--------------------------------------------------------------------------------
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------------------------------------------------------
This Exclusive Distribution Agreement ("Agreement"), effective as of the 17th
day of October, 2003 (the "Effective Date"), is entered into by and between
M.POS Limited, having offices at 000 Xxxxxxx Xxxxx, 00 Xxxxxxx Xxxx, Xxxxxxx,
Xxxx Xxxx ("MPOS"), and Maximum Dynamics, Inc., having offices at 2 N. Cascade
Ave., Suite 1100, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, X.X.X. ("Distributor").
BACKGROUND
MPOS is in the business of developing, selling and licensing Electronic
Funds Transfer at Point of Sale (EFTPOS) terminals and related wireless
communications software (hereafter referred to as "Products"). Distributor
desires to market and distribute such Products in Africa and first rights of
refusal for the same distribution rights in the United States and Mexico, and
MPOS agrees to authorize Distributor to so market and distribute such Products,
pursuant to the terms and conditions set forth below.
AGREEMENT
Now, therefore, in consideration of the foregoing and the mutual
covenants and conditions contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Products" shall mean those products listed in Exhibit A attached
hereto, as such products may be added to or abandoned by MPOS at
MPOS's sole discretion from time to time during the term of this
Agreement.
1.2 "Product Unit" shall mean one unit of a particular product of MPOS.
For example, one MPOS point of sale unit shall constitute one
Product Unit.
1.3 "MPOS Marks" shall mean those trademarks, tradenames and
servicemarks listed in Exhibit B attached hereto, as such
trademarks, tradenames and servicemarks may be added to or removed
by MPOS at MPOS's sole discretion from time to time during the term
of this Agreement.
1.4 Sale and Purchase of Products. All references in this Agreement to
the "sale" or "selling" of Products shall mean a license to use such
Products and sale of the tangible media on which the Products are
distributed. All references in this Agreement to the "purchase" of
Products shall mean a license to use such Products and the purchase
of the tangible media on which the Products are distributed.
1.5 "Territory" shall mean Africa and those islands surrounding Africa
that are considered part of the African Continent,
1.6 "Year 1" shall mean the period commencing on the Effective Date and
ending on December 31, 2004.
1
1.7 "Year 2" shall mean the period commencing on January 1, 2005 and
ending on December 31, 2005.
1.8 "Year 3" shall mean the period commencing on January 1, 2006 and
ending on December 31, 2006.
2. APPOINTMENT
2.1 Appointment of Distributor. Conditioned upon Distributor's continued
satisfaction of the terms and conditions of this Agreement, MPOS
hereby appoints Distributor, and Distributor hereby accepts
appointment, as MPOS's exclusive Distributor for the licensing and
distribution of Products to customers in the Territory only for use
in the Territory. This exclusive agreement is subject to the
conditional precedent that the Distributor will meet the minimum
initial order commitment in Exihibit E. Distributor shall not
reproduce or sell the Products, and Distributor shall not license or
distribute the Products except as expressly set forth in this
Agreement. Distributor agrees that it shall not offer for sale,
sell, license or otherwise distribute similar products acquired by
it from any entity other than directly from MPOS without the prior
written approval of MPOS.
2.2 Distribution outside the Territory. Distributor shall limit its
sales activities with respect to the Products to customers located
in the Territory.
2.3 Appointment of Subdistributors. Distributor may appoint
subdistributors to act on the Distributor's behalf only on prior
written approval of MPOS; provided, however, that any compensation
to such subdistributors shall be solely the Distributor's
responsibility. Any agreement with such agent or subdistributor with
respect to Products shall be coterminous with this Agreement.
2.4 Independent Contractor Status. The relationship of MPOS and
Distributor established by this Agreement is that of independent
contractors, and neither party is an employee, agent, partner or
joint venturer of the other. Distributor shall not be considered an
agent or legal representative of MPOS for any purpose, and neither
Distributor nor any director, officer, agent, or employee of
Distributor shall be, or is considered, an agent or employee of
MPOS. Distributor is not granted and shall not exercise the right or
authority to assume or create any obligation or responsibility on
behalf of or in the name of MPOS. All sales and other agreements
between Distributor and its customers are Distributor's sole
responsibility and will have no effect on MPOS's obligations under
this Agreement.
2.5 Operations and Expenses. The detailed operations of Distributor
under this Agreement are subject to the sole control and management
of Distributor. Distributor shall be responsible for all of its own
expenses and employees. Distributor shall provide, at its own
expense, such office space and facilities, and hire and train such
personnel, as may be required to carry out its obligations under
this Agreement. Distributor agrees that it shall incur no expense
chargeable to MPOS, except as may be specifically authorized in
advance in writing in each case by MPOS.
2.6 No Other Rights. Except as expressly provided in this Agreement, no
right, title or interest is granted by MPOS to Distributor. No
right, title or interest is granted by MPOS to Distributor relating
to products other than the Products as set forth in this Agreement.
Notwithstanding Section 2.1 above, MPOS reserves the right to sell
and distribute the Products directly to the customers that are set
forth in Exhibit C attached hereto ("House Accounts"), or to
customers who purchase products indented to be used in the Territory
2
through a central purchasing office not located within the
Territory. Where customers purchase products intended for use in the
Territory through sources other than the Distributor, then
Distributor shall be entitled to remuneration as determined by MPOS.
