Exhibit 10.19
SUBDISTRIBUTOR AGREEMENT
This Subdistributor Agreement (the "Agreement") effective the 15th day of
November, 2000.
BETWEEN:
XX-XXxxxx.xxx Ltd., a
Bermuda Corporation having its corporate office
at #129 Front Street
Xxxxxxxx, XX HM11
Fax: (000) 000-0000
(herein the "Distributor")
OF THE FIRST PART
AND:
FUTURECOM GLOBAL, INC.,
a Nevada corporation having an office
at 00000 X. 00xx Xxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
(herein "FutureCom")
OF THE SECOND PART
WHEREAS:
A. The Distributor is party to a Distribution Agreement (the "Distribution
Agreement") with CYBERBANK CORP., a Korean corporation (the "Company") with
its head office in Seoul, Korea.
B. The Company has developed a handheld device/terminal that can be used to
perform multiple functions on a CDMA, GSM or other wireless application
protocol system (the "Multipalm").
C. The Distributor has acquired from the Company the United States and
Canada rights to market and distribute the Multipalm on a sole and
exclusive basis on the terms and conditions contained in the Distribution
Agreement.
D. The Distributor may have the right to acquire from the Company the
worldwide (other than the United States and Canada) rights to market and
distribute the Multipalm on a non-exclusive basis on the terms and
conditions contained in the Distribution Agreement.
E. The Distributor is desirous of developing and accelerating its marketing
strategy to exploit any and all business opportunities with respect to the
aforementioned product; and
F. FutureCom is desirous of participating with the Distributor in the
implementation of the foregoing marketing strategy in the manner
hereinafter described.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. DEFINITIONS
In this Agreement, the following words and phrases shall have the following
meanings:
(A) "Company" means CYBERBANK CORP., a Korean corporation and its successors
and assigns;
(B) "Confidential Information of the Company" means all business plans, trade
secrets, design concepts, knowledge, information, production technology,
processes, know how, business projections, customer lists and intellectual
property concerning or relating to the business of the Company and the
Products, including the Manufacturing Information, which may be
communicated to, acquired by, or learned of by the Distributor from the
Company, whether or not such information is subject to proprietary
protection at law;
(C) "Confidential Information of the Distributor" means all customer lists,
sales marketing contacts and information, business plans, trade secrets,
knowledge, information, know how, business projections, computer software
programs and intellectual property concerning or relating to the business
of the Distributor which may be communicated to, acquired by, or learned of
by the Company from the Distributor, whether or not such information is
subject to proprietary protection at law;
(D) "Distribution Agreement" means that certain Distribution Agreement dated
November 6, 2000 between the Company and the Distributor;
(E) "Exclusive Territory" means the United States of America (50 states) and
Canada;
(F) "Future Products" means any future products developed by the Company of a
similar or like nature as the Multipalm which is primarily a PC/PDA/
wireless telecommunication device.
(G) "Manufacturing Information" means all information, technology, data and
trade secrets relating to the manufacture of the Products;
(H) "Non-exclusive Territory" has the meaning assigned to it by Section 2.3;
(I) "Patents" means any patents underlying the Products which are owned or may
be owned by the Company or licensed or which may be licensed to the
Company;
(J) "Products" means the personal digital assistant products marketed by the
Company under the current trade name "Multipalm" (including all necessary
accessories included in the Multipalm retail package to maintain the
functionality of the Product including, but not limited to a battery,
battery charger, adaptor, and non-phone stylus).
(K) "Reference Date" means the later of (a) December 31, 2001 and (b) one year
after approval of the Products by the US FCC;
(L) "Term" has the meaning described in Section 12.1 of this Agreement;
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
(M) "Trade Name" means the trade name "Multipalm", or any other trade name for
the Product or Future Products, and the trademark "Multipalm", or any other
trademark for the Product or Future Products, in the event that the Company
is granted trademark protection by the United States Patent and Trademark
Office.
2. Exclusive Distribution Rights and Non-exclusive Distribution Rights
-------------------------------------------------------------------
2.1 Subject to the terms and conditions of this Agreement and the Distribution
Agreement, the Distributor hereby grants to FutureCom the exclusive right to
market, distribute and sell the Products within the Exclusive Territory (the
"Distribution Rights"). The Distribution Rights will include the following
rights:
(A) the right to market, distribute and sell the Products;
(B) the right and license to use the Trade Name in connection with the
marketing, distribution and sale of the Products.
2.2 The Distribution Rights will extend to the right and license to use the
trademark "Multipalm" or any other trademark relating to the Products or Future
Products in the event that the Company's application to the United States Patent
and Trademark Office for the registration of "Multipalm" or any other trademark,
if any, is approved. FutureCom acknowledges that there is no assurance that
trademark protection will be granted by the United States Patent and Trademark
Office.
