EXHIBIT 10.29
TELE DIGITAL DEVELOPMENT, INC.
DOMESTIC DISTRIBUTION
AGENT AGREEMENT
AGREEMENT, made this 9th day of July 2003, by and between Tele Digital
Development Inc.; a Minnesota corporation, located at 0000 X. 00xx Xxxxxx, Xxxxx
0, Xxxxxxxxxxx, XX 00000, ("Manufacturer" or "Teledigital") and Cellnet
Communications, 00000 Xxxx X Xxxx, Xxxxxxx Xxxxxxx, XX 00000 ("Distributor").
1. APPOINTMENT
Manufacturer hereby appoints the Distributor as an authorized Distributor and
Agent to be primarily responsible for the development of the territory
("Territory") as set forth in Schedule A, attached hereto. Distributor/Agent
accepts this appointment and agrees that the relationship between it and
Teledigital shall be governed by the terms and conditions of this agreement.
Distributor shall have the right to appoint subdistributors, sales agents or
sales representatives for the Products in the Territory, under the same or
similar terms and conditions as set forth herein.
2. PRODUCTS AND CUSTOMERS
2.1 Products. The Products are defined as those products set forth on Schedule
B, attached hereto and related updates. Such Schedule B may be updated from time
to time.
2.2 Updates. The Updates are defined as all revisions to, enhancements of, and
replacements for any of the Products.
2.3 Customers. Customers are defined as those persons and entities that purchase
Products or Updates from the Distributor/Agent in compliance with the provisions
of this Agreement.
3. COVENANTS AND DUTIES OF THE DISTRIBUTOR
3.1 Sales. The Distributor/Agent shall use its best efforts to actively sell the
Products to Customers in the territory.
3.2 Installation and Training. Distributor/Agent shall train its employees and
sales reps or other employees the same as sales reps to sell the Products.
Distributor/Agent shall also be responsible for training its Customer's
employees to operate the Products.
3.3 Service. Distributor/Agent shall render prompt, courteous and willing
service with respect to the Products and shall use its best efforts to handle
satisfactorily all matters relating to the sale and servicing of the Product in
the Territory.
3.4 Purchase Order and Price. Distributor agrees to pay Teledigital the prices
for the Products as set forth in Schedule C, attached hereto. Such prices are
F.O.B. Teledigital's facility and include the cost of insurance. Teledigital
agrees that once Distributor issues a firm purchase order and it has been
acknowledged by Teledigital, the pricing applicable to that order is firm
1
EXHIBIT 10.29
and will not be changed by Teledigital. Distributor shall pay all applicable
retail sales taxes on the use or sale of the Products and all insurance on the
Products during transit.
3.5 Payment. The purchase price for all Products and all expenses incurred by
Manufacturer in the shipment and delivery of the Products, including without
limitation freight charges, taxes, and insurance premiums, shall be payable by
Distributor to Manufacture. PAYMENT OF 50% (HALF) OF THE ORDER VALUE IS DUE
WITHIN 10 DAYS OF PLACEMENT OF THE ORDER AND UPON TELEDIGITAL PRESENTING CELLNET
WITH AN INVOICE. THE REMAINING 50% (HALF) IS DUE 10 DAYS OF DELIVERY OF THE
ORDER. All payments by Distributor to Manufacturer shall be made in the currency
of the United States of America. Manufacturer shall own the source code and
Distributor shall have the right to use the custom software during the term of
the Agreement.
If Distributor fails to pay any amount within ten (10) days after payment is due
with respect thereto, it shall pay Manufacturer a late payment charge equal to
1.0% per monthly on such unpaid amounts, together with all costs and expenses,
including reasonable attorney fees, incurred by Manufacturer in collecting such
overdue amounts.
3.6 Title and Risk of Loss in Transit. Delivery of Products by Manufacturer or
its authorized fulfillment facility to any carrier for transportation to
Distributor shall constitute delivery to Distributor and Distributor shall bear
all risk of physical loss or damage thereafter.
3.7 Trademarks and Trade Names. Distributor shall not use Teledigital's name or
any other trademark or trade name used or claimed by Manufacturer (all of which
names or marks shall hereinafter in this Section by referred to as "Proprietary
Marks") in connection with any business conducted by Distributor other than
dealing with the Products. Distributor acknowledges and agrees that its use of
the Proprietary Marks shall not create any right, title or interest therein and
acknowledges Manufacturer's exclusive right, title and interest in the
Proprietary Marks. During the term of this Agreement, Distributor agrees that it
will not use, without Manufacturer's prior written consent, any xxxx, which is
likely to be similar to, or confused with the Proprietary Marks. Products sold
shall be sold under the trademark and trade name and copyright notices as
established by Manufacturer. All Manufacturer technical information furnished to
Distributor hereunder and intellectual property rights herein shall remain the
exclusive property of Manufacturer.
