CONFIDENTIAL TREATMENT The registrant is
requesting confidential treatment of Schedules A
and B to this Exclusive Supply Agreement, in
their entirety. The non-public information
contained in Schedules A and B has been filed
with the Securities and Exchange Commission.
EXHIBIT 10.2
EXCLUSIVE SUPPLY AGREEMENT
THIS AGREEMENT is made and entered into as of the 20th day of December,
2001, by and between Source Technologies, Inc., a North Carolina corporation
with offices at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxxx, XX 00000 ("STI") and
AccuPoll, Inc., a Delaware corporation with offices at 0000 Xxx Xxxxxx Xxxxxx
Xxxxx 000, Xxxxxxx Xxxxx, XX 00000 ("API").
WHEREAS, STI is engaged in the business of designing, developing,
marketing, integrating, distributing and selling, inter alia, desktop digital
laser printing technology, toner cartridges and integrated voting technology
solutions; and
WHEREAS, API desires to have specially manufactured for its exclusive use
a version of STI's product described as follows: AccuPoll electronic voting
hardware solution and toner cartridges (the "Products"); and
WHEREAS, API desires to purchase Products exclusively from STI for resale
and distribution in the Territory, and STI is willing to sell Products
exclusively to API, all upon the terms and subject to the conditions set forth
in this Agreement;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions.
(a) Products shall mean the integrated AccuPoll hardware described more
fully in the STI AccuPoll Specification set forth in Schedule A herein as
amended, any subsequent specifications applicable to the Products (the
"Specifications") and any improvements to such Products made during the term of
this Agreement, which Products comprises a printer, touch screen, computer
processing unit, integrated case, power supply and all related control software
to be used in conjunction with the AccuPoll software.
(b) Pre-Existing Intellectual Property shall mean all intellectual
property worldwide including, but not limited to, all discoveries, inventions,
designs, formulae, algorithms, processes, software, technical information, data,
test results, apparatus and methods, whether or not patentable, and all patents,
copyrights, trade marks, mask works, trade secrets, know-how and all other forms
of intellectual property which are owned or controlled by either party prior to
this Agreement, or contemporaneously with this Agreement but not arising from
the performance of work under this Agreement.
(c) Developed Intellectual Property" shall mean all intellectual property
worldwide, including but not limited to, all discoveries, inventions, designs,
formulae, algorithms, processes, software, technical information, data, test
results, apparatus and methods, whether or not patentable, and all patents,
copyrights, trade marks, mask works, trade secrets, know-how and all
other forms of intellectual property conceived or first-reduced to practice or
made during the performance of work under this Agreement.
(d) Work performed by STI shall include the research and development
pursuant to the Specifications for the development of the Products.
(e) Field shall mean voting and elections systems worldwide.
2. Exclusivity.
(a) Upon the terms and subject to the conditions contained herein, STI
hereby agrees to manufacture and sell to API such quantities of Products
pursuant to the specifications set forth in Schedule A to this Agreement (the
"Specifications") as API shall require for use and resale solely in the Field.
(b) API acknowledges and agrees that it shall acquire such Products
exclusively from STI and that it will use and resell the Products solely in the
Field. If STI is unable to produce and deliver on time the required quantity of
Products, API may obtain Products from another supplier.
(c) Nothing herein shall preclude STI from selling or otherwise providing
printers or printer-based solutions with different specifications or
customizations, to any other third party, government or businesses, including
for use or sale in the Field.
3. Purchase of Products.
(a) STI shall sell Products to API at the prices set forth on Schedule B,
which may be amended from time to time at STI's sole discretion, upon sixty (60)
days after written notice thereof is given to API.
(b) The Product prices are exclusive of all taxes and all insurance,
freight, transportation, portage and similar charges and expenses, each of which
shall be the sole responsibility of API, and each of which will be added to
STI's invoices as a separate charge to be paid by API.
(c) All orders shall be placed by API in the form of a written purchase
order.
(d) All sales are final; except for warranty returns, no returns shall be
allowed. Due to the exclusive nature of this Agreement and the unique
specifications for the Products, API acknowledges that the Products are
customized goods sold by STI are unique to API and its customers and could not
be resold by STI. If API wrongfully rejects or revokes acceptance of such
Products or any part of them, or fails to purchase Products for which it has
caused manufacturing to be commenced or raw materials to be procured, STI shall
invoice API, and may hold the goods and materials at API's risk and maintain an
action for the price.
