1
Exhibit 4(c)
[LOGO]
ALPHACOM AND ITEM:
A Preliminary Agreement to Establish
a Manufacturing and Distribution Joint Venture
for the Territory of Asia / Romania, Hungry and Bulgaria
This PRELIMINARY AGREEMENT (hereafter the "Agreement") is made on the 9 January
1999, in the City of Akron, County of Summit, State of Ohio, by and among Mr.
Xxxxxx Xxxxxx, President of AlphaCom, Inc. (hereafter "AlphaCom"), a company
based in Akron, Ohio, and Xx. Xxxx Xxxxxxx, III, Chairman / CEO of ITM Group
(hereafter "ITM"), a company based in Hong Kong.
The Parties listed above, understand, recite, and stipulate the following:
A. Under this Agreement AlphaCom, / ITM have agreed to negotiate a
Joint-Venture agreement that will contribute to the development of a
Joint-Venture Company to be named AlphaCom International Ltd.
B. The purpose of the AlphaCom International Ltd. is to exclusively
manufacture, market, license and distribute AlphaCom equipment, products,
software and services in certain countries or terratories (hereafter referred to
as the "Territory"). Herewith attached see addendum I., which defines the
"Territory";
C. ITM, has responded to the request by AlphaCom, Inc., to open
extensive discussions, to share communications, to consult with each other and
to perform comprehensive due diligence regarding the "Territory" and the ITM
exclusive representation of AlphaCom in the "Territory";
D. The Parties do hereby agree that it is in the best interest of the
Parties, to complete a "Preliminary Agreement" as follows;
Upon the execution of this Agreement:
1. ITM agrees to begin research within the "Territory," to negotiate
the agreement of the Joint-Venture Company and to complete the incorporation of
AlphaCom International Ltd., under the laws of the territory of Hong Kong.
2. AlphaCom shall establish an Asian / Romania, Hungry and Bulgaria
Development Department and appoint Xx. Xxxx Xxxxxxx III, and or his assigns as
the Manager of the Department, until such time that AlphaCom International Ltd
is incorporated and ITM will assume all expences in connection with the
development of the Department.
3. AlphaCom grants the Exclusive Agent Representation Right(s) of the
"Territory to ITM and or its Assigns.
4. AlphaCom grants ITM the exclusive right to sell sub-licenses within
the Territory.
2
[LOGO]
Page 2. Preliminary Joint Venture agreement AlphaCom/ITM
5. AlphaCom shall expressly, formally, disclose to all inquiring,
potential and prospective Clients of/ or regarding the Territory, that ITM is
its partner and exclusive agent of the "Territory";
6. AlphaCom agrees not to directly answer questions and/or to discuss
the "Territory" with any prospective Client regarding the "Territory." AlphaCom
agrees to direct all inquiries from, the "Territory" to the attention of Xx.
Xxxx Xxxxxxx III. Xx. Xxxxxxx III will qualify each inquiry and communicate
relevant information directly to AlphaCom Inc.
7. AlphaCom shall be responsible within the "Territory" for: the
development of technology, the supply of detailed documentation and educational
programs to affect the transfer of technology (including price lists); supply
equipment and products for testing (at no cost to AlphaCom) and technical
evaluation reports; and contribute to the completion of the transfer of
technology.
8. ITM shall be responsible within the Territory for: completing
comprehensive government, commercial and consumer marketing research programs;
prepare a manufacturing feasibility study, obtain the required approvals from
the relevant authorities of government, and qualify potential Joint - Venture
partners and sub - licensees; research application(s), penetration potentials
and evaluate wholesale and retail price considerations for AlphaCom equipment,
products, software and services; negotiate Joint - Venture partner and
sup-licensee fee structures; and develop "show case(s)" for AlphaCom equipment,
products, software and service Programs.
9. AlphaCom International Ltd., agrees to pay AlphaCom 50% of the sub -
licensing fees earned from the "Territory" up until the sub - licensing fee
payments to AlphaCom equal US$650,000.
10. AlphaCom International Ltd., agrees to pay AlphaCom a mutually
agreed upon US dollar amount for subscriber fees and for AlphaCom equipment,
products, software and service;
II. AlphaCom / ITM have agreed to the following:
a) J. V. Name: AlphaCom International, Ltd.
b) Shareholders: ITM / AlphaCom.
c) Shares: ITM = 95%, AlphaCom = 5%.
d) Directors: AlphaCom = 1 seat.
e) Officers: Xx. Xxxx Xxxxxxx III and Mr. Xxx Xxxxxx
g) J. V. Term: Ten (10) years.