2.3 FutureCom may, from time to time, deliver notice to the Distributor that
requests non-exclusive distribution rights for certain territories outside of
the Exclusive Territory (the "Non-exclusive Territory"). FutureCom and the
Distributor shall have fifteen (15) days to discuss and reach an agreement on
such request. Failure to reach an agreement on such a request shall be deemed
to be a rejection of such request by the Distributor. If granted, such
non-exclusive distribution rights shall be for a period of one year from the
date of delivery of the request by FutureCom to the Distributor. Provided
however, FutureCom shall be entitled to deal with and sell to existing customers
and contacts of FutureCom at the 2000 Las Vegas Comdex Show for markets outside
the exclusive Territory but shall always be governed by the terms and conditions
of the Distribution Agreement. The terms and conditions of such non-exclusive
distribution rights may be modified or amended subject to a separate agreement
by FutureCom and the Distributor but shall always be governed by the terms and
conditions of the Distribution Agreement .
2.4 The Distributor agrees FutureCom shall endeavor to add Mexico as an
exclusive market at the earliest possible date but makes no representation that
such exclusivity can or will be obtained.
2.5 FutureCom acknowledges that the rights granted to Distributor pursuant to
this Agreement are expressly subject to the terms and conditions of the
Distributor Agreement which contains consent/approval requirements, limits and
thresholds as to the period of exclusivity, volume requirements, and similar
conditions. FutureCom further acknowledges that the rights granted to it
hereunder shall be subject to the conditions and limitations contained in the
Distribution Agreement including, but not limited to, methods of payment, and
payment security requirements
2.6 FutureCom and its affiliates covenant that it will not contact the
Company directly or indirectly without the express written consent of
Distributor during the term of the Distribution Agreement.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
2.7 Notwithstanding any other term or terms of this Agreement, any sales
orders and/or sales contracts for Products to third parties made before
execution of a final formal distribution agreement and all profits resulting
therefrom shall be for the sole benefit of Distributor. Upon execution of this
Agreement, Distributor shall submit a list of such third parties which the
Distributor may be closing sales orders with, prior to the date hereof. Any
sales made by Distributor to a verifiable party on the aforementioned list shall
be excluded from the application of this Agreement. It is agreed that the
number of potential purchasers on said list shall not exceed five (5).
3. Product Prices, Payment and Minimum Purchase Amounts
----------------------------------------------------
3.1 The prices to be paid by FutureCom to the Distributor for the Products (the
"Product Prices") shall:
(A) until December 31, 2001, not be less than
US${............*............} per unit {............*............}
and shall not be greater than {............*............}; and
(B) after December 31, 2001, not be greater than the
{............*............}.
Plus {............*............} as more particularly set forth in clause
3.10(d).
3.2 At the time of giving the purchase order, FutureCom will open an
irrevocable and confirmed letter of credit without recourse in favour of the
Company and the Distributor for the aggregate price for all of the Products
ordered at the Product Prices ordered (the "Order Price"). In addition, the
letter of credit will be transferable and negotiable by the Company and the
Distributor. Such letter of credit shall be arranged with a financial
institution satisfactory to the Company and Distributor. Such letter of credit
shall be granted on the basis that payment will be made upon presentation of
adequate documentation by the Company and the Distributor, but the Order Price
for each delivery of Products will not be paid any earlier than the due date as
described in section 3.3 below.
3.3 The Distributor will invoice FutureCom for all Products delivered to
FutureCom at the Product Prices. The Order Price shall be paid
{............*............} days after presentation of documents as relate to
each delivery of Products but, for greater certainty, may be paid in partial
amounts for partial shipments.
3.4 FutureCom shall have the right to establish its own selling prices for the
Products within the Exclusive Territory and the Non-exclusive Territory, where
non-exclusive distribution rights have been granted to FutureCom by the
Distributor.
3.5 The determination of sales and marketing strategies for the Products within
the Exclusive Territory and the Non-exclusive Territory, where non-exclusive
distribution rights have been granted to FutureCom by the Distributor, will be
the sole responsibility of FutureCom.
3.6 All references to money or currency herein contained shall mean lawful
money of the United States of America.
3.7 Each order placed by FutureCom for the purchase of any Products shall be
subject to the terms and conditions of this Agreement.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
3.8 The Distributor will cause to the Company to deliver all Products to
FutureCom {............*............} but at a location in
{............*............} that is a reasonable distance from a major shipping
location which includes, but is not limited to, {............*............}.
3.9 As a condition of maintaining the Distribution Rights, during the period
from the effective date of this Agreement to the Reference Date, FutureCom must
purchase from the Company a minimum of units of the Products as specified in
Section 3.10 at the prices provided for by this Agreement. Notwithstanding the
above, FutureCom shall not be held responsible for not achieving the minimum
purchase requirements if the Products are not completely delivered, are not
delivered on a timely basis, and/or not delivered in a functioning format for
North American use.
