EXHIBIT 10.1
AMENDED AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT
THIS AMENDED AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT (the
"Agreement") is entered into as of April 22, 1997 by and between JAVELIN
SYSTEMS, INC., a corporation existing under the laws of the State of Delaware
("JAVELIN"), and RIVA ELECTRONICS LIMITED, a corporation existing under the laws
of the United Kingdom ("RIVA").
R E C I T A L S
A. JAVELIN and RIVA are parties to that certain Exclusive Distribution
Agreement dated as of November 1, 1996 (the "November Agreement") pursuant to
which JAVELIN has appointed RIVA as a distributor of certain of JAVELIN's
products as described in the November Agreement.
B. JAVELIN and RIVA desire to amend and restate the November Agreement
with the terms and conditions set forth herein and intend that this Agreement
shall supersede the November Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
(a) "MINIMUM PURCHASE REQUIREMENTS" shall have the meaning
given such term in Section 2.2 hereof.
(b) "ORDER" means a written purchase order submitted by RIVA
setting forth the number of Products to be purchased and the requested shipping
date.
(c) "PRODUCTS" shall mean those certain JAVELIN computer
products set forth on Exhibit A attached hereto.
(d) "TERRITORY" shall mean the countries listed on EXHIBIT B
attached hereto.
2. APPOINTMENT AS DISTRIBUTOR.
2.1 Distributor.
(a) Subject to the terms and conditions contained herein, JAVELIN hereby
appoints RIVA as JAVELIN's authorized exclusive distributor for the promotion,
marketing and sale of the Products in the Territory and RIVA hereby accepts such
appointment. Subject to RIVA meeting the Minimum Purchase Requirements set
forth in Section 2.2 below, JAVELIN agrees that during the term of this
Agreement, it will appoint no other distributors for the sale of Products in the
Territory or any part thereof.
(b) In the event that RIVA's sales and/or services in any country included
within the Territory is unacceptable to JAVELIN in its reasonable discretion
then JAVELIN shall have the right, by delivering written notice to RIVA, to
convert RIVA's exclusive appointment as JAVELIN's distributor of the Products
with respect to that country into a non-exclusive appointment and JAVELIN shall
then have the right to appoint other distributors for the sale of the Products
in that country or sell the Products itself in that country, either directly or
indirectly.
(c) During the term of this Agreement, RIVA shall not market, sell or
distribute directly or indirectly in the Territory products which are
competitive with the Products.
2.2 MINIMUM PURCHASE REQUIREMENTS.
(a) As a condition to RIVA retaining the exclusive right to
distribute the Products in the Territory, RIVA shall purchase from JAVELIN the
minimum number of Products for each period set forth on EXHIBIT C attached
hereto (the "Minimum Purchase Requirements").
(b) Purchases of Products in excess of the Minimum Purchase
Requirements for any period shall be credited towards the Minimum Purchase
Requirements for the next period. For purposes of this Section 2.2, a
"purchase" of Products will be deemed to have occurred within a specified time
period if payment for such Products are made on a timely basis as provided
herein.
(c) RIVA's failure to satisfy the Minimum Purchase Requirements for
any period shall constitute a material breach of this Agreement including for
the purposes of Section 4(b); provided, however, that in lieu of terminating
this Agreement pursuant to Section 4(b), JAVELIN may elect to reduce the
exclusive rights granted to RIVA pursuant to Section 2.1 to non-exclusive
rights, in which case JAVELIN shall then have the right to (i) appoint
additional non-exclusive distributors in the Territory and (ii) sell the
Products itself in the Territory, either directly or indirectly.
2.3 TERRITORY. RIVA shall distribute Products only within the
Territory and RIVA shall use its best efforts to sell and promote the sale of
Products in the Territory. RIVA shall refrain from establishing or maintaining
any branch, warehouse or distribution facility for
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the Products outside the Territory. RIVA shall not engage in any advertising or
promotional activities relating to the Products directed primarily to customers
outside the Territory. RIVA shall not solicit orders from any prospective
purchaser with its principal place of business located outside the Territory. If
RIVA receives any order from a prospective purchaser whose principal place of
business is located outside of the Territory and outside of the European Union,
RIVA shall not accept such order and shall immediately refer such order to
JAVELIN. RIVA may not deliver or tender (or cause to be delivered or tendered)
any Product outside of the Territory and outside of the European Union. RIVA
shall not sell, directly or indirectly, Products outside the Territory or to any
person or entity in the Territory knowing or having reason to believe that such
person or entity will or intends to sell or resell Products outside the
Territory. Advertising or promotion of Products by RIVA to any customer,
retailer or dealer outside the Territory or distribution of Products by RIVA to
any dealer who resells or otherwise redistributes such Products for use outside
the Territory will constitute a material breach of this Agreement, including for
the purposes of Section 4(b). If Products originally shipped to RIVA are located
or identified by JAVELIN as available for sale or distribution by any
unauthorized source, whether inside or outside the Territory, such location or
identification by JAVELIN shall be presumptive evidence of a material breach by
RIVA of this Section 2.3.
2.4 SALES PERSONNEL. RIVA shall hire, train and maintain
sufficient personnel with the appropriate experience and qualifications to
develop a market and service the demand for Products in the Territory, and shall
maintain appropriate office facilities and equipment necessary to fulfill its
obligations hereunder. RIVA shall have at all times at least one full-time
salesperson trained and capable of expert demonstration of all Products.
2.5 INVENTORY; PURCHASE FORECASTS. RIVA shall, at all times,
maintain an inventory of Products sufficient, in both quantity and variety, to
meet current and anticipated demand in the Territory. On or before the 1st day
of each month during the term of this Agreement, RIVA shall submit a purchase
forecast to JAVELIN, which forecast shall set forth the estimated number of
Products to be purchased during the ninety (90) day period beginning with the
month for which such forecast is being delivered. RIVA shall uses its best
efforts to purchase the number of Products specified in the forecast for each
applicable month.
