EXHIBIT 10.11
MARKETING AND DISTRIBUTION AGREEMENT DATED DECEMBER 17, 1996, BETWEEN INGENICO,
S.A., INTERNATIONAL VERIFACT INC. AND IVI INGENICO INC.
MARKETING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT MADE AS OF THE 7TH DAY OF DECEMBER, 1996.
B E T W E E N:
INGENICO
incorporated under the laws of France,
(hereinafter called "Ingenico")
OF THE FIRST PART
-AND-
INTERNATIONAL VERIFACT INC.
continued under the laws of Canada,
(hereinafter called "IVI")
OF THE SECOND PART
-AND-
IVI INGENICO INC.
(hereinafter called "Latin Newco")
OF THE THIRD PART.
WHEREAS Ingenico and IVI have entered into a Master Alliance Agreement dated
of even date herewith (the "Master Alliance Agreement");
AND WHEREAS such Master Alliance Agreement contemplates Ingenico and IVI
entering into a Marketing and Distribution Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants and agreements contained herein, the parties hereto covenant and agree
with each other as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. Unless otherwise defined herein, all of the terms having
initial capital letters and defined in the Master Alliance Agreement shall have
the meanings ascribed to them therein. In addition to the definitions
incorporated herein by reference as aforesaid or defined in the text hereof, the
following terms shall have the following meanings:
(A) "Agreement" means this Marketing and Distribution Agreement, and all
schedules and instruments supplemental hereto or any amendment or
confirmation hereof.
(B) "Delivery Point" means the delivery point into a Distributor's
Territory of ordered Products, as specified by the Distributor with respect
to each Product order.
(C) "Distributor" means either Party (or Latin Newco) in its capacity as
distributor vis a vis the other Party acting in the capacity of Supplier.
(D) "Future Products" means either IVI Future Products or Ingenico
Future Products as may be dictated by the context in which such reference
appears.
(E) "Group" means either Groupe Ingenico or IVI Group as may be dictated
by the context in which such reference appears.
(F) "Performance Criteria" means either the Performance Criteria for
Ingenico, the Performance Criteria for IVI or the Performance Criteria for
Latin Newco as may be dictated by the context in which such reference
appears.
(G) "Person" means an individual, partnership, joint venture, trustee,
trust, corporation, division of a corporation, unincorporated organization
or other entity or a government, state or agency or political subdivision
thereof, and pronouns have a similarly extended meaning.
(H) "Supplier" means either Party in its capacity as manufacturer,
vendor or source of supply vis a vis the other party acting in the capacity
of Distributor.
(I) "Term" means the term of this Agreement including renewals.
1.2 ACCOUNTING TERMS. Accounting terms shall be construed in accordance
with United States generally accepted accounting principles consistently
applied.
1.3 INCORPORATION OF SCHEDULES. Schedules and other documents attached or
referred to in this Agreement are an integral part of this Agreement, as they
may be amended from time to time. The Schedules to this Agreement are the
following:
Schedule "A" Selected IVI Products
1.4 EXTENDED MEANINGS. As used herein, each gender shall include all
genders, and words importing the singular shall include the plural and vice
versa as the context shall require.
1.5 U.S. CURRENCY. Except as otherwise expressly stated, all dollar
amounts referred to in this Agreement are in United States currency.
1.6 TRADE TERMS. Undefined words and abbreviations which have well-known
technical trade meanings are used herein in accordance with such recognized
meanings in the electronic funds and benefits transfer at point of service
industry.
1.7 GROUPE INGENICO AND IVI GROUP. Each of Ingenico and IVI respectively
shall take all steps, undertake all proceedings and enter into all such
agreements as may be necessary in order to cause all entities comprised in
Groupe Ingenico and IVI Group to fulfill all of the obligations of Ingenico and
IVI respectively in this Agreement and in agreements comprised in the Schedules
to this Agreement, including without limitation pertaining to ownership of
intellectual property, compliance with the terms of technology licenses, and
compliance with confidentiality obligations. Notwithstanding the foregoing,
Ingenico shall be unconditionally responsible for any and all acts of Groupe
Ingenico and IVI shall be unconditionally responsible for any and all acts of
the IVI Group.
ARTICLE 2
APPOINTMENT AND ACCEPTANCE
2.1 INGENICO APPOINTMENT OF IVI. Subject to the terms hereof, Ingenico
appoints IVI as distributor, and IVI hereby accepts, to market, distribute, sell
and/or lease the Ingenico Products, Ingenico Future Products, Ingenico
Technology and Unicapt Technology in the IVI Territory during the Term. IVI
shall not have the right to manufacture any Ingenico Product in the IVI
Territory or elsewhere, unless a license to manufacture is granted except in
furtherance of its rights to use for manufacturing and other purposes any
escrowed materials released in accordance with the provisions of any escrow
agreement entered into by the Parties pursuant to the Technology License
Agreement.