3.8 Private Label. Distributor/Agent has right to private Brand labeling retail
wireless services as NO STRINGS ATTACHED, NSA CELLULAR, GET A FONE OR GET A
PHONE. Manufacturer agrees that the subscribers created by this private label
remain the property of CELLNET COMMUNICATIONS. Manufacturer further agrees not
to solicit services of any kind either directly or indirectly to the customer
subscriber base or the dealer/agent base owned by CELLNET COMMUNICATIONS without
the expressed written permission of Distributor/Agent, during the term of this
agreement and for a period of (12) twelve months following the termination of
this agreement for any reason. CELLNET COMMUNICATIONS, FURTHER AGREES TO SUBMIT
TO TELEDIGITAL A LIST OF DEALER/AGENTS THAT DISTRIBUTOR INTENDS TO DISTRIBUTE
THE TELEDIGITAL PREPAID PRODUCTS TO. TELEDIGITAL WILL NOT SELL DEALER/AGENTS
THAT ARE ON THE LIST SUBMITTED BY THE DISTRIBUTOR. TELEDIGITAL WILL REVIEW THE
LIST EVERY 6 MONTHS WITH DISTRIBUTOR. DEALER/AGENTS THAT HAVE NO SALES VOLUME
SHOULD BE DELETED FROM THE LIST.
2
EXHIBIT 10.29
DISTRIBUTOR CAN ADD DEALER/AGENTS TO THE LIST AT THE DISCRETION OF THE
DISTRIBUTOR DURING THE TERM OF THIS AGREEMENT WITH A WRITTEN NOTIFICATION TO
TELEDIGITAL. TELEDIGITAL WILL NOT CONTACT THE DEALER/AGENTS ON THE LIST FOR 90
DAYS FOLLOWING TERMINATION OF THIS AGREEMENT FOR ANY REASON.
3.9 Licenses: Compliance with US Export' Regulations. Distributor shall be
responsible for obtaining all necessary licenses or approvals required for the
conduct of its activities with respect to the Products in the Territory and
shall provide Manufacturer upon written request with copies of all such licenses
and approval documents.
Products purchased may require an export license issued by the United States
Department of Commerce. Manufacturer will obtain such license and Distributor
agrees to assist Manufacturer to obtain license by supplying information
requested by Manufacturer.
4. COVENANTS AND DUTIES OF MANUFACTURER
4.1 Orders. Manufacturer shall use its best efforts to fill Distributor's orders
in a timely manner.
4.2 Delivery. In filling each order submitted by the Distributor, Manufacturer
shall be responsible for (a) delivering the Products to a carrier and (b)
promptly notifying the Distributor of the shipment.
4.3 Force Majeure. Manufacturer shall not be liable in any respect for failure
to ship or for delay in shipment of the Products pursuant to accepted orders
where such failure or delay shall have been due wholly or in part to the
elements, acts of God, acts of Distributor, acts of civil or military authority,
fires, floods, epidemics, quarantine restrictions, war, riots, strikes, lock
outs, break down, differences with workmen, accidents to machinery, delays in
transportation or delays in delivery by Manufacturer's suppliers.
4.4 Sales Literature. Manufacturer shall furnish such information as is
necessary to enable the Distributor to prepare adequate selling materials and to
service the Products. Limited supplies of sales literature may be available from
the Teledigital.
4.5 Training. Manufacturer shall make available, training for Distributor's
personnel. Training is to include operation and maintenance of the Products and
systems provided by Teledigital.
5. WARRANTIES
5.1 Manufacturer Warranties. Subject to the limitation set forth in this
section, Teledigital warrants to Distributor that the Products sold by it to
Distributor shall be new and in good working condition as set forth in the
handsets manufacturer's warranty. From time to time manufacture may offer
remanufactured equipment the distributor will be informed in advance of any
shipment.
3
EXHIBIT 10.29
Manufacturer agrees to indemnify and hold harmless Distributor from any and all
legal actions arising out of a claim of copyrights or trade secret infringement
concerning Teledigital's Products or Updates, or any legal actions arising out
of Teledigital design of Products, brought against Distributor by a third party.
The total liability for Manufacturer shall not exceed the amount paid for the
products. Distributor shall notify the Manufacturer promptly, in writing, of any
legal actions and shall, at Manufacturer's expense, cooperate with Manufacturer
in the defense of such claims. Distributor will immediately inform Teledigital
in writing via FAX or courier service as soon as Distributor becomes aware of
liability claims by a third party against the Products.