3.10 FutureCom agrees to issue binding purchase orders to the Distributor for
the purchase of Products in a form that is substantially similar in terms and
conditions as attached in Appendix 3.10 and additionally as follows:
a) Purchase {............*............} units of the current model Product
which purchase order shall be made with Distributor
{............*............};
b) Purchase {............*............} units of future generation
Products to be delivered over {............*............} with the
first purchase order and deliverable to be a minimum of
{............*............};
c) Purchase a minimum of {............*............} units of the Products
for each {............*............} thereafter. Any purchases by
FutureCom in excess of {............*............} units for a
particular {............*............} shall be carried forward to the
next {............*............} as a credit towards the next
{............*............} minimum purchase requirement, except that
no carry forward is permitted beyond {............*............} of
each {............*............};
d) Pay Distributor a purchase price equal to the Distributor's actual cost
price plus {............*............} calculated on each order (which
may include Product options and/or accessories). Distributor's actual
purchase price shall be the contracted bona fide arm's-length price
charged by the Company to the Distributor. FutureCom shall be entitled
to documented verification of the foregoing purchase price. Distributor
shall, on a best efforts basis, endeavour to obtain on going
competitive pricing from the Company to maintain the market advantage
of the Product;
e) Pay Distributor a fee of {............*............} on received
payments on all sales of Product accessories made by FutureCom,
calculated and payable monthly by the third business day of the
following month, it being understood that such fee is only in respect
of Product accessories developed and/or manufactured for or by
FutureCom. FutureCom shall not develop or have manufactured any Product
option or accessory presently marketed by the Company.
3.11 To help the Company and Distributor to establish manufacturing and
marketing plans, FutureCom shall submit to the Distributor a
{............*............} forecasting purchase plan for
{............*............} at least {............*............} days prior to
the beginning of each quarter.
3.12 All Canadian and U.S. (50 states) purchase inquiries received by the
Distributor shall be
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
referred to FutureCom for further handling, PROVIDED HOWEVER, in the event a
customer insists upon dealing with and purchasing from Distributor, then in such
event only, Distributor shall be entitled to deal with such customer at its own
effort and cost. Distributor shall provide written notice to FutureCom of all
such sales. The sale price charged to such customer by Distributor shall be no
less than the lowest price charged by FutureCom to its preferred customers.
Distributor shall upon receipt of the sales proceeds from said customer, pay
FutureCom an amount equal to Distributor's cost plus
{............*............}, it being the intent of the parties to implement
reciprocal arrangements with respect to amounts paid on sales of the Products.
Distributor shall not promote or seek, directly or indirectly, any sales of the
Products within the U.S. (50 states) and Canadian markets.
3.13 Any returns of defective units of Products in excess of
{............*............} points shall be considered a "catastrophic event",
and FutureCom may elect to suspend or terminate its obligations under this
Agreement.
3.14 Distributor shall provide at cost to FutureCom one (1) functional unit of
Product (PC-Ephone) upon execution hereof, and shall provide at cost a further
fifteen (15) units for carrier testing purposes. Distributor shall attempt, on a
best efforts basis, to obtain the foregoing units on a timely manner to permit
carrier testing to commence at the earliest possible date.
4. Limitations on the Distribution Rights
--------------------------------------
4.1 FutureCom shall not knowingly distribute or sell any Products for
re-sale to any person or company in any market outside: (a) the Exclusive
Territory and (b) the Non-exclusive Territory where FutureCom has non-exclusive
rights as granted by virtue of section 2.3.
4.2 FutureCom will not, directly or indirectly, sell, assign or grant to any
other person, firm or corporation, the right to sell, or distribute the Products
within the Exclusive Territory and the Non-exclusive Territory, where non-
exclusive distribution rights have been granted to FutureCom by the Distributor,
except as set forth in Article 5.
4.3 Paragraph Intentionally Deleted.
4.4 Nothing in this Agreement shall be deemed in any way to constitute any
transfer or assignment by the Company or Distributor of any Patents, Trade Name
or Confidential Information to FutureCom or to give FutureCom any right, title
or interest in or to any Patents, Trade Name or Confidential Information.
FutureCom acknowledges that all patents pertaining to the Products or
Confidential Information are and shall remain the exclusive property of the
Company.
4.5 FutureCom will not purchase Products from any person other than through
Distributor.
5. Sub-Assignees
-------------
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
5.1 FutureCom will have the right to appoint marketing representatives
within the Exclusive Territory and the Non-exclusive Territory, where
non-exclusive rights have been granted to FutureCom by the Distributor, provided
that each marketing representative is appointed on the following terms and
conditions:
a) each marketing representative will enter into a restrictive agreement
with FutureCom on terms and conditions acceptable to the Distributor
which will fully bind the marketing representative to the terms and
conditions set forth in this Agreement; and
b) FutureCom shall provide the Distributor a copy of each executed
marketing representative agreement within 10 days of execution in order
that the Distributor can verify compliance of the marketing
representative agreement with the terms and conditions of this
Agreement.