2.7 No Conflicts. Distributor represents and warrants that, as of the
Effective Date, it is not involved, directly or indirectly, in any
activities involving products which compete or have the potential to
compete with the Products, including but not limited to the
distribution of competing product lines ("Competing Activities").
Distributor agrees that it shall not enter into any Competing
Activities in the Territory during the term of this Agreement. If
Distributor becomes involved in any Competing Activities,
Distributor shall promptly inform MPOS of such involvement, and MPOS
shall have, in addition to all other remedies to which it may be
entitled, the right to terminate this Agreement without liability at
any time thereafter pursuant to Section 14.2.
2.8 During the first 90 days after the signing of this agreement, the
Distributor is entitled to first rights of refusal for exclusive
distribution of MPOS products in the United States and Mexico.
3. LICENSE OF MPOS MARKS
3.1 License. Subject to the terms and conditions of this Agreement, MPOS
grants to Distributor a non-transferable, revocable license, without
right of sublicense, to use the MPOS Marks in the Territory solely
in connection with the sale, distribution and advertisement of the
Products. Distributor shall not use the MPOS Marks except as
expressly permitted herein.
3.2 Restrictions. All representations of the MPOS Marks that Distributor
intends to use shall first be submitted to MPOS for approval of
design, color and other details or shall be exact copies of those
provided by MPOS. Distributor shall fully comply with all
guidelines, if any, communicated by MPOS concerning the use of the
MPOS Marks. Distributor shall not alter or remove any trademarks,
servicemarks, tradenames or other marks affixed to the Products by
MPOS, nor affix the MPOS Marks to any Product. Except as set forth
in this Article 3, nothing contained in this Agreement shall grant
or shall be deemed to grant to Distributor any right, title or
interest in or to the MPOS Marks. All uses of the MPOS Marks shall
inure solely to the benefit of MPOS, and Distributor shall obtain no
rights with respect to any of the MPOS Marks, other than the right
to distribute Products as set forth herein, and Distributor hereby
irrevocably assigns to MPOS all right, title and interest held by
Distributor, if any, in or to any of the MPOS Marks. At no time
during or after the term of this Agreement shall Distributor
challenge or assist others in challenging the MPOS Marks (except to
the extent expressly entitled by applicable law) or the registration
thereof or attempt to register any trademarks, servicemarks, marks
or trade names confusingly similar to the MPOS Marks. Upon any
termination or expiration of this Agreement, or the election of MPOS
pursuant to Section 4.2 below, Distributor shall immediately cease
to use any and all of the MPOS Marks, and any listing by Distributor
of any MPOS Xxxx in any telephone book, directory, public record or
elsewhere shall be removed by Distributor as soon as possible, but
in any event not later than the subsequent issue of such
publication.
3.3 Infringement. Distributor shall promptly notify MPOS of any actual
or suspected infringements, imitations, or unauthorized use of the
MPOS Marks by third parties of which Distributor becomes aware. MPOS
shall have the sole right, at its expense, to bring any action on
account of any such infringements, imitations or unauthorized use,
and Distributor shall cooperate with MPOS, as MPOS may reasonably
3
request, in connection with any such action brought by MPOS. MPOS
shall retain any and all damages, settlement and/or compensation
paid in connection with any such action brought by MPOS. Distributor
shall be entitled to any damages, settlement and/or compensation
paid in connection with any such action brought by MPOS provided
that such infringements, imitations or unauthorized use of the MPOS
Marks by third parties resulted in material damages to Distributor
as well.
3.4 Registered User Agreements. MPOS and Distributor shall enter into
registered user agreements with respect to the MPOS Marks pursuant
to applicable trademark law requirements in the Territory, if any.
Distributor or MPOS, at MPOS's sole discretion, shall be responsible
for proper filing of registered user agreements and all such other
required registrations relating to the legal protection of the MPOS
Marks with governmental authorities in the Territory and shall pay
all costs or fees associated with such filing(s).
4. OBLIGATIONS OF DISTRIBUTOR
4.1 Diligence. Distributor shall use its best efforts to promote the
marketing and distribution of the Products.
4.2 The Distributor agrees to cause MPOS or it's designees (including
but not limited to Smart Advance Holdings Limited) to receive a
grand total of 500,000 shares of the common stock of Maximum
Dynamics, Inc.. The shares shall be S.E.C. 144 Rule restricted
shares of Maximum Dynamics, Inc. stock (OTCBB:MXDY), within 30 days
of the signing of this agreement. This stock shall be considered as
part of the consideration of payment for the rights granted by MPOS
in this agreement in Year 1. Once these shares are received by MPOS,
these shares are not required to be refunded by MPOS to Distributor.
MPOS shall receive 500,000 additional shares of MXDY as balance of
the said consideration in this agreement in Year 1, on or before the
end of Year 1.
4.3 Upon execution of this agreement Distributor agrees to initiate
software design and product certification process for the MPOS2002
Terminal for South Africa banking and begin sales efforts.
Distributor will make best efforts to obtain this certificate within
90 days, however, MPOS understands that there may be uncertainties
and third parties involved in the South African banking system that
may prolong this process. In any case, Distributor agrees to pursue
the certification in the fastest possible manner.
4.4 Minimum Requirements. In the event Distributor fails to meet the
minimum requirements set forth in Exhibit E attached hereto, then,
notwithstanding anything in this Agreement to the contrary, and at
MPOS's election and not obligation, (i) MPOS shall be free to
appoint other distributors for its Products in the Territory, (ii)
Distributor shall not have any exclusive sale, marketing or
distribution rights to the Products, and (iii) the license grant of
Article 3 to the MPOS Marks shall terminate.
