MARKETING AND DISTRIBUTION AGREEMENT
NET2PHONE, INC. and AMERICOM XXXXXX.XXX, INC.
This Marketing and Distribution Agreement ("Agreement") is made and effective
this 3rd day of April, 2000 by and between Net2Phone, Inc. ("NET2PHONE"), a
Delaware Corporation with offices at 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 XXX and XxxxxxxxXxxxxx.xxx, Inc., ("AMERICOM"), a Delaware corporation
with offices at 0000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx X, Xxxxxxxx, Xxxxxxx 00000.
WHEREAS, NET2PHONE wishes to sell a range of products and services in a
retail and distributor channel; and
WHEREAS, AMERICOM has experience and access to certain markets within the
retail and distributor channel.
NOW, THEREFORE, in consideration of the premises, as well as the
obligations herein made and undertaken, the parties, intending to be legally
bound, do hereby agree as follows:
I. NET2PHONE'S OBLIGATIONS to AMERICOM
1.1 NET2PHONE hereby appoints AMERICOM as its exclusive representative for
certain accounts ("Accounts") as specified in Exhibit A: (the "Accounts &
Commissions "), attached hereto, which may be modified from time to time upon
written agreement of the parties, for certain products and services
(collectively the "Products") made available to AMERICOM by NET2PHONE for sale
through NET2PHONE's channel distribution program as specified in Exhibit B (the
"Net2Phone Products"), which Exhibit B shall be subject to change, at
NET2PHONE's sole discretion, from time to time upon written notification to
AMERICOM.
1.2 NET2PHONE shall furnish to AMERICOM sales materials, sample kits, order
forms, advertising literature, and sale price lists of the Products to be
distributed by AMERICOM. Such materials shall remain the exclusive and absolute
property of NET2PHONE and all such material not distributed in accordance with
the terms of this Agreement shall be returned immediately upon request.
1.3 All prices and terms of sale shall be established by NET2PHONE, and shall be
subject to change at NET2PHONE's sole discretion, upon written notice to
AMERICOM.
1.4 NET2PHONE shall provide AMERICOM and AMERICOM's employees with reasonable
training and instruction in connection with the Products, as shall be determined
by NET2PHONE in its sole discretion.
NET2PHONE shall advise AMERICOM of material communications relating to the
Accounts.
NET2PHONE shall directly invoice the Accounts, and send a copy of such invoices
to AMERICOM.
Net2Phone shall compensate AMERICOM in accordance with the terms of Article III.
II. AMERICOM'S OBLIGATIONS to NET2PHONE
2.1 AMERICOM agrees to use good faith efforts to sell, promote and support the
Products in an effort to increase the sales and market share of the NET2PHONE
Products.
2.2 AMERICOM will coordinate and disburse written materials, literature, sales
programs, pricing, and policies for NET2PHONE to the Accounts.
2.3 AMERICOM will conduct all of its business in its own name as an independent
contractor. AMERICOM will pay all expenses relating to its office and activities
and be responsible for the compensation and expenses of its employees.
2.4 AMERICOM shall comply with NET2PHONE's reasonable written policies which are
provided to AMERICOM, and shall communicate same to the Accounts.
2.5 AMERICOM shall present all orders as received from the Accounts and shall
not, without NET2PHONE's prior written approval, alter, enlarge or limit orders;
accept the return of or make any allowance for Products sold. Orders are subject
to NET2PHONE's acceptance and shall not be binding on NET2PHONE unless accepted
by NET2PHONE.
2.6 AMERICOM shall promptly furnish to NET2PHONE any information that it may
have, from time to time, relative to the credit standing of any of its Accounts.
2.7 AMERICOM agrees that it will attend, at NET2PHONE's request, a reasonable
number of Account-specific trade shows necessary for the promotion of
NET2PHONE's Products and will perform such tasks as reasonably required by
NET2PHONE at such trade shows.
2.8 AMERICOM agrees to make no false or misleading representations with respect
to NET2PHONE or NET2PHONE's Products. AMERICOM shall make no express or implied
warranties to customers or prospective customers or their representatives or to
any other person on behalf of NET2PHONE with respect to any of NET2PHONE's
Products without NET2PHONE's express written consent. AMERICOM agrees to hold
NET2PHONE harmless from all damages resulting from AMERICOM's breach of
obligations under this paragraph.
