EXHIBIT 3.7
PointRed Technologies Agreement
Master Distributor/System Integrator Agreement
This Master Distributor/System Integrator Agreement (this "Agreement") is made
as of this January 7th, 2004 ("Effective Date") by and between PointRed
Technologies, Inc., a California corporation ("PointRed") with offices at 000
Xxxx Xxxxxxx Xxxx, Xxxx.0 Xxx Xxxx, XX 00000 XXX, and Gateway Access Solutions,
Inc. ("GAS") with corporate offices at 000 Xxxxx Xxxx., 000-000 Xxxxxxx Xxxxxxx,
XX 00000
Recitals
A. PointRed designs, manufactures, and distributes certain computer
networking products ("PointRed Products").
B. PointRed and GAS desire that GAS be authorized to act as an
independent distributor and systems integrator of PointRed Products
under the terms and conditions set forth below.
NOW, THEREFORE, PointRed and GAS agree as follows:
1. Appointment.
(a) Appointment. Subject to the terms of this Agreement, PointRed
appoints GAS, and GAS accepts such appointment, as the Exclusive
independent distributor and systems integrator of the PointRed
Products listed on Exhibit A (the "Authorized Products") in the
territory set forth in Exhibit A (the "Territory") and as a
non-exclusive distributor and systems integrator for all PointRed
Products anywhere in the world, both inside and outside the
Territory.
(b) Point Red's reserved Rights. PointRed reserves the right from
time to time, in its sole discretion and without liability to
Point Red and/or GAS to change pricing and products with 30 days
written notice to GAS, except it may not discontinue products
that affect GAS's ability to perform under this agreement unless
agreed to in writing.
(c) Obligation of GAS understands that PointRed does not have
existing distributors/systems integrators in the Territory and
will be introducing Point Red Products in the Territory for the
first time.
(d) Software. To the extent that any PointRed Product contains or
consists of software, GAS's appointment grants to GAS only a
license to distribute the software contained in such PointRed
Products, and does not transfer any right, title or interest to
any such PointRed software to GAS or GAS's customers.
(e) Product Certification. PointRed expects that GAS will use its
best efforts to comply with the radio frequency laws of the
countries in which GAS sells PointRed Products and receive
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Product Certification - continued
identifiers for their product modifications to PointRed Products
in the countries in which GAS sells PointRed Products. GAS will
use the "product" specific PointRed identifiers for radio
frequency certification and infer that they have approval for
their "product". Any modifications of electrical, radio
frequency, and/or software protocol products from PointRed will
be the sole responsibility of the GAS.
(f) Promotion Efforts. GAS will use reasonable business efforts to:
(i) Promote the distribution of the Authorized Products in the
Territory; and
(ii) Comply with the reasonable promotional terms and policies of
PointRed communicated in writing to GAS by Point Red from
time to time.
(g) GAS Personnel. GAS will train and maintain a sufficient number of
capable technical and sales personnel having the knowledge and
the training necessary to:
(i) Inform customers properly concerning the features/capabilities of
PointRed Products;(i)
(ii) Install, service and support PointRed Products in accordance
with GAS's obligations under this Agreement; and
(iii)Carry out the obligations and responsibilities of GAS under
this Agreement.
(h) Technical Expertise. GAS will train its technical and sales
personnel to be conversant with the technical language applicable
to PointRed Products and similar computer products in general,
and will develop sufficient knowledge of the industry, PointRed
Products and products competitive with PointRed Products
(including specifications, features and benefits) so as to be
able to explain in detail to its customers the differences
between PointRed Products and competitive products;
(i) Installation, Service and Support. GAS will provide prompt
installation and pre- and post-sales service and support for all
Authorized Products sold by GAS in the Territory. GAS will
provide installation assistance and consultation on the use of
PointRed Products; timely response to customers' general
questions concerning use of PointRed Products; and assistance to
customers in the diagnosis and correction of problems encountered
in using PointRed Products.
(j) Customers Leads. PointRed will provide GAS information about all
leads received by PointRed from potential customers from the
Territory.
(k) GAS Covenants. GAS will:
(i) Conduct business in a manner the reflects favorably at all
times on PointRed Products and the good name, good will and
reputation of PointRed;
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GAS Covenants. GAS will - continued
(ii) Avoid deceptive, misleading or unethical practices that are
or might be detrimental to PointRed, PointRed Products or
the public;
(iii)Make no false or misleading representations with regard to
PointRed or PointRed Products;
(iv) Not publish or employ, or cooperate in the publication or
employment of, any misleading or deceptive advertising
material with regard to PointRed or PointRed Products;
(v) Make no representation, warranties or guarantees to
customers or to the trade with respect to the
specifications, features or capabilities of PointRed
Products that are inconsistent with the literature
distributed by PointRed; and
(vi) Not engage in any practice detrimental to the interests of
PointRed or PointRed Products.