2.2 IVI APPOINTMENT OF INGENICO. Subject to the terms hereof, IVI appoints
Ingenico as distributor, and Ingenico hereby accepts, to market, distribute,
sell and/or lease the IVI Products, IVI Future Products and IVI Technology in
the Ingenico Territory during the Term. Ingenico shall not have the right to
manufacture any IVI Product in the Ingenico Territory or elsewhere, unless a
license to manufacture is granted.
2.3 EXCLUSIVITY
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(A) Subject to the paragraphs below, the rights granted to a Distributor
under either subsection 2.1 or 2.2 above shall be exclusive with respect to
the Ingenico Products, Ingenico Future Products, Ingenico Technology and
Unicapt Technology in the case of IVI and the Selected IVI Products in the
case of Ingenico.
(B) A Supplier shall have the right to enter into any arrangement with
any other Person to market, distribute and sell any Product and Future
Products, either jointly with a Distributor as agent, or independently or in
any other capacity whatsoever:
(I) outside the other Party's Territory at any time; and
(II) A- in the case of IVI as Supplier, inside the Ingenico
Territory, in the event that Ingenico is in default of the
Performance Criteria for Ingenico; and
B- in the case of Ingenico as Supplier, in Canada and the U.S.A
only, in the event that IVI in default of the Performance
Criteria for IVI.
(C) Notwithstanding the provisions of subsections (a) and (b) above, and
subject to Section 2.7, IVI's exclusive right to market and distribute the
Ingenico Products, Ingenico Future Products, Ingenico Technology and Unicapt
Technology, on an exclusive basis shall be terminated in the event that
either:
(I) IVI does not adopt and incorporate the Unicapt Technology into
Future IVI Smart Card Terminals in accordance with the provisions of the
Technology License Agreement, and actively promote the Unicapt Technology
in the IVI Territory or
(II) revenues generated by IVI from sales of the Ingenico Products,
Ingenico Future Products, Ingenico Technology and Unicapt Technology in
Canada and the U.S.A are less than 20%, 50% or 60% of the Performance
Criteria for IVI in the first, second or third calendar years
respectively of the Term;
provided that such distribution rights shall continue on a
non-exclusive basis for the remainder of the Term.
(D) In addition to any rights it may have pursuant to (b) above, IVI
retains the right to market distribute, sell and/or lease worldwide and to
permit others to market, distribute, sell and/or lease worldwide:
(I) IVI Products and IVI Technology, which are not identified by
Ingenico on or before December 31, 1997, as Selected IVI Products or
Selected IVI Technology and IVI Future Products which are not selected by
Ingenico; and
(II) Selected IVI Products for which Ingenico has not generated
actual reoccurring sales in the Ingenico Territory on or before December
31, 1998, except for IVI Products and IVI Future Products containing
Unicapt Technology.
(E) Notwithstanding the foregoing, and subject to Section 2.5,
Ingenico's exclusive right to market and distribute the Selected IVI
Products on an exclusive basis shall be terminated in the event that
revenues generated by Ingenico from sales of the Selected IVI Products in
the Ingenico Territory are less than 20%, 50% or 60% of the Performance
Criteria for Ingenico in any year of the Term of this Agreement, provided
that such distribution rights shall continue on a non-exclusive basis for
the remainder of the Term of this Agreement.
(F) Notwithstanding the foregoing, Ingenico shall not market and
distribute in the IVI Territory, Ingenico Products or Ingenico Future
Products incorporating IVI Technology, except through IVI or Latin Newco.
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2.4 LATIN NEWCO. The Parties agree that marketing and distribution of
their respective Products in Latin America shall be conducted by Latin Newco as
Distributor on behalf of both Ingenico and IVI in their capacity as Suppliers in
accordance with the provisions of the Latin America Shareholder Agreement and
this Agreement, MUTATIS MUTANDIS.
2.5 RIGHT OF SELECTION OF IVI PRODUCTS: As soon as practicable, but in any
event not later than December 31, 1997, Ingenico shall provide a written notice
to IVI as to which of the IVI Products Ingenico shall market and distribute in
the Ingenico Territory, pursuant to this Agreement. A Schedule "A" to this
Agreement setting out the Selected IVI Products shall be attached to this
Agreement at such time. IVI shall advise Ingenico of any IVI Future Products and
in such cases Ingenico may also select such products to become IVI Selected
Products. Any such IVI Future Products which are selected by Ingenico shall be
set out in Schedule "A" to this Agreement.