III. FINANCES & EXPENSES
3.1 NET2PHONE shall compensate AMERICOM for sales of NET2PHONE's Products to
Accounts in the amounts set forth in Exhibit A, and shall award AMERICOM stock
options in accordance with the terms of Exhibit C.
3.2 AMERICOM's commissions shall be a percentage of the "Net Invoice Revenue"
collected from the Accounts based upon the then- current Net Invoice Price as of
the time of any such sale or order, set forth on Exhibit B. "Net Invoice
Revenue" shall mean the total amount collected from an Account excluding
shipping charges, mailing costs, taxes, insurance, freight allowances, and
returns.
3.3 Commissions will be paid within thirty (30) days after the end of the month
in which shipment was made, together with a detailed reconciliation and
explanation of commissions paid; provided, however, that with respect to sales
resulting in a commission less than One Hundred ($100) Dollars, such commission
shall be paid within sixty (60) days.
3.4 NET2PHONE may deduct from any commission due AMERICOM the amount of any
commissions previously paid or credited to AMERICOM on any sale of NET2PHONE's
Products to the extent that such commission has been paid or credited with
respect to any Product returned by the Account or on allowances credited to the
Account for any reason by NET2PHONE.
3.5 In the event an Account fails to pay an invoice, after NET2PHONE has taken
reasonable steps to effectuate collection, NET2PHONE shall advise AMERICOM in
writing of its intent to charge back commissions on the unpaid balance of such
invoice. NET2PHONE may then deduct the amount of commissions earned on the
unpaid invoice amount from AMERICOM's next commission check. However, NET2PHONE
shall have the option to request that AMERICOM take reasonable steps to collect
the entire amount of the debt or any portion thereof and upon collection, retain
the appropriate commission percentage of collected revenue, as specified in
Exhibit A, and remit to NET2PHONE the balance of the amount collected, if any.
In the event that AMERICOM shall not succeed in collecting such unpaid Account
balance, AMERICOM shall not be required to commence legal action against any
Account(s), and AMERICOM shall not be held responsible to remit any such unpaid
Account balance, notwithstanding commission chargebacks.
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IV. LEGAL FORMALITIES
4.1 NET2PHONE's Exclusive Rights. NET2PHONE is and shall at all times be and
remain the owner of the Products, the NET2PHONE services (the "Services"), the
NET2PHONE software (the "Software") and the NET2PHONE hardware (the "Hardware")
including, without limitation, the intellectual property rights associated
therewith and AMERICOM shall not at any time be deemed to have acquired any
right in and to such property. AMERICOM shall not sell the Products under a
private label without the prior written consent of NET2PHONE, and AMERICOM shall
not sell any competing Internet protocol telephony products, services, software
and/or hardware similar to or the same as the Products, Services, Software
and/or Hardware provided by NET2PHONE. AMERICOM shall not reproduce, decompile,
disassemble or reverse engineer any of NET2PHONE's Hardware or Software in any
manner whatsoever for any purpose. AMERICOM shall not use NET2PHONE's
trademarks, trade names, service marks, copyrights, patents or logos ("Marks")
without NET2PHONE's prior written consent. AMERICOM shall not interfere or cause
any third party to interfere with NET2PHONE's intellectual property rights. All
Marks as well as NET2PHONE's trade secrets, trade practices, copyrights,
patents, operating practices and procedures, good will, and all other items
tangible or intangible, used presently or in the future, are the assets of
NET2PHONE and shall remain NET2PHONE's exclusive property. Should AMERICOM
violate this provision NET2PHONE shall be entitled to terminate this Agreement
and obtain immediate injunctive relief in addition to any other legal rights and
remedies available to NET2PHONE.
4.2 Confidentiality. Neither party to this Agreement shall disclose the terms
and conditions of this Agreement to any third party, nor will either party issue
a press release and/or otherwise disclose the existence of this Agreement to the
media or general public, without the express written consent of the other.
During the term of this Agreement, AMERICOM may obtain confidential or
proprietary information regarding NET2PHONE or its affiliates ("Confidential
Information"). AMERICOM shall hold such Confidential Information in strict
confidence and shall not reveal same without NET2PHONEs' express written
consent. Should AMERICOM violate this provision NET2PHONE shall be entitled to
terminate this Agreement and obtain immediate injunctive relief in addition to
any other legal rights and remedies available to NET2PHONE.