2.6 GENERAL OBLIGATIONS. RIVA shall:
(a) Use its best efforts to promote and sell the Products in the
Territory. RIVA shall translate, at its own expense, all user and technical
manuals, advertising and marketing information and any warranty information into
the languages of the countries in which Products are sold. RIVA shall provide a
copy of such materials to JAVELIN for approval prior to distribution of such
materials as and when requested by JAVELIN;
(b) At its own expense, obtain any and all necessary import
licenses, assist JAVELIN in obtaining any other required permits or licenses,
assist JAVELIN in the registration within the Territory of any trademarks or
patents with respect to the Products and comply with all government requirements
for the import into and sale of Products in the Territory and for the
performance of its obligations under this Agreement;
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(c) Maintain accurate records and accounts in respect of all sales
of the Products and related business activities including training and after-
sales service and support to customers for at least two years from the date of
sale of any Products;
(d) Refer to JAVELIN any inquiries from prospective customers and/or
other leads outside the Territory, supply to JAVELIN any information which may
come into its possession which may assist JAVELIN to effect sales or other
dealings in the Products outside the Territory and inform JAVELIN as to any
information which may come to RIVA's attention that may have a negative impact
on sales of Products in the Territory or otherwise;
(e) Permit JAVELIN reasonable access to RIVA's corporate offices and
warehouse locations upon two days' notice to enable JAVELIN to monitor RIVA's
compliance with the terms of this Agreement;
(f) Not obligate or purport to obligate JAVELIN by issuing or making
any affirmations, representations, warranties or guaranties with respect to the
Products to any third party, other than the warranties described in Section 5
hereof; and
(g) Use JAVELIN's trade names, trademarks and service marks on a
non-exclusive basis in the Territory only for the duration of this Agreement and
solely for displaying or advertising purposes in connection with selling and
distributing the Products in accordance with this Agreement.
2.7 INDEMNIFICATION. RIVA shall indemnify, protect and save
JAVELIN, its affiliates, successors and assigns and all officers, directors,
employees and agents thereof (collectively, the "Indemnitees") harmless from and
against all claims, damages, losses, costs, expenses, demands, suits or actions
(including attorneys' fees incurred in connection therewith) which may be
asserted against JAVELIN for any kind of damages, including but without
limitation, damage or injury to property or persons which may be sustained by
any third party or any of the Indemnitees occurring out of or incident to the
sale of any Products sold by JAVELIN to RIVA hereunder, the conduct of RIVA's
operations under this Agreement, any representations made by RIVA to any third
parties or the breach by RIVA of any of its representations, warranties or
covenants hereunder. In no event shall JAVELIN be liable for any punitive,
indirect, incidental, special or consequential damages, including loss of
profits, revenue or use incurred by RIVA or any third party, whether in an
action in contract or tort or based upon a warranty. JAVELIN's liability for
any damages arising in connection with Products sold hereunder shall in no event
exceed the amounts actually paid by RIVA to JAVELIN for Products sold hereunder.
2.8 INDEPENDENT CONTRACTORS; NO PARTNERSHIP OR LICENSING
ARRANGEMENT. The relationship between the parties hereto shall be that of
independent contractors, each in sole and full control of its business. Under
no circumstances shall either party have the right to act or make any commitment
on behalf of the other or represent the other in any way as its agent. The
parties acknowledge that by entering into this Agreement the parties are not
creating a partnership nor are they creating a licensing arrangement with
respect to the Products.
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3. PRICES AND TERMS.
3.1 AGREEMENT CONTROLS. All Products purchased by RIVA from JAVELIN
during the term of this Agreement shall be subject to the terms and conditions
of this Agreement. Nothing contained in any Order issued by RIVA shall in any
way modify such terms of purchase or add any additional terms or conditions
without the written consent of JAVELIN.
3.2 PURCHASE PRICE. Prices for Products delivered to RIVA shall be
in accordance with the prices outlined on Exhibit A attached hereto, as amended
or supplemented from time to time by JAVELIN, provided that JAVELIN shall give
prompt notice to RIVA of any amendment or supplement to the prices of the
Products.
3.3 PAYMENT. Payment for each Product purchased by RIVA from
JAVELIN shall be made in United States dollars ($US), by check or wire transfer,
within thirty (30) days from the date of invoice. A service charge equal to the
lesser of 1.5% per month or the maximum amount permitted by law shall be
assessed on each invoice remaining unpaid thirty (30) days after its due date,
and RIVA shall be responsible for all costs and expenses, including attorney's
fees, incurred by JAVELIN in connection with the collection of any delinquent
amounts.
3.4 TAXES; PERMITS. RIVA shall be responsible for the payment of
all foreign, U.S. federal, state and local excise, sales, use and property taxes
levied in respect of Products sold to RIVA hereunder; provided that RIVA shall
not be responsible for any income taxes levied upon JAVELIN.
3.5 ORDERS. RIVA shall purchase Products from JAVELIN by
submitting Orders to JAVELIN. All Orders submitted by RIVA to JAVELIN are
subject to acceptance by JAVELIN at its offices in California. JAVELIN will use
its best efforts to fill all Orders within six (6) weeks of the date such Orders
are accepted by JAVELIN. JAVELIN shall promptly notify RIVA if any Order, or
any portion of any Order, is rejected, cannot be filled, or of any delays in
delivery.