4.5 Minimum Requirements. Distributor hereby guarantees that the
aggregate amount of "Product Units" sold by Distributor under this
Agreement during each of Year 1, Year 2 and Year 3 shall equal or
exceed the amounts as set forth in Exhibit E (the "Guaranteed
Minimums"). The Guaranteed Minimums shall be waived in any of the
Years should any of the following occur: (i) MPOS incurs production
or quality problems that cause delay; (ii) events that may be
classified in Section 16.6 below. At the discretion of MPOS, the
Guaranteed Minimum requirement in any year may be waived at any time
4
4.6 Costs and Expenses. Except as expressly set forth herein,
Distributor shall be solely responsible for all costs and expenses
related to the advertising, marketing, promotion, and distribution
of the Products and for performing its obligations hereunder.
4.7 Promotional Materials. Distributor shall maintain an adequate
inventory of MPOS's current sales materials and samples ("Sales
Materials") and shall use such Sales Materials in an efficient and
effective manner to promote the sale of the Products in the
Territory.
4.8 Reports.
4.8.1 Annual Financial Reports. Distributor shall provide to MPOS
annual financial reports, which reports shall (i) be provided
to MPOS no later than three (3) months after the close of
Distributor's applicable fiscal year, and (ii) be treated as
Confidential Information pursuant to the terms of Article 11
below.
4.8.2 General Market Information. Distributor shall provide to MPOS
information regarding general market conditions and
competitors on a regular basis, or as reasonable requested by
MPOS.
4.8.3 Sales Activities. Within forty five (45) days after the end
of each calendar quarter, Distributor shall send to MPOS a
sales activities report including the names of customers,
quantities of Products purchased, dollar amounts invoiced to
and received from such customers, and customer backlog and
inventory status of Products, and further shall maintain
records of the same.
4.9 Relations with Customers. Distributor shall process and ship each
customer order in a timely fashion. Distributor shall provide to
customers any and all instructions, precautions, and other warnings
provided by MPOS to Distributor; and MPOS shall provide to
Distributor any such instructions, precautions, and other warnings
as MPOS in its sole discretion deems necessary or desirable.
4.10 Product Representations. Distributor shall not to make any
representations with respect to the Products other than those
expressly authorized in writing in MPOS's written data sheets.
4.11 Indemnification of MPOS. Distributor agrees to indemnify and hold
MPOS harmless from and against any and all losses, damages or
expenses of whatever form or nature, including attorneys' fees and
other costs of legal defense that they, or any of them, may sustain
or incur as a result of any acts or omissions of Distributor
including but not limited to (i) breach of any of the provisions of
this Agreement, (ii) negligence or other tortious conduct, (iii)
representations or statements not specifically authorized by MPOS
herein or otherwise in writing, or (iv) violation by Distributor of
any applicable law, regulation, or order in the Territory.
4.12 Indemnification of Distributor. MPOS agrees to indemnify and hold
Distributor harmless from and against any and all losses, damages or
expenses of whatever form or nature, including attorneys' fees and
other costs of legal defense that they, or any of them, may sustain
or incur as a result of any acts or omissions of MPOS or including
but not limited to (i) breach of any of the provisions of this
Agreement, (ii) negligence or other tortious conduct, (iii)
misrepresentations or fraudulent acts, or (iv) violation by MPOS of
any applicable law, regulation, or order in any jurisdiction that
has a material effect on the Distributor.
5
5. PRODUCTS
5.1 Product Prices. The prices to be paid by Distributor to MPOS for
Products hereunder shall be Prices for the Products set forth in
Exhibit D attached hereto ("Prices"). "Prices" as used herein shall
mean the prices set forth in MPOS's then-current customer price
schedules or bulletins. Prices shall be F.O.B. Hong Kong. All prices
are expressed and shall be payable in U.S. dollars.
5.2 Price Changes. Prices are subject to change by MPOS in its sole
discretion upon advance written notice of at least sixty (60) days.
Price changes shall be effective immediately after such sixty (60)
days notice period and applicable to all purchase orders whether or
not accepted prior to the effective date of the Price change.
5.3 Product Changes. MPOS reserves the right from time to time in its
sole discretion, without incurring any liability to Distributor with
respect to any previously placed Purchase Order (as defined in
Section 6.1 below), to discontinue or to limit its production of any
Product; to allocate, terminate or limit deliveries of any Product
in time of shortage; to alter the design or construction of any
Product; to add new and additional products to the Products; and
upon reasonable notice to Distributor, to change its sales and
distribution policies, not inconsistent with the terms of this
Agreement.
6. PURCHASER ORDERS
6.1 Purchase Orders. All orders for Products submitted by Distributor
shall be initiated by written purchase order in form acceptable to
MPOS (each a "Purchase Order"); provided, however, that an order may
initially be placed orally or by fax if a confirmational Purchase
Order is received by MPOS within five (5) days of said oral or fax
order. All Purchase Orders for Products are subject to acceptance by
MPOS in writing, and MPOS shall have no liability to Distributor
with respect to Purchase Orders that are not accepted. No partial
acceptance of a Purchase Order shall constitute the acceptance of
the entire Purchase Order, absent the written acceptance of such
entire Purchase Order.
6.2 Agreement Governs. Purchase Orders shall be governed by the terms of
this Agreement. Nothing contained in any Purchase Order shall in any
way modify or delete the terms and conditions contained herein or
add any additional or different terms or conditions to the terms and
conditions of this Agreement.