4.3 Change in NET2PHONE Procedure. NET2PHONE reserves the right to change the
billing, pricing, carrier, and any other procedure contained herein in its
absolute and final discretion. AMERICOM will be notified in writing of such
changes, the effective date of such changes, and of any resulting material
effect upon AMERICOM's or NET2PHONE's obligations under this Agreement; and such
notice shall be incorporated herein and shall become an amendment to this
Agreement.
4.4 Term & Termination. The term of this Agreement is one (1) year from the date
first written above (the "Initial Term"). This Agreement shall thereafter be
renewed on an annual basis, subject to termination by either party upon thirty
(30) days prior written notice to the other party. NET2PHONE may terminate this
Agreement immediately upon notice to AMERICOM and recover from AMERICOM any and
all amounts due NET2PHONE from AMERICOM, if any, under this Agreement, in the
event (i) AMERICOM fails to perform AMERICOM's obligations hereunder, or (ii)
AMERICOM is declared insolvent or bankrupt, or a petition is filed in any court
of competent jurisdiction under the applicable bankruptcy laws, including for
liquidation or reorganization. In addition, NET2PHONE may terminate this
Agreement immediately if the passage or adoption of any law, rule or regulation
would make it materially more expensive for NET2PHONE to provide the Services
under this Agreement or pursuant to a determination that the provision of
Services under this Agreement is contrary to existing laws, rules or
regulations. Either party may terminate this Agreement without cause upon thirty
(30) days prior written notice to the other after the Initial Term of this
Agreement. In the event of termination, AMERICOM shall return any advertising
materials, sales items, Product samples and all other items owned by NET2PHONE
upon written request by NET2PHONE. The obligations of the parties that, by their
nature, survive termination of this Agreement shall so survive.
4.5 Non-Waiver. NET2PHONE's failure to require AMERICOM's performance of any
term or condition of this Agreement shall not constitute a waiver and shall not
affect the right of NET2PHONE to later enforce such provision, unless such
waiver is made expressly in writing signed by an authorized representative of
NET2PHONE.
4.6 Force Majeure. Neither party shall be liable (except in the case of
nonpayment) for Service interruptions, delays, failures to perform, damages,
losses or destruction, or malfunction of any equipment or any consequence
thereof caused or occasioned by, or due to fire, flood, water, the elements,
acts of God, war and threat of imminent war, labor disputes or shortages,
utility curtailments, power failures, explosions, civil disturbances,
governmental actions, shortages of equipment for supplies, unavailability of
transportation, acts or omissions of third parties, or any other cause beyond
the affected party's reasonable control. The party so delayed or prevented from
performing shall provide prompt notice of such force majeure event and shall
exercise good faith efforts to remedy any such cause of delay or cause
preventing performance.
4.7 Product Warranty. Each Product shall be warranted by either NET2PHONE or the
Product manufacturer, or both, for a warranty period of twelve months from the
date of purchase subject to the conditions set forth on the warranty card
provided with each Product.
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4.8 No Other Warranties. Except for the foregoing, while NET2PHONE attempts to
provide Services consistent with industry standards, results may vary based on
the quality of the Internet connection for which NET2PHONE is not responsible.
ALL SERVICES PROVIDED BY NET2PHONE ARE PROVIDED ON AN "AS IS" BASIS WITHOUT
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT
LIMITATION WARRANTIES AS TO THE DESCRIPTION, QUALITY, MERCHANTIBILITY,
NON-INFRINGEMENT, COMPLETENESS, FITNESS FOR A PARTICULAR PURPOSE, ALL SUCH
WARRANTIES BEING EXPRESSLY EXCLUDED AND DISCLAIMED.
4.9 Limitation of Liability. In no event will NET2PHONE be liable to AMERICOM or
any third party, for any direct, indirect, special, incidental or consequential
losses or damages arising in any manner from this Agreement and the performance
or non-performance of obligations hereunder whether a claim is brought in
contract, tort or other legal theory, and even if NET2PHONE knew in advance
about the possibility of such losses or damage.