(l) Compliance with Law. GAS will comply with all applicable
international, national, state, regional and local laws and
regulations in performing its duties hereunder and in any of its
dealings with respect to PointRed Products.
(m) Market Conditions. GAS will advise PointRed promptly concerning
any market information that comes to GAS's attention respecting
PointRed, PointRed Products, PointRed's market position or the
continued competitiveness of PointRed Products in the
marketplace. GAS will confer with PointRed from time to time at
the request of PointRed on matters relating to market conditions,
sales forecasting and product planning relating to PointRed
Products.
(n) Costs and Expenses. Except as expressly provided here in or
agreed to in writing be PointRed and GAS, GAS will pay all costs
and expenses incurred in the performance of GAS's obligations
under this Agreement.
2. Inspections, Records and Reporting.
(a) Reports. Within 15 days of the beginning of each quarter, GAS
will provide to PointRed a written report showing, for the time
periods PointRed reasonably requests, GAS's shipments of PointRed
Products by dollar volume, both in the aggregate and for such
categories as PointRed may designate from time to time.
(b) Forecast. After an intial start up period of 90 days, GAS shall
provide PointRed with a six (6) month forecast showing
prospective orders for each month. Point Red acknowledges that
such 6-month forecast shall be based on GAS's good faith estimate
for planning purposes and shall not be binding. Thereafter,
within 15 days of the beginning of each month, GAS will provide
to PointRed a rolling six (6) month forecast of GAS's anticipated
orders.
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(c) Notification. GAS will:
(i) Notify PointRed in writing of any claim or proceeding
involving PointRed Products within ten (10) days after GAS
learns of such claim or proceeding;
(ii) Report promptly to PointRed all claimed or suspected product
defects.
(d) Records. GAS will maintain, for at least two (2) years after
termination of this Agreement, its records, contracts and
accounts relating to the distribution of PointRed Products, and
will permit examination thereof by authorized representatives of
PointRed at all reasonable times.
3. Order Procedure.
(a) Initial Order and Forecast. Upon execution of this Agreement, GAS
shall place an initial order for Authorized Products. During the
term of this agreement, GAS will maintain inventory of Authorized
Products at a level agreed to between the parties from time to
time.
(b) In exchange for the product and territory exclusivity provided in
Section 1(a) and listed in Exhibit A, GAS must order a minimum
amount of MMDS products from PointRed, as follows:
1. A minimum of USD $150,000 worth of MMDS products in the 1st
calendar quarter of 2004;
2. A minimum of USD $250,000 worth of MMDS products in the 2nd
quarter, and
3. A total minimum of USD $1,000,000 worth of MMDS products in
the first 12 months following the Effective Date of this
Agreement;
4. A minimum of USD $350,000 worth of MMDS products per quarter
in the calendar year of 2005.
(c) PointRed Acceptance. All orders for PointRed Products by GAS
shall be subject to acceptance in writing by PointRed at its
principal place of business and shall not be binding until the
earlier of such acceptance or shipment, and, in the case of
acceptance by shipment, only as to the portion of the order
actually being shipped.
(d) Controlling Terms. The terms and conditions of this Agreement and
the applicable PointRed invoice or confirmation shall apply to
each order accepted or shipped by PointRed hereunder. The
provisions of GAS's form of purchase order or other business
forms will not apply to any order notwithstanding PointRed's
acknowledgement or acceptance of such order.
(e) Cancellation. PointRed reserves the right to cancel any orders
placed by GAS and accepted by PointRed as set forth above, or to
refuse or delay shipment thereof, if GAS:
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Cancellation - continued
(i) Fails to make any payment as provided in this Agreement or
under the terms of payments set forth in any invoice or
otherwise agreed to by PointRed and GAS;
(ii) Fails to meet reasonable credit or financial requirements
established by PointRed, including any limitations on
allowable credit, or
(iii)Otherwise fails to comply with the terms and condition of
this Agreement.
All purchase orders cancelled within 60 days will incur a penalty
equal to 20% of the total purchase order. All returned products
are subject to restocking charge of 30% of the purchase order
value
(f) Discontinue Manufacture. PointRed agrees to inform GAS s by
written notice of any discontinuation in manufacture or
distribution of products covered under this agreement within 60
days thereof. PointRed also reserves the right to discontinue the
manufacturing or distribution of any or all PointRed Products at
anytime, and to cancel any orders for such discontinued PointRed
Products without liability of any kind to GAS or to any other
person except as noted in manufacturing rights clause. No such
cancellation, refusal or delay will be deemed a termination
(unless PointRed so advises GAS) or breach this Agreement by
PointRed.