5.2 In the event of restructuring of FutureCom so that separate companies are
used to sell Products in different countries within the Exclusive Territory and
the Non-exclusive Territory, such separate companies shall collectively be
considered to be parties to this Agreement in place and stead of FutureCom named
herein, without the necessity of any further documentation.
6. Additional Covenants of FutureCom
---------------------------------
6.1 FutureCom will throughout the term of this Agreement:
(A) purchase and maintain a sufficient liability insurance policy with
reputable insurance companies in those jurisdictions in which FutureCom
markets, distributes and sells the Products;
(B) ensure that any advertising or promotional efforts undertaken by
FutureCom will be conducted in compliance with advertising and marketing
guidelines established by the Company or the Distributor in order to
ensure a consistent marketing and brand recognition of the Products;
(C) comply with all applicable laws and regulations regarding the
distribution, marketing and sale of the Products within the Exclusive
Territory and the Non-exclusive Territory, where non-exclusive
distribution rights have been granted to FutureCom by the Distributor.
(D) FutureCom will not enter into any business that is unrelated to
telecommunications without the prior written consent of the Company.
(E) FutureCom shall not represent itself as an agent and/or legal
representative of the Company or Distributor.
(F) FutureCom shall not challenge the Company or Distributor for the Company's
Patents, Trade Name and/or other intellectual properties.
(G) FutureCom shall not give information on and guarantee the performance and
efficiency of the Products and Future Products unless otherwise confirmed
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
by written consent of the Company or Distributor.
6.2 Execution and delivery of this Agreement by FutureCom has been duly
authorized. The person executing this Agreement on behalf of FutureCom has full
and proper authorization to execute same, and this Agreement is a valid and
binding agreement of FutureCom and is enforceable against FutureCom in
accordance with its terms.
7. Additional Covenants of the Distributor
---------------------------------------
7.1 The Distributor will during the term of this Agreement:
(A) provide FutureCom with all such information as received by Distributor
from the Company, or as the Distributor considers appropriate, in order to
assist FutureCom in the preparation of sales promotion material and
Distributor shall provide FutureCom with all sales promotional material
relating to the Products in order to facilitate advertising of the
Products within the Exclusive Territory and the Non-exclusive Territory,
where non-exclusive distribution rights have been granted to FutureCom by
the Distributor;
(B) to the greatest extent of Distributor's ability to do so, ensure all the
Products meet the Company's specifications for the applicable Products;
(C) to the greatest extent of Distiributor's ability to do so, ensure that in
addition to any warranty requirements pursuant to the terms of this
Agreement, all Products supplied to FutureCom by the Company, its
manufacturers or Distributor shall meet any and all U.S. governmental
standards applicable to such Products. FutureCom shall have the right,
through its duly appointed representative, to examine, inspect and/or test
any and all of the Products supplied by the Company through the
Distributor, and to the extent possible, the production lines, production
facilities and storage facilities. The Distributor warrants to the
fullest extent in favor of FutureCom and its customers all available
Company warranties that the goods delivered in accordance with this
Agreement shall measure up to the same standard as the sample Products
previously submitted to FutureCom.
(D) permit FutureCom and its marketing representatives, if any, to hold
themselves out as authorized distributors of the Products within the
Exclusive Territory and the Non-exclusive Territory, where non-exclusive
distribution rights have been granted to FutureCom by the Distributor;
(E) assist FutureCom in obtaining all applicable US FCC and Industry Canada
approvals in order that the Products can be distributed in the Exclusive
Territory and the Non-exclusive Territory, where non-exclusive
distribution rights have been granted to FutureCom by the Distributor.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
(F) furnish to FutureCom in a timely manner all available product information
regarding the Products, which product information shall accurately
describe the nature, character and prescribed use of the Products, which
information shall be appropriate for distribution to consumers in the
discretion of FutureCom. The product information shall not misrepresent
or in any way intentionally mislead FutureCom, or consumers with respect
to the Products. FutureCom may incorporate such product information in
its sales and advertising and promotional literature and materials (the
"Sales Materials"). Said product information utilized shall not be deemed
as Confidential Information as set forth in this Agreement.
(G) To the greatest extent of the Distributor's ability to do so, ensure that
the Distributor has the right to supply and distribute the Products and
all components thereof, and the Products shall not and do not, constitute
any known infringement of any license, trademark, copyright, patent or
similar proprietary interest of any third party.
(H) Except as expressly otherwise agreed in this Agreement, the Distributor
will not directly, or indirectly, sell Products to any customers in the
Exclusive Territory and, furthermore, will refer those customers to
FutureCom.
(I) Except as expressly otherwise agreed in this Agreement, the Distributor
will not directly, or indirectly, sell Products to any customers in the
Non-exclusive Territory where FutureCom has been granted non-exclusive
distribution rights by the Distributor and, furthermore, will refer those
customers to FutureCom.
7.2 To its best knowledge the Distributor represents the Company has the
capability to supply the Products necessary to meet the anticipated sales of
FutureCom for the duration of this Agreement.
