parts kits when Dealer makes its initial purchase of an Equipment
model; f) not sell parts and supplies which do not work properly in the
Equipment or which fail to meet Mita's specifications; g) comply with and carry
out the service requirements associated with the Mita Equipment Warranty Policy
and Procedure; h) carry out any special service requirements or programs which
Mita deems necessary; and i) not alter or remove any serial numbers or labels
from the Products, nor alter any counters found in the Products.
From time to time, Mita's representatives may visit Dealer's location
and evaluate the service provided by Dealer. Mita's service representatives may
inspect Dealer's service records and facilities to assure compliance with the
above standards, and to obtain service data related to the Products. Dealer
agrees to take any corrective action requested by Mita to improve Dealer's
service.
7. WARRANTIES AND WARRANTY SERVICE. Dealer agrees to incorporate the Mita
Limited Warranties packaged with the Equipment, in each of its agreements for
sale to the end-user. As an integral part of Dealer's service obligation, Dealer
will perform, pursuant to the Mita Equipment Warranty Policy and Procedure (the
"Warranty Policy") in effect at the time, without charge to the end-user, such
service as may be required to fulfill the provisions of Mita's warranties. For
performing such service, Mita will credit Dealer's parts account for the parts
returned, after the Dealer has properly completed and submitted to Mita the
documentation, all as set forth in the Warranty Policy. Dealer's labor and labor
costs are expressly excluded. Dealer shall only use Mita brand parts when
performing service under the Warranty Policy. After the Warranty period, Dealer
agrees to make "per call" and annual contract service available at industry-wide
competitive rates to Dealer's customers, and any customer who brings or delivers
the Equipment to Dealer, no matter where the Equipment was purchased.
The Products are warranted to Dealer and end-users only to the extent,
and in accordance with the conditions, set forth in the Warranty Policy. There
are no other warranties on the Products. ANY CURRENT WARRANTY PUBLISHED BY MITA
IS IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. MITA SHALL IN NO EVENT BE LIABLE FOR ANY SPECIAL INCIDENTAL
OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THE SALE OF ANY PRODUCT TO DEALER,
OR OTHERWISE.
Mita's liability, if any, shall in all events be limited to repair or
replacement of any defective Products, all to the extent set forth in Warranty
Policy, and Dealer's rights to obtain repair or replacement pursuant to any
such warranty statement shall be the Dealer's sole and exclusive remedy. Without
limiting any of the foregoing, Mita shall incur no liability to Dealer or any
customer of Dealer arising out of any contract or arrangement between Dealer and
any of the customers, unless Mita shall expressly and in writing agree to the
contrary. If Dealer's warranty to the customer is greater than the Mita Limited
Warranty, Dealer shall advise customer that Mita is not responsible for
Dealer's extended warranty.
8. NATIONAL AND GOVERNMENT ACCOUNTS. If Mita requests, Dealer will service
Mita's National and Government Accounts located in Dealer's area, and Mita
agrees to compensate Dealer for such service, and Dealer accepts the
compensation and terms and conditions of Mita's National Account Representative
Program as amended from time to time. Further, Mita in its sole discretion
reserves the right to add or remove Dealer's name from Mita Dealer Service
Locations listed in Mita's Federal Supply Schedule with the General Services
Administration Federal Supply Service (GSA Schedule).
9. RELATIONSHIP OF THE PARTIES. It is expressly understood that Dealer is an
independent contractor and that Dealer has not been granted a franchise. Dealer
will not under any circumstances sign on Mita's behalf any agreements, forms or
other documents. This Agreement will not create a partnership, employment, or
agency relationship between Mita and Dealer, and no act or obligation of either
party shall in any way bind the other except as expressly set forth herein.
Salespeople and other employees utilized by Dealer in connection with its
obligation hereunder will be under the management and control of Dealer and
under no circumstances will be considered employees or agents of Mita.
10. SECURITY INTEREST. Dealer hereby grants Mita, as security for all amounts
now or in the future owed Mita, a continuing security interest in all Mita
products, now owned or hereafter acquired, and the proceeds thereof, as may be
granted under the Uniform Commercial Code in the jurisdiction where Dealer is
located. Dealer agrees to execute a standard security agreement, financing
statements, and any other documents necessary to perfect Mita's security
interest.
11. TRADEMARKS. Dealer acknowledges the validity of the Mita trademarks and
other trade names affixed to the Products, and that such trademarks and trade
names are exclusively owned by Mita or its parent company. Dealer further
acknowledges that considerable time and money have been expended to create the
goodwill associated with the Mita trademarks and that such goodwill belongs to
Mita. Nothing contained herein shall give Dealer any interest or right in the
trademarks or other trade names affixed to the Products except as is expressly
granted herein.
<PAGE>
Dealer shall not use the trademarks "MITA" and the "MITA" logo except as
specifically authorized by Mita. Dealer shall not use Mita's trademarks as part
of its corporate, trade, or other business name; or in any manner not approved
or authorized by Mita; or in any manner in which Mita concludes, in its sole
judgement, is confusing or misleading, or reflects negatively on the quality or
goodwill associated with the trademarks or Mita. Dealer shall not alter or
remove the Mita trademarks from any of the Products, or affix any other name or
marks to the Products.
12. ETHICS. Dealer will maintain the highest ethical business standards and
avoid and refrain from being involved in any activities which may in any manner
disparage the Mita name, any of Mita's marks, or the Mita Products. Further, in
the conduct of its business, Dealer will comply with all federal, state and
local laws, rules and regulations.
Dealer shall make no statement which contains representations with
respect to the Products which exceeds the specifications approved in writing by
Mita. Dealer shall not make any false, misleading or deceptive representations
to anyone or engage in any unfair trade practices. Dealer shall be solely
responsible for the actions of its personnel and its sales and service
representatives. Dealer shall indemnify and hold Mita harmless from any and all
liability or damages that may result from a breach of this section.
13. TERMINATION. This Agreement may be terminated by either party upon 120 days'
prior written notice at any time, with or without cause and without liability,
provided that in the event of a material breach by Dealer of the provisions of
this Agreement, Mita may terminate this Agreement effective immediately. After
termination, if the Dealer's account is current, Mita will sell the Dealer parts
and supplies for the Equipment at the Mita Dealer prices then in effect, on a
C.O.D. basis, for no less than one year from the date of Dealer's last purchase
of the Equipment model to which the parts and supplies are related. Upon
termination of this Agreement, Dealer, at its expense, shall immediately
discontinue the use of, and remove from its business locations, vehicles,
stationery, advertisements, etc., any Mita trademarks authorized under this
Agreement.
14. DELAYS. Mita will not be liable under this Agreement for damages or delays
caused by strikes, vendors, lockouts, accidents, delays in manufacturing, delays
in carriers, acts of God, governmental actions, or any other causes beyond its
control.
15. HEADINGS. The headings in this Agreement are for the convenience of the
parties and shall have no interpretive effect. This Agreement sets forth the
entire understanding of the parties. If it is necessary to bring an action to
enforce this Agreement, Mita shall be entitled to all costs and fees incurred,
including reasonable attorney's fees.
16. ASSIGNMENT. Neither this Agreement nor any interest or right hereunder may
be assigned by either party without the prior written consent of the other
party.
17. NOTICES. Notices required or permitted to be given hereunder shall be
in writing and sent by mail to the principal office of the other party indicated
herein or at such other address as the parties may designate in writing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
MITA COPYSTAR AMERICA, INC.
IMTEK CORPORATION By /s/ Allen Mahmarian
- -------------------------- -------------------------------
(legal name of Dealer) (signature)
By /s/ Michael L. Lowe Allen Mahmarian, V.P. IDI Division
- -------------------------- ----------------------------------
(signature) (name and title)
Michael L. Lowe, Pres, COO Accepted November 26, 1997
- -------------------------- ----------------------------------
(name and title) (date of acceptance)
<PAGE>
EXHIBIT A
Equipment Models:
DC-1824ZS
DC-1824F
DC-3648
DC-1824II
Minimum Sales Goals:
MONTHLY FIGURE:
- --------------
$5,000
Branch Locations (if any):
<PAGE>
Exhibit 10.3
[MITA LETTERHEAD APPEARS HERE]
MITA DEALER AGREEMENT FOR BUSINESS FACSIMILE EQUIPMENT
This agreement is made and entered into by and between Mita Copystar
America, Inc.("Mita") a corporation with its principal place of business at 225
Sand Road, Fairfield, New Jersey 07004, and IMTEK CORPORATION, d/b/a IMTEK
-------------------------------------
OFFICE SOLUTIONS ("Dealer"), a Corporation, with its principal place of business
- ----------------- ------------
at 2800 Build America Drive, Hampton, VA 23666. This Agreement will only be
---------------------------------------------
binding and effective after it has been accepted and signed by Mita.