In the event that Ingenico does become an exclusive distributor of Selected
IVI Products in the Ingenico Territory a business plan for the marketing of
Selected IVI Products in the Ingenico Territory shall be reviewed annually,
commencing in October of each year, and approved by the Parties by no later than
the following January 31st. Revisions to the Performance Criteria for Ingenico,
and for Sales and performance targets for Selected IVI Products shall be subject
to mutual agreement between the Parties. Ingenico shall commit resources to
achieve the Performance Criteria for Ingenico for 1997, 1998 and 1999. In the
event that the Performance Criteria for Ingenico are not so mutually agreed by
the Parties for any year, they shall, for each subsequent year, be equal to the
Performance Criteria for Ingenico established by mutual agreement for the prior
year, increased by 10% for each of the successive years during the term of this
Agreement. Notwithstanding Clause 2.3(e) should the Performance Criteria for
Ingenico, or any mutually agreed sales performance targets not be achieved in
any year, IVI shall notify Ingenico of its recommendation for optional
improvements in order to obtain such targets the following year. In addition,
prior to any loss of exclusivity for Ingenico based on failure to comply with
this Section 2.5 with respect to sales of the Selected IVI Products in the
Ingenico Territory, IVI shall notify Ingenico on or before each October 1, that
the level of sales of Selected IVI Products are not satisfactory to IVI.
Ingenico shall commit resources, supported by IVI to achieve the Performance
Criteria for Ingenico at such time and to the extent Ingenico selects IVI
Products and IVI Future Products.
2.6 RIGHT OF SELECTION OF IVI TECHNOLOGY: As soon as practicable, but in
any event not later than December 31, 1997, Ingenico shall provide a written
notice to IVI as to whether and to what extent it is electing to utilize the IVI
Technology in the Ingenico Products thereafter. To the extent Ingenico does not
elect to so utilize the IVI Technology IVI shall thereafter be entitled, in its
sole discretion, to license the IVI Technology to such third parties in the
Ingenico Territory as IVI shall determine.
2.7 PERFORMANCE CRITERIA FOR IVI: IVI shall commit resources to achieve
the Performance Criteria for IVI for 1997, 1998 and 1999. The business plans for
the sale and marketing of Ingenico Products in the IVI Territory shall be
reviewed annually in October, commencing October 1997, and approved by the
Parties by no later than the following January 31. Revisions to the Performance
Criteria for IVI, and Performance Criteria for Latin Newco, and for sales and
performance targets for Ingenico Products in the IVI Territory thereafter, shall
be subject to mutual agreement between the Parties. In the event that the
Performance Criteria for IVI, or the Performance Criteria for Latin Newco are
not so mutually agreed by the parties for any year, they shall, for each
subsequent year, be equal to the Performance Criteria for IVI or Performance
Criteria for Latin Newco, as the case may be, established by mutual agreement
for the prior year, increased by 10%, for each of the successive years during
the term of the Marketing and Distribution Agreement. Notwithstanding clause
2.3(c)(ii) should the Performance Criteria for IVI, or Performance Criteria for
Latin Newco, as the case may be, or any mutually agreed sales performance
targets not be achieved in any year, Ingenico shall notify IVI of its
recommendations for operational improvements in order to achieve such targets
for the following year. In addition, prior to any loss of exclusivity for IVI,
which may only occur with respect to Canada and the United States, based on
failure to comply with this Section 2.7 with respect to sales of the Ingenico
Products in Canada and the United
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States, Ingenico shall notify IVI on or before each October 1 commencing October
1, 1997 that the level of sales of Ingenico Products in Canada and the United
States is not satisfactory to Ingenico.
ARTICLE 3
NON-COMPETITION
3.1 NON-COMPETITION OF IVI: Except as indicated on Schedule "J" to the
Master Alliance Agreement, during the term of this Agreement, including any
renewal thereof, IVI shall not, either directly or indirectly, and shall not
permit any member of the IVI Group, to develop, distribute, market or
manufacture any smart card-based transactional system with application to
payment systems, loyalty, electronic benefit transfer systems, or terminal
systems for smart card technology, except utilizing the Ingenico Technology and
Unicapt Technology. IVI shall not, either directly or indirectly, and shall not
permit any member of the IVI Group, to develop, distribute or market, in the
Ingenico Territory, any IVI Future Products, which incorporates Unicapt
Technology, other than those that become a Selected IVI Product.
3.2 NON-COMPETITION OF INGENICO: In the event that Ingenico elects to
become an exclusive licensee of Selected IVI Technology pursuant to Section 2.6
hereof, it shall not thereafter, either directly or indirectly, and shall not
permit any member of Groupe Ingenico, to develop, distribute, market or
manufacture any products in competition with IVI Technology except utilizing
either the Ingenico Technology, Unicapt Technology or the IVI Technology
3.3 NON-SOLICITATION OF EMPLOYEES: During the term of the Agreement and
for a period of one year thereafter, neither Ingenico nor IVI shall solicit or
induce current employees of the other to accept employment or provide contract
services to any member of the IVI Group or Groupe Ingenico, except with the
mutual written approval of both Ingenico and IVI. Notwithstanding the foregoing,
both Ingenico and IVI consent to the employment of Xxxx-Xxxxxx Chabanel by IVI.