7.3 Execution and delivery of this Agreement by the Distributor has been duly
authorized. The person executing this Agreement on behalf of the Distributor
has full and proper authorization to execute same, and this Agreement is a valid
and binding agreement of the Distributor and is enforceable against the
Distributor in accordance with its terms.
8. Indemnification
---------------
8.1 Each of the parties agrees to indemnify, defend and hold harmless the
other party from any liability arising out of the act or omission of the
indemnifying party, its servants, agents and representatives.
8.2 Distributor shall not be responsible for any claim and loss arising out of
the marketing, sales and distribution process of FutureCom and/or its marketing
representatives.
8.3 FutureCom shall be responsible for the losses and claims arising out of
the conduct, non-performance and misrepresentations of FutureCom and its
marketing representatives, if any. Furthermore, FutureCom shall defend itself
and shall indemnify and hold harmless the Company and the Distributor from any
liability arising therefrom.
8.4 The maximum liability of the Distributor arising out of and relating to
this Agreement shall not exceed the Order Price of the Products delivered.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
9. Right of First Refusal for Future Products
------------------------------------------
9.1 FutureCom will have a right of first refusal to acquire the marketing,
distribution and sales rights for (a) Future Products on an exclusive basis for
the Exclusive Territory and (b) Future Products on a non-exclusive basis for the
Non-exclusive Territory where non-exclusive distribution rights have been
granted pursuant to section 2.3.
10. Confidential Information
-------------------------
10.1 The Distributor acknowledges that the Confidential Information of
FutureCom is the property of FutureCom and the success, profitability and
competitive position of FutureCom requires that the Confidential Information of
FutureCom be maintained in confidence by the Distributor. Accordingly, the
Distributor covenants and agrees with FutureCom, subject to Sections 10.2 and
10.3 of this Agreement, that:
(A) the Distributor will at all times keep all Confidential Information of
FutureCom in the strictest confidence;
(B) the Distributor will not use the Confidential Information of FutureCom for
any purpose other than for performing its obligations pursuant to this
Agreement;
(C) the Distributor will not at any time publish or in any way participate or
assist in the publishing of any Confidential Information of FutureCom;
(D) the Distributor will not disclose or assist in the disclosure of any
Confidential Information of FutureCom to any person, firm, corporation or
other entity.
10.2 The Distributor may disclose the Confidential Information of FutureCom in
confidence to the Company and the lawyers, accountants and other professional
advisors of the Company and Distributor in connection with the performance of
the business arrangements between FutureCom and the Distributor, each of whom
shall be advised of the confidential nature of and requirement to maintain such
confidential information.
10.3 The Distributor may disclose the Confidential Information of FutureCom
only to the extent necessary in order that the Distributor may comply with all
applicable laws and regulations, including compliance with Distributor's
obligations as a reporting issuer under the United States Securities Exchange
Act of 1934. Any press releases making reference to a party shall require the
consent of that party. The Parties shall endeavor to consult one with the
other with respect to any press releases or similar dissemination of
information.
10.4 FutureCom acknowledges that the Confidential Information of the Company or
the Distributor is the property of the Company or the Distributor and the
success, profitability and competitive position of the Company or the
Distributor requires that the Confidential Information of the Company or the
Distributor be maintained in confidence by FutureCom. Accordingly, FutureCom
covenants and agrees with the Distributor, subject to Sections 10.5 and 10.6 of
this Agreement, that:
(A) FutureCom will at all times keep all Confidential Information of the
Distributor in the strictest confidence;
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
(B) FutureCom will not use the Confidential Information of the Distributor for
any purpose other than for performing its obligations pursuant to this
Agreement;
(C) FutureCom will not at any time publish or in any way participate or
assist in the publishing of any Confidential Information of the
Distributor;
(D) FutureCom will not disclose or assist in the disclosure of any
Confidential Information of the Distributor to any person, firm,
corporation or other entity.
10.5 FutureCom may disclose the Confidential Information of the Company or
Distributor in confidence to the lawyers, accountants and other professional
advisors of FutureCom in connection with the performance of the business
arrangements between the Distributor and FutureCom each of whom shall be advised
and required to maintain the confidential nature of each confidential
information.
10.6 FutureCom may disclose the Confidential Information of the Company or the
Distributor only to the extent necessary in order that FutureCom may comply with
all applicable laws and regulations, including compliance with FutureCom's
obligations as a reporting issuer under the United States Securities Exchange
Act of 1934. Any press releases making reference to a party shall require the
consent of that party. The Parties shall endeavor to consult one with the
other with respect to any press releases or similar dissemination of
information.
10.7 No waiver by either party of its rights pursuant to the confidentiality
agreements or any consent to any release of Confidential Information shall be
effective unless expressed in writing, and no such waiver or consent shall apply
beyond the specific facts in respect of which the waiver of consent was given.
10.8 This confidentiality agreement of each party does not apply to
information that is or becomes publicly available or is lawfully received by the
other party other than by breach of this confidentiality agreement.