3.6 CANCELLATION; POSTPONEMENT. RIVA shall be allowed to cancel or
postpone any Order placed with, and accepted by, JAVELIN if the postponement or
cancellation is received not later than fourteen (14) days prior to the
requested delivery date; provided, however, that in the event of such
postponement or cancellation RIVA shall be liable to JAVELIN for payment of
JAVELIN's costs for any special or non-standard parts purchased or which JAVELIN
is obligated to purchase, such payment to be made to JAVELIN within thirty (30)
days after the date of such cancellation or postponement.
3.7 SHIPMENT. All Products delivered pursuant to the terms of this
Agreement shall be suitably packaged, marked for shipment and delivered by
common carrier of JAVELIN's choice, F.O.B. JAVELIN's plant in Tustin,
California, or any other plant or warehouse designated by JAVELIN. Risk of loss
for all Products purchased hereunder shall pass to RIVA upon delivery of such
Products by JAVELIN to a common carrier for shipment to RIVA. All freight,
insurance and shipping expense shall be borne by RIVA.
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3.8 RESALE PRICE. RIVA shall resell the Products at such prices as it
may determine and JAVELIN retains no control over such prices.
4. TERM AND TERMINATION.
(a) Unless earlier terminated as provided in this Section 4, this
Agreement shall continue until December 31, 1999 and shall be deemed renewed for
additional one (1) year terms thereafter, unless either party shall give the
other party written notice of cancellation at least six (6) months prior to the
expiration of the original or any additional term.
(b) Upon the occurrence of a material breach or default as to any
obligation hereunder by either party and the failure of the breaching party to
promptly cure such material breach or default, after receiving written notice
thereof from the non-breaching party, this Agreement may be terminated by the
non-breaching party by giving written notice of termination to the breaching
party, such termination being immediately effective upon the giving of such
notice of termination.
(c) Upon the filing of a petition in bankruptcy, insolvency or
reorganization against or by either party, or either party becoming subject to a
composition for creditors, whether by law or agreement, or either party going
into receivership or otherwise becoming insolvent (such party hereinafter
referred to as the "insolvent party"), this Agreement may be terminated by the
other party by giving written notice of termination to the insolvent party, such
termination being immediately effective upon the giving of such notice of
termination.
(d) Upon the occurrence of a change in control or management or
operating personnel of either party (the "Changed Party"), which has, or in the
reasonable opinion of JAVELIN could have, a material adverse effect on the
business, prospects or operations of such Changed Party, this Agreement may be
terminated by JAVELIN by giving written notice of termination to RIVA, such
termination being immediately effective upon the giving of such notice of
termination.
(e) In the event of a termination pursuant to any of subsections
(b), (c) or (d) above or upon expiration of this Agreement pursuant to
subsection (a) above, neither party shall have any obligation to the other party
or to any employee of the other party for compensation or for damages of any
kind, whether on account of the loss by either party or such employee of present
or prospective sales, investments, compensation or goodwill. Each party, for
itself and on behalf of each of their respective employees, hereby waives any
rights which may be granted to it or them under the laws and regulations of the
Territory or otherwise which are not granted to it or them by this Agreement.
Each party hereby indemnifies and holds the other party harmless from and
against any and all claims, costs, damages and liabilities whatsoever asserted
by any employee, agent or representative of the other party under any applicable
termination, labor, social security or other similar laws or regulations.
(f) Termination of this Agreement shall not affect the obligation of
RIVA to pay JAVELIN all amounts owing or to become owing as a result of Products
tendered
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or delivered to RIVA on or before the date of such termination, as well as
interest thereon to the extent any such amounts are paid after the date they
became due pursuant to this Agreement.
(g) Within thirty (30) days after any termination or expiration of
this Agreement, RIVA shall elect in writing either to: (i) to sell off its
remaining inventory of Products; provided, however, that RIVA shall comply with
all terms and conditions of this Agreement restricting such reselling activities
in effect immediately prior to such termination or expiration; or (ii) cause
JAVELIN to repurchase RIVA's inventory of Products which are salable and in the
original packages and unaltered from their original form and design, subject to
JAVELIN's inspection, test, and acceptance.
(h) Any repurchase of RIVA's inventory of Products pursuant to
subsection (g) of this Section 4 shall be at the price such Products were
originally sold to RIVA, less a ten percent (10%) percent handling charge.
Repurchased inventory shall be shipped by RIVA, freight prepaid, according to
JAVELIN's instructions. JAVELIN shall pay RIVA for such repurchased Products
within thirty (30) days after JAVELIN receives such Products in one of its
facilities.
(i) Notwithstanding anything contained in this Agreement to the
contrary, the parties agree that Section 2.1(c) (Non-Compete), Section 2.7
(Indemnification), Section 5 (Warranties), Section 6 (Confidentiality), Section
8.8 (Governing Law), Section 8.10 (Arbitration) and Section 8.12 (Security
Interest) shall survive the termination or expiration of this Agreement, as the
case may be, to the extent required thereby for the full observation and
performance by any or all of the parties hereto.
5. PRODUCT WARRANTY.
(a) JAVELIN shall provide to RIVA and the purchasers of the
Products, JAVELIN's standard warranties as are then in effect at the time for
all components of the Products manufactured or produced by JAVELIN; provided,
however, that the period covered by such warranties shall include the period
ending twelve (12) months after the date of sale of the Product by RIVA.
Notwithstanding the foregoing, the time and scope of such warranties shall in no
event exceed the time and scope of any warranties granted by RIVA to any
purchaser of the Products. Under no circumstances shall JAVELIN's warranties
provided under this subsection (a) apply to any Products which have been used
with unapproved software or hardware or which have been customized, modified,
damaged or misused.
(b) JAVELIN extends to RIVA for all components of the Products
manufactured or produced by any entity other than JAVELIN, the warranties as to
such components provided by such other entity to JAVELIN for the length of time
that such warranty remains valid for JAVELIN.