1. APPOINTMENT. Dealer will be appointed as a non-exclusive Mita Facsimile
Equipment Dealer to market and service only the facsimile equipment ("Facsimile
Equipment") and related products reflected on Exhibit A, for which Dealer must
meet Mita's training requirements. Both the Facsimile Equipment and related
products are referred to as "Products" in this Agreement. Mita may, in its sole
discretion, amend, modify or discontinue any or all of the Products on Exhibit
A, upon thirty days written notice to the Dealer. Dealer agrees that it will
concentrate its marketing efforts for the Products in its area of prime
responsibility ("Area of Prime Responsibility"), from the above location, and
the branch location(s) reflected on Exhibit A, unless otherwise authorized by
Mita in writing.
2. TERM. This Agreement will commence on the date of acceptance by Mita, and
will continue on a year-to-year basis unless terminated as provided herein.
3. PRICE AND TERMS OF PAYMENTS. The Purchase prices for the Products and terms
of payment will be set forth, from time to time, on the Mita Dealer Price List
for Products. Mita will provide Dealer with thirty days written notice
of any changes in the prices of the Facsimile Equipment. Mita reserves the right
to allocate the Products in a manner deemed appropriate by Mita when such
allocation may be necessary for any reason whatsoever.
4. MINIMUM SALES GOALS. Dealer will be required to achieve certain minimum sales
goals in its Area of Prime Responsibility as indicated on the attached Exhibit A
("Minimum Sales Goals"). The Minimum Sales Goals shall be established by Mita
based upon its evaluation of the sales potential of the Dealer, taking into
consideration the size and population surrounding Dealer's location(s), Dealer's
previous sales record, estimated total prior sales of facsimile equipment and
Products in Dealer's Area of Prime Responsibility, and other economic and market
factors considered pertinent by Mita. Mita shall review the sales performance of
Dealer periodically as the need arises. Mita will consult with Dealer regarding
all goals established by Mita under this Agreement, by Mita shall have final
authority in setting the Minimum Sales Goals. Mita will notify Dealer in writing
of any changes in Dealer's Minimum Sales Goals.
5. SALES PROMOTION. Dealer shall sell and market the Products only to retail
end-users, and shall not sell or market the Products to third parties for resale
or outside the United States. Dealer shall use its best efforts to promote the
sale, lease and rental of the Products in its Area of Prime Responsibility.
Dealer shall use marketing programs that include thoroughly trained sales
personnel who are familiar with the Products. In addition, Dealer shall conform
with and carry out the marketing programs and policies of Mita as announced by
Mita in writing from time to time.
6. SERVICE OBLIGATION AND AREA OF SALES. The Dealer may only market the
Facsimile Equipment where it can provide prompt, professional, willing, and
courteous maintenance, repair, and warranty service.
The Dealer shall: a) establish and maintain a qualified service staff
trained for the Products; b) send its maintenance personnel to such schools as
Mita shall offer from time to time; c) maintain an adequate inventory of Mita
<PAGE>
brand spare parts and supplies to perform its service obligations; d) purchase
Mita parts kits when Dealer makes its initial purchase of a Facsimile Equipment
model; e) not sell parts and supplies which do not work properly in the
Facsimile Equipment or which fail to meet Mita's specifications; f) comply with
and carry out the service requirements associated with the Mita Facsimile
Equipment Warranty Policy and Procedure; g) carry out any special service
requirements or programs which Mita deems necessary; and h) not alter or remove
any serial numbers or labels from the Products, nor alter any copy counter found
in the Products.
From time to time, Mita's representatives may visit Dealer's location
and evaluate the service provided by Dealer. Mita's service representatives may
inspect Dealer's service records and facilities to assure compliance with the
above standards, and to obtain service data related to the Products. Dealer
agrees to take any corrective action requested by Mita to improve Dealer's
service.
7. WARRANTIES AND WARRANTY SERVICE. Dealer agrees to incorporate the Mita
Limited Warranties packaged with the Facsimile Equipment, in each of its
agreements for sale to the end-user. As an integral part of Dealer's service
obligation, Dealer will perform, pursuant to the Mita Facsimile Equipment
Warranty Policy and Procedure (the "Warranty Policy") in effect at the time,
without charge to the end-user, such service as may be required to fulfill the
provisions of Mita's warranties. For performing such service, Mita will credit
Dealer's parts account for the parts returned, after the Dealer has properly
completed and submitted to Mita the documentation, all as set forth in the
Warranty Policy. Dealer's labor and labor costs are expressly excluded. Dealer
shall only use Mita brand parts when performing service under the Warranty
Policy. After the Warranty period, Dealer agrees to make "per call" and annual
contract service available at industry-wide competitive rates to Dealer's
customers, and any customer who brings or delivers the Facsimile Equipment to
Dealer, no matter where the Facsimile Equipment was purchased.
The Products are warranted to Dealer and end-users only to the extent,
and in accordance with the conditions, set forth in the Warranty Policy. There
are no other warranties on the Products. ANY CURRENT WARRANTY PUBLISHED BY MITA
IS IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. MITA SHALL IN NO EVENT BE LIABLE FOR ANY SPECIAL INCIDENTAL
OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THE SALE OF ANY ITEM TO DEALER OR
OTHERWISE.
Mita's liability, if any, shall in all events be limited to repair or
replacement of any defective Products, all to the extent set forth in Warranty
Policy, and Dealer's rights to obtain repair or replacement pursuant to any
such warranty statement shall be the Dealer's sole and exclusive remedy. Without
limiting any of the foregoing, Mita shall incur no liability to Dealer or any
customer of Dealer arising out of any contract or arrangement between Dealer and
any of the customers, unless Mita shall expressly and in writing agree to the
contrary. If Dealer's warranty to the customer is greater than the Mita Limited
Warranty, Dealer shall advise customer that Mita is not responsible for
Dealer's extended warranty.
8. NATIONAL AND GOVERNMENT ACCOUNTS. If Mita requests, Dealer will service
Mita's National and Government Accounts located in Dealer's area, and Mita
agrees to compensate Dealer for such service, and Dealer accepts the
compensation and terms and conditions of Mita's National Account Representative
Program as amended from time to time. Further, Mita in its sole discretion
reserves the right to add or remove Dealer's name from Mita Dealer Service
Locations listed in Mita's Federal Supply Schedule with the General Services
Administration Federal Supply Service (GSA Schedule).
9. RELATIONSHIP OF THE PARTIES. It is expressly understood that Dealer is an
independent contractor and that Dealer has not been granted a franchise. Dealer
will not under any circumstances sign on Mita's behalf any agreements, forms or
other documents. This Agreement will not create a partnership, employment, or
agency relationship between Mita and Dealer, and no act or obligation of either
party shall in any way bind the other except as expressly set forth herein.
Salespeople and other employees utilized by Dealer in connection with its
obligation hereunder will be under the management and control of Dealer and
under no circumstances will be considered employees or agents of Mita.
10. SECURITY INTEREST. Dealer hereby grants Mita, as security for all amounts
now or in the future owed Mita, a continuing security interest in all Mita
products, now owned or hereafter acquired, and the proceeds thereof, as may be
granted under the Uniform Commercial Code in the jurisdiction where Dealer is
located. Dealer agrees to execute a standard security agreement, financing
statements, and any other documents necessary to perfect Mita's security
interest.
11. TRADEMARKS. Dealer acknowledges the validity of the Mita trademarks and
other trade names affixed to the Products, and that such trademarks and trade
names are exclusively owned by Mita or its parent company. Dealer further
acknowledges that considerable time and money have been expended to create the
goodwill associated with the Mita trademarks and that such goodwill belongs to
Mita. Nothing contained herein shall give Dealer any interest or right in the
trademarks or other trade names affixed to the Products except as is expressly
granted herein.
