1
EXHIBIT 10.8(a)
AMENDED AND RESTATED MARKETING, SELLING,
ADMINISTRATIVE AND MANAGEMENT SERVICES AGREEMENT
THIS AMENDED AND RESTATED MARKETING, SELLING, ADMINISTRATIVE AND MANAGEMENT
SERVICES AGREEMENT ("Agreement") is made as of May 6, 1994, between Larizza
Industries, Inc., an Ohio corporation whose address is 201 West Big Beaver
Road, Suite 1040, Columbia Center, Troy, Michigan, U.S.A. 48084 ("Larizza"),
and Manchester Plastics, Ltd., an Ontario corporation whose address is 900
Queen Street, Gananoque, Ontario, Canada K7G 2W7 ("Manchester").
R E C I T A L S
A. Manchester is a wholly-owned subsidiary of Larizza.
B. Manchester has obtained and will continue to obtain from time to time
certain marketing, selling and sales representative services from Larizza.
C. Larizza and Manchester have previously entered into the Marketing,
Selling, Administrative and Management Services Agreement, dated as of December
20, 1991 (the "Prior Agreement"). Simultaneously with the execution of this
Agreement, Manchester is selling certain assets to Larizza pursuant to the
Asset Sale and Purchase Agreement between the parties.
D. Larizza and Manchester desire to amend and restate the Prior Agreement and
to set forth in writing their understanding and agreement with respect to
Larizza's provision of, and Manchester's payment for, marketing, selling, sales
representative, administrative and management services.
THEREFORE, Larizza and Manchester agree as follows:
1. Marketing, Selling, Sales Representative, Administrative and Management
Services. Larizza has rendered and shall, during the term of this Agreement,
continue to render, to Manchester marketing, selling, sales representative,
administrative and management services. Such services shall include, without
limitation, (i) those described in the attached Exhibit A, which is
incorporated into and made a part of this Agreement, (ii) soliciting and
securing purchase orders from existing and potential new customers for the
manufacturing of products of Manchester, (iii) preserving the relationships
with manufacturers representatives seeking to secure such purchase orders for
Manchester, (iv) servicing Manchester customers with respect to current and
future purchase orders, (v) preparing and distributing marketing and
advertising literature, and (v) developing and coordinating Manchester's
marketing strategy and program. The services to be rendered by Larizza under
this Section 1 shall be modified from time to time by agreement of the parties
to reflect changes in the business and activities of the parties.
2
2. Compensation and Reimbursement. During the term of this Agreement,
Manchester shall (i) pay to Larizza, as full compensation for its services
rendered pursuant to Section 1, (A) 3% of its "Gross Sales" (as defined below)
during the term, minus (B) amounts payable by Manchester to third party
manufacturers' representatives engaged by Manchester, with respect to "Gross
Sales" during the term, and (ii) reimburse Larizza for all expenses incurred by
Larizza in rendering the services described in Exhibit A plus an additional
amount equal to 15% of such expenses. Larizza shall be responsible for
compensating its own marketing and sales representatives and employees.
Larizza shall submit a bill to Manchester for the expenses described above, and
Manchester shall pay all of the compensation and reimbursements described above
to Larizza on a monthly or other periodic basis. For purposes of this
Agreement, "Gross Sales" shall mean the total price charged by Manchester
during the term of this Agreement to its customers, as such price and the date
of the charge are shown by its invoices to customers, less any returns and
allowances granted by Manchester with respect to such invoices. All payments
under this agreement and the computations of such payments shall be made in
United States dollars.
3. Term. The "term" of this Agreement shall begin effective as of January 1,
1994 and shall terminate upon not less than 30 days prior written notice from
the party desiring to terminate this Agreement to the other party.
