EXHIBIT 10.7
DISTRIBUTION AND MARKETING AGREEMENT
THIS AGREEMENT made this 16th day of December, 2002.
BETWEEN:
FUTURECOM GLOBAL, INC.,
a Nevada corporation having an office at 00000 X. 00xx Xxx,
Xxxxx X, Xxxxxxxxxx, XX 00000
(hereinafter referred to as "FCG")
OF THE FIRST PART
AND:
NATIONAL SCIENTIFIC CORPORATION
a Texas corporation having offices at 0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000, Xxxxxxxxxx, XX 00000-0000
(hereinafter referred to as "NSC")
OF THE SECOND PART
WHEREAS NSC is a developer of tracking and location equipment, and related
products, based upon locator technology that is a merger of cell phone and
global positioning systems technology; and
WHEREAS FCG is, among others, engaged in the distribution and marketing of
communication equipment and other technology-based products; and
WHEREAS FCG is desirous of entering into a formal agreement with NSC for
the distribution and marketing of NSC tracking and location equipment in certain
international and regional markets; and
WHEREAS NSC is agreeable to appointing FCG as its Distributor and Marketing
Agent in accordance with the terms and conditions herein; and
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WHEREAS the Parties of the First and Second Part hereto wish to enter into
this Agreement to set forth the terms and conditions of the distribution and
marketing appointment.
NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
1. DISTRIBUTION AND MARKETING RIGHTS
(i) NSC hereby grants to FCG for One (1) year from the date hereof the
renewable rights to sell within the Territory the products and
equipment manufactured by NCS described in Schedule "A" attached
hereto and forming a part hereof (hereinafter collectively referred to
as the "Products"), which Schedule shall stipulate whether or not the
distribution rights granted hereunder are on an exclusive basis.
(ii) FCG may describe itself as an authorized distributor of the Products
but shall not characterize itself or enter into any transaction as an
agent of, except as permitted herein, or in the name of, NSC.
2. THE TERRITORY
(i) FCG is hereby appointed as the distributor for the territory (herein
referred to as the "Territory") described in Schedule "B", which is
attached hereto and forms a part hereof.
(ii) In the event the Products and/or Territory are expanded, reduced, or
revised in any manner, Schedule "B" shall be modified accordingly
without the requirement for a new Distribution and Marketing Agreement
unless the Parties hereto determine otherwise.
3. LABELING RIGHTS
FCG or its customers shall not be entitled to market any Products covered
herein under any private label brand name utilized by FCG or its customers
from time to time without prior written consent from NSC. However, FCG is
authorized to add labeling with "Distributed by FCG" type identification.
4. TERMS AND PRICES FOR THE PRODUCTS
(i) NSC shall supply FCG with the Products on the terms and at the prices
set forth in Schedule "C" which is attached hereto and forms a part
hereof. For greater certainty, the prices set forth in Schedule "B"
are current prices quoted as of the date of the Agreement, and may be
revised by NSC from time to time with 45-day advance written notice of
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change provided to FCG. Any and all written, issued, and acknowledged
Purchase Orders for Products from customers of FCG received by FCG
prior to, or before the end of, the 45-day change notification period
will be honored at the existing price(s) before the intended change.
(ii) FCG shall be entitled to re-sell the Products at whatever price(s) it
deems fit into any sales channels available.
5. TRAINING AND PRODUCT SUPPORT
(i) At the request of FCG from time to time, NSC shall provide, without
charge, adequate training of FCG's employees or agents, in the proper
use of the Products.
(ii) NSC shall furnish and provide to FCG during the term of this
Agreement, without charge, periodic follow-up assistance and
instruction that FCG deems necessary or appropriate.
(iii) The Parties hereto agree that the Products may be marketed at trade
shows to be agreed upon. Actual trade show costs shall be shared by
the Parties hereto, according to a formula to be determined at a later
date, but prior to each applicable show. Any and all customer and/or
sales prospects generated at, or as a result of participation in, a
trade show, will be immediately turned over to FCG for all follow-up
effort, as long as the lead is for application within the Territory,
and will not be acted upon by NSC or any NSC third party.
(iv) For those Products sold under the NSC, or NSC created, name, NSC shall
provide and furnish to FCG without significant cost, reasonable
quantities of advertising and user information, primarily in
electronic form, as required to assist FCG in selling the Products. In
addition, a reasonable quantity of marketing sample products to
support testing or new product evaluation will be provided to FCG as
soon as final production products are available to NSC.
