NKO [LOGO]
MEGAHERTZ - NKO, INC.
AUTHORIZED DISTRIBUTOR AGREEMENT - PrePaid
This Agreement is made and entered into in Jacksonville, Florida between
MegaHertz-NKO Inc., a Delaware corporation authorized to do business in the
State of Florida and the distributor, QCOMM INC, a corporation whose address is:
0000 Xxxxx 0000 XXXX, XXXX XX 00000 telephone is 000-000-0000, fax 000-000-0000.
ARTICLE I - DEFINITIONS
As used in this Agreement, the capitalized terms appearing in this Article
I shall be defined as set forth below:
Section 1.1. "Distributor" means the Distributor is authorized to
represent and sell Services on behalf of the Company.
Section 1.2. "Agreement" means this contract, and any attachment or
exhibit hereto, as the same may be amended from time to
time.
Section 1.3. "Company" means MegaHertz-NKO, Inc. of Jacksonville,
Florida and any parent, subsidiary or affiliate thereof.
Section 1.4. "Customer" means any third party which contracts with
the Distributor for the purchase, use or lease of any of
the Products or Services of the Company.
Section 1.5. "Distributor" means QCOMM INC. and any parent, subsidiary
or affiliate thereof.
Section 1.6. "Effective Date" means that the date that this Agreement
shall become effective, which date shall be the date on
which the Company signs and dates this Agreement below.
Section 1.7. "Products" means the Company's products sold or consigned
to the Distributor pursuant to this Agreement, and which
are more fully described in Attachment 1 to this
Agreement.
Section 1.8. "Sales Location" means the location of a sales office
operated by the Distributor under the terms of this
Agreement.
Section 1.9. "Service Activation" means the date upon which the
Customer is capable of transmitting data over the
Company's network.
Section 1.10. "Services" means the Company's services rendered to the
Distributor and/or the Customer by the Company, and which
are more fully described in Attachment 1 to this
Agreement.
Section 1.11. "Territory" means the channels of distribution and
specific customers pursued described in Attachment 2.
Initials SF Date 8/5
----- ----
Page 1 of 13
to the Company, with a combined single limit of not less
than $1,000,000 for bodily injury or death and for
property damage. The Distributor also shall procure and
maintain, in full force and effect, worker s compensation
insurance, within the limits required by applicable
Federal and state statutes. Such policies shall provide
that they shall not be canceled or altered without at
least thirty (30) days prior written notice to the
Company. Within ten (10) days after submitting this
Agreement, the Distributor shall furnish the Company with
a certificate or certificates of such policies, together
with satisfactory evidence that the premiums therefor have
been paid. Maintenance of such insurance and the
performance by the Distributor of its obligations under
this paragraph shall not relieve Distributor of liability
under the indemnity provisions set forth above.
ARTICLE III - TERM AND TERMINATION OF THE AGREEMENT
Section 3.1. Term. This Agreement shall commence as of the Effective
Date, and shall remain in effect for an initial period of
one year. The Agreement automatically shall renew on each
anniversary of the Effective Date unless either party
gives sixty (60) days prior, written notice to the other
of its intention to terminate the Agreement at the end of
the term.
Section 3.2. Termination for Cause. Notwithstanding Section 3.1, the
Company may immediately terminate this Agreement for
"cause" upon written notice to the Distributor. For
purposes of this Section, "cause" shall be determined by
the Company and shall include, without limitation, a
breach of this Agreement or any action on the part of the
Distributor or its employees or Distributors that might
discredit the good name and goodwill of the Company.
Unless otherwise expressly agreed to in writing by the
Company, any such termination automatically shall operate,
as of the effective date thereof, as a cancellation of any
further deliveries of Products to the Distributor, and as
a cancellation of all purchase orders of the Distributor
for Products, whether or not any such orders previously
have been accepted by the Company. The termination of this
Agreement shall not release either party form any
obligation which, pursuant to these terms, is to survive
or be performed thereafter except in regards to the
existing hone card pins which will remain active; and all
commissions due will continue to be paid to QComm as
agreed. Neither party shall, by reason of the termination
of this Agreement, or the associated cancellation of any
undelivered orders, in accordance with these terms, be
liable to the other for compensation, reimbursement or for
any damages on account of the loss of profits or
prospective profits on anticipated sales, or on
commitments in connection with the business or goodwill of
either party or otherwise, or for direct, special,
incidental, indirect or consequential damages, nor shall
either party have the right to any equitable remedies by
reason of such termination. However, the Distributor shall
remain obligated to the Company after any such termination
for any unpaid invoices for Products ordered and
delivered.