(c) THE PROVISIONS OF THE FOREGOING WARRANTIES ARE IN LIEU OF ANY
OTHER WARRANTY, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL (INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE).
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JAVELIN'S LIABILITY ARISING OUT OF THE MANUFACTURE, SALE OR SUPPLYING OF
THE PRODUCTS OR THEIR USE OR DISPOSITION, WHETHER BASED UPON WARRANTY, CONTRACT,
TORT OR OTHERWISE, SHALL NOT EXCEED THE ACTUAL PURCHASE PRICE PAID BY RIVA FOR
THE PRODUCTS.
IN NO EVENT SHALL JAVELIN BE LIABLE TO RIVA OR ANY OTHER PERSON OR ENTITY
FOR PUNITIVE, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT
LIMITED TO, LOSS OF PROFITS OR LOSS OF USE DAMAGES) ARISING OUT OF THE
MANUFACTURE, SALE OR SUPPLYING OF THE PRODUCTS, EVEN IF JAVELIN HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES OR LOSS.
6. CONFIDENTIAL INFORMATION. Each party agrees during the term of this
Agreement and for a period of twenty-four (24) months after the termination of
this Agreement, to treat as confidential all information and knowledge not in
the public domain which such party may acquire during the term of this Agreement
from the other party concerning the operations, business or financial affairs,
know-how, processes, techniques, trade secrets, products, services, properties,
research and development, plans or projections of the other party. The
receiving party agrees to keep the information secret and neither use nor
divulge it directly or indirectly or for the benefit of any person or entity
other than as contemplated by this Agreement. In addition, each party shall
take such steps as reasonably requested by the other party to protect the other
party's patents, trademarks, service marks, copyrights, trade secrets and other
proprietary interests as set forth herein. Each party agrees to promptly advise
an officer of the other party of any knowledge of any unauthorized release or
use of confidential information. All uses by RIVA of JAVELIN's name, or any
trademark or tradename (or any xxxx or name closely resembling the same), now or
hereafter owned or licensed by JAVELIN or any of its affiliates shall be subject
to the prior written approval of JAVELIN. RIVA is not authorized to use
JAVELIN's name or any such trademark or tradename in connection with any aspect
of its business other than in connection with the sales, marketing and promotion
of Products in accordance with this Agreement. If RIVA violates the non-compete
provisions contained in Section 2.1 hereof or either party violates this Section
6, such party agrees that the other party will be entitled to injunctive and/or
equitable relief, without the necessity of posting any bond, because such a
violation, if not restrained or granted equitable relief, would result in
irreparable and serious harm for which damages would be an inadequate remedy.
7. Technology Escrow Agreement. Concurrent with the execution of this
Agreement, JAVELIN agrees to enter into the Technology Escrow Agreement in the
form attached hereto as Exhibit D.
8. General Provisions.
8.1 WAIVERS. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party hereto, shall be deemed to constitute
a waiver by the party taking such action. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other provision or of any
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subsequent breach of the same provision. No waiver shall be effective unless in
writing and signed by the party making the waiver.
8.2 OFFICIAL NOTICES. All notices and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered personally, by courier or
overnight mail delivery service, telecopied, or mailed by registered or
certified mail, postage prepaid, return receipt requested, to the party to whom
the same is so delivered or mailed
(a) if to JAVELIN:
JAVELIN SYSTEMS, INC.
0000X Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Chief Executive Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to (which shall not constitute notice):
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone No. (000) 000-0000
Telecopier No.: (000) 000-0000
(b) if to RIVA:
RIVA ELECTRONICS LIMITED
Xxxxx Fold Road, Xxxx 00
Xxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxxxxx, Xxxxxx 0X0 0XX
Xxxxxx Xxxxxxx
Attn: Moray Xxxx
Telephone No. x00 0000 000000
Telecopier No. x00 0000 000000
or to such other address as any of the above shall have specified by written
notice hereunder.
8.3 ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
and supersedes any and all prior or contemporaneous agreements and
understandings, oral or written, concerning the subject matter hereof. This
Agreement may only be amended or modified by a writing signed by each of the
parties hereto.
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8.4 SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
8.5 BINDING EFFECT; BENEFITS. This Agreement shall inure to the
benefit of and shall be binding upon and enforceable by the parties hereto and
their respective successors and assigns. Nothing in this Agreement, expressed
or implied, is intended to or shall confer on any person other than the parties
hereto any rights, remedies, obligations, or liabilities under or by reason of
this Agreement.
8.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
8.7 ASSIGNMENT. Neither party may assign or otherwise transfer
this Agreement or any of its rights or obligations hereunder to any third party
without the prior written consent of the other party; provided, however, this
Agreement may be assigned by either party in connection with the sale of all or
substantially all of the assets or business of such assigning party. Any party
assigning this Agreement shall provide at least ten (10) days prior written
notice to the other party of such assignment.
8.8 GOVERNING LAW. The validity, performance and enforcement of
this Agreement shall be governed by the laws of the State of California
including the Uniform Commercial Code as adopted in California. In no event
shall this Agreement be governed by the United Nations Convention on Contracts
for the International Sale of Goods.
8.9 FORCE MAJEURE. Neither party shall be liable for any failure
to comply with, nor for any delay in performance with respect to, any of its
obligations (other than payment for Products purchased hereunder) when such
failure or delay is directly or indirectly caused by or in any manner arises or
results from fire, flood, earthquake, accident, acts of God, riot, war,
governmental interference, rationing, allocation or embargoes, strikes or
shortages of labor, delay in delivery of material by suppliers, acts of any
government or agency thereof, or other difficulties (whether or not similar in
nature to any of those specified) beyond its control. Delivery of any Order
shall be deemed suspended so long as any such causes delay its fulfillment.