11. Modifications
-------------
11.1 FutureCom will not make any modifications to any Products or in any way
vary or change the specifications or content of the Products purchased from or
through the Distributor. FutureCom will use its reasonable efforts to ensure
that its marketing representatives, dealers, agents, or customers do not make
any modifications to, or in any way vary, the specifications or content of any
Products.
11.2 FutureCom shall be entitled to name or brand the Products in whichever
manner FutureCom deems necessary for marketing purposes, and shall be further
entitled to offer private labeling to its customers at its cost; PROVIDED
HOWEVER FutureCom may be required to include the name and/or trademark, if any,
of the Distributor and/or the Company on all units of the Products, in a manner
satisfactory to the Distributor, and at Distributor's cost.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
12. Term and Termination
--------------------
12.1 The term of this Agreement (the "Term") will commence on the date of
signing of this Agreement and will continue until (i) the earlier of December
31, 2007, (ii) the date on which this Agreement is terminated in accordance with
the provisions of this Agreement, or (iii) the date on which the Distribution
Agreement is terminated. However, the Term of this Agreement will automatically
renew from year to year after the initial Term provided the Company or
Distributor has not given 60 days advance notice of termination in writing.
12.2 Each of FutureCom and the Distributor shall have the right to terminate
this Agreement upon the occurrence of any of the following events, such
termination to be effective immediately upon the receipt or deemed receipt by
the other party of notice to that effect and the expiry of any applicable period
for remedy of the default:
(A) if a party is in default of any of the material terms or conditions of
this Agreement and fails to remedy such default within seven (7) days of
written notice thereof from the other party unless the non-defaulting
party agrees to extend such seven (7) day period;
(B) if the other party becomes bankrupt or insolvent, makes an assignment for
the benefit of its creditors or attempts to avail itself of any applicable
statute relating to insolvent debtors;
(C) if the other party winds-up, dissolves, liquidates or takes steps to do
so or otherwise ceases to function as a going concern or is prevented from
reasonably performing its duties hereunder; or
(D) if a receiver or other custodian (interim or permanent) of any of the
assets of the other party is appointed by private instrument or by court
order or if any execution or other similar process of any court becomes
enforceable against the other party or its assets or if distress is made
against the other party's assets or any part thereof.
12.3 Notwithstanding anything in this Agreement to the contrary, in the event
that the Distributor shall be given notice from the Company that there has
occurred any event pursuant to which the Company has or may have the right to
terminate the Distribution Agreement, then Distributor represents and agrees to
immediately give written notice to FutureCom of said event, as well as related
information with respect to action to be taken by Distributor to remedy any
claim of default as asserted by the Company.
In the event Distributor shall be unable to remedy the claim of default by
the Company, Distributor agrees to utilize its best commercial efforts to assist
FutureCom to directly contract with the Company for the continued purchase of
the Products by FutureCom and to otherwise enable FutureCom to continue to
receive, to the maximum extent commercially feasible, the benefits of this
Agreement. In the event so required, as may pertain to the claim of default by
the Company which is not remedied by the Distributor to the satisfaction of the
Company, the Distributor agrees to not unreasonably withhold its consent to a
request by FutureCom of an assignment of the Distribution Agreement to FutureCom
under which FutureCom would assume all of the rights, duties and obligations of
the Distributor pursuant to the Distribution Agreement, subject to such terms
and conditions as may then be imposed by the Company as a condition to obtaining
the consent of the Company to an assignment of the Distribution Agreement by
Distributor to FutureCom.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
12.4 Upon termination of this Agreement for any reason whatsoever, the
following shall apply:
(A) those rights and obligations of each of the Distributor and FutureCom
which are expressly stated to survive termination of this Agreement will
survive termination and will continue in full force and effect;
(B) all rights and privileges granted by the Distributor to FutureCom pursuant
to this Agreement, including the rights to market, distribute and sell
Products, will immediately terminate and be relinquished by FutureCom, and
thereafter FutureCom shall take no action that would make it appear to the
public that the Distributor is still supplying Products;
(C) FutureCom shall return to the Distributor all advertising, informational
or technical material given to FutureCom by the Company or Distributor;
(D) FutureCom shall cease using the Trade Names and thereafter refrain from
holding itself out as an authorized distributor of the Products;
(E) FutureCom will retain in confidence all information regarding the business
and property of the Company, the Distributors and the Products;
(F) all marketing agreements entered into by FutureCom will terminate.
The provisions of this Section 12.4 will survive the termination of this
Agreement.
12.5 The obligations of FutureCom hereunder shall be subject to the Products
receiving all requisite {..........*..........} units of the Products. The
Distributor shall cause the filing of the requisite regulatory approvals in a
timely and expeditious manner, it being anticipated that such approvals may be
obtained in January, 2001.