6.3 Order Changes. Purchase Orders may be canceled only with MPOS' prior
written approval. Changes to Purchase Orders must be received by
MPOS 60 days before the Purchase Order is scheduled to be shipped.
7. PAYMENT; TAXES
7.1 Payment Terms. Payment of any and all amounts due under this
Agreement shall be in U.S. Dollars.
7.2 Offsets. Any credits, allowances, or other amounts payable to or
creditable by Distributor shall be subject to offset for any claims
or other amounts owed by Distributor to MPOS pursuant to the
provisions of this Agreement.
6
7.3 Taxes.
7.3.1 Taxes. Prices do not include and are net of any foreign or
domestic governmental taxes or charges of any kind that may
be applicable to the sale, licensing, marketing or
distribution of the Products, including without limitation
excise, sales, use, or value-added taxes; customs or other
import duties; or other taxes, tariffs or duties. Each party
shall be responsible for its respective tax liabilities and
payments to the appropriate taxing authority.
8. DELIVERY; REJECTION
8.1 Shipment and Delivery. Products delivered pursuant to the terms of
this Agreement shall be suitably packed for shipment in MPOS's
standard shipping cartons, marked for shipment to the destination
specified in Distributor's Purchase Order, and delivered to the
carrier agent F.O.B. Hong Kong, at which time risk of loss shall
pass to Distributor. Unless otherwise specified in writing by
Distributor in Distributor's purchase order, MPOS shall select the
carrier. All freight, insurance, and other shipping expenses, as
well as expenses for any special packing requested by Distributor
and provided by MPOS, shall be paid by Distributor. All shipment and
freight charges shall be deemed correct unless MPOS receives from
Distributor, no later than fifteen (15) days after the date of
shipment, a written notice specifying the shipment, the purchase
order number, and the exact nature of the discrepancy between the
order and the shipment in number or type of Products shipped, or
freight or other charges, as the case may be. MPOS may cease any and
all shipments of Products until Distributor is in full performance
of its obligations under Article 7.
8.2 Title. MPOS shall retain all right, title and interest in and to
Products delivered to Distributor until MPOS has received all
applicable payments therefor.
8.3 Inspection; Rejection. Distributor shall inspect all Products
promptly upon receipt thereof and may reject any defective Product,
provided that Distributor shall (i) within the earlier of thirty
(30) days after receipt of such alleged defective Product or ten
(10) days after discovery of such alleged defect, notify MPOS of its
rejection and request a Return Material Authorization ("RMA") number
and (ii) within ten (10) days of receipt of the RMA number from MPOS
return such rejected Product to MPOS at MPOS' expense. Products not
rejected within the foregoing time periods shall be deemed accepted
by Distributor. In the event that MPOS determines that the returned
Product is defective and properly rejected by Distributor, MPOS
shall return to Distributor, freight prepaid, all repaired or
replaced Products properly rejected by Distributor.
8.4 Returned Product. Distributor shall only return Products to MPOS
with MPOS' prior written approval. Any Product returned to MPOS by
Distributor as authorized under this Agreement shall be shipped at
MPOS' expense to the address first set forth above or such other
location as MPOS may instruct Distributor, and shall be packed in
its original packing material. MPOS may refuse to accept any Product
not packed and shipped as herein provided.
8.5 If it is determined that Returned Material was rejected improperly
as a result of Distributor error, then the Distributor shall bear
the cost of shipping for any such material.
7
9. TECHNICAL SUPPORT
9.1 Support by Distributor. Distributor shall be solely responsible for
"First Level Support" for all Products distributed hereunder. First
Level Support shall mean, (i) providing reasonable technical support
to customers, including maintaining trained and competent technical
support personnel for the Products who are sufficiently
knowledgeable with respect to the Products to answer customer
questions regarding the use and operation of Products, (ii)
designating a technical liaison to coordinate Distributor's
technical support provided to Customers, and (iii) responding
promptly to requests for technical support from customers. MPOS
shall be responsible for "Second Level Support", which shall mean
providing technical support services with respect to the Products to
address and resolve customers' support requests that the Distributor
is unable to resolve.
10. DISCLAIMER OF WARRANTY
MPOS MAKES NO WARRANTIES OR CONDITIONS, EXPRESS STATUTORY, IMPLIED OR
OTHERWISE, AND MPOS SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND CONDITIONS
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT, AND
ALL OTHER IMPLIED WARRANTIES OR CONDITIONS ARISING FROM COURSE OF DEALING, USAGE
OF TRADE OR CUSTOM.
11. CONFIDENTIALITY AND PROPRIETARY RIGHTS
11.1 Confidentiality. Distributor acknowledges that by reason of its
relationship to MPOS hereunder it will have access to certain
information and materials concerning MPOS's business, plans,
customers, technology, and products that are confidential and of
substantial value to MPOS, which value would be impaired if such
information were disclosed to third parties ("Confidential
Information"). Distributor agrees that it will not use in any way
for its own account or the account of any third party, nor disclose
to any third party, any Confidential Information revealed to it by
MPOS. Distributor shall take every reasonable precaution to protect
the confidentiality of Confidential Information. Upon request by
Distributor, MPOS shall advise whether or not it considers any
particular information or materials to be confidential. Distributor
shall not publish any technical description of the Products beyond
the description published by MPOS. In the event of termination of
this Agreement, there shall be no use or disclosure by Distributor
of any Confidential Information of MPOS, and Distributor shall not
reproduce, manufacture, have reproduced or have manufactured any
software programs, devices, components or assemblies utilizing any
of MPOS's confidential information.
