Exhibit 10.5
Distribution and Sales Agreement between the Company
and Sideware Corp. effective January 1, 1999
DISTRIBUTION AND SALES AGREEMENT
DATED for reference the 1st day of January, 1999.
BETWEEN:
SIDEWARE SYSTEMS INC., a company incorporated
pursuant to the laws of the Province of British
Columbia, Canada and having an office at #102 - 000
Xxxx 0xx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
("Sideware")
OF THE FIRST PART;
AND:
SIDEWARE CORP., a company incorporated pursuant to
the laws of the State of Washington, U.S.A., and
having an office at #000-000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, X.X.X.
(the "Distributor")
OF THE SECOND PART;
WHEREAS:
A. Sideware has developed computer software described in Schedule "A" hereto
which provides real-time communication support and services to internet
users and which is better known as "Xx. Xxxx" Version 2.0 (the
"Software");
B. Sideware has appointed the Distributor, and the Distributor has agreed,
to market and distribute the Software in the 50 United States, the
District of Columbia, and Puerto Rico (the "Authorized Area") on the
terms and conditions contained herein.
IN CONSIDERATION of the mutual promises and covenants contained herein,
the parties record their agreement as follows:
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1.0 GRANT OF DISTRIBUTION RIGHTS
1.1 Subject to the terms of this Agreement, Sideware hereby grants to the
Distributor a non-exclusive right to market, sell and distribute the
Software in the Authorized Area to end users, value-added resellers,
distributors and original equipment manufacturers ("OEMS") for the Term
of this Agreement, as defined herein.
1.2 Notwithstanding paragraph 1.1, the Distributor shall have the right to
sell and distribute the Software outside the Authorized Area provided
that Sideware has consented in writing to each such sale.
1.3 Sideware shall deliver to the Distributor copies of the Software for sale
and distribution to end users, resellers, distributors and OEMS in
accordance with section 3.0 herein. Sideware shall provide to the
Distributor one (1) copy of the Software for demonstration purposes free
of charge, and the Distributor shall be entitled to make copies thereof
solely for demonstration and backup purposes only.
1.4 SOFTWARE CHANGES - Sideware may make changes to the Software as Sideware
deems necessary or advisable without advance notice to Distributor,
except that Sideware shall give the Distributor at least thirty (30) days
written notice before discontinuing the sale or distribution of the
Software pursuant to this Agreement.
2.0 TERM
2.1 TERM - The Term of this Agreement shall commence January 1, 1999, and
subject to earlier termination in accordance with this Agreement, shall
expire on December 31, 2001. The Term shall automatically be renewed for
one (1) year periods thereafter unless either party gives notice to the
other party, at least sixty (60) days before the end of the then current
year period, of its desire to let the Agreement expire at the end of such
year period (the "Term").
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3.0 PURCHASE ORDERS
3.1 The Distributor shall order copies of the Software from Sideware by
issuance of a written purchase order to Sideware. Each purchase order
shall state components of the Software required in each copy ordered, a
requested shipment date, the method of shipment, and the location to
which each unit of Software should be shipped.
3.2 Sideware will use its best efforts to meet the requested shipment date in
the Distributor's purchase order, but will not be liable to the
Distributor or to any other person if it fails to meet the requested
shipment date. Orders without a requested shipment date will be
processed for shipment according to Sideware's then current shipping
schedule.
3.3 Shipping charges shall be paid by the Distributor and will be shown
separately on Sideware invoices.
4.0 SOFTWARE PRICES
4.1 SIDEWARE PRICE - The price payable by Distributor for each copy of the
Software shall be equal to Sideware's then current list price for the
Software less the Distributor's Discount. Sideware's current list price
schedule and the Distributor's Discount are contained in Schedule "B"
hereto. All prices are quoted F.O.B. Sideware's shipping point,
exclusive of taxes, shipping, and insurance charges, which shall all be
the Distributor's costs.
4.2 CHANGE IN LIST PRICE - The Distributor hereby acknowledges that Sideware
may change the list price for the Software in Schedule "B" by giving
written notice to the Distributor no less than thirty (30) days prior to
the effective date of such changes. Any such written notice given by
Sideware shall set forth the new effective date and shall be attached
hereto as an Amended Schedule "B". Upon Sideware making changes to the
list price for the Software, the Distributor may request a renegotiation
of the Distributor's Discount specified in Schedule "B".