Whenever such causes have been remedied, JAVELIN shall make and RIVA shall
accept deliveries under such Order.
8.10 ARBITRATION.
(a) AGREEMENT. All disputes and differences between JAVELIN and
RIVA shall first be referred to the individuals named in Section 8.2 of this
Agreement, or their successors, as the principal representatives of the parties.
All disputes and differences on which
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an agreement cannot be reached shall be submitted for binding arbitration in
accordance with this Section 8.10.
(b) METHOD. Three arbitrators will decide any differences using the
rules of the American Arbitration Association, such arbitration to be held in
Orange County, California. One of the arbitrators is to be appointed by
JAVELIN, another by RIVA and the two arbitrators shall select a third before
arbitration begins. Should one of the parties decline to appoint an arbitrator
or should the two arbitrators not be able to agree upon the choice of a third,
the appointment(s) shall be made by the President of the American Arbitration
Association or his designee. The arbitrators are not bound by rules of
evidence. They shall decide by a majority of votes and their decision shall be
final and binding upon both parties. The cost of arbitration, including the
fees of the arbitrators, shall be shared equally by the parties unless the
arbitrators decide otherwise.
The parties agree to be bound by the decision of the arbitrator, which
shall be final, shall not be appealable, and which shall allow for no trial de
novo on the same issues. The arbitrator's decision shall be rendered within 30
days following submission of the matter at issue, but the failure to comply with
this provision shall in no way invalidate any decision or award that may be
rendered more than 30 days after submission. Judgment upon any award may be
entered in any court having jurisdiction or applications may be made to such
court for judicial acceptance of the award and an order of enforcement. By
agreeing to arbitration, none of the parties is waiving any of the benefits of
statutes of limitations or equitable defenses.
(c) Notwithstanding anything contained in this Section 8.10 to the
contrary, each party shall have the right to institute judicial proceedings
against the other party or anyone acting by, through or under such other party,
in order to enforce the instituting party's rights hereunder through reformation
of contract, specific performance, injunction or similar equitable relief.
(d) The parties irrevocably submit to the jurisdiction of the courts
of the county of Orange, California; provided, however, that nothing herein
shall preclude either party from instituting proceedings against the other party
or anyone acting by, through or under the other party, in any place which may
have jurisdiction for the purpose of protecting and enforcing such party's
rights either hereunder or pursuant to any other agreements, documents,
instruments or otherwise.
(e) RIVA hereby designates and appoints Data Securities International,
Inc. ("DSI") (or its successors and assigns) (the "Agent") as its agent for the
service of process in Orange County, California and agrees to consider any legal
process or any demand or notice made or served on said Agent as being made on
it; provided, however, that (i) such appointment of Agent shall be effective
until such time as RIVA gives notice to JAVELIN that (a) RIVA has appointed
another agent located in Orange County, California, on the same terms as RIVA's
appointment of its initial agent identified hereunder, and (b) such new agent
has accepted such appointment; and (ii) JAVELIN shall, within 48 hours of
service pursuant to this sentence, send a copy of the documents so served by
international air courier to RIVA's address as set forth herein (or such
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other address as RIVA shall specify in writing to JAVELIN). Service upon the
Agent shall constitute service upon RIVA, provided that JAVELIN sends to RIVA
copies of the documents so served.
8.11 ATTORNEYS' FEES. The prevailing party in any proceedings
(including, without limitation any arbitration proceedings) arising in
connection with this Agreement shall be entitled to reimbursement for his or its
reasonable costs incurred in connection therewith, including reasonable
attorneys' fees.
8.12 RETENTION OF SECURITY INTEREST. Until the full purchase price
for each Product is paid in full, RIVA hereby grants to JAVELIN a purchase money
security interest in the Products delivered by JAVELIN hereunder and all
proceeds thereof for the full amount of the purchase price and any costs and
charges incurred by JAVELIN in connection therewith. RIVA shall perform all
acts and execute and deliver all documents that JAVELIN may request to permit
the creation, attachment, perfection and continuation of such security interest.
Without limiting the foregoing, JAVELIN is hereby authorized to file or record,
without RIVA's signature, this Agreement or any applicable financing statement
under the California Uniform Commercial Code, or any other applicable foreign,
state or local law evidencing JAVELIN's interest in the Products.
8.13 TERMINATION OF NOVEMBER AGREEMENT. The parties hereto agree
that the November Agreement shall be terminated and be of no further force or
effect and shall be replaced in its entirety by this Agreement; provided,
however, that JAVELIN shall be obligated to satisfy all purchase orders
submitted by RIVA under the November Agreement as of the date hereof and RIVA
shall be obligated to tender all amounts payable to JAVELIN for purchase orders
made under the November Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the date first above written.
JAVELIN SYSTEMS, INC.