11.2 Proprietary Rights. Distributor agrees that MPOS retains all of its
right, title and interest in and to all patents, trademarks, trade
names, inventions, copyrights, know-how and trade secrets relating
to the Products or the product lines that include the Products, and
the design, manufacture, operation or service of the Products. The
use by Distributor of any of these property rights is authorized
only for the purposes herein set forth and upon termination of this
Agreement for any reason such authorization will cease. Distributor
shall not (and shall require that its customers do not) remove,
alter, cover or obfuscate any copyright notices or other proprietary
rights notices placed or embedded by MPOS on or in any Product.
12. INTELLECTUAL PROPERTY INDEMNIFICATION
8
12.1 Limited Indemnity. Distributor agrees that MPOS has the right to
defend, or at its option to settle, and MPOS agrees, at its own
expense, to defend or at its option to settle, any third party
claim, suit or proceeding (collectively, "Action") brought against
Distributor alleging the Products infringe any copyright or
trademark in existence as of the Effective Date, subject to the
limitations hereinafter set forth. MPOS shall have sole control of
any such Action or settlement negotiations, and MPOS agrees to pay,
subject to the limitations hereinafter set forth, any final judgment
entered against Distributor on such issue in any such Action
defended by MPOS. Distributor agrees that MPOS will be relieved of
the foregoing obligations unless Distributor notifies MPOS in
writing of such Action within ten (10) days after becoming aware of
such action, gives MPOS authority to proceed as contemplated herein,
and gives MPOS proper and full information and assistance to settle
and/or defend any such Action. If it is adjudicatively determined,
or if MPOS believes, that the Products, or any part thereof,
infringe any copyright or trademark, or if the sale or use of the
Products, or any part thereof, is, as a result, enjoined, then MPOS
may, at its election, option, and expense: (i) procure for
Distributor the right under such copyright or trademark to sell or
use, as appropriate, the Products or such part thereof; (ii) replace
the Products, or part thereof, with other noninfringing suitable
products or parts; (iii) suitably modify the Products or part
thereof; or (iv) remove the Products, or part thereof, terminate
distribution or sale thereof and refund the payments paid by
Distributor for such Products. MPOS shall not be liable for any
costs or expenses incurred without its prior written authorization,
or for any installation costs of any replaced Products.
12.2 Limitations. Notwithstanding the provisions of Section 12.1 above,
MPOS assumes no liability for infringement claims arising from (i)
combination of the Products or portions thereof with other software
not provided by MPOS if such infringement would not have occurred
but for such combination, or (ii) the modification of the Products
or portions thereof unless such modification was made or authorized
by MPOS, when such infringement would not have occurred but for such
modification.
12.3 DISCLAIMER. MPOS'S Liability arising out of or relating to this
article 12 shall not exceed the aggregate amounts paid by
Distributor to MPOS for the allegedly infringing products that are
the subject of the infringement claim. The foregoing provisions of
this article 12 state the entire liability and obligation of MPOS
and the exclusive remedy of distributor with respect to any alleged
infringement of any intellectual property rights by the products or
any part thereof.
13. LIMITATION OF LIABILITY
In no event shall MPOS' liability arising out of or relating to this
agreement exceed the aggregate amounts payable by Distributor to MPOS hereunder,
including but not limited to liability under article 12 above. In no event shall
either party be liable for lost profits, cost of procurement of substitute
goods, or any other special, reliance, incidental, or consequential damages,
however caused and under any theory of liability whether based in contract, tort
(including negligence), products liability, or otherwise except as set forth in
this Agreement. The foregoing limitations shall apply regardless of whether such
party has been advised of the possibility of such damages and notwithstanding
the failure of essential purpose of any limited remedy stated herein.
14. TERM AND TERMINATION
9
14.1 Term. Unless earlier terminated pursuant to Section 14.2 below or by
mutual written consent, this Agreement shall commence upon the
Effective Date and continue in full force and effect for an initial
term expiring on December 31, 2006 ("Expiration Date"). After the
Expiration Date, this Agreement shall automatically renew for another
year (each year a "RENEWAL TERM") unless otherwise terminated by
either party.
14.2 Termination. This Agreement may be terminated prior to the expiration
of the initial term by prior written notice to the other party as
follows:
14.2.1 By either party upon written notice of termination if the
other party breaches any material term or condition of this
Agreement and fails to cure that breach within thirty (30)
days after receiving written notice stating the nature of
the breach and the non-breaching party's intent to
terminate; or
14.2.2 By either party, effective immediately, if the other party
should become the subject of any voluntary or involuntary
bankruptcy, receivership, or other insolvency proceedings or
make an assignment or other arrangement for the benefit of
its creditors, or if such other party should be nationalized
or have any of its material assets expropriated; or
14.2.3 By MPOS, effective immediately, if there should occur any
material change in the management, ownership, control, sales
personnel, sales and marketing capability, or financial
condition of Distributor that prevents Distributor from
fulfilling its obligations hereunder; or
14.2.4 By MPOS, effective immediately, if any law or regulation
should become adopted or in effect in the Territory that
would restrict MPOS's termination rights or otherwise
invalidate any provisions hereof; or
14.2.5 By MPOS, effective immediately, if Distributor should
violate the terms of Section 2.7 above or Section 16.3
below; or
14.2.6 By MPOS, effective immediately, in accordance with
provisions of Sections 15.3; or
14.2.7 By MPOS, effective immediately, if Distributor knowingly
makes any false or untrue statements or representations to
MPOS herein or in the performance of its obligations
hereunder.