(g) Upgrade. In the event that PointRed modifies, upgrades or makes
any other changes to PointRed Products, PointRed will upgrade all
products GAS is holding in inventory and make kits available to
upgrade all PointRed Products sold to GAS customers, on terms and
conditions to be agreed between the parties.
4. Prices and Payments.
(a) Prices to GAS. PointRed shall charge GAS in accordance with the
price schedule attached as Exhibit B. PointRed may change its
prices from time to time upon at least sixty (60) days' prior
written notice; provided, however, that GAS shall always have the
right to purchase PointRed Products at a 50% discount off
PointRed's list price.
(b) Taxes, Tariffs, Fees. PointRed's prices do not include any
national, state or local sales, use, value added or other taxes,
custom duties, or similar tariffs and fees which PointRed may be
required to pay or collect upon the delivery of PointRed Products
or upon collection of the prices or otherwise. Should any tax or
levy be made, GAS agrees to pay such tax or levy and indemnify
PointRed for any claim for such tax or levy demanded. GAS
represents and warrants to PointRed that all PointRed Products
acquired hereunder are for redistribution in the ordinary course
of GAS's business, and GAS agrees to provide PointRed with
appropriate resale certificate numbers and other documentation
satisfactory to the applicable taxing authorities to substantiate
any claim of exemption from any such taxes or fees. GAS will pay
any withholding taxes required by applicable law.
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(c) Credit Terms. At PointRed's option, shipment may be made on
PointRed's credit terms in effect at the time an order is
accepted. PointRed reserves the right, upon written notice to
GAS, to declare all sums immediately due and payable in the event
of a breach by GAS of any of its obligations to PointRed,
including the failure of GAS to comply with credit terms.
Furthermore, PointRed reserves the right at all times either
generally or with respect to any specific order by GAS to vary,
change or limit the amount or duration of credit to be allowed to
GAS. GAS agrees to pay for PointRed products as invoiced.
(d) Security Interest. GAS agrees that if and when PointRed
established a line of credit for GAS or permits GAS to obtain
PointRed Products on open account, GAS concurrently grants
PointRed a continuing security interest in the Collateral (as
defined below) in order to secure payment of the Indebtedness (as
defined below). "Collateral" means any PointRed Products now or
hereafter acquired by GAS and all proceeds there from and
accessions thereto, and "Indebtedness" means any and all debts,
obligations or liabilities of GAS to PointRed, now or hereafter
existing, including without limitation, any late payment charges
due GAS hereunder and any expenses incurred by PointRed in
enforcing its rights hereunder (including without limitations
attorney's fees, court costs and the costs of retaking and
holding in Collateral, preparing it for resale or other
disposition, or selling or otherwise disposing of it). GAS
acknowledge that this Section 4 (d) constitutes a security
agreement and hereby authorizes PointRed to file any financing
statement or other documents necessary to perfect PointRed's
security interest in the Collateral in any public office in any
jurisdiction deemed necessary by PointRed. GAS hereby grants
PointRed limited power of attorney for the sole purpose of
executing, in GAS's name, any financing statements and related
documents deemed necessary by PointRed to perfect the security
interest granted herein. Upon the occurrence of any event
specified in Section 10 permitting termination of this Agreement,
PointRed, in addition to all other rights and remedies under this
Agreement, shall be entitled to all rights, powers and remedies
available to a secured party under Uniform Commercial Code with
respect to the Collateral.
(e) Interest. Interest shall accrue on any delinquent amounts owed by
GAS for PointRed Products at the lesser of eighteen percent (18%)
per annum or the maximum rate permitted by applicable usury law.
5. Shipment, Risk of Loss and Delivery.
(a) Shipment. All PointRed Products will be shipped by PointRed F.O.B
PointRed's point of shipment. Shipment will be made to GAS's
identified warehouse facilities or freight forwarder, subject to
approval in writing by PointRed in advance of shipment. Unless
specified in GAS's order, PointRed will select the mode of
shipment and the carrier. GAS will be responsible for and pay all
packaging, shipping, freight and insurance charges, which charges
PointRed may require GAS to pay in advance.
(b) Title and Risk of Loss. Title and all risk of loss of or damage
to PointRed Products will pass to GAS upon delivery by PointRed
to GAS and said GAS's acceptance of shipment in writing.
