The opinion of the court was delivered by: POLLACK
This is an antitrust suit brought under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13. The plaintiff has applied for a preliminary injunction under Section 16 of the Clayton Act, 15 U.S.C. § 26.
Were the plaintiff to prevail herein it would have an adequate remedy at law. It has shown neither likelihood of success on the merits nor even sufficiently serious questions going to the merits to make them a fair ground for litigation. The facts are as follows.
The defendant UKF America, Inc., imports urea and allied products into the United States. UKF employs no salesmen but sells urea instead through independent distributors. One such distributor is the defendant, Cedar Point Supply, Inc., which distributes urea in the Northeast and Mid-Atlantic states. Under its agreement with UKF, Cedar Point purchases urea at the prevailing list price minus a distributor's discount of four percent. Cedar Point's obligations to UKF are secured by a personal guarantee of its president.
Until approximately July 1978, Cedar Point employed Mr. John Ryan as a salesman of urea and Mr. Joseph Brady as a financial analyst. At that time Ryan and Brady resigned from Cedar Point and formed Highspire, Inc., of which they are respectively president and vice-president, to sell agricultural chemicals in Delaware, Maryland, New Jersey, New York and Pennsylvania.
Ryan and Brady met with Messrs. J. W. H. Spin and Walter Maerz of UKF on August 4 and 11, 1978, to negotiate an agreement under which Highspire would distribute UKF urea. At the meeting on August 4, Highspire forecast to UKF that it would purchase and resell 25,000 to 30,000 tons of urea between July 1, 1978, and June 30, 1979. UKF demanded that Highspire submit for verification, either to UKF or an outside accounting firm, the resale contracts on which Highspire based its forecast of sales in excess of 25,000 tons. Highspire refused so to submit its contracts. In October, UKF advised Highspire that UKF would not enter a distributorship agreement unless Highspire proved that it had contracts to sell 10,000 tons of urea. Highspire still refused to produce any contracts.
During the meeting on August 11, UFK also advised Highspire that it would have to post as security a letter of credit or personal guarantee for $ 100,000 as a further condition of obtaining a distributorship agreement. Ryan and Brady rejected personal guarantees but said that a letter of credit for $ 100,000 would not be a problem. At the same meeting, Highspire tendered a proposed agreement to UKF, but the representatives of UKF refused to sign because a distributorship agreement would first have to be approved by UKF's board of directors.
As a result of the negotiations on August 4 and 11, UKF sent Highspire a letter of intent on August 16, 1978. It provided:
It is contemplated that the parties shall negotiate and enter into a formal contract, at some time prior to September 30, 1978, pursuant to which UKFA shall sell to Highspire and Highspire shall purchase from UKFA 10,000 short tons of agricultural urea and 5,000 short tons of UAN (urea ammonium nitrates) (and possibly additional quantities, as may subsequently be considered), for delivery prior to June 30, 1979, which shall be the termination date of such contract.
Of such quantities, a minimum of 4,000 and a maximum of 8,000 short tons of agricultural urea shall be purchased by Highspire and delivered by UKFA during the fall 1978 season, with the balance being purchased and delivered in the spring 1979 season; and a minimum of 3,000 and a maximum of 4,000 short tons of UAN shall be purchased by Highspire and delivered by UKFA in the fall 1978 season, with the balance being purchased and delivered in the spring 1979 season.
The purchase price to be invoiced for all such orders shall be UKFA's price, F.O.B. car/truck at UKFA's Baltimore, Maryland warehouse, in effect at the time of shipment. . . .
UKFA shall allow Highspire, through December 31, 1978, a commission of 4% Of UKFA's F.O.B. bulk price at the time of shipment, as stated above, after deduction of freight and other allowances, if any. The parties shall negotiate and agree upon a commission rate, to be effective after December 31, 1978, which commission rate shall not be less than 4%.
As a condition to UKFA's entering into the proposed agreement and making any deliveries, UKFA shall receive an irrevocable standby letter of credit in the amount of $ 100,000 in form and substance satisfactory to UKFA.
It is understood that this letter shall be considered only as a letter of intent, and that the above terms and such other terms and provisions as the parties may deem appropriate, including the General Terms and Conditions of UKFA applicable to such transactions (a copy of which has been furnished to ...