3
[LOGO]
Page 3. Preliminary Joint Venture agreement AlphaCom / ITM
12. Although this Agreement is a "Preliminary Agreement," any
subsequent amendments shall be made with the consent of both parties.
13. Any disputes arising from or in connection with this agreement
shall be resolved under the laws of the State of Ohio.
14. It is agreed that all facsimile transmitted documents shall be
considered as original and binding unless or until substituted by original hard
copy documents.
15. This Agreement consists of three originals, with each party holding
one original, and shall be effective upon execution.
Accepted by:
/s/ Xxx Xxxxxx Date: January 9, 1999
-------------------------------- -----------------
Mr. Xxx Xxxxxx,
President of the Alpha Com, Inc.
Accepted by:
/s/ Xxxx X. Xxxxxxx III Date: January 9, 1999
-------------------------------- -----------------
Xxxx X. Xxxxxxx III,
Chairman/CEO of the ITM Group
4
ADDENDUM I
Asian Territory Definition
Afghanistan Macao
Bangladesh Malaysia
Brunci Mongolia
Burma Nepal
Cambodia Pakistan
China Philippines
Hong Kong Singapore
Taiwan Sri Lanka
Japan Thailand
India Vietnam
Indonesia
Korea North
Korea South
Laos
Eastern - Europe Territory Definition
Romania Hungry
Bulgaria
5
POWER OF ATTORNEY
I, Xxxxxx Xxxxxx, President of AlphaCom, Inc., residing in Akron, Ohio, United
States of America, with the approval of the Board of Directors of the company,
hereby appoint Xxxx Xxxxxxx III, Chairman / CEO of the ITM Group as our
Attorney-in-Fact and Exclusive Agent.
My Agent shall have the full power and authority to act on my behalf within the
territory of Asia and in the countries of Romania, Hungry and Bulgaria,
hereinafter referred to as the "Territory." This power and authority shall
authorize my Agent to manage and conduct the affairs of AlphaCom Inc., as
described below.
My Agents powers shall include, the power to:
1. Perform market research, prepare a manufacturing feasibility
studies, obtain approvals from the relevant authorities of the governments
within the "Territory", identify partners, research application(s) and
penetration potentials, and evaluate wholesale and retail price considerations
of AlphaCom equipment, products, software and services within the "Territory";
define sub-licensee qualifications, fee structures, and develop international
"show cases" of AlphaCom equipment, products, software and service programs in
the "Territory."
I grant this Power of Attorney to Xx. Xxxx Xxxxxxx, III to support his effort to
provide ITM and AlphaCom with the relevant research, feasibility studies and
other information required to negotiate an agreement that will directly
contribute to the development and ownership of a Joint-Venture company, named
AlphaCom International Ltd. (in organization) by AlphaCom and ITM.
The purpose of the AlphaCom International Ltd., will be to exclusively
manufacture, market, license and distribute AlphaCom equipment, products,
software and services throughout the "Territory."
Further, I hereby appoint Xx. Xxxx Xxxxxxx III, the Manager of the AlphaCom
Department of Asian, Romania, Hungary and Bulgaria Development, until the
intended Joint-Venture Company is completed.
My agent shall be liable for any loss that results from a judgment error made in
good faith or for willful misconduct or the failure to act in good faith while
acting under the authority of this Power of Attorney.
The Agent is hereby notified and required, to indemnify and hold harmless, Xx.
Xxxxxx, AlphaCom Inc., and any third party that accepts and acts under this
document.
My Agent, or any third party, shall not be entitled to any compensation for any
service provided as Agent(s) unless previously agreed upon, in writing, by
AlphaCom, Inc.
This power of attorney shall become effective immediately and remain in effect
for one year or up to the date that the above-mentioned Joint-Venture Company is
incorporated. This Power of Attorney supersedes all other Powers of Attorney
granted prior to this date.
By: /s/Xxx Xxxxxx By: /s/Xxxx Xxxxxxx III Date: January 9, 1999
--------------------- -------------------- ----------------
Mr. Xxx Xxxxxx Xx. Xxxx Xxxxxxx III
President, AlphaCom Inc. Chairman/CEO ITM Group
