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the parties agreed that Matrix would own 70 percent of petitioner
and WRD, Inc., would own 30 percent of petitioner. Paragraph 11
of the JV agreement states "RESTORE shall pay MMC a royalty fee
equivalent to 10 (ten) percent of RESTORE's net sales, in return
for the exclusive rights to be granted by MMC to RESTORE as set
forth in the Marketing Agreement. Net sales shall be defined as
total gross sales less returns." The JV agreement provided that
Mr. Sultan shall be the chairman of the board and Mr. Werner
shall be the president and the chief executive officer of
petitioner. The agreement was signed by Mr. Fares as the
president of Matrix and by Mr. Werner as president of WRD, Inc.
On April 5, 1983, Matrix entered into an agreement with
petitioner known as the "Marketing Agreement". Among other
things, the Marketing agreement provided that petitioner, as
Matrix's exclusive representative in North America and the
Caribbean, would market and sell Matrix's product consisting
primarily of the alloy in its finished form. Paragraph 6 of the
Marketing agreement provided:
In return for the exclusivity granted by MMC [Matrix]
to RESTORE under the provisions of this Agreement,
RESTORE shall pay MMC a royalty fee of 10 (ten) percent
of RESTORE's net sales. Net sales shall be defined as
total billed gross sales less the value of any products
returned by customers and less the trade cash discount
of 2%.
3(...continued)
continued to file its Federal income tax returns as a U.S.
corporation.
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Last modified: May 25, 2011