<PAGE>
Dealer shall not use the trademarks "MITA" and the "MITA" logo except as
specifically authorized by Mita. Dealer shall not use Mita's trademarks as part
of its corporate, trade, or other business name; or in any manner not approved
or authorized by Mita; or in any manner in which Mita concludes, in its sole
judgement, is confusing or misleading, or reflects negatively on the quality or
goodwill associated with the trademarks or Mita. Dealer shall not alter or
remove the Mita trademarks from any of the Products, or affix any other name or
marks to the Products.
12. ETHICS. Dealer will maintain the highest ethical business standards and
avoid and refrain from being involved in any activities which may in any manner
disparage the Mita name, any of Mita's marks, or the Mita Products. Further, in
the conduct of its business, Dealer will comply with all federal, state and
local laws, rules and regulations.
Dealer shall make no statement which contains representations with
respect to the Products which exceeds the specifications approved in writing by
Mita. Dealer shall not make any false, misleading or deceptive representations
to anyone or engage in any unfair trade practices. Dealer shall be solely
responsible for the actions of its personnel and its sales and service
representatives. Dealer shall indemnify and hold Mita harmless from any and all
liability or damages that may result from a breach of this section.
13. TERMINATION. This Agreement may be terminated by either party upon 120 days'
prior written notice at any time, with or without cause and without liability,
provided that in the event of a material breach by Dealer of the provisions of
this Agreement, Mita may terminate this Agreement effective immediately. After
termination, if the Dealer's account is current, Mita will sell the Dealer parts
and supplies for the Facsimile Equipment at the Mita Dealer prices then in
effect, on a C.O.D. basis, for no less than one year from the date of Dealer's
last purchase of the Facsimile Equipment model to which the parts and supplies
are related. Upon termination of this Agreement, Dealer, at its expense, shall
immediately discontinue the use of, and remove from its business locations,
vehicles, stationery, advertisements, etc., any Mita trademarks authorized under
this Agreement.
14. DELAYS. Mita will not be liable under this Agreement for damages or delays
caused by strikes, vendors, lockouts, accidents, delays in manufacturing, delays
in carriers, acts of God, governmental actions, or any other causes beyond its
control.
15. HEADINGS. The headings in this Agreement are for the convenience of the
parties and shall have no interpretive effect. This Agreement sets forth the
entire understanding of the parties. If it is necessary to bring an action to
enforce this Agreement, Mita shall be entitled to all costs and fees incurred,
including reasonable attorney's fees.
16. ASSIGNMENT. Neither this Agreement nor any interest or right hereunder may
be assigned by either party without the prior written consent of the other
party.
17. NOTICES. Notices required or permitted to be given hereunder shall be
in writing and sent by mail to the principal office of the other party indicated
herein or at such other address as the parties may designate in writing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
MITA COPYSTAR AMERICA, INC.
IMTEK CORPORATION By /s/ Allen Mahmarian
- --------------------------------- -------------------------------------
(legal name of Dealer) (signature)
By /s/ Michael L. Lowe Allen Mahmarian, V.P. IDI Division
------------------------------- ----------------------------------------
(signature) (name and title)
Michael L. Lowe, Pres, COO Accepted November 26, 1997
- --------------------------------- ----------------------------------------
(name and title) (date of acceptance)
<PAGE>
COUNTIES IN THE STATE OF MARYLAND:
Caroline Somerset
Dorchester Talbot
Kent Wicomico
Queen Anne's Worcester
COUNTIES IN THE STATE OF NORTH CAROLINA:
Camden
Currituck
Dare
Pasquotank
COUNTIES IN THE STATE OF VIRGINIA:
Accomack New Kent
Charles City Norfolk
Essex Northampton
Gloucester Northumberland
Isle of Wight Rappahannock
James City Richmond
King and Queen Surry
Lancaster Sussex
Mathews York
Middlesex
BRANCH OFFICE LOCATION:
5604 B Virginia Beach Blvd. #103
Virginia Beach, VA 23462
<PAGE>
Facsimile Equipment Models:
LDC-720
LDC-750
LDC-770
LDC-780
Area of Prime Responsibility:
SEE ATTACHED:
Minimum Sales Goals:
MONTHLY FIGURE:
--------------
$19,367
Branch Locations (if any):
<PAGE>
EXHIBIT 10.4
MITA DEALER HVC SALES
AGREEMENT
MITA COPYSTAR AMERICA, INC.
AND
IMTEK CORPORATION, d/b/a
IMTEK OFFICE SOLUTIONS
DATED: November 26, 1997
<PAGE>
MITA DEALER HVC SALES
AGREEMENT
THIS AGREEMENT is made this 31st day of October 1997, by and between
MITA COPYSTAR AMERICA, INC., a California corporation, having its principal
place of business located at 225 Sand Road, Fairfield, New Jersey 07004
(hereinafter referred to as "Mita"), and Imtek Corporation, d/b/a Imtek Office
Solutions, having its principal office located at 2800 Build America Drive,
Hampton, VA 23666 (hereinafter referred to as "Dealer").
SECTION I. APPOINTMENT.
(1) Mita hereby appoints Dealer as a nonexclusive dealer for certain
business equipment, and related accessories and supplies, specified in the
attached Schedule "A" (herein referred to as the "Products"), and Dealer accepts
such appointment in accordance with the terms, conditions and covenants set
forth in this Agreement. The appointment of Dealer to sell any other Mita
products not contained in Schedule "A" must be agreed upon, and acknowledged in
writing, by Mita.
(2) Dealer shall use its best efforts to promote and sell the Products
in the territory set forth in the attached Schedule "B" (herein referred to as
the "Area of Prime Responsibility"). Dealer shall not sell, lease, rent or
otherwise market the Products outside the Area of Prime Responsibility.
(3) Dealer shall not advertise or market the Products outside the Area
of Prime Responsibility. If Dealer advertises the Products along with other
merchandise in media of broader circulation, or by mailings that may reasonably
be expected to reach potential customers outside the Area of Prime
Responsibility, that advertising and those mailings must prominently state the
counties comprising the Area of Prime Responsibility, and that the Products are
sold, rented, or leased only in those counties.
(4) Dealer shall sell the Products only to retail end-users, and shall
not sell the Products to third parties for resale.
(5) If Mita intends to appoint any new dealers in the Area of Prime
Responsibility, Mita will notify Dealer of its intention, in writing, at least
thirty (30) days before any such appointments become official.
(6) Mita reserves the right to make modifications and improvements to
the Products at any time, and discontinue the manufacture and sale of any model
without incurring any liability to Dealer.
SECTION 2. MINIMUM SALES GOALS
(1) Within the Area of Prime Responsibility, Dealer will be required to
achieve certain minimum sales goals as indicated on the attached Schedule "C"
(herein referred to as "Minimum Sales Goals").
(2) The Minimum Sales Goals shall be established by Mita based upon its
evaluation of the sales potential of the Area of Prime Responsibility, taking
into consideration the Area's size and population, Dealer's previous sales
record, estimated total prior sales of copiers and Products in the Area, and
other economic and market factors pertaining to the Area. Mita shall review the
sales performance of Dealer periodically as the need arises. Mita will consult
with Dealer regarding all goals established by Mita under this Agreement, but
Mita shall have final authority in setting the Minimum Sales Goals. Any changes
in Dealer's Minimum Sales Goals shall be reflected in a new Schedule "C" sent to
Dealer by Mita.
SECTION 3. LOCATION OF DEALER.
(1) Once Dealer has established facilities in the Area of Prime
Responsibility at one or more locations mutually satisfactory to Mita and
Dealer. Dealer shall be designated as an Authorized Mita Dealer and shall
thereafter be authorized to sell the Products only at or from such locations.
(2) Dealer shall not move to or establish a new or different location
for the sale of the Products from those locations designated herein without the
prior written approval of Mita.
(3) If Dealer has branch offices located outside the Area of Prime
Responsibility, Dealer shall not show, sell, lease, rent, or otherwise market
any of the Mita Products from those branch locations or any other locations
outside its Area of Prime Responsibility.
SECTION 4. DEALER OPERATING MANUAL.