14.2.8 Unless the distributor meets the annual minimum product
purchase requirements (Exhibit E , Section E1-E4) as stated
in Exhibit E, MPOS has the right to terminate the said
exclusive distributor agreement subject to the provisions of
Exhibit E.7..
14.3 Termination of Exclusivity. Unless MPOS shall state otherwise,
termination of this Agreement shall mean termination of the
exclusivity of the distribution rights, and Distributor shall be
entitled to continue sales of Product Units at the same terms and
conditions with no Minimum Requirements for sales of Product Units.
14.4 Rights of Parties Upon Termination or Expiration. The following
provisions shall apply on the termination of all Distribution rights
or expiration of this Agreement.
10
14.4.1 Purchase Orders; No Waiver. If MPOS shall terminate all
distribution rights of Distributor, then Distributor shall
be obligated to accept deliveries of Products for which
Purchase Orders were accepted by MPOS prior to the effective
date of termination. After any notice of termination of all
Distribution rights has been delivered by either party
hereunder, deliveries of Product from MPOS to Distributor,
unless otherwise agreed by MPOS in its sole discretion,
shall require prepayment by wire transfer by Distributor to
MPOS. The acceptance of any Purchase Order for the sale of
any Product to Distributor after the termination or
expiration of this Agreement shall not be construed as a
renewal or extension of this Agreement nor as a waiver of
termination of this Agreement.
14.4.2 Cessation of Sales Activities. If MPOS shall terminate all
distribution rights of Distributor, then Distributor shall
cease all sales and other activities on behalf of MPOS and
shall return to MPOS and immediately cease all use of
Confidential Information previously furnished by MPOS and
then in Distributor's possession. Distributor shall
additionally turn over to MPOS Distributor's current
customer mailing list and take such action as is necessary
to terminate Distributor's registration as MPOS's sales
representative with any governmental authority.
14.4.3 Amounts Owed. If MPOS shall terminate all distribution
rights of Distributor, then all indebtedness of Distributor
to MPOS shall become due and payable within thirty (30)
days.
14.4.4 Cessation of Use of MPOS Marks. If MPOS shall terminate all
distribution rights of Distributor, then Distributor shall
remove from its property and immediately discontinue all
use, directly or indirectly, of the MPOS Marks, or of any
word, title, expression, trademark, design, or marking that,
in the opinion of MPOS, is confusingly similar thereto.
Distributor shall further certify in writing to MPOS that
Distributor has completely terminated its use of any and all
such MPOS Marks, trademarks, designs, or markings, or any
other word, title, or expression similar thereto that
appeared in or on any devices or other materials used in
conjunction with Distributor's business.
14.4.5 No Obligation to Repurchase. If MPOS shall terminate all
distribution rights of Distributor, then MPOS shall have no
obligation to repurchase or to credit Distributor for its
inventory of Products at the time of termination of this
Agreement. MPOS may, at its sole option, repurchase from
Distributor, at the prices paid by Distributor, any or all
inventory of Products originally purchased by Distributor
from MPOS and remaining unsold by Distributor.
14.5 No Liability for Termination. Except as expressly required by law, in
the event of termination of this Agreement by either party in
accordance with any of the provisions of this Agreement, neither
party shall be liable to the other, because of such termination, for
compensation, reimbursement or damages on account of the loss of
prospective profits or anticipated sales or on account of
expenditures, inventory, investments, leases or commitments in
connection with the business or goodwill of MPOS or Distributor.
Termination shall not, however, relieve either party of obligations
incurred prior to the termination.
14.6 Survival. Except for termination of all Distribution rights by MPOS
pursuant to Section 14.2.1 above, Distributor may sell Products
existing in its inventory as of the effective date of termination of
this Agreement for a period of one hundred twenty (120) days after
the effective date of such termination ("Wind-Down Period"). During
11
the Wind-Down Period, the provisions of Article 15 and Sections 2.2,
4.8 and 4.9 shall survive. In addition to the foregoing provisions,
the following provisions shall survive any termination or expiration
of this Agreement: Articles 1, 11, 13 and 16, and Sections 2.4, 2.6,
2.7, 3.2, 4.10, 6.2, 8.2, 14.4, 14.6, 15.1 and 15.4.
15. COMPLIANCE WITH LAWS
15.1 Export Control. Any and all obligations of MPOS to provide the
Products, as well as any technical data, shall be subject in all
respects to such laws and regulations in the Territory as will from
time to time govern the license and delivery of technology and
products abroad by persons subject to the jurisdiction of the
Territory. Distributor represents and warrants that it will not
export or re-export the Products or technical data related thereto
except in conformity with such laws and regulations.
15.1.1 Required Authorization. Distributor agrees that, unless
prior written authorization is obtained from the appropriate
regulating entity, or the appropriate regulating entity
explicitly permits the export, re-export, and/or
transshipment of the Products or technical data disclosed or
provided to Distributor, as applicable, without such written
authorization, Distributor shall not export, re-export, or
transship, directly or indirectly, the Products or technical
data, to country groups that are prohibited under export
regulations in the Territory.