3.4 EXTRA-TERRITORIAL SALES: Each party, in its capacity as Distributor,
shall not through any agents sell any of the Products of the Supplier outside
the Distributor's Territory or, knowingly, or, if it has reason, to believe that
such Products might be so resold, to first notify in writing the other Party of
that fact and in such event the Parties agree to enter into mutually
satisfactory arrangements which ensure that the customer's interests are
satisfied and the objectives, and terms and conditions of this Agreement are
respected. Each Party, acting as Supplier, shall not through any agents sell any
of the Supplier's Products to be sold by the Distributor hereunder within the
Distributor's Territory or if it has reason to believe that such Products might
be so resold, to first notify in writing the other Party of that fact and in
such event the Parties agree to enter into mutually satisfactory arrangements
which ensure that the customer's interests are satisfied and the objectives, and
terms and conditions of this Agreement are respected.
ARTICLE 4
MARKETING RESPONSIBILITIES
4.1 DISTRIBUTOR'S OBLIGATIONS. In its capacity as Distributor of the other
Party's Products, each Party agrees to dedicate its commercially reasonable best
efforts to promote in every reasonable manner at its own expense the sale of the
respective Supplier's Products throughout the Distributor's Territory and to
comply with the Supplier's policy as made known from time to time to the
Distributor regarding advertising and sales promotion.
4.2 SUPPLIER'S OBLIGATIONS. Each Party, insofar as it is the Supplier of
Products, agrees to assist the other party as Distributor in the marketing of
such Products in the Distributor's Territory by:
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(F) ensuring that sales brochures, parts catalogues, service manuals and
other literature relative to the Products, including advertising artwork (in
all media, but only to the extent owed by the Supplier), are made available
to the Distributor at no charge, together with such sales and service
training as a Distributor may reasonably request for its sales and service
personnel; and
(G) acquainting the Distributor with such new methods of selling and new
applications for the Products as may be recommended by the Supplier.
4.3 In its capacity as Distributor of the other Party's Products, each party
agrees to dedicate its commercially reasonable best efforts to localize the
Product to comply with regulatory approvals for their Territory.
4.4 All technical and marketing documentation shall be provided by the
Supplier to the Distributor in the English language and such other languages as
may be available.
ARTICLE 5
SPECIAL OBLIGATIONS OF THE PARTIES
5.1 JOINT OBLIGATIONS: Each party agrees that it will dedicate its
commercially reasonable best efforts to achieve the following joint objectives
in cooperation with the other Party:
(H) as Distributor, to:
(I) market and distribute the other Party's Products in the
applicable Territory in accordance with this Agreement;
(II) furnish end users such instructions as to the operation, routine
maintenance and use of the Supplier's Products as the Supplier shall have
provided to the Distributor in accordance with the provisions hereof;
(III) to meet or exceed its respective Performance Criteria;
(I) as Supplier, to:
(i) ensure that its Products comply with market requirements,
standards, pricing and functionality;
(ii) make available a reasonable supply of parts and support for the
Supplier's Products in the Distributor's Territory based on each
Distributor's reported sales of the Supplier's Products in each region of
the Distributor's Territory,
(c) develop a marketing strategy, in the case of IVI for smart card
products and technologies, and in the case of Ingenico for the Selected IVI
Products, and to propose effective resources and organization in support of
such strategy in order to become a leader in those respective domains.
5.2 During the term of this Agreement, if an Ingenico Product or Ingenico
Future Product exists which meets the requirements of the IVI Territory and is
provided to IVI by Ingenico at prices which enable IVI to distribute such
product at a price for the payment of all customs, duties and other taxes and
fees, whether payable in local or foreign currency. The Distributor shall also
be responsible for further transportation of the Products which is competitive
in the market and allows IVI to make a reasonable return on such product, IVI
shall not develop or sell its own product which is identical to the Ingenico
Product or Ingenico Future Product and shall buy such product from Ingenico.
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ARTICLE 6
CONTRACT RESPONSIBILITIES
6.1 ASSUMPTION OF CONTRACT RESPONSIBILITIES. The assignment and assumption
of contract responsibilities in respect of all Ingenico Customer Contracts and
IVI Customer Contracts, (other than the agreement between Dassault Automatismes
et Telecommunications and IVI dated September 29, 1995) as the case may be,
including the administration of such Contracts and transmission of proceeds
shall be governed by the provisions of the Master Alliance Agreement including,
without limitation, the provisions of section 8.02(b)(ii). The Parties agree to
take all steps necessary to terminate the Distribution Agreement between
Ingenico and La Societe J.R.C. Marketing Inc. ("JRC") dated April 6, 1995
forthwith, and in any event no later than April 30, 1997, in a manner which is
fair to all concerned. The Parties agree to share equally all reasonable costs
incurred with respect to such termination.