EXCEPT AS STATED ABOVE, MANUFACTURER DISCLAIMS ALL WARRANTIES, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THE PRODUCTS,
INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. MANUFACTURER
SHALL NOT BE LIABLE FOR ANY LOSS OR DAMAGE CAUSED BY DELAY IN
FURNISHING THE PRODUCTS. THIS PARAGRAPH 5 CONTAINS THE SOLE AND
EXCLUSIVE REMEDIES FOR BREACH OF ANY AND ALL WARRANTIES AND THE SOLE
REMEDY FOR MANUFACTURER'S LIABILITY OF ANY KIND WITH RESPECT TO THE
PRODUCTS COVERED BY THIS AGREEMENT. IN NO EVENT SHALL MANUFACTURER'S
LIABILITY OF ANY KIND INCLUDE SPECIAL, INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES INCLUDING BUT NOT LIMITED TO LOST PROFITS, EVEN IF
MANUFACTURER SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
POTENTIAL LOSS OR DAMAGE.
5.2 Distributor Warranties. Distributor, acting on its own behalf only, shall
extend a written warranty at least as favorable to its customers as the warranty
extended to it by Handset manufacturer, in connection with each sale of the
products. Distributor shall perform and fulfill all of the terms and conditions
of each warranty.
6. TERM AND PURCHASE REQUIREMENTS
6.1 Term. Subject to Section 6.2 and Section 7 hereof, this Agreement shall
remain in effect for a period of two (2) years from the date hereof. This
agreement will be automatically renewed for successive two (2) years unless
otherwise terminated.
6.2 Purchase Requirements. The Distributor agrees to purchase in the first 60
days from the date of this contract.
4
EXHIBIT 10.29
7. TERMINATION
7.1 Termination. Upon the occurrence of any one of the following events, the
party not responsible for the event of termination specified below shall have
the right, upon giving the other party written notice of its intention to
terminate this Agreement, without further obligation other than as expressly
specified herein, to terminate this Agreement:
a. Material breach by either party in fulfilling any one or more of the
covenants, obligations or responsibilities undertaken by it pursuant to
this Agreement which failure is not cured within sixty (60) days after
written notice;
b. Dissolution, termination of existence, liquidation, insolvency or
business failure of either party, or the appointment of a custodian or
receiver for either party or any part of the property of either party
if such appointment is not terminated or dismissed within thirty (30)
days;
c. The institution by either party of any proceeding under the United
States Bankruptcy Code, or any other federal or state bankruptcy,
reorganization, receivership, insolvency or other similar law affecting
the rights of creditors generally or the making by either party of a
composition or any assignment or trust mortgage for the benefit of
creditors; or
d. The institution against either party of a proceeding under the
United States Bankruptcy Code, or any other federal or state
bankruptcy, reorganization, receivership, insolvency or other similar
law affecting the rights of creditors generally, which proceeding is
not dismissed within thirty (30) days of filing; or
e. The Distributor makes any material false statement, representation
or claim of any kind regarding the products of Manufacturer.
f. Changes in ownership of Distributor.
g. Changes or lease of Distributor's assets which in opinion of
Manufacturer may affect the ability of Distributor to perform under
this contract.
7.2 Waiver of Termination Compensation. Distributor waives any and all rights it
may have under local law in the Territory to termination compensation and
consequential damages; and Distributor will indemnify Manufacturer from all
damages; of Distributor's agents, employees or other third parties, with respect
to any such rights they may have under local law in the Territory.
7.3 Duties of Distributor upon Termination. Upon termination of this Agreement
for any reason whatsoever, Distributor shall be obligated to:
a. Cease immediately from acting as a distributor of manufacturer and
abstain from making further sales of Products, except with the written
approval of Manufacturer.
5
EXHIBIT 10.29
b. Cooperate with Manufacturer in completing all outstanding
obligations to Customers, including the fulfillment, at Distributor's
expense, of each Warranty term and condition
c. Cease making use of any sign, printed material, sales literature,
trademarks or trade names identified with Manufacturer without the
express written consent of Manufacturer, and refrain from holding
itself out as having been formerly connected in any way with
Manufacturer.
7.4 Duties of Manufacturer upon Termination. Upon termination for breech of this
Agreement or by mutual agreement of both parties. Manufacturer is not obligated
to purchase back from Distributor any package cellular phones or unused airtime
cards or pins.
8. CONFIDENTIALITY
8.1 Confidential Information. Each party agrees to hold in confidence any
written or recorded information received by it from the other party that is
marked "Confidential" (or equivalent) or oral information that is designated as
confidential at the time of disclosure and reduced to a writing so marked within
twenty (20) days of disclosure, with the same degree of care that it exercises
with respect to its own information of like import.