15.2 Import Licenses; Exchange Controls; Other Governmental Approvals.
Distributor represents and warrants that it shall, at its expense,
obtain any and all import licenses and governmental approvals that
may be necessary to permit the sale by MPOS and the purchase by
Distributor of the Products, comply with all registration
requirements in the Territory, obtain such approvals from the banking
and other governmental authorities of the Territory as may be
necessary to guarantee payment of all amounts due hereunder to MPOS
in U.S. dollars, and comply with any and all governmental laws,
regulations, and orders that may be applicable to Distributor by
reason of its execution of this Agreement, including but not limited
to any requirement to be registered as MPOS' independent distributor
with any governmental authority, and including but not limited to any
and all laws, regulations, or orders that govern or affect the
ordering, export, shipment, import, sale (including government
procurement), delivery, or redelivery of the Products in the
Territory. Distributor shall furnish MPOS with such documentation as
MPOS may request to confirm Distributor's compliance with this
Section 15.2 and agrees that it shall not engage in any course of
conduct that, in MPOS' reasonable belief, would cause MPOS to be in
violation of the laws of any jurisdiction.
15.3 Local Law. Distributor shall notify MPOS of the existence and content
of any mandatory provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at
the time of its execution or thereafter. Failure to do so shall
constitute a breach of this Agreement for which MPOS may terminate
this Agreement effective immediately upon notice to Distributor
pursuant to Section 14.2 above.
15.4 Liability of MPOS. The provisions of this Agreement under which the
liability of MPOS is excluded or limited shall not apply to the
extent that such exclusions or limitations are declared illegal or
void under the laws applicable in the countries in which Products are
sold hereunder.
12
16. MISCELLANEOUS PROVISIONS
16.1 Governing Law. This Agreement shall be governed by and construed
under the laws of Hong Kong.
16.2 Jurisdiction; Venue. The parties consent to the personal jurisdiction
of, and venue in, the courts of Hong Kong.
16.3 Assignment. Distributor may not transfer or assign any of its rights
or obligations under this Agreement without the prior written consent
of MPOS. MPOS may transfer or assign its rights or obligations under
this Agreement with written consent of Distributor. Subject to the
foregoing, this Agreement will be binding upon and inure to the
benefit of the parties hereto, their successors and assignees.
16.4 No Implied Waivers. The failure of either party at any time to
require performance by the other of any provision hereof shall not
affect the right of such party to require performance at any time
thereafter, nor shall the waiver of either party of a breach of any
provision hereof be taken or held to be a waiver of a provision
itself.
16.5 Severability. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining
provisions will nevertheless remain in full force and effect. The
parties agree to renegotiate in good faith those provisions so held
to be invalid to become valid, enforceable provisions which
provisions shall reflect as closely as possible the original intent
of the parties, and further agree to be bound by the mutually agreed
substitute provision.
16.6 Force Majeure. Except for payment of monies, neither party shall be
liable for failure to fulfill its obligations under this Agreement or
any purchase order issued hereunder or for delays in delivery due to
causes beyond its reasonable control, including, but not limited to,
acts of God, man-made or natural disasters, earthquakes, fire, riots,
flood, material shortages, strikes, delays in transportation or
inability to obtain labor or materials through its regular sources.
The time for performance of any such obligation shall be extended for
the time period lost by reason of the delay.
16.7 Conflicting Terms. The parties agree that the terms and conditions of
this Agreement shall prevail, notwithstanding contrary or additional
terms, in any purchase order, sales acknowledgment, confirmation or
any other document issued by either party effecting the purchase
and/or sale of Products.
16.8 Headings. Headings of paragraphs herein are inserted for convenience
of reference only and shall not affect the construction or
interpretation of this Agreement.
16.9 Notice. Any notice required or permitted to be given under this
Agreement shall be delivered (a) by hand, (b) by registered or
certified mail, postage prepaid, return receipt requested, to the
address of the other party first set forth above, or to such other
address as a party may designate by written notice in accordance with
this Section 16.9, (c) by overnight courier, or (d) by fax with
confirming letter mailed under the conditions described in (b) above.
Notice so given shall be deemed effective when received, or if not
received by reason of fault of addressee, when delivered.
13
16.10 Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes
all prior agreements relating thereto, written or oral, between the
parties. Amendments to this Agreement must be in writing, signed by
the duly authorized officers of the parties. The terms of any
purchase order are expressly excluded.
16.11 Injunctive Relief. Distributor agrees that any violation or
threatened violation of sections 2.7, 3.2, 3.4, 11.1, 11.2 or 14.4.3
will cause irreparable injury to MPOS, entitling MPOS to obtain
injunctive relief in addition to all legal remedies.
16.12 Should any communications be regarding this contract be required
between MPOS and Distributor contacts should be sent to each party
at the coordinates provided in this section.
16.12.1 MPOS may be contacted by Maximum Dynamics using the
information below:
M.POS Limited
000, Xxxxxxx Xxxxx,
00 Xxxxxxx Xx, Xxxx Xxxx
Telephone: (000) 00 00 0000
Facsimile: (000) 0000 0000
Email: xxxxx@xxxx.xxx
16.12.2 Maximum Dynamics, Inc. may be contacted by MPOS using the
information below:
Maximum Dynamics, Inc.
ATT: Xxxx Xxxxxx
0 Xxxxx Xxxxxxx Xxx.
Xxxxx 0000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, X.X.X.
