Exhibit 10.1
CO-DEVELOPMENT, CO-OWNERSHIP
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AND SUPPLY AGREEMENT
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This Agreement ("the Agreement" or "this Agreement") is made this 5th
day of Jan, 2005 (the "Effective Date") by Franklin Wireless Corporation, a
California corporation located at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, XX
00000, XXX ("Franklin") and C-Motech Co., Ltd. Located at 0X Xxxxxxx Xxxx.,
00-00 Xxxxxxxxx, Xxxxxxxxxxx-xx, Xxxxx, Xxxxx 150-874. ("CMO")
WHEREAS, Franklin and CMO are developers and providers of wireless access
devices for worldwide markets.
WHEREAS, Franklin and CMO wish to enter into a partnership to jointly develop
and market the Product to USA and worldwide markets.
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth herein, the parties hereby agree as follows:
1. Products
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The Products include all access devices designed with Qualcomm's MSM 5100, 5500
and 6500 chipset solutions provided or designed by CMO or both companies.
2. Distinctive Roles of Each Party.
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Recognizing the strength and expertise each party brings to this strategic
alliance the parties have agreed to the following role assignment in their
relationship:
Franklin is responsible for the marketing, sales and distribution, field
testing, certifications of the Product to wireless service operators and other
commercial buyers within the Territory.
CMO will be responsible for the design, development, testing, certification, and
completion of the Product as well as the efficiency and the quality of the
product manufacturing process.
3. Territory
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CMO agrees Franklin will have the exclusive rights to market the Products in
South, North and Central America. The current customers handled by CMO will be
transferred to Franklin gradually by both mutual agreed upon.
Franklin agrees CMO will have the exclusive rights to freely market the Products
in regions other than North, Central and South America.
4. Product price and payment
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The initial price for the Products as privately labeled is set forth on Exhibit
A, subject to modification from time to time upon mutual agreement so as to keep
the Products competitive.
The terms of payment shall be L/C 40 days ahead from date of delivery or other
terms by mutual agreed.
5. Purchase Order.
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5.1. All Purchase Orders (i) are subject to the terms and conditions of
this Agreement; (ii) must be set forth in writing, (iii) must be submitted by
appropriate personnel of Franklin, and (iv) may be submitted at any time during
the term of this Agreement by Franklin to CMO via facsimile, electronic mail or
electronic data interchange.
5.2. All shipments of Products shall be F.O.B. Korea. All shipments
shall be made in accordance with Franklin's instructions as set forth in the
corresponding Purchase Order. Such instructions are subject to change upon
submission of timely written notice by Franklin.
5.3. Purchase Orders accepted by CMO but not delivered to the carrier
for shipment to Franklin as of the requested delivery date set forth in the
Purchase Order shall be deemed to be "past due." Franklin reserves the right to
cancel, postpone or reschedule any past due Purchase Orders.
6. Brand
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The Products will be supplied by CMO to Franklin bearing a Franklin approved
private label and packaging. Franklin will provide the artwork.
7. Intellectual Property Rights
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Both CMO and Franklin shall have own the rights of the Products USB Dongle, Card
Bus, PCI Bus and Module designed with MSM 5500 dual band products. In the event
sell the rights of the Products to others in partial or in whole, both shall
need the other party's prior written approval. Future products and the
development cost shall be decided from time to time by mutual agreed upon. Both
parties agree the right of the products designed with MSM 5500 dual band will be
transferred to the other party in the event any party is in condition of section
8.2 (iii), (iv) and (v).
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8. Term and Terminations
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8.1. The initial term of this Agreement is for two years (2) years
commencing on the date set forth above. This Agreement shall automatically renew
and extend for additional terms of one (1) year each unless either party hereto
has provided the other with written notice of its intention to terminate this
Agreement at least sixty (60) days prior to the end of the existing term.
8.2. Either party may terminate this Agreement immediately upon written
notice to the other party if the other party (i) is in default of any material
obligation hereunder, and, if curable, such party has failed to cure such
default within thirty (30) days after receipt bf such notice; (ii) violates any
international, federal, state, provincial or local law relating to or affecting
this Agreement; or (iii) makes a general assignment for the benefit of its
creditors; (iv) files or does not object to the filing against it of any
petition in bankruptcy or insolvency in any federal or state proceeding; (v) has
a receiver or trustee appointed for all or a material portion of its assets.
Termination of this Agreement for any of the reasons set forth in this Section 8
shall not affect the obligations or rights of either party regarding invoices
outstanding or amounts owed at the time of such termination.
9. Warranty
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CMO warrants that (in addition to those warranties implied by law) the Products
together with the packaging, labeling and other material furnished by CMO shall
(a) be free from defects; (b) comply with the laws, rules, orders and
regulations of applicable government authorities; and (c) not infringe on any
third parties' proprietary rights, patents, trademarks or copyrights. Franklin
should notify the above (b) and Cc) to CMO in advance before shipping The
Products. CMO shall warrant the contents which is agreed by both parties
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CMO warrants that the Products are free from defect in material, workmanship and
design under normal use and service.