By: /s/ XXXXXXX X. XXXXX
--------------------------------
Xxxxxxx X. Xxxxx
Chief Executive
Officer
RIVA ELECTRONICS LIMITED
By: /s/ XXXXX XXXXXX
--------------------------------
Xxxxx Xxxxxx
Managing Director
12
EXHIBIT A
PRODUCTS AND PRICING
PRODUCTS PRICE
JAVELIN Wedge 586 133 Mhz 8 MB (less than) 1GB
Hard Disk Drive + Customer Display $1550
LC with 1.2GB Hard Disk Drive $1560
LC with 540MB Hard Disk Drive $1470
LC without Hard Disk Drive, with Boot Rom $1400
JAVELIN Wedge 586 133 Mhz 8 MB 1GB+
MB Hard Drive+Customer Display To be determined
Additional JAVELIN open system touch screen
point-of-sale computers designed for the
hospitality, retail, and kiosk markets, as agreed
in writing by JAVELIN and RIVA to be included
in this Agreement To be determined
00
XXXXXXX X
XXXXXXXXX
Xxxxxx Xxxxxxx Xxxxxxx
Spain France
Belgium Holland
Luxembourg Russian Federated States
Estonia Portugal
Germany Norway
Sweden Finland
Latvia Poland
Czech Republic Lithuania
Austria Slovenia
Hungary Romania
Slovakia Italy
Malta Turkey
Sicily Corsica
Sardinia Yugoslavia
Bosnia Croatia
Bulgaria Greece
Macedonia Albania
Moldova Cyprus
Gibralta Iceland
Australia
New Zealand
Xxxx Island
EXHIBIT C
MINIMUM PURCHASE REQUIREMENTS
PERIOD MINIMUM PURCHASE AMOUNTS (#)
--------------------------------------------------------------------------------
November 1996 - December 31, 1997 $2,500,000
--------------------------------------------------------------------------------
January 1, 1998 - June 30 1998 $2,750,000
--------------------------------------------------------------------------------
July 1, 1998 - December 31, 1998 $6,250,000
--------------------------------------------------------------------------------
January 1, 1999 - June 30, 1999 $4,250,000
--------------------------------------------------------------------------------
July 1, 1999 - December 31, 1999 $8,250,000
--------------------------------------------------------------------------------
January 1, 2000 and thereafter Amount to be mutually agreed to, but in
(if Agreement is renewed) no event less than $7,800,000
--------------------------------------------------------------------------------
EXHIBIT D
TECHNOLOGY ESCROW AGREEMENT
TECHNOLOGY ESCROW AGREEMENT
This TECHNOLOGY ESCROW AGREEMENT (this "Agreement") is made and entered
into as of this first day of November 1996 by and among JAVELIN SYSTEMS, INC., a
corporation existing under the laws of the State of Delaware ("Javelin"), RIVA
ELECTRONICS LIMITED, a corporation existing under the laws of the United Kingdom
("Riva"), and Data Securities International, Inc. ("DSI"), as escrow agent
("Escrow Agent").
RECITALS
A. This Agreement is being entered into between the parties in connection
with the execution of that certain Exclusive Distribution Agreement dated as of
the date hereof between Javelin and Riva (the "Distribution Agreement").
Capitalized terms used and not otherwise defined herein shall have the meanings
given to such terms in the Distribution Agreement.
B. As an inducement to Riva to enter into the Distribution Agreement,
Javelin has agreed to place in escrow (the "Escrow") certain information (as
described herein) relating to the products covered by the Distribution Agreement
and to maintain such information in Escrow pursuant to the terms and conditions
of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. APPOINTMENT OF ESCROW AGENT. Javelin and Riva hereby appoint DSI to
act as Escrow Agent and DSI hereby agrees to serve as Escrow Agent and to hold,
safeguard and disburse all Product Information (as hereinafter defined) held in
Escrow in accordance with the terms and conditions of this Agreement.
2. ESCROW ACCOUNT. Concurrently with the execution of this Agreement,
Javelin shall deposit with Escrow Agent copies of all drawings, specifications,
blueprints, designs, programs and other proprietary information (the "Product
Information") necessary for the design and manufacture of the products set forth
on EXHIBIT A attached hereto (the "Products"). Escrow Agent shall retain all
Product Information until the first to occur of (i) November 1, 1999 or, if
earlier, the date of termination of the Distribution Agreement (the "Termination
Date"), and (ii) the date Javelin is adjudicated a bankrupt, a receiver,
custodian or trustee is appointed for all or substantially all of the assets of
Javelin or Javelin makes an assignment for the benefit of its creditors
(hereinafter collectively referred to as a "Bankruptcy Event").
3. RELEASE OF PRODUCT INFORMATION FROM ESCROW.
(a) In the event that no Bankruptcy Event has occurred on or prior to
the Termination Date, on the first business day following the Termination Date,
Escrow Agent shall deliver all Product Information to Javelin without the
necessity of any further notice, approval or other instruction from Javelin or
Riva.
1
(b) In the event of the occurrence of a Bankruptcy Event on or prior
to the Termination Date, Javelin shall promptly deliver written notice to such
effect to the Escrow Agent, with a copy to Riva. If such written notice is not
delivered by Javelin within five (5) business days of the occurrence of a
Bankruptcy Event, then Riva may deliver such notice to the Escrow Agent, with a
copy to Javelin.
(c) In the event Riva shall deliver written notice to Escrow Agent
(the "Riva Notice") that a Bankruptcy Event has occurred, Escrow Agent shall
promptly notify Javelin of the Riva Notice. Javelin shall have five (5)
business days from the date of delivery of such notice from Escrow Agent (the
"Notice Period") to contest any Riva Notice. In the event Javelin does not
contest the Riva Notice then, without the necessity of any further notices,
approvals or instructions of any kind, Escrow Agent shall, following the
expiration of the Notice Period, deliver to Riva the Product Information then
held in Escrow and Riva shall accept delivery of the Product Information subject
to the terms and conditions set forth in this Agreement.
4. NON-EXCLUSIVE LICENSE; ROYALTY; TERM.
(a) Upon the occurrence of a Bankruptcy Event and delivery of the
Product Information to Riva pursuant to Section 3 above, and without any other
action on the part of Javelin, Javelin shall be deemed to grant to Riva a non-
exclusive license to utilize the Product Information, and any enhancements
thereto made from time to time during the term of this Agreement, in the
Territory solely for the manufacture of Products to be sold or distributed by
Riva in the Territory.