Section 3.3. Company's Repurchase Right. The Company shall have the
option (but not the obligation), in its sole and absolute
discretion, exercisable upon written notice to the
Distributor mailed within fourteen (14) days following the
mailing of a notice of termination of this Agreement to
repurchase from the Distributor, or from the Distributor's
legal representatives (in the event of the insolvency or
other such situations), all or any part of the
Distributor's inventory of Products existing on the
effective date of such termination for cause, at a price
equal to the Distributor's net purchase price therefor
from the Company, or the Company's price for Products to
its authorized Distributors of the Products at the time of
such repurchase, whichever price is lower. If the Company
elects, in its sole and absolute discretion, to purchase
Products which are not then on the Company's current price
sheet or which are damaged or not in their original
containers, the parties hereto agree to negotiate the
price thereof in good faith. In the event the
Initial SF Date 8/5
----- ----
Page 3 of 13
Company exercises its option to repurchase all or any part
of the Distributor's inventory of the Products, the
Distributor hereby agrees to sell to the Company that
portion of its inventory of Products as the Company elects
to purchase, as of the effective date of termination of
this Agreement, and to immediately deliver the same to the
Company at the Distributor's sole cost and expense, at
such time(s) and to such place(s) as the Company shall
have the right to designate, free and clear of any liens
or encumbrances thereon. The Company shall have the right
to offset against any monies payable to the Distributor
under this paragraph any monies that are due and owing
from the Distributor to the Company as of the date any
such payment is due.
Initial SF Date 8/5
----- ----
Page 4 of 13
ARTICLE IV - OBLIGATION AND RIGHTS OF THE DISTRIBUTOR
Section 4.1. Right to Purchase. As an authorized Distributor of the
Products, the Distributor shall have the non-assignable
and non-transferable right to purchase the Products from
the Company upon such terms and conditions, and at such
prices, as may be established or modified by the Company
from time to time. The pricing and terms of purchase are
contained as Attachment 3 to this Agreement.
Section 4.2. Maintenance of Inventory. The Distributor agrees, while an
authorized Distributor for the Products, to purchase from
the Company, and to maintain in inventory at all times, a
quantity of Products sufficient for and consistent with
the needs of the Distributor's Customers
Section 4.3. Promotion of Products. The Distributor agrees to promote,
display and demonstrate the Products in a manner which is
attractive and consistent with the Product's reputation
for high quality, and which is at least equivalent to the
Distributor's promotion, display and demonstration of
other products sold by the Distributor;
Section 4.4. Purchase Orders. The Company agrees that the
Distributor may submit orders on the Distributor's
purchase order form, if any, provided however that the
terms and conditions provided in this Agreement shall
solely govern the sale, delivery and warranty of the
Products, and that any printed terms of the Distributor's
purchase order, and any other terms in the Distributor's
purchase order which vary from, or are inconsistent with,
contrary to, or in addition to, these terms and conditions
shall be null and void. Any purchase order submitted to
the Company by the Distributor shall be subject to the
Company's confirmation, and upon confirmation by the
Company, shall be firm and non-cancelable, and shall not
be subject to rescheduling by Distributor except upon the
written consent of the Company.
Section 4.5. Shipment Dates. Delivery dates set forth in any
confirmation of purchase order shall be deemed to be
estimated delivery dates only, and the Company shall not
be liable to the Distributor or the Customers for any
losses or damages whatsoever, including, without
limitation, direct, indirect, special, consequential or
incidental damages, that may arise out of the failure by
the Company to deliver, or the prevention of, or delay in,
the delivery of any Product shipment or any part thereof,
due to any cause or reason whatsoever.
The Company shall make reasonable efforts to timely fill
and ship the Distributor's orders for Products. However,
the Company shall not be liable in any respect for any
failure or delay in any delivery due in whole or in part
to such matters as shortage or curtailment of material,
labor, transportation or utility services, or failure or
delay by the Company's suppliers in making deliveries to
it, whether due to labor or production difficulty or other
causes or due to any other cause beyond the Company's
reasonable control or without the Company's fault or
negligence.
Section 4.6. Shipping Risk of Loss. The risk of loss on all shipments
of Products to the Distributor shall pass to the
Distributor at the Company's shipping point. The
Distributor shall be solely responsible to insure the risk
of loss or damage to such Products at the Distributor's
own expense and shall be solely responsible to pursue any
claim against the carriers for negligent delivery of the
Products.