ARTICLE 7
CUSTOMER ASSISTANCE
7.1 ENQUIRIES. In view of the mutual interests of the Parties in
maintaining high standards of service to the customer, each Party, insofar as it
is a Distributor, shall remain knowledgeable concerning the Products of the
Supplier and shall be responsive to all customer inquiries respecting the
Products, in accordance with the Supplier's reasonable instructions. To this
end, each Party, insofar as it is a Supplier, shall provide, in accordance with
the Distributor's request, reasonable technical support, selling assistance,
application support to the Distributor at the cost of the Supplier, however the
Distributor shall pay all reasonable, pre-approved out of pocket expenses,
including, without limitation, travel expenses. If any such services are
required for special situations, then the total cost of the services shall be
negotiated by the Supplier and the Distributor.
7.2 PROCEDURES. Each party shall, in its capacity as Distributor:
(a) carry out all procedures laid down by the Supplier from time to time
governing pre-delivery preparation and delivery installation (if required)
for all Products supplied by it;
(b) ensure, in respect of all Products supplied by it, that the proposed
user thereof is fully and properly instructed in all aspects of the
operation and maintenance thereof and is provided with sufficient
information in order that it may obtain the greatest benefit from the use of
the Products; and
(b) make the Distributor capable of installing, servicing, maintaining,
and repairing to Supplier's Products in the Distributor's Territory and make
available such installation, service, maintenance and repair in accordance
with the standards, guidelines, techniques and inspections designated from
time to time in the Supplier's instructions manuals, service manuals,
operation and maintenance manuals and operating instructions furnished to
the Distributor in accordance with the provisions of this Agreement.
ARTICLE 8
ORDERS, SHIPMENT AND PAYMENT
8.1 FORECAST. To assist the other Party as Supplier in the production
scheduling for the manufacture and supply of each Product, each Distributor
shall provide to the Supplier monthly during the Term, a twelve-month rolling
forecast of the Distributor's estimated requirements for such Product together
with a report on the respective Distributor's sales of such Product during the
immediately preceding quarter, all in such form as the Supplier shall reasonably
require.
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8.2 MINIMUM ORDER. All orders for Products shall be in the minimum order
amount specified for each such Product by the Supplier from time to time, acting
reasonably, and given in writing in such form as reasonably reflects the
provisions of this Agreement.
8.3 TERMS OF DELIVERY. Each Party in its capacity as Supplier shall use
its commercially reasonable best efforts to supply Products ordered in
accordance with this Agreement. The terms of delivery for Ingenico Products
distributed by IVI shall be set forth in the Ingenico Price List set forth in
Schedule "K" to the Master Alliance Agreement, and the terms of delivery for
Selected IVI Products distributed by Ingenico shall be set forth in the IVI
Price List set forth in Schedule "L" to the Master Alliance Agreement. The
Supplier shall arrange for the delivery of all Products to the Delivery Point
and shall arrange for all insurance in connection with such delivery. The
Distributor shall have the opportunity to approve in advance the transporter and
the insurance carrier.
8.4 DEEMED DELIVERY. The date of delivery of the Product shall be deemed
to be the date on which the Products arrive at the Delivery Point. If the
Distributor or its representatives are not available on the date of arrival of
the Products at the Delivery Point, the Supplier shall use its commercially
reasonable best efforts to notify the Distributor about shipment of Products on
the date of shipment, or as soon as practicable thereafter, provided that
failure to so notify the Distributor shall not impose any liability on the
Supplier nor effect the deemed delivery of the Product.
8.5 IMPORTATION. The Distributor shall be responsible, at its expense, for
the performance of customs clearance of the Products, including obtaining, if
necessary, the applicable import license, and for the payment of all customs,
duties and other taxes and fees, whether payable in local or foreign currency.
The Distributor shall also be responsible for further transportation of the
Products.
8.6 CLAIMS ON QUANTITY, QUALITY, LOSS OR DAMAGE. If the Distributor raises
any claims concerning quantity, quality, loss or damage to the Products, the
Distributor shall submit to the Supplier a claim in writing which must be
received by the Supplier within ninety (90) days of the date of the deemed
delivery of the Products. The Supplier's liability in connection with such claim
shall in no event exceed the Price of the Products with respect to which such
claims are made.
8.7 PRICE INCREASES. The Supplier in each instance may change the price of
its Products from time to time upon giving the Distributor written notice
thereof at least sixty (60) days in advance of the effective date of any such
change, and the new prices shall be effective as to all orders accepted by the
Distributor after the effective date as specified in such notice and to all
orders accepted by the Distributor prior to the effective date to the extent of
any Products specified to be shipped later than ninety (90) days after the
effective date.
ARTICLE 9
CHANGES IN SPECIFICATION
9.1 CHANGES BY SUPPLIER. The Supplier may make modifications to the
specifications of the Products or make improvements to them at any time and
shall be under no obligation to apply the same to any Products previously
purchased by the Distributor. The Supplier shall provide the Distributor full
particulars in writing of any change in Product specifications at least sixty
(60) days prior to implementing such change.