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4.3 If any change in the suggested list price and Distributor's Discount
results in a higher price to the Distributor, Sideware agrees to honour
the previous lower price for purchase orders based on the Distributor's
outstanding quotations to customers executed within ninety (90) days of
the price change. The Distributor will provide a list of outstanding
proposals within ten (10) working days of receiving notice of the change.
4.4 RESALE PRICES - The Distributor is free to determine its own resale
prices for the Software.
4.5 TAXES AND DUTIES - The prices listed in Schedule "B" are exclusive of all
applicable taxes and duties. The Distributor shall pay all taxes and
duties associated with the sale and delivery of the Software, exclusive
of taxes based on Sideware's income. If claiming tax exemption, the
Distributor must provide Sideware with valid tax exemption certificates.
4.6 PAYMENT TERMS - Payment to Sideware for delivered copies of the Software
shall be made no later than thirty (30) days after the invoice date.
4.7 NO WITHHOLDING OR SET-OFF - The Distributor shall not withhold any amount
due and owing pursuant to this Agreement either on the basis that the
Distributor disputes some issue in respect of, or its obligations under,
this Agreement, or as a set-off of obligations which are allegedly owing
to the Distributor by Sideware.
4.8 CURRENCY - All payments due hereunder to Sideware shall be made in United
States currency by wire transfer or cheque drawn on a United States bank,
unless otherwise specified by Sideware.
4.9 OVERDUE ACCOUNTS - Overdue payments for Software will bear interest at
the rate of 1.5% per month.
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5.0 RECORDS
5.1 ACCESS TO RECORDS - During the Term and for one (1) year following the
termination of this Agreement, the Distributor shall keep at its
principal place of business full, accurate and complete records and books
of account relating to the Software, and shall make them available for
examination, inspection and audit at all reasonable times by Sideware or
duly authorized independent accountants designated by Sideware. Sideware
and the accountants shall also be entitled to investigate generally all
the business transactions carried on by the Distributor relating to this
Agreement, to call for all vouchers supporting the account documentation,
including orders received, work sheets, invoices, bank account
documentation, and all other relevant documents, and to make notes and
copies of any information.
6.0 END USER LICENSE AGREEMENTS
6.1 All copies of the Software sold by the Distributor directly to end users
or indirectly to end users through resellers shall be subject to the
software license agreement provided by Sideware to the Distributor from
time to time, including any modifications or amendments thereof (the
"Software License Agreement"). The Distributor shall not install, nor
permit any of its resellers to install, a copy of the Software until the
end user purchasing the Software has executed the Software License
Agreement. The Distributor shall utilize the latest version of the
Software License Agreement when selling the Software directly to end
users or otherwise require the resellers to utilize the latest version.
7.0 SUBDISTRIBUTION AGREEMENTS
7.1 APPOINTMENT OF SUBDISTRIBUTORS - The Distributor may appoint
subdistributors of the Software provided that such subdistributors enter
into the subdistributor agreement provided by Sideware to the Distributor
with respect to the marketing, sale, installation
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and integration of the Software (the "Subdistributor Agreement").
Sideware reserves the right to change the Subdistributor Agreement from
time to time, and the Distributor shall utilize the latest version of
such agreement when appointing subdistributors.
8.0 DISTRIBUTOR'S RESPONSIBILITIES
8.1 INSTALLATION, INTEGRATION AND TRAINING - The Distributor will be
responsible for the installation and integration of all copies of
Software the Distributor sells directly to end users. The Distributor
shall further provide training to its subdistributors regarding the
installation, integration and use of the Software.
8.2 MAINTENANCE AND SUPPORT - The Distributor will be responsible for
operating telephone and Internet support systems to provide maintenance
and support to all end users and resellers of the Software. The
Distributor and Sideware will consult from time to time on the scope and
content of the support systems to be provided by the Distributor.
8.3 Notwithstanding the above, Sideware may make telephone and Internet
support systems available to the Distributor at Sideware's prevailing
standard charges.
8.4 FEES - The Distributor may, at its discretion, determine the fees to be
charged to end users and subdistributors with respect to the
installation, integration, training, maintenance and support services
provided by the Distributor.