Mita shall provide Dealer with its current Mita Dealer Policy and
Procedures Manual (hereinafter referred to as the "Dealer Manual"). The
provisions of the Dealer Manual may be amended, changed, or revised by Mita,
from time to time, at its own discretion.
SECTION 5. PURCHASE.
Mita shall sell the Products to Dealer and Dealer shall purchase the
Products from Mita in accordance with the terms and conditions set forth herein
and in the Dealer Manual. Mita reserves the right to allocate the Products in a
manner deemed appropriate by Mita when such allocation may be necessary for any
reason whatsoever.
SECTION 6. PRICE.
Dealer shall pay to Mita the price for the Products set forth in Mita's
price schedule, issued from time to time, which is in effect at the time of the
acceptance of Dealer's order.
SECTION 7. PAYMENT.
All payments shall be made in accordance with the procedures set forth
in the Dealer Manual.
<PAGE>
SECTION 8. SECURITY INTEREST.
Dealer hereby grants Mita, as security for all amounts which it now
owes Mita and all amounts it may owe Mita in the future, a continuing security
interest in all of the Mita Products, now owned or hereafter acquired, and the
proceeds thereof, as may be granted under the Uniform Commercial Code in the
jurisdiction where Dealer is located. Dealer agrees to execute a standard
security agreement, financing statements, and any and all other documents
necessary to perfect Mita's security interest herein granted by Dealer.
SECTION 9. SHIPMENT.
All shipments shall be made pursuant to procedures set forth in the
Dealer Manual.
SECTION 10. SALES PROMOTION.
(1) Dealer shall use its best efforts to promote the sale, lease and
rental of the Products through marketing programs that include thoroughly
trained sales personnel who are familiar with the Products. Dealer shall conform
with and carry out the marketing programs and policies of Mita as announced by
Mita in writing from time to time.
(2) Dealer shall make no statement which contains representations with
respect to the Products which exceed the specifications approved in writing by
Mita. Dealer shall not make any false, misleading or deceptive representations
to anyone or engage in any unfair trade practices. Dealer shall be solely
responsible for the actions of its sales personnel and representatives. Dealer
shall indemnify and hold Mita harmless from any and all liability or damages
that may result from a breach of this Section.
SECTION 11. SERVICE OBLIGATION.
(1) The Dealer shall provide prompt, professional, willing, and
courteous service to the end-users of the Products in the Area of Prime
Responsibility. Dealer's service duties shall include after-sale inspection;
repairs; warranty and special service requirements; furnishing parts, supplies
and accessories; and providing operating and maintenance instructions to end-
users of the Product.
(2) The Dealer shall: a) establish and maintain a qualified service
staff trained for the Products; b) send its maintenance personnel to such
schools as Mita shall offer from time to time; c) maintain an adequate inventory
of Mita brand spare parts and supplies to perform its service obligation; d)
purchase Mita parts kits when Dealer makes its initial purchase of a copier
model; and e) not sell parts and supplies which do not work properly in the Mita
copiers or which fail to meet Mita's specifications. Dealer agrees to make
annual contract service available at industry--wide competitive rates for the
products sold by Dealer, Mita, or other Authorized Dealers for use within the
Area of Prime Responsibility.
(3) Dealer shall not alter or remove any serial numbers or labels from
the Products, and Dealer shall not alter any copy counter found in the Products.
SECTION 12. WARRANTIES.
(1) The Products, parts and accessories are warranted to Dealer and
end-users only to the extent of and in accordance with the conditions set forth
in any current applicable warranty statement which may be published by Mita with
respect to any particular model, unit or item as to Dealers and end-users. Mita
shall make its current applicable warranty statement available to Dealer in
connection with Dealer's purchase of the products. There are no warranties on
any Products, parts or accessories beyond those set forth in the current
applicable warranty statement published by Mita in the Dealer Manual.
(2) Dealer agrees to incorporate the Mita Limited Warranty packaged with
certain Products, in each of its agreements for sale to the end-user. As an
integral part of its obligation. Dealer will perform without charge to the
end-user or to Mita, such service as may be required to fulfill the provisions
of Mita's warranties. For performing such service. Mita will credit Dealer's
parts account for the parts returned which are covered under Mita's warranty in
accordance with the then existing warranty policies and procedures. Dealer's
labor and labor costs are expressly excluded. Further, Dealer will perform such
reasonable, mandatory or special service programs for the Products as Mita may
request from time to time.
(3) ANY CURRENT WARRANTY PUBLISHED BY MITA IS IN LIEU OF ANY AND ALL
OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, MITA
SHALL IN NO EVENT BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
IN CONNECTION WITH THE SALE OF ANY ITEM, TO DEALER, OR OTHERWISE.
(4) Mita's liability, if any, shall in all events be limited to repair
or replacement of any defective Products, parts or accessories, all to the
extent set forth in any current applicable warranty statement, and Dealer's
rights to obtain repair or replacement pursuant to any such warranty statement
shall be the Dealer's sole and exclusive remedy. Without limiting any of the
foregoing, Mita shall incur no liability to Dealer or any customer of Dealer
arising out of any contract or arrangement between Dealer and any of its
customers, unless Mita shall expressly and in writing agree to the contrary.
SECTION 13. INTERTERRITORIAL TRANSACTIONS.
In the Event that Dealer enters into an agreement in the Area of Prime
Responsibility for the sale, lease or rental of Products for use outside the
Area of Prime Responsibility, Dealer shall immediately make appropriate
arrangements to have installation and warranty service provided by another
Authorized dealer. Dealer shall pay such other dealer an interterritorial
allowance as set forth in the Dealer Manual. This allowance is designated to
give the recipient dealer reasonable compensation for services to be performed.
SECTION 14. NATIONAL AND GOVERNMENT ACCOUNTS.
If Mita requests, Dealer will service Mita's National and Government
Accounts located in the Area of Prime Responsibility, and Mita agrees to
compensate Dealer for such service, and Dealer accepts the compensation and
terms and conditions of Mita's National Account Representative Program, as
amended from time to time. Further, Mita in its sole discretion reserves the
right to add or remove Dealer's name from Mita Dealer Service Locations listed
in Mita's Federal Supply Schedule with the General Services Administration
Federal Supply Service (GSA Schedule).
<PAGE>
SECTION 15. TRADEMARK LICENSE.
(1) Mita grants to Dealer, during the term of this Agreement, a
non-exclusive license to use the trademarks "Mita" and the "MITA" logo and the
words "Authorized Mita Dealer." Dealer shall not use Mita's trademarks as part
of its corporate, trade, or other business name; or in any manner not approved
or authorized by Mita: or in any manner in which Mita concludes, in its sole
judgment, is confusing or misleading, or reflects negatively on the quality or
goodwill associated with the trademarks or Mita.
(2) Dealer acknowledges the validity of the Mita trademarks and other
trade names affixed to the Products and that such trademarks and trade names are
exclusively owned by Mita or its parent company. Dealer further acknowledges
that considerable time and money have been expended to create the goodwill
associated with the Mita trademarks and that such goodwill belongs to Mita.
Nothing contained herein shall give Dealer any interest or right in the
trademarks or other trade names affixed to the Products except as is expressly
granted herein.
(3) Dealer shall not alter or remove the Mita trademarks from any of the
Products or affix any other name or marks to the Products.
SECTION 16. SCOPE OF AUTHORITY.
(1) Dealer shall not assume obligations in the name of or on account of
Mita or accept payment for any part of an obligation due to Mita, except such as
are expressly authorized by Mita. Dealer shall indemnify and hold Mita harmless
from and against any and all liabilities or obligations not authorized by Mita.
(2) It is expressly understood that the sole relationship of the parties
hereto is that of principal and independent contractor, and that Dealer has not
been granted a franchise.
SECTION 17. COMMENCEMENT.
The term of this Agreement shall commence on the execution of this
Agreement as indicated above.
SECTION 18. TERMINATION.
(1) Dealer may terminate this Agreement at any time by giving Mita not
less than thirty (30) days prior written notice.
(2) Notwithstanding anything herein to the contrary, this Agreement may
be terminated by Mita for any of the following reasons upon giving Dealer not
less than thirty (30) days prior written notice:
(a) Failure of Dealer to fulfill or perform any one or more of its
convenants obligations, duties,or responsibilities described
in this Agreement or in the Dealer Manual.