6. DELIVERY
(i) NSC shall deliver the Products F.O.B. in Scottsdale, AZ to FCG, or to
a place designated by FCG, in accordance with the ongoing delivery
schedules to be set forth in specific FCG Purchase Orders issued to
NSC from time-to-time.
(ii) FCG shall have the right of pre-delivery inspection of the Products to
be shipped, which right shall extend to any duly authorized agent of
FCG.
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7. PRODUCT IMAGE
Otherthan in the matter of pricing, neither Party shall do, or permit
anything to be done, to prejudice the market image of the Products.
8. COMMERCIALLY REASONABLE EFFORTS
(i) NSC agrees to utilize Commercially Reasonable efforts to supply FCG
with the Products as provided in this contract. Furthermore, NSC
agrees to coordinate its production and manufacturing to facilitate
the orderly manufacture and shipping of the Products as
hereinafter-set forth in greater detail.
(ii) FCG shall use its Commercially Reasonable efforts to promote the sale
of the Products within the Territory and to provide timely quantity
forecasts to NSC on a regular basis for the duration of this
Agreement.
9. FCC AND OTHER APPROVALS
NSC shall be responsible for securing, on a timely basis, and for payment
of any and all costs pertaining to, FCC, UL, and all other necessary
regulatory approvals within the Territory.
10. RESTRAINT OF COMPETITION
NSC agrees that it will not sell, or assist any third party in sales, any
competing Products within the Territory to any of FCG's pre-existing
customers or actively solicited potential customers during the term of this
agreement.
11. ORDERS
In order to ensure the prompt delivery of the Products to customers, and to
facilitate the orderly scheduling of production and shipments, NCS agrees
to submit to FCG its production capabilities on a quarterly basis. FCG
agrees to submit to NSC its orders for product as far as possible in
advance of desired delivery. NSC will then provide FCG a specific schedule
of production to meet FCG's commitment. FCG agrees to accept all of NSC's
products ordered by FCG. NSC will not ship the Products to FCG except upon
FCG's orders. All orders are subject to approval and acceptance by FCG at
its corporate head office in Scottsdale, Arizona.
FCG also agrees to provide NSC with quarterly estimates and forecasts of
FCG's prospective requirements of the Products in order to facilitate NSC's
production planning, but such estimates are not to be treated by NSC in any
way as firm purchase orders from FCG.
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12. WARRANTIES AND DEFECTIVE PRODUCTS
NSC warrants that the products it provides to FCG will perform in
accordance with the published specifications in the documentation provided
by NSC and will achieve the functionality described therein. NSC's
obligation under this warranty will be to promptly bring any non-complying
products into compliance with NSC's published specifications, or to
promptly replace the products, or grant a full refund of the actual net
price paid for any such defective products, all of which will be performed
at no cost or obligation to FCG. This warranty will commence on the date of
receipt of each product by the end-user and shall continue for a period of
one (1) year thereafter. The warranty provided in this provision is in lieu
of all other warranties, express or implied, including, but not limited to,
the warranties of merchantability and fitness for a particular purpose,
warranties through course of dealing or usage of trade or any other implied
warranties.
NSC also warrants and represents that it has the right to sell the
Products, and that the Products sold hereunder shall be free of all liens,
encumbrances and charges of whatsoever nature or cause. Furthermore, the
Products will not infringe upon any intellectual property or
design/development rights.
13. CUSTOMER COMPLAINTS
FCG will receive, investigate, and handle all complaints received from
customers with a view toward protecting the good will of the Parties hereto
in the sales of the Products. Recognizing the importance of customer good
will, FCG will make every reasonable effort to satisfy owners of the
Products as provided for herein, and in pursuance thereof, establish
regular contact either by correspondence or personal interview with such
owners or purchasers. All warranty complaints received by FCG, which cannot
be readily remedied by FCG when FCG applies commercially reasonable efforts
to do so, shall be promptly reported to NSC who will then undertake to
remedy such complaints, and FCG will be relieved of primary responsibility
in that regard.
14. NON-AGENCY
It is expressly agreed to by the Parties hereto that the relationship
created in this Agreement between FCG and NSC is not that of a principal
and agent and under no circumstances shall this Agreement be intended to
constitute a partnership between any of the Parties.