8.2 Exceptions. The obligations of Section 8.1 shall not apply to any portion of
the information which:
a. Is now or which hereafter through no act or failure to act on the
part of the receiving party or its employees or former employees
becomes generally known in the cellular telephone industry;
b. Is known to the receiving party at the time of receiving such
information
c. Is hereafter furnished to the receiving party by a third party as a
matter of right without restriction on disclosure
d. Is independently developed by the receiving party provided that the
person or persons developing the same have not had access to the same
information as received from the transmitting party
e. Is disclosed by the transmitting party after written notice has been
received by the transmitting party from the receiving party that the
receiving party no longer wishes to receive information of the type
disclosed; or
f. Is disclosed by the receiving party after three (3) years from the
receipt
6
EXHIBIT 10.29
8.3 Breach of Security, Definition. Each party agrees to notify the other
promptly in writing in the event of any breach of its security under conditions
in which it would appear that confidential information was prejudiced or exposed
to loss. Each party shall, upon request from the other, take reasonable steps to
recover any compromised confidential information.
9. MISCELLANEOUS
9.1 IF CELLNET IS NOT IN DEFAULT OF THIS AGREEMENT THE ABILITY TO PURCHASE
TELEDIGITAL SOFTWARE, PINS, MOBILE PHONES AND THE USE OF TELEDIGITAL
ACTIVATION/DEACTIVATION PROCESSES WILL NOT BE INTERRUPTED BY A CHANGE IN
OWNERSHIP OF TELEDIGITAL. CELLNET WILL BE REQUIRED TO ADHERE TO THE POLICIES AND
VOLUME REQUIREMENTS OF THE ACQUIRING COMPANY AND MUST ENTER IN TO A NEW
AGREEMENT WITH SUBSTANTIALLY SAME TERMS AND CONDITIONS WITH THE ACQUIRING
COMPANY WITHIN 1 YEAR OF A CHANGE IN OWNERSHIP OF TELEDIGITAL.
9.2 Status of Parties. The relationship of the parties under this Agreement
shall be and at all times remain one of independent contractors. Distributor is
not an employee, agent or legal representative of Manufacturer and shall have no
authority to assume or create obligations on Manufacturer's behalf with respect
to the Products or otherwise.
9.3 Entire Agreement. This instrument constitutes the entire agreement between
Manufacturer and Distributor and supersedes any prior agreement, verbal or
written, express or implied, which may exit between the parties. This Agreement
shall not be amended, altered, or changed except by a written agreement signed
by the parties hereto.
9.4 Waivers. No delay or omission on the part of either party to this Agreement
in requiring performance by the other party hereunder, or in exercising any
right hereunder, shall operate as a waiver of any provision hereof or of any
right or rights hereunder; and the waiver or omission or delay in requiring
performance or exercising any right hereunder on one occasion shall not be
construed as a bar to or waiver of such performance of right, or of any right or
remedy under this Agreement, on any future occasion.
9.5 Notification. For the purposes of this Agreement, and for all notices and
correspondence hereunder, the addresses of the respective parties have been set
out at the beginning of this Agreement and no change of address shall be binding
upon the other party hereto until written notice hereof is received by such
party at the address shown herein. All notices shall be in English and shall be
effective upon receipt if delivered personally or sent by facsimile, and five
(5) days after mailing if sent by express courier.
9.6 Governing Law, Arbitration. This Agreement shall be governed and construed
in accordance with the laws of the State of Minnesota. If any dispute,
difference or question shall arise at any time after the date of Agreement
between the Parties in respect of, or in connection with this Agreement, then,
if so elected by either party, the dispute, difference or question shall be
finally settled by arbitration to be conducted in Minneapolis, Minnesota under
the Rules of the American Arbitration Association. Judgment upon the award
rendered may be entered in any court having made to such court for judicial
acceptance of the award and an order of enforcement, as the case may be.
7
EXHIBIT 10.29
The arbitrators shall be permitted to award punitive, exemplary or other damages
beyond actual damages or award either party reimbursement of losses incurred
from any judgment or award for punitive, exemplary or consequential damages.
9.7 Assignment. This Agreement shall not be assigned or transferred by
Distributor/Agent, directly or indirectly, without the prior written consent of
Manufacturer.
9.8 Local Laws. Distributor shall not make or offer any payments or anything of
value to any government officials or employees, or engage in any other
questionable activities with government officials to obtain orders for or sell
the Products.
9.9 Severability. The declaration by a court of law or governmental authority
that any provision of this Agreement is invalid or unenforceable shall not
affect the validity or unenforceability of the other provisions not subject to
such declaration.
SIGNATURE PAGE TO FOLLOW
8
EXHIBIT 10.29
EXECUTED as of the date first above written.
TELE DIGITAL DEVELOPMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
Title: President & Chief Executive
Officer
CELLNET COMMUNICATIONS
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Title: President
9