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ARTICLE 10
NO PARTNERSHIP
10.1 NO PARTNERSHIP. Nothing contained in this Agreement shall constitute
Ingenico and IVI as partners. No Party shall have or shall represent that it has
the authority or power to act for or to undertake or create any obligation or
responsibility on behalf of the other Party, or shall represent that it is the
agent or legal representative of the other Party, except as otherwise
specifically provided in this Agreement.
ARTICLE 11
TRADEMARKS AND TRADE NAMES
11.1 USE BY DISTRIBUTOR. Subject to the terms and conditions of the
Technology License Agreement, the Distributor shall have the right during the
continuance of this Agreement and subject to due compliance with the provisions
of this Section to use the Supplier's trade marks in promoting the sales of the
Products in the Territory and for the purpose of describing itself as an
official distributor or as an approved dealer and, except as permitted in
writing by the Supplier, for no other purpose whatsoever.
11.2 DISTRIBUTOR'S UNDERTAKINGS. The Distributor agrees:
(A) to comply with all reasonable instructions issued by the Supplier
relating to the form and manner, but not the location, in which the
Supplier's trade marks shall be used and to discontinue immediately upon
notice from the Supplier any practice relating to the use of the Supplier's
trade marks which in the Supplier's opinion would or might adversely affect
the rights or interests of the Supplier or any associate company;
(B) not to use or permit any entity controlled by it, other than Latin
Newco, to use in its corporate or trading style or name any trade marks or
trade names owned, used or adopted by the Supplier;
(C) not to contest the title of the Supplier to any trade marks, trade
names, copyrights and registrations used in connection with the Products,
not to effect any registrations thereof, and not to take any action to the
detriment of their respective interest therein;
(D) not to effect or permit the removal, renewal or alteration of any
trade marks or marks, patent numbers, notices, name plates or serial numbers
affixed to any of the Products.
ARTICLE 12
TERM AND TERMINATION
12.1 TERM. This Agreement shall be for a period of ten (10) years,
commencing January 1, 1997, and shall be automatically renewed for subsequent
periods of five (5) years unless either Party provides written notice of
non-renewal to the other not later than six (6) months prior to the expiry of
the initial ten-year term, and the subsequent renewal periods, if any.
12.2 CONTINUING OBLIGATION. Termination of this Agreement does not relieve
a party of its obligations and liabilities existing at or accruing to the date
of termination.
12.3 TRANSITION ARRANGEMENTS. Upon Termination of this Agreement for
whatever reason:
(A) All amounts owed by a Distributor to a Supplier shall become
immediately due and payable net of any amounts justly owed by a Supplier to
a Distributor and all unfilled orders of Products for purchase by a
Distributor specifying shipment dates beyond sixty (60) days after
termination shall be deemed terminated without liability on the part of
either Party.
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(B) The right of a Distributor to act as a distributor for a Supplier
shall cease and a Distributor shall immediately discontinue all use of a
Supplier's trade names and trade marks, and a Distributor shall return to a
Supplier all price lists, catalogues, sales literature, operating and
service manuals, advertising literature and other materials relating to the
Products, except that, notwithstanding the foregoing, a Distributor shall
have the right to, for a reasonable period not to exceed one hundred and
twenty (120) days, sell any Products remaining in inventory to the extent
the same are not repurchased by a Supplier pursuant to subsection 12.3(c)
below.
(C) If desired by a Distributor or a Supplier will repurchase from a
Distributor all of a Supplier's Products (to the extent that the same are in
new and original condition) then in a Distributor's inventory, F.O.B. a
Distributor's facilities, and a Supplier shall repay to a Distributor the
actual price paid for such returned Products less any and all amounts then
owing, for whatever reason, by a Distributor to a Supplier.
(D) Except to the extent of selling any remaining inventory of Products
as permitted by subsection 12.3(b) above, a Distributor shall not thereafter
represent or hold itself out as being an authorized distributor for the
Products or engage in any practices which might make it appear that a
Distributor is still such an authorized distributor.
12.4 SUBSEQUENT ORDERS. The acceptance by a Supplier of orders after
notice of termination, if given hereunder, shall be separate transactions and
shall not operate as a renewal or revival of this Agreement or as a waiver of
any provision hereof.
12.5 SUPPLY OF PARTS. Notwithstanding termination of this Agreement, a
Supplier shall continue to make available to the Distributor on a basis which
shall be reasonable, in particular with respect to pricing and availability,
sufficient parts to permit the Distributor to continue, after the Term hereof,
to supply maintenance services to end users in the Distributor's Territory.
12.6 NO RELEASE. No termination of this Agreement shall in any manner
whatsoever release, or be construed as releasing, any party from any liability
to the other arising out of or in connection with a party's breach of, or
failure to perform, any covenant, agreement, duty or obligation contained
herein.