15. USE OF TRADE NAMES
NSC agrees that in marketing the Products, FCG may use NSC's current trade
names and may add FCG's distribution authorization data to existing Product
packages and/or labeling.
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16. ASSIGNMENT OF CONTRACT
This Agreement may be assigned by one party without the prior written
consent of the other party to any entity legally controlled by the first
party. Any assignment to other entities shall be subject to the prior
written consent of the second party, which consent shall not be
unreasonably withheld.
17. TERMINATION
(i) The Parties hereto may terminate this Agreement by mutual consent at
any time, but with the provision that all open orders will be
satisfied by the Parties, as required.
(ii) Subject to clause 18 herein, either Party may terminate any renewal
hereof prior to the applicable termination date upon three (3) months
written notice to the other.
(iii) Each of the Parties hereto shall have the right to terminate this
Agreement upon the occurrence of any of the following events, such
termination to be effective immediately upon the receipt or deemed
receipt by the other Party of notice to that effect and the expiry of
any applicable period for remedy of the default:
(a) if a Party is in default of any of the materials terms or
condition of this Agreement and fails to remedy such default
within 60 days of written notice thereof from the other Party;
(b) if the other Party becomes bankrupt or insolvent, makes an
assignment for the benefit of its creditors or attempts to avail
itself of any applicable statute relating to insolvent debtors;
(c) if the other Party winds-up, dissolves, liquidates or takes steps
to do so or otherwise ceases to function as a going concern or is
prevented from reasonably performing its duties hereunder; or
(d) if a receiver or other custodian (interim or permanent) of any of
the assets of the other Party is appointed by private instrument
or by court order or if any execution or other similar process of
any court becomes enforceable against the other Party or its
assets or if distress is made against the other Party's assets or
any part thereof.
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18. TERM
(i) This Agreement shall be effective for one (1) year from the date
hereof. FCG shall have the first right of renewal for two (2)
additional one (1) year terms. FCG shall notify NSC of FCG's intention
to renew two (2) months prior to the expiration date of this
agreement, or any renewal thereof, as the case may be.
(ii) In the event no notice to terminate has been given by any Party prior
to the termination date of any renewals referred to in clause 18(i)
above in accordance with this Agreement, then in such event this
Agreement or renewal thereof shall automatically be renewed, mutates
mutandi, for a further one (1) year term.
19. RIGHT OF FIRST REFUSAL
The Parties agree that FCG shall have the right of first refusal on the
distribution within the Territory of any Products that are essentially
upgrades, major modifications, or replacements to the Products covered by
this distribution agreement. All other new product offerings from NSC will
be discussed with FCG regarding the possibilities of FCG distribution prior
to distribution decisions with other parties.
20. CONFIDENTIAL INFORMATION
The Parties hereto ratify and confirm the terms and conditions of any and
all agreements entered into between them pertaining to the maintaining and
disclosure of confidential information.
21. SEPARABILITY
If any provision of this Agreement is invalid, unenforceable, or not
enforced, this Agreement shall be considered divisible as to such
provisions without affecting the validity of the balance of this Agreement.
22. FORCE XXXXXX
Neither Party hereto shall be liable for failure to perform its respective
part of this Agreement if such failure is due to fire, flood, strikes, or
other industrial disturbances, inevitable accident, war, riot,
insurrections, or other causes beyond the control of the Parties.
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23. ENTIRE AGREEMENT
(i) This Agreement constitutes the entire Agreement between the Parties
pertaining to the subject matter contained in it and supercedes all
prior and contemporaneous agreements, representations, and
understandings of the Parties. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in
writing by all the parties to this Agreement. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions, whether or not similar, nor shall any
waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
(ii) There are no representations, constitutions, terms or collateral
contracts affecting the transaction contemplated in the Agreement
except as expressly set forth herein.
24. NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is
to be given, or on the second (2nd) day after pickup by a courier service,
if delivered to the Party to whom notice is to be given, by such courier
service.
25. HEADINGS
The capitalized headings in this Agreement are only for convenience of
reference and do not form part of or affect the interpretation of this
Agreement.
26. TIME OF ESSENCE
Time is of the essence of this Agreement.
