Adam and Bill, citizens of State Z, are plaintiffs in an action brought in the United States District Court in State X against Parco, a State Y corporation, and Buyco, a State X corporation. Parco’s office and plant are located in State Y. At no time has Parco had an office or salesmen in State X. Buyco’s sole place of business is in State X.

The complaint alleges that each of the plaintiff’s sustained serious personal injuries when a blade broke on an electric lawn mower while the equipment was being demonstrated by a clerk in Buyco’s store in State X. Each plaintiff requested damages in the sum of $80,000. The mower had been manufactured by Parco and shipped to Rob in State Z. Rob had a contract with Parco to act as exclusive distributor of Parco products in eleven states, including States X and Z.

Process was served personally on the president of Parco at Parco’s office in State Y and on the president of Buyco at its office in State X. Thereafter the following occurred:

1. Parco moved to dismiss the action on the ground that the court had no jurisdiction over it.

2. Buyco filed a counterclaim against Adam for $74,000 alleged to be due for merchandise previously sold to Adam.

3. Parco filed a cross-claim against Buyco for $12,000 alleged to be due for merchandise previously sold by Parco to Buyco.