(b) In consideration of the non-exclusive license granted hereby,
Riva shall pay to Javelin, on the last business day of each calendar quarter
following the occurrence of a Bankruptcy Event, a royalty equal to ten percent
(10%) of net sales of the Products sold or distributed by or for Riva, exclusive
of any taxes or shipping charges. In no event shall Riva be permitted to
license, sublicense or otherwise assign any of the Product Information licensed
hereby nor utilize any of the Product Information for any other purpose.
(c) The non-exclusive license granted to Riva hereby shall continue
until the first to occur of (i) the expiration of a period of five (5) years
from the date of the occurrence of a Bankruptcy Event or (ii) the breach or
default by Riva of any of its obligations under this Agreement, including
without limitation, the failure to pay any royalty amounts within five (5)
business days of the date due or the breach of the confidentiality agreements of
Riva contained herein, at which time, all rights granted to Riva hereunder shall
terminate.
5. INFRINGEMENT ACTIONS. Each of Javelin and Riva shall promptly notify
and give complete information to the other party concerning any infringement of
any of the Product Information licensed under this Agreement of which such party
becomes aware and of any and all legal proceedings, suits or actions brought
against either such party relating to any of the Products. The parties agree to
cooperate with each other in connection with the defense or prosecution of any
such infringement actions.
2
6. CONFIDENTIALITY AND OWNERSHIP RIGHTS. Riva acknowledges and agrees
that the Products and the Product Information are and will continue to be the
confidential proprietary information and trade secrets of Javelin and were
developed by Javelin through the investment of substantial time and money. Riva
shall not disclose, and shall take all necessary actions to prevent its
officers, directors, employees and other agents from disclosing, any of the
Product Information to anyone except officers, directors, employees and other
agents of Riva who need to know such information in connection with the
performance of their duties to Riva or any of Riva's subsidiaries. Riva
acknowledges and agrees that all proprietary rights relating to the Products are
the sole and exclusive property of Javelin and, except for the non-exclusive
license rights granted to Riva hereunder, Riva shall have no ownership interest
or other interest in or to any Product Information. Riva's obligations under
this Section 6 shall survive any termination of this Agreement.
7. INDEMNIFICATION.
(a) INDEMNIFICATION OF JAVELIN. Riva shall indemnify and hold
harmless Javelin and its officers, directors, employees, stockholders and other
agents from and against any and all claims, liabilities, damages, losses,
judgments, fines, amounts paid in settlement, costs and expenses (including
without limitation, reasonable attorneys' fees), incurred by Javelin in
connection with any claim, action, suit, proceeding or investigation based upon
or arising out of Riva's use of any of the Products or Product Information,
including, without limitation, any and all actions brought against Javelin that
are based upon, allege or arise out of any claim that the use of the Products or
Product Information by Riva infringes any patent or other proprietary
information of any other person or entity.
(b) INDEMNIFICATION OF ESCROW AGENT.
(i) If this Agreement or any matter relating hereto shall become the
subject of any litigation or controversy, Riva and Javelin agree, jointly and
severally, to hold Escrow Agent free and harmless from any loss or expense,
including attorneys' fees that may be suffered by it by reason thereof except
for any losses or expenses that arise from Escrow Agent's own negligence or
willful misconduct. If conflicting demands are made or notices served upon
Escrow Agent with respect to this Agreement, the parties expressly agree that
Escrow Agent shall be entitled to file a suit in interpleader and obtain an
order from a court of competent jurisdiction requiring the parties to interplead
and litigate their several claims and rights among themselves. Upon the filing
of the action in interpleader, and upon the disposition of any Product
Information held in Escrow as instructed by the court, Escrow Agent shall be
fully released and discharged from any obligations imposed by it under this
Agreement.
(ii) Escrow Agent shall not be liable for the sufficiency or
correctness as to form, manner, execution or validity of any instrument
deposited with it, nor as to the identity, authority or rights of any person
executing such instrument, nor for failure to comply with any of the provisions
of any agreement, contract or other instrument filed with Escrow Agent or
referred to herein other than this Agreement. Escrow Agent's duties hereunder
shall be limited to the safekeeping of the Product Information delivered to
Escrow Agent hereby and their disposition in accordance with the terms of this
Agreement.
3
8. MISCELLANEOUS PROVISIONS.
(a) BINDING EFFECT; ASSIGNMENT, TRANSFER AND SUBLICENSE. This
Agreement shall inure to the benefit of and shall be binding upon and
enforceable by the parties hereto and their respective successors and assigns.
Nothing in this Agreement, expressed or implied, is intended to or shall confer
on any person other than the parties hereto any rights, remedies, obligations,
or liabilities under or by reason of this Agreement. This Agreement is
assignable by Javelin upon thirty (30) days' prior written notice to Riva. Riva
may not assign or otherwise transfer this Agreement or assign, transfer or
sublicense any of its rights or obligations hereunder to any party without the
prior written consent of Javelin. For purposes of the foregoing, a change in
ownership of more than 50% of the outstanding capital stock or voting power of
Riva shall be deemed to be an assignment for purposes of this provision.
(b) WAIVERS. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party hereto, shall be deemed to
constitute a waiver by the party taking such action. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other provision or of any subsequent breach of the
same provision. No waiver shall be effective unless in writing and signed by
the party making the waiver.
(c) OFFICIAL NOTICES. All notices and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered personally, by courier or
overnight mail delivery service, telecopied, or mailed by registered or
certified mail, postage prepaid, return receipt requested, to the party to whom
the same is so delivered or mailed
(i) if to Javelin:
Javelin Systems, Inc.
0000X Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Chief Executive Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to (which shall not constitute notice):
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone No. (000) 000-0000
Telecopier No.: (000) 000-0000
4
(ii) if to Riva:
Riva Electronics Limited
Xxxxx Fold Road, Xxxx 00
Xxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxxxxx, Xxxxxx 0X0 0XX
Xxxxxx Xxxxxxx
Attn: Mr. Moray Xxxx
Telephone No. 00-0000-000000
Telecopier No. 00-0000-000000
(iii) if to Escrow Agent:
Data Securities International, Inc.