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(e) Lead time for purchases shall be set forth on Purchase Orders to be
submitted by API as mutually agreed. To the extent practical, all Products shall
be produced on a made-to-order basis; to meet other production schedules,
however, STI may, but shall not be required to, build a finished goods
inventory, in which case no storage charges shall apply (API may, however,
specifically request manufacture and storage of larger quantities, which shall
be charged in accordance with STI's then current storage formula; billing will
be upon delivery into storage in such instance, unless STI and API elect a
different alternative). API shall endeavor to provide forecasts of requirements,
and of spikes or troughs in demand. STI shall rely upon API's forecasts in
obtaining raw materials, and API shall compensate STI for all finished goods,
dedicated raw materials or work in process manufactured or purchased as a result
of such forecasts (not to exceed a one-month supply, unless API shall have
forecast a larger amount), after 12 months have passed from manufacture of any
goods or purchase of any raw materials.
4. Payment. Commercially reasonable Payment Terms for all Products will be set
forth on Purchase Orders to be issued by API and will be not dissimilar to
standard STI Payment Terms which are net 30 days cash upon receipt of invoice,
F.O.B. shipping point, freight collect or freight prepaid and added to the
invoice, unless otherwise agreed in a joint writing. Invoices not paid within 30
days of invoice date are subject to late fees at 1.5% per month or the highest
rate allowed by law (if lower). Payments shall be tendered without deduction or
offset.
5. Warranty.
(a) STI has all rights necessary to sell, distribute and exploit the
Products, and no other person has any interest therein or claims with regard
thereto. The Products do not infringe on the rights of any third party, whether
patent, trademark or copyright and no future sales of the Products by STI
pursuant to the terms hereof shall infringe on any third party patents.
(b) There are no claims, suits, actions or proceedings pending or,
threatened against STI, or in connection with the Products which could adversely
affect the transactions contemplated by this Agreement.
(c) API shall have good title to all Products sold by STI to API; transfer
and delivery of such goods to API shall be rightful and shall effectively convey
title to such goods to API free and clear of all liens, claims, encumbrances and
rights of third parties.
6. Limitation Of Liability. EXCEPT AS PROVIDED IN PARAGRAPH 6. BELOW, IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER, WHETHER IN CONTRACT, TORT OR
UNDER ANY OTHER LEGAL THEORY, FOR LOST PROFITS OR REVENUES, LOSS OF USE OR
SIMILAR ECONOMIC LOSS, OR LOSS OF GOODWILL, FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR SIMILAR DAMAGES ARISING OUT OF OR IN CONNECTION
WITH THE SALE, DISTRIBUTION, DELIVERY, NONDELIVERY, CONDITION, USE, OWNERSHIP,
POSSESSION, OPERATION, TRANSPORTATION, LOADING, UNLOADING OR RETURN OF THE
PRODUCTS, OR FOR ANY CLAIM MADE AGAINST EITHER PARTY.
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7. Indemnification.
(a) STI agrees to indemnify and hold API harmless from and against any and
all claims, demands, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees), irrespective of the theory upon which
based (including, without limitation, negligence and strict liability), arising
out of any breach of STI's warranties hereunder, including claims of
infringement of patents, copyrights or other proprietary rights of third
parties.
(b) API agrees to indemnify and hold STI harmless from and against any and
all claims, demands, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees), irrespective of the theory upon which
based (including, without limitation, negligence and strict liability), arising
out of any breach of API's warranties hereunder, including claims of
infringement of patents, copyrights or other proprietary rights of third
parties.
8. Confidentiality. The parties shall maintain and preserve during the Term of
this Agreement and at all times thereafter the confidentiality of all
information concerning the other, its business and Products. The parties agree
that they will not, and will not permit any of their employees or agents to use
or disclose to any third person any confidential information, except to the
extent necessary to perform their obligations hereunder during the Term of this
Agreement as provided herein. The provisions of this paragraph shall survive any
expiration or termination of this Agreement.
9. Term. Unless sooner terminated as provided herein, this Agreement shall
commence on the date hereof and shall continue for five years from the date of
execution ("Initial Term"). Upon the expiration of such Initial Term, this
Agreement shall be automatically renewed for successive one-year terms, unless
sooner terminated as provided herein or unless either party gives the other
party written notice of cancellation at least ninety (90) days prior to the
expiration of the then current term. The Initial Term of this Agreement and any
renewals is referred herein as the "Term."
10. Intellectual Property.
(a) Each party's Pre-existing Intellectual Property shall remain the
exclusive property of such party, and except for the license rights to use
certain Pre-existing Intellectual Property expressly provided herein, neither
party acquires any right, title or interest in the other party's Pre-existing
Intellectual Property. Each party shall promptly notify the other of any actual
or threatened misappropriation or infringement of the other party's Pre-existing
Intellectual Property rights which comes to such party's attention.
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(b) During the Term of this Agreement, STI grants to API a non-exclusive,
perpetual, royalty-free, paid up, world-wide license, under all of STI's
Pre-existing Intellectual Property (as such STI Intellectual Property is
included in the Products) and to any third party technology which has been
incorporated into the Products, for the purpose of using, selling and
distributing the Products within the Field.