(b) Any substantial change in the operating management of Dealer, or
any sale, transfer or relinquishment of any substantial interest
in the direct or indirect ownership of Dealer or its business.
(3) This Agreement shall automatically terminate in the event Dealer
shall suffer or assume any bankruptcy, arrangement, reorganization or
insolvency proceeding or make a general assignment for the benefit of creditors;
or Dealer shall fail in making payments when due to Mita, or Dealer shall
attempt any transfer in violation of Section 22 hereof.
(4) Termination of this Agreement shall not relieve Dealer from its
obligations which shall have accrued pursuant to the provisions of this
Agreement, or release the parties hereto from any obligations which may have
been incurred as a result of operations conducted under this Agreement.
(5) Upon termination of this Agreement, if Dealer's account with Mita
is current, Mita is current, Mita will continue to sell to Dealer parts and
supplies for the Products for three years from date of Dealer's last purchase of
the copier model the parts and supplies are related to, at Dealer prices in
effect at the time of the order.
(6) Upon termination of this Agreement, Dealer, at its expense shall
immediately discontinue the use of, and remove from its business locations
vehicles, stationery, advertisements, etc., any Mita trademarks licensed under
this Agreement.
SECTION 19. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement or
breach thereof shall be settled by arbitration in Bergen County, New Jersey, in
accordance with the Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction.
SECTION 20. COMPLIANCE WITH LAWS.
Dealer shall conduct and maintain, at all times, its activities and
business operation in strict compliance with all federal and state laws and
regulations, count and city ordinances and regulations, or ordinances applicable
thereto. Dealer shall be responsible for and shall pay promptly when due any and
all taxes, levies, and assessments upon any Products in Dealer's inventory,
whether paid for or not.
SECTION 21. NONDISCLOSURE.
During the period of this Agreement, Dealer agrees not to divulge the
names of any customers of Mita or any trade secrets which Mita has disclosed to
Dealer. Within thirty (30) days after the termination of this Agreement. Dealer
shall deliver to Mita all documents, materials and samples Mita may have
furnished to Dealer relating to its business; provided, that Dealer may retain
technical bulletins and service manuals for as long as Dealer is providing
service to persons who have purchased the products from Dealer in a manner that
is satisfactory to Mita.
SECTION 22. ASSIGNMENT.
This Agreement shall not be assignable or transferrable in any manner
whatsoever without the consent in writing of Mita.
<PAGE>
SECTION 23. FORCE MAJEURE.
Mita shall not be liable for any failure to perform any part of this
Agreement arising out of compliance with any law, ordinance, regulation,
ruling, orders or other governmental action or arising out of acts of God,
fire, flood, war, sabotage, accidents, labor disputes, shortage, or failure of
supply of materials or equipment, interruption of or delay in transportation,
or any other circumstances of like nature beyond its control.
SECTION 24. NOTICES.
All notices required or permitted to be given or made under this
Agreement may be effected by personal delivery in writing or by registered or
certified mail, postage prepaid, return receipt requested and shall be deemed
communicated three (3) days from the mailing thereof. Mailed notices shall be
addressed to the parties as their addresses appear above, but each party may
change his address by written notice in accordance with this paragraph.
SECTION 25. NONWAIVER OF RIGHTS.
Failure of either party hereto to enforce any of the provisions of this
Agreement or any rights with respect thereto or failure to exercise any
election provided for herein shall in no way be considered to be a waiver of
such provisions rights or elections or in any way affect the validity of this
Agreement.
SECTION 26. ENTIRE AGREEMENT.
This Agreement supersedes any and all other agreements, either oral or
written, between the parties hereto with respect to the Products and contains
all of the convenants and agreements between the parties with respect to said
matter. This Agreement may not be altered, amended, or modified, except by
written instrument signed by the parties hereto.
SECTION 27. MISCELLANEOUS.
(1) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(2) If any term, provision, covenants, or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remainder of the provisions shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated.
(3) This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their respective permitted successors in interest and permitted
assigns.
(4) In the event any action is necessary to enforce any of the terms
and conditions of this Agreement. Dealer shall pay to Mita all costs and fees
incurred, including reasonable attorney's fees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
MITA COPYSTAR AMERICA, INC.
By: /s/ Robert Magrino
------------------------------------
Robert Magrino
Title: Executive V.P. of Sales
---------------------------------
Imtek Corporation
---------------------------------------
"Dealer"
By: /s/ Michael L. Lowe
------------------------------------
Title: President, COO
---------------------------------
<PAGE>
SCHEDULE "A"
The Products to be sold by Dealer are listed below.
DC-5585 DC-6090
DC-5685 DC-6590
DC-5690 DC-7085
DC-5590 DC-7090
(related toners and developers)
<PAGE>
SCHEDULE "B"
The Area of Prime Responsibility for the Dealer shall be the area designated
below:
COUNTIES IN THE STATE OF DELAWARE:
Kent
New Castle
Sussex
COUNTIES IN THE STATE OF MARYLAND:
Caroline Somerset
Dorchester Talbot
Kent Wicomico
Queen Anne's Worcester
COUNTIES IN THE STATE OF NORTH CAROLINA:
Camden
Currituck
Dare
Pasquotank
COUNTIES IN THE STATE OF VIRGINIA:
Accomack New Kent
Charles City Norfolk
Essex Northampton
Gloucester Northumberland
Isle of Wight Rappahannock
James City Richmond
King and Queen Surry
Lancaster Sussex
Mathews York
Middlesex
BRANCH OFFICE LOCATION:
5604 B Virginia Beach Blvd. #103
Virginia Beach, VA 23462
<PAGE>
SCHEDULE "C"
The minimum sales goals for the Dealer in the Area of
Prime Responsibility are listed below.
DEALERSHIP: IMTEK CORPORATION, d/b/a IMTEK OFFICE SOLUTIONS
6 MONTH QUOTAS:
--------------
HVC Copiers & Accessories: $192,486
HVC Parts, Suppliers &
Other Related Products: $180,841
<PAGE>
EXHIBIT 10.5
[MITA LETTERHEAD APPEARS HERE]
MITA CUSTOMER ASSURANCE (MITA) DEALER AGREEMENT
This agreement is made and entered into by and between Mita Copystar
America, Inc.("Mita") a corporation with its principal place of business at 225
Sand Road, Fairfield, New Jersey 07004, and IMTEK CORPORATION, d/b/a IMTEK
--------------------------------
OFFICE SOLUTIONS ("Dealer"), a Corporation, with its principal place of business
- ----------------- ------------
at 2800 Build America Drive, Hampton, VA 23666.
--------------------------------------------
This Agreement will only be binding and effective after it has been accepted and
signed by Mita.
1. APPOINTMENT.
Dealer has signed the Mita Dealer HVC Sales Agreement ("HVC
Agreement"), which is currently in effect. Mita has developed the MCA Program to
work in conjunction with the HVC Agreement. To accomplish this, Mita has
evaluated and placed its HVC Dealers into Categories A,B and C. (See the
attached information from Mita's Technical Department, which may be amended from
time to time, regarding Dealer's Qualification Level.) If Dealer does not know
the Category in which it has been placed for the MCA Program, it should confirm
its status with Mita's Technical Department.
If Dealer is a Category A or B Dealer, it will be appointed as a
non-exclusive MCA Dealer to offer HVC customers in Dealer's Area of Prime
Responsibility, the guarantees and service support under the MCA Program. Dealer
agrees to observe and perform faithfully all its obligations under the MCA
Program.