This warranty shall be for a period of thirteen (13) months after delivery to
Franklin. If during this warranty period, the Products fail to meet the
warranties herein, CMO shall, at its expense, correct such defect by repair or
replacement of the defective part of the Products without delay. If Franklin can
correct such defect by repair or replacement of defective parts in a Franklin
repair center, Franklin may do so and CMO shall be responsible for the costs and
expenses incurred. If the defect cannot be repaired, CMO will issue Franklin a
credit or refund of the purchase price.
10. Manufacturing
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CMO will use its best efforts to establish manufacturing of the technology
wireless products on a SKD basis in a country where duties are reduced.
11. Indemnification; Limitation of Liability.
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11.1. Subject to the provisions of Section 11.2. below, CMO shall
indemnify, defend and hold harmless Franklin from and against any and all claims
brought against Franklin with respect to any breach by CMO of any provision of
this Agreement. Subject to the provisions of Section 11.2. below, Franklin
indemnify, defend and hold harmless CMO from and against any and all claims
brought against CMO with respect to any breach by Franklin provision of this
Agreement.
11.2. In no event shall either Franklin or CMO be liable to the other
or any of their respective affiliates, agents or any other person or entity, for
any special, incidental, consequential, punitive or any other indirect loss or
damage arising out of or related to the performance by the parties hereto of
their respective obligations hereunder, or the use or performance of any
Product, service or system, regardless of whether the action is for breach of
contract or warranty, negligence (except for personal injury due to negligence),
strict liability, tort or otherwise. No action shall be brought for any alleged
breach of this Agreement more than one (1) year after the accrual of such cause
of action except for money due on open account.
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12. Dispute Resolution.
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Any dispute, claim or controversy which may arise under or in relation to this
Agreement shall be settled between the parties hereto negotiating in good faith.
If the parties are unable to resolve any such dispute within sixty (60) days of
notice that such dispute exists, the parties agree that will submit the dispute
to mediation either in Los Angeles, California or in Seoul, Korea and select a
mediator in accordance with the procedures established by the International
Arbitration Association for the resolution of commercial disputes. In any
arbitration proceeding, the arbitrator shall not be authorized to assess or
impose any putative or consequential damages. Each party shall bear its own
costs and expenses in connection with any arbitration proceeding and shall share
equally the costs and expenses of the arbitrator.
13. Force Majeure.
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Nonperformance under this Agreement by either Franklin or CMO shall be excused
and such party shall not be liable for any loss, damage, penalty or expense, to
the extent that such performance is rendered impossible or delayed due to fire,
flood, acts of God or the public enemy, acts of government (whether / foreign,
federal, state, county or municipal) or government officials, labor
difficulties, riot or any other cause where the failure to perform or the delay
is beyond the reasonable control of the non-performing party and without the
negligence of such party.
14. Miscellaneous.
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14.1. This Agreement constitutes the entire understanding of the
parties hereto with respect to the subject matter hereof and supersedes all
prior written or oral communications or understandings between the parities.
This Agreement may not be amended or modified in any respect unless set forth in
a writing signed by authorized officers of each of the parties hereto.
14.2. This Agreement is made in, governed by, and shall be construed
solely in accordance with the internal laws of Seoul, Korea without giving
effect to any rules regarding conflicts of laws.
14.3. The relationship of the parties under this Agreement shall be,
and shall at all times remain, one of partnership and contractors. This
Agreement shall not be deemed to constitute or create a joint venture and shall
not at any time create a franchisor--franchisee, principal-agent, master-servant
or employee-employer relationship. Except as expressly set forth herein, neither
party hereto shall the right or authority to bind the other.
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14.4. Neither party may assign its rights, duties or obligations under
this Agreement, in whole or in part, to any other party without the prior
written consent of the other party hereto.
14.5. If any provision of this Agreement is determined to be illegal,
invalid or unenforceable by a governmental agency or authority, or by any
federal or state court, having appropriate jurisdiction, such provision shall be
disregarded and shall not affect the legality, validity and enforceability of
the remainder of this Agreement.
14.6. Notices and other communications by either party / under this
Agreement shall be deemed given (i) when delivered by hand, (ii) upon the next
business day following delivery thereof to a reputable overnight carrier; or
(iii) as of the third business day after deposit thereof in the U.S. mails as
certified mail, postage prepaid, return receipt requested, addressed to the
principal place of business of the party as set forth below:
If to Franklin: If to CMO:
0000 Xxxxxx Xxxxxx 000 0X Xxxx. Xxxxxxx 00-00
Xxx Xxxxx, XX 00000 Yoido-dong, Youngdungpo-gu
Fax : 000-000-0000 Seoul, Korea
Fax : (0)000-0000
14.7. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and together shall be deemed to
constitute but one and the same instrument. In addition, this Agreement may be
executed by facsimile and the parties agree that such facsimile signatures shall
have the same force and effect for all purposes as original signatures.
[Signature page follows]
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In Witness Whereof, the parties hereto have executed this Agreement as of the
Effective Date.
C-MOTECH CO. LTD
By: /s/ signature
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(Signature)
CEO
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(Title)
2005 01 05
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(Date)
FRANKLIN CORP.
By: /s/ signature
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(Signature)
President
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(Title)
1/7/05
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(Date)
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EXHIBIT A
PRODUCT PRICES
CM 5100
CMG-1x800
CM-450
PC card
USB modem
CM 5500U
CM 5500P
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