Phone & Voice Message in South Africa: 00-00-000-0000
Facsimile & Voice Message (U.S.A.): 000-000-0000
Email: xxxxxxxx@xxxxxxxxxxxxxxx.xxx
14
In Witness Whereof, the parties hereto have duly executed this Agreement
effective as of the ____ day of October, 2003.
M.POS:
M.POS Limited
By: Witnessed:
------------------------------- -----------------------------
Name: Xxxxx Xxxxx Name:
Title: Managing Director
DISTRIBUTOR:
Maximum Dynamics, Inc.
By: Witnessed:
------------------------------- ----------------------------
Name: Xxxx Xxxxxx Name:
Title: Chief Executive Officer
15
EXHIBIT A
PRODUCT LISTING
All of MPOS's general product line, including but not limited to:
M.POS2002 is the first in a series of mobile EFTPOS devices, designed to offer
all the advantages of modern wireless communications, combined with a highly
secure, feature rich, Electronic Funds Transfer at Point of Sale (EFTPOS)
terminal to merchants.
M.RECHARGE is a highly secure management system for the distribution and sale of
direct (voucherless) top-up, prepaid vouchers and tickets from multiple service
providers. It is able to deliver these products over the wireless network via
M.POS2002 terminals, from which top up orders can be placed, or vouchers sold
and dispensed to customers.
M.PPS is a self-contained, solar powered telecommunications services outlet
operated by a single proprietor. It can be deployed in any location and
customers may purchase airtime from the proprietor via his M.POS2002 terminal,
or can make telephone calls from the bank of six to eighteen public payphones
attached to the M.PPS booth. All communications are performed via the wirless
network (GSM or CDMA options), and a high-gain antenna ensures that premium
voice quality is delivered up to 30Km from the nearest base station.
M.Gate is the wireless transaction switching gateway used to connect M.POS
EFTPOS terminals to banking acquirers.
M.Loyalty is a multi-merchant, multi-campaign loyalty system, integrated with
M.POS terminals.
M.Lottery is a system which uses M.Recharge to provide pre-paid value to
customers via M.POS EFTPOS terminals, and then allows them to select and
register lottery ticket purchases from their mobile phones.
16
EXHIBIT B
MPOS TRADEMARKS, TRADENAMES AND SERVICEMARKS
M.POS
X.Xxxx Framework
M.Gate
M.Recharge
M.PPS
M.Loyalty
M.Lottery
17
EXHIBIT C
HOUSE ACCOUNTS
MPOS shall provide Distributor with written notification of all such customers
in the future that it considers House Accounts.
When appropriate, and only under confidentiality agreements satisfactory to
MPOS, MPOS shall provide advance notification to Distributor of any pending OEM
relationships.
Current, nominated house accounts are:
American Express International (central purchasing office, Australia)
Standard Chartered Bank (central purchasing office, Singapore)
HSBC (central purchasing office, Hong Kong)
JCB (Central Purchasing Office Japan)
18
EXHIBIT D
DISTRIBUTION PRICES
D.1 For so long as Distributor meets the Minimum Requirements set forth in
Section 4.4, the cost for each and every product other than M.POS2002
Terminals shall be negotiated on an order by order basis. Unless otherwise
agreed the cost for each MPOS2002 device before shipping and taxes shall
be $700.00 U.S.D. (seven hundred U.S.D.) FOB Hong Kong
D.2 If Distributor fails to meet the Minimum Requirements set forth in Section
4.4, then MPOS shall be entitled to cancel any an all distribution rights
given in this agreement in accordance with the guidelines, Section 14.
19
EXHIBIT E
MINIMUM PRODUCT UNIT ORDER REQUIREMENTS
E.1 Year 1. The aggregate amount of Product Units Sold by the Distributor
under this Agreement during Year I must equal or exceed twenty thousand
(20,000) Product Units.
E.2 Year 2. The aggregate amount of Product Units Sold by the Distributor
under this Agreement during Year 2 must equal or forty thousand (40,000)
Product Units.
E.3 Year 3. The aggregate amount of Product Units Sold by the Distributor
under this Agreement during Year 3 must equal or exceed sixty thousand
(60,000) Product Units.
E.4 The distributor shall obtain an irrevocable transferable L/C at sight from
a prime bank, acceptable by, and in favor of, MPOS Limited for a minimum
of 5,000 units of the Products within 90 days of the signing of this
agreement, otherwise it serves as a material breach of this agreement
subject to Section 14.2.8
E.5 Renewal Terms. The aggregate amount of Product Units Sold by the
Distributor under this Agreement during each Renewal Term must equal or
exceed fifty thousand (50,000) Product Units.
E.6 MPOS, at its sole discretion, may waive the Minimum Requirements of the
Distributor in a given year, in which case Distributor will not be
required to meet any Minimum Requirements unless an alternate amount of
Product Units to be sold is specified by MPOS as the new Minimum
Requirement. Any year in which the Distributor does not meet the Minimum
Requirements and MPOS waives the Minimum Requirements shall not require
MPOS to waive the Minimum Requirements in any of the subsequent years.
E.7 If in any year the Distributor is not going to meet the Minimum
Requirements, then sixty (60) days before the end of that year the
Distributor shall notify the MPOS if the Minimum Requirements ARE NOT
going to be met. This agreement will remain in full effect until such time
as MPOS notifies Distributor that either (i) the Minimum Requirements will
be waived, (ii) this contract will be terminated pursuant to the
termination provisions in Article 14, (iii) or some other alternative
agreement has been reached between MPOS and Distributor.
20