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(c) Partial Delivery. Unless GAS clearly advises PointRed to the
contrary in writing, PointRed may make partial shipments on
account of GAS's orders, to be separately invoiced and for when
due delay in delivery of any installment shall not receive GAS of
its obligation to accept the remaining deliveries.
(d) Delivery Schedule; Delays. PointRed will use reasonable efforts
to meet GAS's requested delivery schedules for PointRed Products,
but PointRed reserves the right to refuse, cancel or delay
shipment to GAS when Distributor's credit is impaired, when GAS
is delinquent in payments or fails to meet other credit or
financial requirements established by PointRed, or when GAS has
failed to perform its obligations under this Agreement. Should
orders for PointRed Products exceed PointRed's available
inventory, PointRed will allocate its available inventory and
make deliveries on a basis PointRed deems equitable, in its sole
discretion, and without liability to GAS on account of the method
of allocation chosen or its implementation. In any event,
PointRed will not be liable for any damages, direct,
consequential, special or otherwise, to GAS or to any other
person for failure to deliver or for any delay or error in
delivery of PointRed Products for any reason whatsoever.
7. Suggested Retail Price. Although PointRed may publish suggested
wholesale or retail prices, GAS shall determine the actual prices at
which PointRed Products will be sold to GAS's customers, at GAS's sole
discretion.
8. Trademarks, Trade Names, Logos, Designations and Copyrights.
(a) Use During Agreement. During the term of this Agreement, GAS is
authorized by PointRed to use the trademarks, trade names, logos
and designations PointRed uses for PointRed Products in
connection with GAS's advertisement, promotion and distribution
of PointRed Products. GAS's use of such trademarks, trade names,
logos and designations will be in accordance with PointRed's
policies in effect from time to time, including but not limited
to trademark usage and cooperative advertising policies. GAS
agrees not to attach any additional trademarks, trade names,
logos or designations to any PointRed Product. GAS further agrees
not to use any PointRed trademark, trade name, logo or
designation in connection with any non-PointRed Product.
(b) Copyright and Trademark Notices. GAS will include on each
PointRed Product that it distributes, and on all containers and
storage media therefore, all trademark, copyright and other
notices of proprietary rights included by PointRed on such
PointRed Product. GAS agrees not to alter, erase, deface or
overprint any such notice on anything provided by PointRed. GAS
also will include the appropriate trademark notices when
referring to any PointRed Product in advertising and promotional
materials.
(c) No Proprietary Rights. GAS has paid no consideration for the use
of PointRed's trademarks, trade names, logos, designation or
copyrights, and nothing contained in this Agreement will give GAS
any right, title or interest in any of them. GAS acknowledges
that PointRed owns and retains all trademarks, trade names,
logos, designation, copyrights and other proprietary rights in or
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No Proprietary Rights - continued
associated with PointRed Products, and agrees that it will not,
at any time during or after this Agreement, assert or claim any
interest in or doing anything that may adversely affect the
validity of any trademark, trade name, logos, designation, or
copyright belonging to or licensed to PointRed (including,
without limitations any act or assistance to any act, which may
infringe or lead to the infringement of any of PointRed's
proprietary rights).
(d) No Continuing Rights. Upon expiration or termination of this
Agreement, GAS will immediately cease all display, advertising
and use of all PointRed trademarks, trade names, logos, and
designation and will not thereafter use, advertise or display any
trademark, trade name, logo or designation which is, or any part
o which is, similar to or confusing with any trademark, trade
name, logo or designation associated with any PointRed Product.
(e) Obligation to Protect. GAS agrees to use reasonable efforts to
protect PointRed's proprietary rights and to cooperate at
PointRed's expense in PointRed's efforts to protect its
proprietary rights. GAS agrees to promptly notify PointRed of any
known or suspected breach of PointRed's proprietary rights that
comes to GAS's attention.
9. Confidentiality. Both parties acknowledge that, in the course of
performing their obligations hereunder, each party will receive
information which is confidential and proprietary to the other. Each
party agrees not to use such information except in performance of this
Agreement and not to disclose such information to third parties,
without the prior written consent of the other party.
10. Escrow Agreement: When GAS has approved the Authorized Products for
sale to its customers, PointRed shall deposit
(i) The printed circuit board design related to the 2.5 - 2.6GHz
(MMDS/ITFS) MicroRed products and interfaces, software source
code, documentation and other information, together with any
related tool kits, scripts, and other ancillary materials needed
to manufacture and deliver the Products to GAS as provided in