<PAGE>
2. CHANGE OF STATUS.
Procedures and costs for replacing equipment under this Program relate
directly to the Category in which the Dealer has been placed. THE FOLLOWING
IMPORTANT POINTS SHOULD BE NOTED BY ALL DEALERS PARTICIPATING IN THE PROGRAM.
a) Category A Dealers, who have complied with the procedures of this
Program, will have equipment which cannot be repaired replaced at Mita's
expense. Category A Dealers, that use Category B Dealers to assist them with
multiple installations outside the Category A Dealer's HVC Area, shall be
responsible to carry out all equipment replacements for machines installed and
maintained by the Category B Dealer, at the Category A Dealer's expense.
b) Category B Dealers may participate in the Program, however the
equipment replacement must be carried out at the Dealer's expense. Mita will not
pay for, or share in any costs associated with equipment replacement for
Category B Dealers.
c) Category C Dealers cannot participate in this Program, and should not
sign this Agreement.
d) If Dealer's status changes from one Category to another, Mita's
reimbursement or payment of costs associated with the replacement of equipment
will be based upon Dealer's status at the time the equipment replacement is
made.
e) If this Agreement or Dealer's HVC Agreement is terminated, the
equipment which was placed and registered under the Program prior to such
termination, shall continue to be covered by Mita under the Program, if Dealer
continues to comply with the terms and conditions of the Program. No new
equipment may be registered under the Program, after such termination.
f) If in Mita's sole discretion, Dealer fails to properly service
equipment registered under the Program, or fails to comply with the Program,
Mita shall have the right to contact the customer directly, or through another
MCA Dealer, to have the registered equipment evaluated, serviced or replaced
with no liability or compensation to Dealer.
3. SERVICE OBLIGATIONS.
Dealer shall carry out all of its service obligations under Paragraph 11
of the HVC Agreement. In addition, it is agreed that:
a) Dealer will offer all HVC copier customers the guarantees and service
support under the MCA program.
b) DEALER WILL OFFER ALL HVC COPIER CUSTOMERS FULL SERVICE MAINTENANCE
AGREEMENTS, FOR AT LEAST THREE YEARS FROM THE DATE OF THE HVC COPIER PURCHASE,
AT PRICES TO BE DETERMINED BY THE DEALER IN ITS SOLE DISCRETION.
SUCH FULL SERVICE MAINTENANCE AGREEMENTS SHALL INCLUDE, IN WRITING, THE
FOLLOWING REPRESENTATIONS:
i) ALL REPAIR WORK FOR HVC COPIERS WILL BE PERFORMED ONLY BY
DEALER'S SERVICE TECHNICIANS WHO HAVE BEEN CERTIFIED BY MITA;
ii)DEALER WILL PROVIDE THE CUSTOMER WITH A FOUR HOUR SERVICE
RESPONSE TIME ON AVERAGE;
iii) DEALER WILL PROVIDE THE HVC CUSTOMER WITH A LOANER COPIER
SHOULD THE CUSTOMER'S COPIER REQUIRE IN-SHOP REPAIR, OR IF THE DEALER
CANNOT REPAIR THE HVC COPIER WITHIN SIXTEEN BUSINESS HOURS, AT NO
ADDITIONAL CHARGE TO THE CUSTOMER;
iv) DEALER WILL USE MITA BRAND PARTS, PM KITS AND SUPPLIES FOR
THE SERVICE AND UPKEEP OF THE HVC COPIERS COVERED BY THE MCA PROGRAM;
v) DEALER'S NORMAL BUSINESS HOURS FOR SERVICE WILL BE FROM 8:30
A.M. TO 5:00 P.M.;
vi) DEALER WILL PROVIDE ALL PREVENTIVE MAINTENANCE NECESSARY FOR
THE HVC COPIER, AND RESPOND TO ALL EMERGENCY CALLS DURING THE TERM OF
THE CUSTOMER'S FULL SERVICE MAINTENANCE AGREEMENT.
c) Dealer will follow and comply with Mita's MCA policy and procedure
for the registration, repair and replacement of copiers and accessories.
<PAGE>
4. REPORTS.
Dealer shall keep good service records for the HVC copiers which shall
include all service work performed, response time, parts installed, serial
number of copier, meter readings etc. If Dealer is requested in writing by
Mita, then Dealer shall provide Mita with the number of HVC copiers covered by
the MCA Program, the serial numbers of those copiers and the initial date of
installation, copies of the service records, and such other information as Mita
may reasonable request, from time to time, regarding the HVC copiers covered
under the MCA Program.
5. SERVICE MARK.
Mita grants to Dealer the non-exclusive right to use the service marks
"Mita Customer Assurance Program" and "MCA Program" during the term of this
Agreement. Dealer acknowledges Mita's ownership, right, title and interest in
the service marks "Mita Customer Assurance Program" and "MCA Program." Dealer
will use the service marks only in accordance with the provisions of this
Agreement and shall not use said marks in any manner not approved or authorized
by Mita, or in any manner in which Mita concludes, in its sole judgment, is
confusing or misleading. Dealer agrees that it will cease using these service
marks upon the termination of this Agreement.
6. MISCELLANEOUS.
Dealer agrees that its participation in the MCA Program is at the
Dealer's sole risk, cost and expense, and that Mita will not compensate or
reimburse the Dealer for any of its costs incurred, except for the issuance of
credit for, or the replacement of, HVC copiers and accessories as provided under
Mita's MCA policies and procedures for repair and replacement of HVC copiers and
accessories.
Mita may at any time with written notice to the Dealer, revise, amend or
terminate the MCA Program.
This Agreement shall terminate automatically and without notice upon the
termination of Dealer's HVC Agreement. This Agreement shall be governed and
construed in accordance with the laws and state of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
MITA COPYSTAR AMERICA, INC.
IMTEK CORPORATION By /s/ Robert Magrino
- -------------------------- ------------------------------------
(legal name of Dealer) (signature)
By /s/ Michael L. Lowe Robert Magrino, Executive V.P. of Sales
----------------------- ---------------------------------------
(signature) (name and title)
Michael L. Lowe, Pres, COO Accepted November 26, 1997
- -------------------------- ---------------------------------------
(name and title) (date of acceptance)
<PAGE>
[LOGO OF MITA APPEARS HERE]
<PAGE>
EXHIBIT 10.6
[MITA LETTERHEAD APPEARS HERE]
MITA DEALER AGREEMENT FOR INTEGRATED DOCUMENT IMAGING EQUIPMENT
This agreement is made and entered into by and between Mita Copystar
America, Inc.("Mita") a corporation with its principal place of business at 225
Sand Road, Fairfield, New Jersey 07004, and IMTEK CORPORATION, d/b/a IMTEK
-------------------------------------
OFFICE SOLUTIONS ("Dealer"), a Corporation, with its principal place of business
- ----------------- ------------
at 2800 Build America Drive, Hampton, VA 23666. This Agreement will only be
---------------------------------------------
binding and effective after it has been accepted and signed by Mita.
1. APPOINTMENT. Dealer will be appointed as a non-exclusive dealer to market
and service only the integrated document imaging equipment ("IDI Equipment")
and related products reflected on Exhibit A, for which Dealer must
meet Mita's training requirements. Both the IDI Equipment and related
products are referred to as "Products" in this Agreement. Mita may, in its sole
discretion, amend, modify or discontinue any or all of the Products on Exhibit
A, upon thirty days written notice to the Dealer. Dealer agrees that it will
only market the Products in its area or areas of prime responsibility ("Area
of Prime Responsibility"), from the above location, and the branch location(s)
reflected on Exhibit A, unless otherwise authorized by Mita in writing.
Dealer shall not sell, lease, rent, advertise or otherwise market the
Products outside the Area of Prime Responsibility. If Dealer advertises the
products along with other merchandise in media of broader circulation, or by
mailings that may reasonably be expected to reach potential customers outside
the Area of Prime Responsibility, that advertising and those mailings must
prominently state the counties comprising the Area of Prime Responsibility, and
that the Products are sold, rented, or leased only in those counties. Dealer
shall sell the products only to retail end-users, and shall not sell the
Products to third parties for resale.
2. TERM. This Agreement will commence on the date of acceptance by Mita, and
will continue on a year-to-year basis unless terminated as provided herein.
3. PRICE AND TERMS OF PAYMENTS. The Purchase prices for the Products and terms
of payment will be set forth, from time to time, on the Mita Dealer Price List
for Products. Mita will provide Dealer with thirty days written notice
of any changes in the prices of the IDI Equipment. Mita reserves the right
to allocate the Products in a manner deemed appropriate by Mita when such
allocation may be necessary for any reason whatsoever.