12.7 SURVIVAL. Notwithstanding the termination or expiry of this
Agreement, all rights and obligations of the Parties pursuant to sections 1,
5.1(b)(ii), 10.1, 12.2, 12.3, 12.4, 12.5, 12.6, 12.7, 13.4, 13.5, 15.1 and 15.2
of this Agreement shall survive in full force and effect.
ARTICLE 13
WARRANTIES
13.1 SPECIFICATIONS. All Products supplied to a party acting as
Distributor hereunder shall be manufactured in accordance with suitable
international standards of good workmanship and market requirements, and shall
conform to the parties' agreed specifications or, failing specific agreement, to
the Supplier's specifications. The Supplier shall provide the Distributor with
full written specifications in respect of the quantifiable attributes of each of
the Supplier's Products in order to enable the Distributor to monitor the
quality of the Products received by it for conformity.
13.2 RETURN BY DISTRIBUTOR. With respect to Products found by a
Distributor to be defective prior to the Distributor's resale, the Supplier
shall promptly replace the defective Products without charge or expense to the
Distributor. Defective Products shall be returned to the Supplier.
13.3 LIMITATION. THE SUPPLIER MAKES NO OTHER EXPRESS WARRANTY, AND THE
SUPPLIER EXCLUDES AND DISCLAIMS, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL IMPLIED WARRANTIES INCLUDING WITHOUT LIMITATION, IMPLIED
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WARRANTIES IN CONNECTION WITH THE DESIGN, SALE, MERCHANTABILITY OR FITNESS OF
THE PRODUCTS FOR ANY PARTICULAR PURPOSE OR USE. THE SUPPLIER SHALL NOT HAVE ANY
OTHER LIABILITY FOR DIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OR DAMAGES
ARISING FROM PERSONAL INJURY, LOSS OR LIFE OR LOST PROFITS, AND ANY AND ALL
LIABILITY OF THE SUPPLIER SHALL BE LIMITED TO THE COST OF THE REPAIR OR
REPLACEMENT OF THE PRODUCTS.
13.4 MUTUAL INDEMNITY. Each of the parties agrees to indemnify and hold
harmless the other from and against any and all claims, demands, actions, causes
of action, suits, proceedings, damages, losses and expenses (including
reasonable legal fees and disbursements) relating to or arising out of a breach
by the former party of any of the provisions of this Agreement, such
indemnification to be governed by the provisions and procedures set forth in the
Master Alliance Agreement (save and except the threshold amount, which shall be
waived), and the aforesaid breaches to be included in the meaning of the term
"Indemnity Event."
13.5 In particular, if the Distributor makes any warranty or
representation inconsistent with or in addition to the warranties stated in this
Section 13.5, the Distributor shall, at its own expense, defend and hold the
Supplier harmless from any claim to the extent it is based upon such
inconsistent or additional warranty or representation. In addition, the
Distributor agrees to indemnify and save harmless the Supplier from and against
any and all claims, liabilities, costs and damages of any kind or amount
whatsoever (including reasonable legal fees and all litigation costs, regardless
of outcome) which arise in connection with the performance of any servicing
provided by the Distributor to the users of the Products other than in
accordance with procedures established by the Supplier. The Supplier shall
similarly indemnify the Distributor to the extent of claims relating to such
servicing where the Distributor has complied with such procedures, such
indemnification to be governed by the provisions and procedures set forth in the
Master Alliance Agreement.
ARTICLE 14
INSURANCE
14.1 SUPPLIER'S INSURANCE. In its capacity as Supplier, each Party shall
furnish the other with satisfactory evidence demonstrating that the Supplier's
product liability insurance shows the Distributor as a named insured and is both
quantitatively and qualitatively satisfactory and keeping with types and amount
of insurance carried by comparable manufacturers in the applicable region in the
Distributor's Territory.
14.2 DISTRIBUTOR'S INSURANCE. In its capacity as Distributor, each party
shall furnish the other with satisfactory evidence demonstrating that the
Distributor's liability insurance shows the manufacturer as a named insured and
is both quantitatively and qualitatively satisfactory and in keeping with types
and amounts of insurance carried by comparable distributors in the applicable
region in the Distributor's Territory.
ARTICLE 15
MISCELLANEOUS PROVISIONS
15.1 RIGHTS CUMULATIVE. Save and except for breaches or acts of omission
by IVI constituting grounds for IVI's loss of exclusivity pursuant to Section
2.3(c) hereof, which loss of exclusivity shall be Ingenico's exclusive remedy
for such breaches, acts or omissions, each and all of the various rights, powers
and remedies of the parties hereto shall be considered to be cumulative with and
in addition to any other rights, powers and remedies which such parties may have
at law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
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neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
15.2 EXPENSES. Each Party hereto is responsible for its own legal, audit
and due diligence fees and other charges incurred in connection with the
preparation of this Agreement, all negotiations between the Parties hereto, and
the consummation of the transactions contemplated hereby.