Section 4.7. Payment for Products. The Distributor shall pay each
Company invoice for Products according to its terms,
without any set-off or claim, except in the
Initial SF Date 8/5
----- ----
Page 5 of 13
amounts of any written credit memorandum issued by the
Company to the Distributor prior to the due date of the
outstanding invoice. Payment terms will be set forth on
the Company's invoices and may be changed from time to
time without the approval of, or prior notice to, the
Distributor. Each shipment of the Products to the
Distributor shall constitute a separate sale, obligating
the Distributor to pay therefor, whether any such shipment
be in complete or partial fulfillment of any purchase
order of the Distributor.
Section 4.8. Price Changes. If the Company shall have the right, in the
Company's sole and absolute discretion, during the term of
this Agreement, announce any change, to include increase,
decrease or modification, in the Distributor price for any
Product except existing phone card pins which will remain
at the activated price and rate plan as agreed herein.
Section 4.9. Quantity Limitations. In the event that product demand
exceeds product availability, the Company shall have the
right to limit the quantity of Products to be sold to the
Distributor hereunder in such manner as the Company
believes to be appropriate, in the Company's sole and
absolute discretion.
ARTICLE V - WARRANTIES
Section 5.1. Return of Defective Products. If any Products furnished
the Distributor are defective at the time of delivery, the
Distributor's sole remedy shall be to return the defective
Products to the Company only if a MegaHertz-NKO, Inc.
Return Authorization Form is approved. The foregoing
constitutes the Distributor's and Customers sole remedy
with respect to initially defective Products. The
Distributor shall have no right to reject all, or any part
of, a shipment of Products furnished hereunder because any
or all such Products may be initially defective. The
Distributor shall accept all Products, even if initially
defective, and be compensated solely through the Company's
issuance of a written credit memorandum.
Section 5.2. Printed Warranties. The Company shall deliver to the
Distributor with the Products such printed warranties or
guarantees with respect to the Products as shall be
afforded by the Company to the Customers of the Products.
The Distributor shall not provide or advertise any
warranties or guarantees with respect to the Products
which purport to obligate the Company other than as
provided in the aforesaid printed warranties and
guarantees furnished by the Company for the Products. The
Distributor shall ensure that the foregoing printed
warranties or guarantees are delivered to the Customers of
the Products at the time of purchase by the Customer.
Section 5.3. Disclaimer of Warranties. THE WARRANTIES SET FORTH IN THIS
ARTICLE V ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
WARRANTIES, OTHER THAN WARRANTY OF TITLE, WHETHER ORAL OR
WRITTEN, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF
MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE,
ALL OF WHICH ARE HEREBY WAIVED BY THE DISTRIBUTOR. The
employees and Distributors of the Company are not
authorized to make modifications to such warranties, or
provide additional warranties binding on the Company
unless such modifications or additions are in writing, and
signed by an officer of the Company. Any such unauthorized
statements, whether oral or written, do not constitute
warranties and should not be relied upon by the
Distributor or its Customers. The Company's liability
under its warranties shall be limited solely to the cost
of any necessary repairs or replacement of the Products,
or refund of the Distributor's purchase price for the
Products, and the Company assumes no risk of, and shall
not in any case be liable for, any other damages,
including, without limitation, any special, incidental,
consequential or
Initial SF Date 8/5
----- ----
Page 6 of 13
punitive damages, arising from breach of warranty or
contract, negligence or any other legal theory, including,
without limitation, loss of goodwill, profits or revenue,
loss of use of the Products or any associated equipment,
cost of capital, cost of any substitute equipment,
facilities or services, downtime costs, or claims of any
party dealing with the Distributor for such damages.
ARTICLE VI - SALE OF COMPANY SERVICES
Section 6.1. Appointment as Service Distributor. In accordance with
this Agreement, the Distributor shall be an authorized
Distributor of the Services offered by the Company
contained in Attachment 1, and shall have a non-assignable
and non-transferable right to sell the Services to
Customers upon such terms and conditions, and at such
prices, as may be established or modified by the Company
from time to time..
Section 6.4. Approval of Customers. The Company shall have the sole and
exclusive right to determine suitability of Customers to
use the Services.