4. MINIMUM SALES GOALS. Dealer will be required to achieve certain minimum sales
goals in its Area of Prime Responsibility as indicated on the attached Exhibit A
("Minimum Sales Goals"). The Minimum Sales Goals shall be established by Mita
based upon its evaluation of the sales potential of the Dealer, taking into
consideration the size and population surrounding Dealer's location(s), Dealer's
previous sales record, estimated total prior sales of office equipment and
Products in Dealer's Area of Prime Responsibility, and other economic and market
factors considered pertinent by Mita. Mita shall review the sales performance of
Dealer periodically as the need arises and Dealer shall provide to Mita such
records as Mita believes are necessary to verify the Products sold and places of
sale. Mita will consult with Dealer regarding all goals established by Mita
under this Agreement, but Mita shall have final authority in setting the Minimum
Sales Goals. Mita will notify Dealer in writing of any changes in Dealer's
Minimum Sales Goals.
If Dealer has multiple locations, or a single location which covers a
large area, Mita may assign more than one Area of Prime Responsibility and
Minimum Sales Goals for each Area. If Dealer fails to meet its Minimum Sales
Goals for any Area of Prime Responsibility, Mita may cancel the Dealer's
authorization for IDI Equipment for the Area where Dealer has failed to obtain
its Minumum Sales Goals.
5. SALES PROMOTION. Dealer shall sell and market the Products only to retail
end-users, and shall not sell or market the Products to third parties for resale
or outside the United States. Dealer shall use its best efforts to promote
the sale, lease and rental of the Products in Areas of Prime Responsibility.
Dealer shall use marketing programs that include thoroughly trained and
certified sales personnel who are familiar with the Products. In addition,
Dealer shall conform with and carry out the marketing programs and policies of
Mita as announced by Mita in writing from time to time.
<PAGE>
6. SERVICE OBLIGATION. The Dealer may only market and service the IDI Equipment
in its Area of Prime Responsibility where it can provide prompt, professional,
willing, and courteous maintenance, repair, and warranty service.
The Dealer shall: a) establish and maintain a qualified service staff
trained for the Products; b) send its maintenance personnel to such schools as
Mita shall offer from time to time; c) maintain an adequate inventory of Mita
brand spare parts and supplies to perform its service obligations; d) purchase
Mita parts kits when Dealer makes its initial purchase of an IDI Equipment
model; e) not sell parts and supplies which do not work properly in the IDI
Equipment or which fail to meet Mita's specifications; f) comply with and carry
out the service requirements associated with preventative maintenance and
warranty policies and procedures; g) carry out any special service requirements
or programs which Mita deems necessary; and h) maintain accurate records on the
service performed on the IDI Equipment; and i) not alter or remove any serial
numbers or labels from the Products, nor alter any copy counter found in the
Products.
From time to time, Mita's representatives may visit Dealer's location
and evaluate the service provided by Dealer. Mita's service representatives may
inspect Dealer's service records and facilities to assure compliance with the
above standards, and to obtain service data related to the Products. Dealer
agrees to take any corrective action requested by Mita to improve Dealer's
service.
7. WARRANTIES AND WARRANTY SERVICE. Dealer agrees to incorporate the Mita
Limited Warranties packaged with the IDI Equipment, in each of its agreements
for sale to the end-user. As an integral part of Dealer's service obligation,
Dealer will perform, pursuant to the Mita IDI Equipment Warranty Policy and
Procedure (the "Warranty Policy") in effect at the time, without charge to the
end-user, such service as may be required to fulfill the provisions of Mita's
warranties. For performing such service, Mita will credit Dealer's parts account
for the parts returned, after the Dealer has properly completed and submitted to
Mita the documentation, all as set forth in the Warranty Policy. Dealer's labor
and labor costs are expressly excluded. Dealer shall only use Mita brand parts
when performing service under the Warranty Policy. After the Warranty period,
Dealer agrees to make "per call" and annual contract service available at
industry-wide competitive rates to Dealer's customers, and any customer in
Dealer's Area of Prime Responsibility, no matter where the IDI Equipment was
purchased.
The Products are warranted to Dealer and end-users only to the extent,
and in accordance with the conditions, set forth in the Warranty Policy. There
are no other warranties on the Products. ANY CURRENT WARRANTY PUBLISHED BY MITA
IS IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. MITA SHALL IN NO EVENT BE LIABLE FOR ANY SPECIAL INCIDENTAL
OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THE SALE OF ANY ITEM TO DEALER, OR
OTHERWISE.
Mita's liability, if any, shall in all events be limited to repair or
replacement of any defective Products, all to the extent set forth in the
Warranty Policy, and Dealer's rights to obtain repair or replacement pursuant to
any such warranty statement shall be the Dealer's sole and exclusive remedy.
Without limiting any of the foregoing, Mita shall incur no liability to Dealer
or any customer of Dealer arising out of any contract or arrangement between
Dealer and any of its customers, unless Mita shall expressly and in writing
agree to the contrary. If Dealer's warranty to the customer is greater than the
Mita Limited Warranty, Dealer shall advise customer that Mita is not responsible
for Dealer's extended warranty.
8. NATIONAL AND GOVERNMENT ACCOUNTS. If Mita requests, Dealer will service
IDI Equipment for Mita's National and Government Accounts located in Dealer's
Area of Prime Responsibility, and Mita agrees to compensate Dealer for such
service, and Dealer accepts the compensation and terms and conditions of Mita's
National Account Representative Program as amended from time to time. Further,
Mita in its sole discretion reserves the right to add or remove Dealer's name
from Mita Dealer Service Locations listed in Mita's Federal Supply Schedule with
the General Services Administration Federal Supply Service (GSA Schedule).
9. INTERTERRITORIAL TRANSACTIONS. In the event that Dealer enters into an
Agreement in Dealer's Area of Prime Responsibility for the sale, lease or rental
of Products for use outside Dealer's Area of Prime Responsibility, Dealer shall
immediately make appropriate arrangements to have installation and warranty
service provided by another Authorized IDI Equipment Dealer. Dealer shall pay
such other dealer an interterritorial allowance as determined by Mita's National
Account Department from time to time. This allowance is to provide the recipient
dealer reasonable compensation for services to be performed.
10. RELATIONSHIP OF THE PARTIES. It is expressly understood the Dealer is an
independent contractor and that Dealer has not been granted a franchise. The
Dealer shall immediately notify Mita of any substantial change in the operating
management of Dealer or any sale, transfer or relinquishment of any substantial
interest in the direct or indirect ownership of Dealer or its business. Dealer
will not under any circumstances sign on Mita's behalf any agreements, forms or
other documents. This Agreement will not create a partnership, employment, or
agency relationship between Mita and Dealer, and no act or obligation of either
party shall in any way bind the other except as expressly set forth herein.
Salespeople and other employees utilized by Dealer in connection with its
obligations hereunder will be under the management and control of Dealer and
under no circumstances will be considered employees or agents of Mita. Dealer
acknowledges that Mita distributes products, which are the same or similar as
the Products to be purchased under this Agreement, which Mita sells through its
own and affiliated companies and through other companies, dealers, and
distributors and that nothing contained in this Agreement shall be construed to
limit Mita's right to market and distribute such products in such ways.
11. SECURITY INTEREST. Dealer hereby grants Mita, as security for all amounts
now or in the future owned Mita, a continuing security interest in all Mita
Products, now owned or hereafter acquired, and the proceeds thereof, as may be
granted under the Uniform Commercial Code in the jurisdiction where Dealer is
located. Dealer agrees to execute a standard security agreement, financing
statements, and any other documents necessary to perfect Mita's security
interest.
12. TRADEMARKS. Dealer acknowledges the validity of the Mita trademarks and
other trade names affixed to the Products, and that such trademarks and trade
names are exclusively owned by Mita or its parent company. Dealer further
<PAGE>
acknowledges that considerable time and money have been expended to create the
goodwill associated with the Mita trademarks and that such goodwill belongs to
Mita. Nothing contained herein shall give Dealer any interest or right in the
trademarks or other trade names affixed to the Products except as is expressly
granted herein.
Dealer shall not use the trademarks "MITA" and the "MITA" logo except as
specifically authorized by Mita. Dealer shall not use Mita's trademarks as part
of its corporate, trade, or other business name; or in any manner not approved
or authorized by Mita; or in any manner in which Mita concludes, in its sole
judgement, is confusing or misleading, or reflects negatively on the quality or
goodwill associated with the trademarks or Mita. Dealer shall not alter or
remove the Mita trademarks from any of the Products, or affix any other name or
marks to the Products.