12.6 Except for the first {..........*..........}, the obligations of FutureCom
hereunder shall be further subject to receipt of carrier approval from Sprint,
AT&T, Verizon, Telus, or any other carrier deemed necessary by FutureCom for
implementation of its marketing plan for the Products. FutureCom undertakes to
obtain such approval at its cost immediately upon receipt of the fifteen (15)
units referred to in Section 3.14. This condition shall terminate at the end of
twenty-two (22) days after the passing of and completion of CDG Level 2 testing.
12.7 In the event the Distributor shall determine or become advised the
Company or Distributor does not intend to renew the Distribution Agreement,
immediate written notice thereof shall be given by the Distributor to FutureCom.
13. Assignment
----------
13.1 Except as provided by Section 5 of this Agreement, the rights granted
by this Agreement may not be sold, assigned, sub-licensed or otherwise
transferred by FutureCom without the prior written consent of the Distributor,
which consent may not be unreasonably withheld by the Distributor.
13.2 In the event the Distributor proposes to make an assignment of all or any
portion of its rights pursuant to the Distribution Agreement. Distributor
agrees to promptly give notice thereof to FutureCom and to permit FutureCom
reasonable opportunity to discuss the proposed assignment with Distributor.
Provided, however, FutureCom acknowledges it does not have a right of first
refusal enforceable against Distributor.
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
14. After-sales Support; Marketing
------------------------------
14.1 The Distributor shall use its highest and best efforts to make all
manufacturer warranties directly available to customers of the Products and to
otherwise enforce warranty covenants against the manufacturers of the Product
for the benefit of FutureCom or its customers. FutureCom shall be responsible
for customer and call-center support services as shall pertain to all sales
originated by FutureCom. However, the Distributor shall provide or make
available through the Company to the greatest extent feasible, training and
technical assistance to FutureCom in the United States and Canada for a period
of three (3) months after the date of this Agreement in order to facilitate
FutureCom's customer and call-center support services.
14.2 FutureCom shall expend One Million Dollars ($1,000,000) to Five Million
Dollars ($5,000,000) on advertising and promotion related to the Product, which
without limiting the generality of the foregoing. shall include media
advertising, co-op advertising schemes, trade show attendances, product
literature, and similar promotional efforts.
15. Miscellaneous Provisions
------------------------
15.1 Entire Agreement
----------------
This Agreement constitutes the entire agreement between the parties with respect
to all matters herein contained, and its execution has not been induced by, nor
do any of the parties hereto rely upon or regard as material, any
representations or writings whatsoever not incorporated herein and made a part
hereof. This Agreement shall not be amended, altered or qualified except by an
instrument in writing, signed by all parties hereto and any amendments,
alterations or qualifications hereof shall not be binding upon or affect the
rights of any party who has not given its consent in writing.
15.2 Interpretation
--------------
The division of this Agreement into articles and sections is for convenience of
reference only and shall not affect the interpretation or construction of this
Agreement.
15.3 Severability
------------
In the event that any of the covenants herein contained shall be held
unenforceable or declared invalid for any reason whatsoever, such
unenforceability or invalidity shall not affect the enforceability or validity
of the remaining provisions of this Agreement and such unenforceable or invalid
portion shall be severable from the remainder of this Agreement.
15.4 Force Majeure
-------------
In the event of an inability or failure by the Company to manufacture, supply or
ship any of the Products herein by reason of any fire, explosion, war, riot,
strike, walk-out, labour controversy, flood, shortage of water, power, labour
transportation facilities or necessary materials or supplies, default or power
failure of carriers, breakdown in or the loss of production or anticipated
production from plant or equipment, act of God or public enemy, any law, act or
order of any court, board, government or other authority of competent
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
jurisdiction, or any other direct cause (whether or not of the same character as
the foregoing) beyond the reasonable control of the Company, then the
Distributor shall not be liable to FutureCom and will not be deemed to be in
default during the period and to the extent of such inability or failure.
Deliveries omitted in whole or in part while such inability remains in effect
shall be canceled.
15.5 Notices
-------
Any notice required or permitted to be given hereunder shall be in writing and
shall be effectively given if:
(a) Delivered personally;
(b) Sent by prepaid courier service or mail; or
(c) Sent prepaid by telecopiers, fax telex or other similar means of
electronic communication
addressed to the "President" at the address/fax number(s) shown for FutureCom or
the Distributor, as the case may be, at the beginning of this Agreement.
Any notice so given shall be deemed conclusively to have been given and received
when so personally delivered or, if sent by telex, fax, telecopier or other
electronic communication (other than e-mail), on the first business day
thereafter, or if sent by courier on the third business day thereafter or if
sent by mail on the tenth business day thereafter. Any party may change any
particulars of its address/fax number for notice by giving notice to the other
party in the manner above described.
For determining the date on which any notice shall have been received, the date
of delivery will be the date in Los Angeles, California at the time of delivery.
15.6 Time of the Essence
-------------------
Time shall be of the essence.