(c) During the Term of this Agreement, API grants STI a non-exclusive,
non-transferable, perpetual, royalty-free, paid up, world-wide license to the
API Intellectual Property (as such API Intellectual Property is included in the
Products) for the sole purpose of using, selling and distributing the Products
worldwide so at API's request and does not directly compete with API worldwide.
(d) In view of the confidential relationship contemplated between STI and
API, and provided that API makes payment in full to STI for all expenses
reasonably and directly related to the Developed Intellectual Property, the
parties hereby agree and represent that all right, title and interest in
Developed Intellectual Property conceived or first reduced to practice or made
during the performance of the work under this Agreement, including copyright
renewal rights, are assigned and will be assigned to API, and such Developed
Intellectual Property shall be and shall remain the exclusive property of API,
whether or not patented or copyrighted, and without regard to any expiration or
termination of this Agreement.
(e) API grants to STI a non-exclusive, perpetual, royalty-free, paid-up,
worldwide license to API's Developed Intellectual Property necessary to sell,
lease or distribute the Products at API's request.
11. Miscellaneous.
(a) Notices. All notices, requests, demands or other communications
required or permitted to be given or made hereunder shall be in writing and
delivered personally or sent by pre-paid, first class, certified or registered
air mail (or the functional equivalent in any foreign country), return receipt
requested, or by facsimile addressed to the intended recipient thereof at the
address and facsimile number set out below (or to such other address or
facsimile number as either party may from time to time duly notify the other).
Any such notice, demand or communication shall be deemed to have been duly given
immediately if given or made by confirmed facsimile, or three (3) days after
mailing if given or made by letter. The addresses and facsimile numbers for the
parties for purposes of this Agreement are:
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to API: Xxxxxx Xxxxxx
President
AccuPoll
0000 Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
000-000-0000 Direct Voice
000-000-0000 Facsimile
to STI:
Miles Xxxxx
President
Source Technologies, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
000-000-0000 Direct Voice
000-000-0000 Facsimile
(b) Waiver. No failure to exercise, and no delay in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy. No
express waiver or assent of any breach of or default in any term or condition of
this Agreement shall constitute a waiver of or an assent to any succeeding
breach of or default in the same or any other term or condition hereof.
(c) Governing Law/Forum. Regardless of the place of contracting, place of
performance or otherwise, this Agreement and the rights of the parties hereunder
shall be governed by and construed and enforced in accordance with the laws of
the State of North Carolina, without regard to conflicts of laws principles. If
any controversy or claim between the parties arises under or relates to the
transactions contemplated herein, only federal or state courts in North Carolina
shall have jurisdiction to hear and decide such matter. STI hereby irrevocably
(a) submits to the exclusive jurisdiction of such courts, and (b) waives any and
all jurisdictional defenses STI may have to the institution of any such action
in any such court.
(d) Severability. All rights and restrictions contained herein may be
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and they are intended to be limited to the
extent necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any term of this Agreement shall be held to be illegal,
invalid or unenforceable by a court of competent jurisdiction, it is the
intention of the parties that the remaining terms hereof shall constitute their
agreement with respect to the subject matter hereof and all such remaining terms
shall remain in full force and effect.
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(e) Entire Agreement. This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
this Agreement contains the sole and entire agreement between the parties with
respect to the matters covered thereby. This Agreement may not be modified or
amended except by an instrument in writing signed by both parties.
(f) Assignment. The obligations and benefits, rights and duties created by
this Agreement are specific and personal and shall not be assigned or delegated
by either party, except that the same shall be assigned in the event of a merger
in which the assigning party is not the surviving entity, or a transfer or sale
of all or substantially all of the assets or ownership interests of STI or of
API or business to another entity that is not a direct competitor of the
non-assigning party. If either party assigns this Agreement to a direct
competitor of the other party by merger, operation of law or otherwise, the
non-assigning party shall have the right to terminate this Agreement. This
Agreement enures to the benefit of and binds the parties and their respective
successors and permitted assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal as of the day and year first written above.
Source Technologies, Inc. AccuPoll, Inc.
By: /s/ Miles Xxxxx By: /s/ Xxxxxx Xxxxxx
----------------------------- ------------------------------------
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CONFIDENTIAL TREATMENT The redacted information
from this Schedule A has been omitted based upon
a request for confidential treatment.
Schedule A
Product Specifications
[REDACTED PURSUANT TO REQUEST FOR CONFIDENTIAL TREATMENT]
CONFIDENTIAL TREATMENT The redacted information
from this Schedule B has been omitted based upon
a request for confidential treatment.
Schedule B
Prices
[REDACTED PURSUANT TO REQUEST FOR CONFIDENTIAL TREATMENT]