13. ETHICS. Dealer will maintain the highest ethical business standards and
avoid and refrain from being involved in any activities which may in any manner
disparage the Mita name, any of Mita's marks, or the Mita Products. Further, in
the conduct of its business, Dealer will comply with all federal, state and
local laws, rules and regulations.
Dealer shall make no statement which contains representations with
respect to the Products which exceeds the specifications approved in writing by
Mita. Dealer shall not make any false, misleading or deceptive representations
to anyone or engage in any unfair trade practices. Dealer shall be solely
responsible for the actions of its personnel and its sales and service
representatives. Dealer shall indemnify and hold Mita harmless from any and all
liability or damages that may result from a breach of this section.
14. TERMINATION. Dealer may terminate this Agreement at any time by giving Mita
not less than thirty (30) days prior written notice. This Agreement may be
terminated by Mita for any of the following reasons upon giving Dealer not less
than thity (30) days prior written notice: (a) Failure of Dealer to obtain its
Minimum Sales Goals, or failure to fulfill or perform any one or more of its
covenants, obligations, duties, or responsibilities described in this agreement;
(b) Any substantial change in the operating management of Dealer, or any sale,
transfer or relinquishment of any substantial interest in the direct or indirect
ownership of Dealer or its business.
This Agreement shall automatically terminate in the event Dealer shall
suffer or assume any bankruptcy, arrangement, reorganization or insolvency
proceeding or make a general assignment for the benefit of creditors; or Dealer
shall fail in making payments when due to Mita; or Dealer shall attempt any
transfer in violation of Section 18 herein. Termination of this Agreement shall
not relieve Dealer from its obligations which shall have accrued pursuant to
the provisions of this Agreement, or release the parties hereto from any
obligations which may have been incurred as a result of operations conducted
under this Agreement.
Upon termination of this Agreement, if Dealer's account with Mita is
current, Mita will continue to sell to Dealer parts and supplies for the IDI
Equipment which is being serviced by Dealer (and not for re-sale), for two years
from date of Dealer's last purchase of the IDI Equipment the parts and supplies
are related to, at Dealer prices in effect at the time of the order on a C.O.D.
basis. Upon termination of this Agreement, Dealer at its expense, shall
immediately discontinue the use of, and remove from its business locations,
vehicles, stationery, advertisements, etc., any Mita trademarks licensed under
this Agreement.
15. DELAYS. Mita will not be liable under this Agreement for damages or delays
caused by strikes, vendors, lock-outs, accidents, delays in manufacturing,
delays in carriers, acts of God, governmental actions, or any other causes
beyond its control.
16. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement or breach thereof shall be settled by arbitration in Essex County, New
Jersey, in accordance with the Rules of the American Arbitration Association,
and judgement upon the award rendered by the arbitrators may be entered in any
court having jurisdiction. The arbitration proceeding shall be conducted by a
panel of three persons selected under the Rules of the American Arbitration
Association. The costs of arbitration shall be borne equally by Mita and Dealer.
Discovery in the arbitration proceeding shall be in accordance with the U.S.
Federal Rules of Civil Procedure.
17. HEADINGS. The headings in this Agreement are for the convenience of the
parties and shall have no interpretive effect. This Agreement sets forth the
entire understanding of the parties. If it is necessary to make or defend an
action or claim arising out of this Agreement, or to collect money past due,
Mita shall be entitled to all costs and fees incurred, including collection fees
and reasonable attorney's fees, and interest (at the lower of 15% or the highest
amount allowed by law) on the unpaid balance from the date due.
18. ASSIGNMENT. Neither this Agreement nor any interest or right hereunder may
be assigned by Dealer without the prior written consent of Mita. This Agreement
shall be governed and construed in accordance with the laws of the State of New
York.
19. NOTICES. Notices required or permitted to be given hereunder shall be
in writing and sent by mail to the principal office of the other party indicated
herein or at such other address as the parties may designate in writing.
<PAGE>
COUNTIES IN THE STATE OF MARYLAND:
Caroline Somerset
Dorchester Talbot
Kent Wicomico
Queen Anne's Worcester
COUNTIES IN THE STATE OF NORTH CAROLINA:
Camden
Currituck
Dare
Pasquotank
COUNTIES IN THE STATE OF VIRGINIA:
Accomack New Kent
Charles City Norfolk
Essex Northampton
Gloucester Northumberland
Isle of Wight Rappahannock
James City Richmond
King and Queen Surry
Lancaster Sussex
Mathews York
Middlesex
BRANCH OFFICE LOCATION:
5604 B Virginia Beach Blvd. #103
Virginia Beach, VA 23462
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
MITA COPYSTAR AMERICA, INC.
IMTEK CORPORATION By: /s/ Allen Mahmarian
- ----------------------------------- -----------------------------------
(Legal Name of Dealer) (Signature)
By: /s/ Michael L. Lowe Allen Mahmarian, V.P. IDI Division
-------------------------------- -----------------------------------
(Signature) (Name and Title)
Michael L. Lowe, Pres, COO Accepted November 26, 1997
-------------------------------- -----------------------------------
(Name and Title) (Date of Acceptance)
EXHIBIT A
Multi-Functional Equipment Models: Color Imaging Models:
AF-1000
AF-1200
Area(s) of Prime Responsibility: Area(s) of Prime Responsibility:
SEE ATTACHED:
Minimum Sales Goals: Minimum Sales Goals:
MONTHLY FIGURE:
- --------------
$3,750
Branch Locations (if any): Branch Locations (if any):
<PAGE>
Exhibit 11
FORM 10-K
Imtek Office Solutions, Inc.
(Formerly Spectrum Equities, Inc.)
Exhibit 11
SCHEDULE OF COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Years Ended September 30
-------------------------------------
1997 1996 1995
---------- ------------ -----------
<S> <C> <C> <C>
Primary
-------
Net income $ 58,367 $ - $ -
Less - preferred stock dividends - - -
Net income for primary income per common share $ 58,367 $ - $ -
========== ============ ===========
Weighted average number of common shares outstanding
during the year 2,447,916 181,157,501 19,275,000
Add - common equivalent shares - - -
---------- ------------ -----------
Weighted average number of shares used in
calculation of primary inv\come per common share 2,447,916 181,157,501 19,275,000
========== ============ ===========
Primary income per common share $ .02 $ - $ -
========== ============ ===========
FULLY DILUTED
-------------
Net income for primary income per common share $ 58,367 $ - $ -
Net income for fully diluted net income per share $ 58,367 $ - $ -
========== ============ ===========
Weighted average number of shares used in
calculating primary income per common share 2,447,916 181,157,501 19,275,000
Add (deduct) incremental shares - - -
Weighted average number of shares used in calculation
of fully diluted income per share 2,447,916 181,157,501 19,275,000
========== ============ ===========
Fully diluted income per common share $ .02 $ - $ -
========== ============ ===========
</TABLE>
<PAGE>
Exhibit 21
FORM 10-K
Imtek Office Solutions, Inc.
(Formerly Spectrum Equities, Inc.)
Exhibit 21
LIST OF SUBSIDIARIES OF THE COMPANY
Imtek Corporation
<PAGE>
Exhibit 23.1
Independent Auditors' Consent
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Imtek Office Solutions, Inc. of our report dated December 19, 1997.
Bridgewater, New Jersey
January 9, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 29,118
<SECURITIES> 0
<RECEIVABLES> 402,137
<ALLOWANCES> 4,000
<INVENTORY> 485,661
<CURRENT-ASSETS> 973,382
<PP&E> 37,523
<DEPRECIATION> 1,783
<TOTAL-ASSETS> 1,007,339
<CURRENT-LIABILITIES> 233,267
<BONDS> 0
0
0
<COMMON> 5
<OTHER-SE> 792,415
<TOTAL-LIABILITY-AND-EQUITY> 1,007,339
<SALES> 2,094,972
<TOTAL-REVENUES> 2,094,972
<CGS> 1,212,264
<TOTAL-COSTS> 1,868,703
<OTHER-EXPENSES> 153,836
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 78,967
<INCOME-TAX> 0
<INCOME-CONTINUING> 58,367
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,367
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