0000 Xxxxxxxxxx Xx., Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxx
Telephone No. 000-000-0000
Telecopier No. 000-000-0000
or to such other address as any of the above shall have specified by written
notice hereunder.
(d) ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof, and supersedes any and all prior or contemporaneous agreements and
understandings, oral or written, concerning the subject matter hereof. This
Agreement may only be amended or modified by a writing signed by each of the
parties hereto.
(e) SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
(g) GOVERNING LAW. The validity, performance and enforcement of
this Agreement shall be governed by the laws of the State of California
including the Uniform Commercial Code as adopted in California.
(h) ARBITRATION. All disputes and differences between Javelin and
Riva relating to this Agreement shall be resolved through arbitration pursuant
to the arbitration provisions contained in Section 8.10 of the Distribution
Agreement, or otherwise as provided in Section 8.10 of the Distribution
Agreement.
5
(i) ATTORNEYS' FEES. The prevailing party in any proceedings
(including, without limitation any arbitration proceedings) arising in
connection with this Agreement shall be entitled to reimbursement for his or its
reasonable costs incurred in connection therewith, including reasonable
attorneys' fees.
(j) EXPENSES. Each of Riva and Javelin shall pay its own fees and
expenses in connection with this Agreement; provided, however, that all fees and
costs and expenses of Escrow Agent shall be borne equally by Javelin and Riva.
(k) RELATIONSHIP OF THE PARTIES. Nothing in this Agreement shall be
construed as creating any joint venture, association, partnership, franchise or
other form of business or agency relationship between Javelin and Riva, except,
solely upon the occurrence of a Bankruptcy Event, that of licensor and licensee,
respectively. Neither party shall have any right, power or authority to assume,
create or incur any expense, liability or obligation, express or implied, on
behalf of the other.
(l) SURVIVABILITY. Notwithstanding anything contained in this
Agreement to the contrary, Section 4(b) and 4(c) (Royalties), Section 5
(Infringement Actions), Section 6 (Confidentiality), Section 7 (Indemnification)
and all of Section 8 (Miscellaneous Provisions) shall survive the termination or
expiration of this Agreement, as the case may be, to the extent required thereby
for the full observation and performance by any and all of the parties hereto.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date and year first
above written:
JAVELIN SYSTEMS, INC.
By: /s/ XXXXXXX X. XXXXX
--------------------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
RIVA ELECTRONICS LIMITED
By: /s/ XXXXX XXXXXX
--------------------------------
Xxxxx Xxxxxx
Managing Director
ACCEPTANCE BY ESCROW AGENT
The undersigned hereby acknowledges that it has received a fully executed
counterpart of this Technology Escrow Agreement and agrees to act as Escrow
Agent thereunder and to be bound by and perform the terms thereof as such terms
apply to Escrow Agent therein.
DSI, INC.
By: /s/ XXXXXXXX X. XXXXXXX
---------------------------
Xxxxxxxx X. Xxxxxxx
Contracts Administrator
7
EXHIBIT A
PRODUCTS
JAVELIN Wedge 586 133 Mhz 8 MB(less than)1GB
Hard Drive + Customer Display
LC with 1.2GB Hard Disk Drive
LC with 540MB Hard Disk Drive
LC with 300MB Hard Disk Drive
LC without Hard Disk Drive, with Boot Rom
JAVELIN Wedge 586 133 Mhz 8 MB 1GB+
MB Hard Drive + Customer Display
Additional JAVELIN open system touch screen
point-of-sale computers designed for the
hospitality, retail, and kiosk markets, as agreed
in writing by JAVELIN and RIVA to be included
in this Agreement
ADDENDUM
--------
This is an addendum to the attached Technology Escrow Agreement between Javelin
and Riva.
The parties acknowledge and agree to all the additions set forth in the
following sections of this Agreement:
Section 2. In the event of the nonpayment of fees owed to Escrow Agent,
Escrow Agent shall provide written notice of delinquency to all parties to this
Agreement. Any party to this Agreement shall have the right to make the payment
to Escrow Agent to cure the default. If the past due payment is not received in
full by Escrow Agent within one month of the date of such notice, then Escrow
Agent shall have the right to terminate this Agreement at any time thereafter by
sending written notice of termination to all parties. Escrow Agent shall have
no obligation to take any action under this Agreement so long as any payment due
to Escrow Agent remains unpaid.
Section 3.c Add "or attempted delivery"
Section 7.(b) Escrow Agent shall be responsible to perform its obligations
under this Agreement and to act in a reasonable and prudent manner with regard
to this escrow arrangement. Provided Escrow Agent has acted in the manner
stated in the preceding sentence, Javelin and Riva each agree to indemnify,
defend and hold harmless Escrow Agent from any and all claims, actions, damages,
arbitration fees and expenses, costs, attorney's fees and other liabilities
incurred by Escrow Agent relating in any way to this escrow Agreement.
AGREED:
JAVELIN SYSTEMS, INC. RIVA ELECTRONICS, LIMITED
By:/s/ XXXXXXX X. XXXXX By: /s/ XXXXX XXXXXX
----------------------- -----------------
Xxxxxxx X. Xxxxx Xxxxx Xxxxxx
Chief Executive Officer Managing Director
Date: May 13, 1997 Date: May 13, 1997
DSI, INC.
By:/s/ XXXXXXXX X. XXXXXXX
-----------------------
Xxxxxxxx X. Xxxxxxx
Contracts Administrator
Date: May 12, 1997