ARTICLE VII - INTELLECTUAL PROPERTY
Section 7.1. Trademarks. The Distributor acknowledges that the Company
has retained the full and exclusive rights to, and
ownership in, the trademarks, "MegaHertz-NKO", "FaxJack",
and "FaxJet Service", and any and all other trademarks and
tradenames applicable to the Company and its Products
("Trademarks and Tradenames"). Such rights and ownership
interests of the Company shall at no time be contested by
the Distributor. The Distributor hereby is granted a
non-exclusive right to use the Trademarks and Tradenames
in connection with the conduct of its business under this
Agreement, but only in such connection, and it is agreed
by the Distributor that such right shall terminate when
this Agreement shall terminate, however such termination
might be occasioned. None of the Trademarks or Tradenames
(and service marks), nor any coined words or combination
of words, including the Trademarks or Tradenames, or any
substantial part of any of the same, shall be used in the
corporate, business or tradename of the Distributor
without the prior written approval of the Company. Any
particular use thereof shall be discontinued upon notice
to the Distributor. The Distributor shall promptly report
to the Company any use of the Trademarks and Tradenames
and any and all other trademarks and tradenames applicable
to the Company and its Products, by any person, firm or
corporation, in connection with the distribution of the
Products, Services or otherwise, which comes to the
attention of the Distributor and which the Distributor
believes is unauthorized. The Distributor will comply with
all requests for cooperation in connection with the
investigation of or legal action to prevent unauthorized
uses.
Section 7.2. Removal, Alteration or Placement of Marks. The Distributor
agrees that it shall not remove or alter any Xxxx or any
other trademark, tradename, service xxxx, logotype or
other proprietary xxxx belonging to the Company
(collectively, the "Marks"), which are affixed to the
Products or the packaging therefor. Unless consented to in
writing, in advance by the Company, the Distributor shall
not affix any additional trademarks or trade designations
to any Products or the packaging therefor which bear any
Xxxx. The Distributor agrees to submit to the Company for
the Company's prior written approval, any advertising or
other printed material employing any Xxxx, prior to any
use thereof by the Distributor.
Initial SF Date 8/5
----- ----
Page 7 of 13
Section 7.3. Cost of Printing Marks. The Distributor is authorized, but
not required, to refer to and advertise itself as an
authorized Distributor of the Products in the Territory.
Any use of the name "MegaHertz-NKO" by the Distributor in
connection with its promotion or sale of the Products or
advertising of the same shall be at the Distributor's sole
cost and expense.
Section 7.4. Use of Marks After Termination. Upon termination of its
appointment hereunder for any reason, the Distributor
shall immediately refrain thereafter from any and all use
of the trademarks, tradenames and service xxxx of the
Company, and shall refrain from the use of any marks
confusingly similar thereto in connection with any
products whatsoever, and shall immediately refrain from
referring to itself as a Distributor of the Products or
Services. The Distributor shall remove from public view
any signs, banners, wall charts, certificates, plaques or
ornamentations stating or suggesting that the Distributor
is authorized by the Company to sell, promote or install
the Products or Services.
ARTICLE VIII - MISCELLANEOUS
Section 8.1. Compliance with Laws. The Distributor agrees that it shall
not participate in the transfer, by any means, of any
commodity or technical data acquired from the Company (i)
in violation of the Export Administration Act ("Act") or
any regulation, order or license issued under the Act, or
(ii) with the knowledge or with reason to know that a
violation of the Act, a regulation, an order or a license
has occurred, is about to occur, or is intended to occur
with respect to any such commodity or technical data.
Section 8.2. Confidential Information. The Distributor agrees to keep
confidential and proprietary information received by the
Distributor in connection with its sale of the Products
and/or Services, including the Company's marketing
strategies and techniques, pricing and discount
structures, and technical data regarding the Products and
Services.
Section 8.3. Assignment Prohibited. This Agreement may not be assigned,
by operation of law or otherwise, by the Distributor
without the Company's prior written consent. The Company
has relied on the personal qualifications and attributes
of the owners and officers of the Distributor as they
existed at the time of this Agreement, to properly
represent the Distributor in the sale of the Products
and/or Services. The Distributor shall immediately notify
the Company in writing of any material change in the
ownership structure or officer representation of the
Company.
Section 8.4. Complete Agreement. This Agreement contains all of the
terms and conditions with respect to the appointment of
the Distributor as an authorized Distributor for the
Products and/or Services and there are no representations,
warranties, covenants, agreements or collateral
understandings, oral or otherwise, express or implied,
affecting this Agreement not expressly set forth herein.