27. GOVERNING LAW AND ARBITRATION
This contract and the Agreement of the Parties shall be governed and
construed according to the laws of the State of Arizona.
All disputes, controversies or claims arising out of or in connection with
this Agreement which cannot be settled by mutual agreement shall be finally
settled by arbitration. Arbitration shall be held in Scottsdale, AZ and
shall be conducted in accordance with the rules of the International
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Chamber of Commerce then in force and effect. Arbitration shall be by three
(3) arbitrators, one chosen by FCG, one chosen by NSC, and the third chosen
by both parties; or, if the selection of a third arbitrator cannot be made
within thirty (30) days after the appointment of the first two arbitrators,
then such third arbitrator shall be chosen by the International Chamber of
Commerce Court of Arbitration. Demand for arbitration shall be served upon
the Party to whom the demand is made. Judgment upon the award rendered may
be entered in any court having jurisdiction, or application may be made to
such court for enforcement as the case may be.
28. FURTHER ASSURANCES
The Parties hereto covenant and agree each with the other that they shall
and will, from time to time and at all times hereinafter, execute such
further assurances and do all such further acts as may be reasonably
required to give effect to the intent of the Parties hereto.
29. ENUREMENT
The Agreement shall enure to the benefit of and be binding upon the Parties
hereto and their respective successors and assigns.
30. LIMITATION OF LIABILITY
Neither Party will be liable for any indirect, incidental, special, or
consequential damages, including, but not limited to, loss of profits,
data, time, or use incurred by either Party, or any third party, even if
informed of their possibility, except for liability relating to a breach of
the confidentiality and intellectual property provisions of this Agreement,
and for claims of bodily injury for which the other Party is legally
liable, in no event will cumulative liability exceed the total amount that
has been paid under this Agreement for the Products and any services
provided. This provision represents each Party's entire liability and
exclusive remedy.
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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the
date above written.
FUTURECOM GLOBAL, INC.
Per: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------------------
Title: CEO and President
-------------------------------------
NATIONAL SCIENTIFIC CORPORATION
Per: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------------------------
Title: CEO and President
-------------------------------------
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SCHEDULE A: PRODUCTS
1. NSC Followit Transponders and related accessories
2. NSC StarPilot Location Servers and related accessories
3. NSC KidCall Children's Security System and related accessories
NOTE: NO PRODUCTS COVERED BY THIS AGREEMENT ARE TO BE DISTRIBUTED BY FCG FOR NSC
ON AN EXCLUSIVE BASIS.
AS AMENDED AND APPROVED:
DATE: DEC 16, 2002
FUTURECOM GLOBAL, INC. NATIONAL SCIENTIFIC CORPORATION
By: /s/ Xxx Xxxxx By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------- ---------------------------------
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SCHEDULE B: TERRITORY
The General Non-Exclusive Territory shall be comprised of customers within North
and South America and Europe for all products other than Followit, which is
initially limited to North America only.
For Accounts listed below as assigned accounts ("Assigned Accounts") NSC will
not compete with FCG, nor will it knowingly support or assist in any third party
potential competition, to FCG.
FCG agrees to assign active representation and appropriate sales representation
and appropriate sales representation to all accounts and to endeavor to sell the
products covered in this Agreement, with face-to-face account contact on at
least, a quarterly basis, and to produce orders from active accounts within 3
quarters of initial contact.
Target markets and major accounts within that geography will include, but are
not limited to, retail and other vertical market applications as defined within
this Schedule B. Customer identification to be defined within this Schedule B as
update from time to time by FCG (and accepted by NSC) as circumstances warrant.
AS AMENDED AND APPROVED:
DATE: DEC 16, 2002
FUTURECOM GLOBAL, INC. NATIONAL SCIENTIFIC CORPORATION
By: /s/ Xxx Xxxxx By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------- ---------------------------------
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SCHEDULE C: PRICING & PAYMENT TERMS
The specific unit pricing, any other applicable pricing data, in addition to the
payment terms for Product purchased by FCG under this Distribution Agreement
will be defined, as appropriate, at a later date, within this Schedule C.
AS AMENDED AND APPROVED:
DATE: DEC 16, 2002
FUTURECOM GLOBAL, INC. NATIONAL SCIENTIFIC CORPORATION
By: /s/ Xxx Xxxxx By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------- ---------------------------------
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