4.10 Indemnification.
(a) AMERICOM shall indemnify, defend and hold NET2PHONE, its affiliates,
subsidiaries, officers, agents, directors, shareholders and employees
(collectively "Affiliates") harmless from and against any and all
claims, liabilities, losses or damages which arise out of (i)
AMERICOM's breach (including any subcontractors of AMERICOM) of this
Agreement or any acts or omissions which in any way misrepresent or
harm NET2PHONE, its Affiliates or any Services; (ii) any claims by any
of its subagents.
(b) NET2PHONE shall indemnify, defend and hold AMERICOM harmless from and
against any and all claims, liabilities, losses or damages which arise
out of (i) NET2PHONE's breach of this Agreement or any acts or
omissions which in any way misrepresent or harm AMERICOM; and (ii)
NET2PHONE's breach of Product warranties; and (iii) infringement of
the intellectual property rights of any third party, including patent,
copyright or trademark infringement.
4.11 Independent Contractors. The parties expressly agree that NET2PHONE and
AMERICOM are acting hereunder as independent contractors and under no
circumstances shall any of the employees of one party be deemed the employees of
the other for any purpose. This Agreement shall not be construed as authority
for either party to act for the other party in any agency or other capacity or
to make commitments of any kind for the account of, or on behalf of, the other
party, except to the extent, and for the purposes, expressly provided for and
set forth herein.
4.12 Amendment and Modification. Subject to paragraph 4.3, no change, amendment,
modification, termination or attempted waiver of any of the provisions set forth
herein shall be binding unless made in writing and signed by duly authorized
representatives of both parties hereto, and no representation, promise,
inducement or statement of intention has been made by either party which is not
embodied herein.
4.13 Assignment and Subcontracting. AMERICOM shall not assign this Agreement or
any rights under this Agreement without the prior written consent of NET2PHONE.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors or assigns.
AMERICOM shall be permitted to subcontract to other marketing firms, provided
that it shall give prior written notice to NET2PHONE of each such
subcontractor's name, address and other reach information; and shall be
responsible to ensure that all of the activities of such subcontractors shall be
in full compliance with each and every term and condition of this Agreement.
4.14 Notices. Any notice, approval, request, authorization, direction or other
communication under this Agreement will be given in writing and will be deemed
to have been delivered and given for all purposes herein two (2) business days
after it is sent by registered or certified mail, prepaid and return receipt
requested, or by nationally recognized overnight courier service, duly addressed
and with proper postage. or upon receipt if sent via confirmed facsimile or by
personal delivery, to the address set forth above or such other address as may
be provided by the other party in writing for the purpose of receiving such
notices.
4.15 Jurisdiction. This Agreement and the relationship between the parties
hereto shall be governed by the laws of the State of New Jersey without giving
effect to its conflicts of law provisions. Both parties consent to the exclusive
jurisdiction and venue in the courts of New Jersey.
4.16 Severability. If a provision of this Agreement is held to be invalid or
unenforceable for any reason, such determination shall not affect the validity
or enforceability of any other part or provision of this Agreement in any way.
The parties agree to replace any invalid provision with a valid provision, which
most closely approximates the intent and economic effect of such invalid
provision.
4.17 Headings. The article and paragraph headings used herein are for reference
purposes only, and shall not in any way affect the meaning or interpretation of
this Agreement and the terms and provisions herein.
4.18 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together will constitute one
and the same instrument.
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4.19 Entire Agreement. This Agreement, including any exhibits attached hereto,
sets forth the entire agreement and understanding of the parties hereto and
supersedes and merges any and all prior proposals, negotiations,
representations, agreements, arrangements or understandings, both oral and
written, relating to the subject matter hereof. The parties hereto have not
relied on any proposal, negotiation or representation, whether written or oral,
that is not expressly set forth herein.
4.20 Authority. Each party represents and warrants that: i) the signatory shown
below has the authority to bind the party on whose behalf he/she is executing
this Agreement; ii) the execution and delivery of this Agreement and performance
of such party's obligations hereunder have been duly authorized; and iii) the
Agreement is a valid and legal agreement binding on such parties and enforceable
in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
XxxxxxxxXxxxxx.xxx, Inc. Net2Phone, Inc.
By: _________________________________ By: ____________________________________
Authorized Representative's Signature Authorized Representative's Signature
_____________________________________ Xxxxxxxx Xxxx, Executive Vice President & Treasurer
Printed Name, Title
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