15.3 TIME OF THE ESSENCE. Time shall be of the essence in respect of this
Agreement and the agreements and transactions contemplated herein.
15.4 FURTHER ASSURANCES. Each of the parties hereto shall from time to
time at the other's request and expense and without further consideration,
execute and delivery such other instruments of transfer, conveyance and
assignment and take such further action as the other may require to more
effectively complete any matter provided for herein.
15.5 ENTIRE AGREEMENT. This Agreement, together with the Schedules hereto,
constitutes the entire agreement between the parties and, except as herein
stated and in the instruments and documents to be executed and delivered
pursuant hereto, contains all of the representations and warranties of the
respective parties. There are no oral representations or warranties among the
parties of any kind. This Agreement may not be amended or modified in any
respect except by written instrument signed by all parties hereto.
15.6 APPLICABLE LAW. this Agreement shall be interpreted in accordance
with the laws of the State of New York, United States of America, and shall be
treated in all respects as a New York contract.
15.7 NOTICES. Any notices required or permitted to be given hereunder
shall be in writing and shall be effectively given by delivering same by prepaid
mail, delivery by courier or sending same by telecopy or other similar form of
electronic communication, addressed:
(A) if to Ingenico, to it at:
Ingenico
0, xxxx xx Xxxx Xxxxxx
00000 Xxxxxxx Xxxxx
Xxxxxx
Attention: Xxxx-Xxxxxxx Poutrel
President du Counseil
Telecopy: 00 (0)00 00 00 00
with a copy to:
Xxxxx Xxxxx
Xxxxx 0000, Xxxxxx Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
Attention: R.G.S. Hull
Telecopy: (000) 000-0000
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(B) if to IVI, to it at:
International Verifact Inc.
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
Attention: L. Xxxxx Xxxxxxx
President and CEO
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxx
Xxx 00, Xxxxxxx Xxxxx Xxxxxx Tower
Suite 1100
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxxxx
Telecopy: (000) 000-0000
(C) and if to Latin Newco, to each of IVI and Ingenico.
Any such notice if sent by prepaid mail or courier shall be deemed to have
been received by the addressee seven (7) days and two (2) days, respectively,
following the day on which the notice was so sent, or if by telecopy or other
similar form of communication on the day following the day on which the notice
was so sent, provided that an acknowledgment of transmission is received by the
sender. Any party hereto or others mentioned above may change any particulars of
its address for notice from time to time by notice to the others in the manner
aforesaid.
15.8 SUCCESSORS AND ASSIGNS. This Agreement enures to the benefit of and
is binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
15.9 ASSIGNMENT. Subject to the rights of Groupe Ingenico and the IVI
Group specified herein, this Agreement may not be assigned by either party
hereto without the prior written consent of the other.
15.10 SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect or limit the validity or
enforceability of the remaining provisions of this Agreement.
15.11 ARBITRATION.
(A) BEST ENDEAVOURS TO SETTLE DISPUTES: In the event of any dispute,
claim, question or difference arising between Ingenico and IVI in respect of
the provisions, the subject matter, the interpretation, or the effect of
this Agreement or any breach hereof, the parties shall use their best
endeavours to settle such dispute, claim, question or difference. To this
effect, they shall consult and negotiate with each other, in good faith and
understanding of their mutual interests, to reach a just and equitable
solution satisfactory to the parties.
(B) ARBITRATION: Except as is expressly otherwise provided in this
Agreement, if the parties do not reach a solution pursuant to Section
15.11(a) within a period of thirty (30) days, then upon written notice by
either party to the other, the dispute, claim, question or difference shall
be finally settled by arbitration in accordance with the American
Arbitration Association Rules for the conduct of Arbitrations in effect at
the date of the commencement of such arbitration, based upon the following:
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(I) the arbitration tribunal shall consist of one arbitrator
appointed by each of the parties who is qualified by education and
training to pass upon the particular matter to be decided, together with
a third arbitrator appointed by the first two selected arbitrators;
(II) the arbitrators shall be instructed that time is of the essence
in proceeding with their determination of any dispute, claim, question or
difference and, in any event, the arbitration award must be rendered
within thirty (30) days of the submission of such dispute to arbitration;
(III) the arbitration shall take place in New York, New York;
(IV) the arbitration award shall be given in writing and shall be
final and binding on the parties, not subject to any appeal, and shall
deal with the question of costs of arbitration and all matters related
thereto; and
(V) judgment upon the award rendered may be entered in any court
having jurisdiction, or, application may be made to such court for a
judicial recognition of the award or an order of enforcement thereof, as
the case may be.
IN WITNESS WHEREOF the parties hereto have executed this Agreement effective
as of the day and year first above written.
INGENICO
Per: /s/
Per: /s/
INTERNATIONAL VERIFACT INC.
Per: /s/
Per: /s/
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