15.7 Further Assurances
------------------
The parties agree to sign such other instruments, cause such meetings to be
held, resolutions passed and by-laws enacted, exercise their vote and influence,
do and perform and cause to be done and performed such further and other acts
and things as may be necessary or desirable in order to give full effect to this
Agreement.
15.8 Successors and Assigns
----------------------
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
15.9 Non-Waiver
----------
No waiver by any party of any breach by any other party of any of its covenants,
obligations and agreements hereunder shall be a waiver of any subsequent breach
of any other covenant, obligation or agreement, nor shall any forbearance to
seek a remedy for any breach be a waiver of any rights and remedies with respect
to such or any subsequent breach.
15.10 Arbitration
-----------
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
All disputes in relation to this Agreement, other than a dispute regarding the
non-payment of any monetary amount required by this Agreement, be referred to
and finally resolved by Arbitration, under the rules of the British Columbia
International Commercial Arbitration Center (the "Rules"), which Rules are
deemed to be incorporated by reference into this Article. The tribunal shall
consist of One (1) Arbitrator. The Parties will endeavour within twenty-one
(21) days of the matter being referred to Arbitration to agree upon an
Arbitrator, failing which the Arbitrator shall be appointed in accordance with
the Rules. The place of Arbitration shall be Surrey, British Columbia. The
language of the Arbitration shall be English. The parties agree that the
Arbitrator shall be requested to make his award within sixty (60) days following
the later of the conclusion of the Arbitration hearings or any exchange of final
written submissions by the parties and further agree that the word of the
Arbitrator shall be final and binding and without appeal.
15.11 Governing Law
-------------
This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia.
15.12 No Conflicts
------------
This Agreement shall supersede any and all previous agreements made between the
parties in connection with the subject matter of this Agreement except for any
non-disclosure or non-circumvention agreements entered into between the parties.
IN WITNESS WHEREOF the parties hereto have executed this Agreement and as of the
date and year first above written.
FUTURECOM GLOBAL, INC. XX-XXxxxx.xxx Ltd.
By its authorized signatory by its authorized signatory
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx Xxx
------------------------------------ ------------------------------------
Signature of Authorized Signatory Signature of Authorized
Signatory
Xxxxxx X. Xxxxx Xxxxxxx Xxx
------------------------------------ ------------------------------------
Name of Authorized Signatory Name of Authorized Signatory
CEO / President Director
------------------------------------ ------------------------------------
Position of Authorized Signatory Position of Authorized Signatory
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
Appendix 3.10
Terms and Conditions of Initial Orders
--------------------------------------
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
Newlands Oil & Gas Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xx. Xxxxxxx Xxx
---------------------------
Dear Xx. Xxx:
Order
-----
As exclusive Subdistributor of the Multipalm product for Canada and the United
States (50 states), we hereby irrevocably order {..........*..........} units of
the Product (as defined in the Subdistributor Agreement) (without stylus) at a
price of not greater than US${............*............} per unit for a total
purchase price of not greater than US${............*............} (the "Order").
Delivery
--------
Delivery schedule shall be as follows:
Delivery Date Number of Units
------------- ---------------
{............*............} {......*......}
Payment
-------
An irrevocable, confirmed, transferable and negotiable letter of credit will be
granted for the value of the Order, payable immediately upon presentation of
documents evidencing shipment.
All other terms and conditions of this purchase order shall be governed, to the
extent applicable, by the Subdistributor Agreement between the two parties. If
you have any questions regarding the above, please contact the undersigned at
{............*............}.
Yours truly,
FUTURECOM GLOBAL, INC.
**DRAFT**
By:
---------------------------------
Xxx Xxxxx, CEO
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
Newlands Oil & Gas Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xx. Xxxxxxx Xxx
---------------------------
Dear Xx. Xxx:
Order
-----
As exclusive Subdistributor of the Multipalm product for Canada and the United
States (50 states), we hereby irrevocably order {............*............}
units of the Product (as defined in the Subdistributor Agreement) (without
stylus) at a price of not greater than US${............*............} per unit
for a total purchase price of not greater than US${............*............}
(the "Order").
Delivery
--------
Delivery schedule shall be as follows:
Delivery Date Number of Units
------------- ---------------
{............*............} {......*......}
{............*............} {......*......}
{............*............} {......*......}
Payment
-------
{............*............}U.S. dollars (US${............*............}) will be
paid at the time of placing the Order. Within {............*............}days
after passing CDG2 Test, an irrevocable, confirmed, transferable and negotiable
letter of credit will be granted for the remaining value of the Order and may be
paid in whole or in part, for partial shipments, but final payment (whether
whole or part) is not due until {............*............} days after
presentation of documents evidencing shipment.
All other terms and conditions of this purchase order shall be governed, to the
extent applicable, by the Subdistributor Agreement between the two parties. If
you have any questions regarding the above, please contact the undersigned at
{............*............}.
Yours truly,
FUTURECOM GLOBAL, INC.
**DRAFT**
By:
---------------------------
Xxx Xxxxx, CEO
* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