4. Indemnities. If the payments required under Section 2 shall, upon audit
or other examination of the tax returns of Larizza and/or Manchester, be
determined to be more or less than the fair market value of the services
rendered under this Agreement, and either:
(a) such determination shall be acceded to by both of the parties to this
Agreement, or
(b) such determination shall be made final by the appropriate taxing
authority or a court of competent jurisdiction of a taxing state (and no
appeal shall be taken therefrom or the applicable period for filing notice of
appeal shall have expired), and appropriate relief from double taxation on
account of such determination shall have been obtained from the other taxing
state's competent authority, within the meaning of the Canada - United States
Tax Convention, with any Protocols, as amended (or the applicable period for
obtaining such relief shall have expired),
then, in the case of excessive payments, Larizza shall repay the excess to
Manchester (after reduction for any applicable withholding taxes) and, in the
case of deficient payments, Manchester shall pay the deficiency to Larizza
(after reduction for any applicable withholding taxes).
5. Interest Rate. Each of Larizza and Manchester agrees to pay to the other
interest on all sums not paid by Larizza or Manchester to the other when due
and owing under the provisions of this Agreement from the date of
2
3
such delinquency until paid at the rate applicable to intercompany indebtedness
owing by Larizza or Manchester to the other; provided, however, that such
interest rate shall constitute an "arms-length rate of interest" within the
meaning of Section 1.482-2(a)(2)(iii) of the United States Treasury
Regulations, as amended.
6. Notices. All notices given pursuant to this Agreement shall be in writing
and shall be delivered by first class mail to the appropriate party, at the
address of such party set forth above, or at such other address as may be
designated by such party in writing from time to time.
7. Nonassignability. This Agreement and the obligations and rights of the
parties under this Agreement shall not be assignable by either party without
the prior written consent of the other party.
8. Governing Law. This Agreement has been entered into in Michigan, and
shall be governed and construed in accordance with the laws of the State of
Michigan.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of the date set forth in the introductory paragraph of this Agreement.
LARIZZA INDUSTRIES, INC.
By: /s/ TERENCE C. SEIKEL
Its: Chief Financial Officer
MANCHESTER PLASTICS, LTD.
By: /s/ TERENCE C. SEIKEL
Its: Chief Financial Officer
3
4
EXHIBIT A
TO MARKETING, SELLING, ADMINISTRATIVE
AND MANAGEMENT SERVICES AGREEMENT BY AND
BETWEEN LARIZZA INDUSTRIES, INC. ("Larizza")
AND MANCHESTER PLASTICS, LTD. ("Manchester")
The marketing, selling, administrative and management services to be
performed by Larizza under the Agreement shall include the following, as well
as such other marketing, selling, administrative and management services as
shall be established by the parties from time to time:
1. Marketing and Selling Services.
a. Preparation and distribution of marketing and advertising literature.
b. Representation of Manchester with respect to soliciting new orders
from existing and potential new customers and servicing such customers with
respect to current and future purchase orders.
2. Administrative and Financial Services.
a. Developing, reviewing and implementing financial, capital and operating
plans, forecasts and budgets.
b. Providing overall guidance and assistance with respect to financial and
accounting systems, including ensuring uniformity of financial reporting.
c. Assistance in preparation of financial statements, tax returns and
representation regarding tax controversies.
d. Planning and coordination of audits by Manchester's independent
auditors and preparation of schedules and workpapers related to such audits.
e. Overall coordination of cash, including cash management, assistance in
the preparation of cash flow projections and investing excess cash.
f. Negotiating and maintenance of credit facilities, including assistance
in management of credit and collection and the monitoring of representations,
warranties and covenants in order to ensure compliance with credit
arrangements.
g. Coordination of risk management, including assistance in obtaining and
establishing insurance policies.
5
h. Providing credit guarantees, enhanced credit leverage and other
services in obtaining required credit.
i. Coordinating Manchester's involvement in litigation, including
contracting for and coordinating legal services and maintaining relationships
with outside counsel.
3. Management Services.
a. Assistance in selecting personnel, making recommendations as to
compensation and incentive plans and negotiating union contracts and
responding to all grievances under such union contracts.
b. Providing overall executive management services including, without
limitation, long-term corporate guidance, planning and decision-making.
c. Assistance in developing and coordinating new manufacturing procedures
and technologies.
d. Assistance in establishing and ensuring compliance with quality systems
in accordance with customer requirements and coordinating quality audits
performed by customers.
e. Overall management of manufacturing facilities.
2