Section 8.5. Written Modifications. None of the terms, conditions or
provisions hereof may be, nor shall they be held, deemed
or construed to have been, changed, waived, varied,
modified or altered by any act or with the knowledge of
either party, their respective Distributors, servants or
employees, and the terms of the Agreement may not be
changed, waived, varied, modified or altered except in
writing signed by an officer or principal of both parties.
Initial SF Date 8/5
----- ----
Page 8 of 13
Section 8.6. Effect of Delays. No delay on the part of either party in
exercising any of their respective rights hereunder or the
failure to exercise the same, shall operate as a waiver of
such rights except in the specific instance.
Section 8.7. Governing Law. The entire transaction contemplated
hereunder shall be governed by the laws of the State of
Florida without regard to its conflict-of-laws rules. Any
dispute arising under this Agreement shall be resolved
exclusively in the state courts located in Xxxxx County,
Florida or the federal courts located in Jacksonville,
Florida.
Section 8.8. Arbitration. Any controversy or claims arising out of or
related to the Agreement, or the breach thereof, shall be
settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association,
but in any such arbitration (i) the decision of the
arbitrators shall be determined under the laws of the
State of Florida, (ii) the Florida Rules of Civil
Procedure with regard to discovery and the Florida
Evidence Code shall be followed, and (iii) the arbitrators
shall prepare a written decision setting forth their
findings of fact and rulings of law. Judgment upon the
award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof.
Section 8.9. Fees and Costs. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default or
misrepresentation in connection with any provisions of
this Agreement, the successful or prevailing party shall
be entitled to recover reasonable attorneys' and
paralegals' fees, court costs and all expenses even if not
taxable as court costs (including, without limitation, all
such fees, costs and expenses incident to appeals),
incurred in that action or proceeding, in addition to any
other relief to which such party may be entitled.
Section 8.10. Notices. Any notices, consents or written communications
between the parties shall be hand delivered or mailed
first class, postage prepaid, to the following address:
To Company: MegaHertz-NKO, Inc.
0000 Xxxxxxxxxx Xxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
p - 000-000-0000
f - 000-000-0000
To Distributor: QCOMM INC.
-----------------------------------
1135 South 1680 West
-----------------------------------
Xxxx, XX 00000
-----------------------------------
P: 801-226-4222
-----------------------------------
F: 000-000-0000
-----------------------------------
-----------------------------------
Either party may modify their address for purposes of this Section by
mailing a notice to the other party in accordance with this Section.
COMPANY: MegaHertz-NKO, Inc.
Dated: August 5, 1999
Initial SF Date 8/5
----- ----
Page 9 of 13
"Effective Date" By:
---------------------------------
Its:
---------------------------------------
DISTRIBUTOR:
Dated: August 5, 1999
By: /s/ Xxxxxxx X. [ILLEGIBLE]
----------------------------------------
Its: President
---------------------------------------
Initial SF Date 8/5
----- ----
Page 10 of 13
ATTACHMENT 1 - Prepaid Phone Cards
PRODUCTS/SERVICES:
Prepaid Phone Cards
The sale and distribution of the MegaHertz-NKO Prepaid Phone Cards
REQUIRED:
Federal Employer Identification Number (FEIN): 000000000
---------------------------------
Certificate of Resale: A Copy of your Certificate of Resale must accompany this
contract.
Initial SF Date 8/5
----- ----
Page 11 of 13
ATTACHMENT 2 - TERRITORY
List channels of distribution and specific Customer(s) pursued:
Direct Sales Force
= All High Transaction/High Volume Retailers
Distributor/Resellers
= 2500 + Nationwide/Retailer, Personal, Activity
Initial SF Date 8/5
----- ----
Page 12 of 13
ATTACHMENT 3 - Terms & Conditions & Pricing
Outline terms and conditions here.
Use MegaHertz-NKO, Inc. generic prepaid phone cards Payment - upon activation
See attached pricing program
Zero Balance/Debit Card
= no charge for pins
= NKO pays QCOMM the agreed upon rate commission
= Commission to be paid QCOMM by the 10th of the month following
activations/recharges.
= 40% commission
= 7.9 rate; 6 sec increment; 49(cents) connect with Int'l rates
as per sent/attached.
= Monthly reporting as agreed to by QCOMM Inc & NKO.
Initial SF Date 8/5
----- ----
Page 13 of 13