8.5 MARKETING - The Distributor will use its best efforts to actively
promote, market and sell the Software in the Authorized Area. From time
to time as requested by Sideware, the Distributor will meet with Sideware
for review and consultation regarding the Distributor's marketing plans
and activities. For purposes of such review, the Distributor will make
available to Sideware such information concerning the Distributor's
marketing plans and activities as Sideware may reasonably request.
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8.6 SALES LITERATURE - The Distributor shall be responsible for developing
and producing its own literature for the promotion and marketing of the
Software, however, Sideware will provide samples of its sales literature
to the Distributor at no charge. The Distributor may purchase Sideware's
sales literature at Sideware's cost.
8.7 The Distributor agrees to conduct its marketing and sales of the Software
in a manner that reflects favourably on the Software and on the
reputation and good will of Sideware.
9.0 INTELLECTUAL PROPERTY RIGHTS
9.1 OWNERSHIP OF SOFTWARE - The Distributor acknowledges that all title and
intellectual property rights, copyright, moral rights, and patent rights
in and to the Software (including but not limited to any images,
photographs, animation, video, audio, music, text and "applets"
incorporated into the Software, and all written materials relating to the
Software) are owned or licensed by Sideware. Nothing in this Agreement
shall constitute a grant, transfer, or assignment to the Distributor of
any of the foregoing rights.
9.2 The Distributor warrants that neither it nor any of its employees will
knowingly convert to their own use or to the use of any other party any
industrial secrets or trade secrets owned or licensed by Sideware in
relation to the Software.
9.3 The Distributor acknowledges that Sideware would be irreparably harmed by
any breach of the Distributor's covenants in this section 9.0 and
accordingly, would be entitled to equitable and injunctive relief. The
Distributor also acknowledges that Sideware has developed and uses
valuable technical and non-technical information and trade secrets in the
Software. The Distributor will use its best efforts not to effect or
permit the removal or alteration of any trade names or marks, warning
labels, serial numbers or other similar markings affixed to the Software.
9.4 The Distributor shall not disclose, and shall keep confidential, all
confidential and proprietary information provided by Sideware or relating
to the Software. This provision
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shall not apply to information which (i) is or becomes part of the public
domain through no act or omission of the Distributor, (ii) the
Distributor receives from a third party acting without any obligation or
restriction of confidentiality in favour of Sideware, (iii) Sideware
releases from confidential treatment by written consent, or (iv) the
Distributor is required by any applicable law or court order to disclose.
The provisions of this clause shall survive the termination of this
Agreement.
10.0 WARRANTIES
10.1 Sideware's warranties with respect to the Software are limited to the
warranties set out in the Software License Agreement referred to in
section 6.0. Except as expressly set out below, Sideware makes no
separate warranty to the Distributor.
10.2 Sideware warrants to the Distributor that Sideware has all right, title,
ownership interest and/or marketing rights necessary to provide the
Software to the Distributor.
10.3 THE WARRANTIES AND COVENANTS SET FORTH ABOVE ARE COMPLETE AND ARE IN LIEU
OF ALL OTHER WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR
IMPLIED BY STATUTE, USAGE, CUSTOM OF THE TRADE OR OTHERWISE.
NOTWITHSTANDING ANY OTHER OR PRIOR STATEMENT, WRITTEN OR ORAL, SIDEWARE
MAKES NO OTHER WARRANTIES REGARDING THE SOFTWARE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, SIDEWARE EXPRESSLY DISCLAIMS WARRANTIES OR
REPRESENTATIONS OF WORKMANSHIP, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, LACK OF NEGLIGENCE, DURABILITY, ACCURACY OR COMPLETENESS OR
RESPONSES, LACK OF VIRUSES, THAT THE SOFTWARE WILL MEET ANY OF A
CUSTOMER'S NEEDS, OR THAT THE SOFTWARE WILL OPERATE ERROR FREE.
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11.0 INFRINGEMENT INDEMNIFICATION
11.1 INDEMNIFICATION FOR THIRD PARTY RIGHTS - Sideware shall indemnify and
hold harmless the Distributor, from any claim that the Software supplied
hereunder infringes a patent, copyright, trade secret, or similar
proprietary right of a third party. If such claim occurs, or in
Sideware's judgment is likely to occur, the Distributor agrees to allow
Sideware, at Sideware's option, to procure the right for the Distributor
to continue using the Software in accordance with the terms hereof or to
replace or modify the Software in a functionally equivalent manner so it
becomes non-infringing. If neither of the foregoing is available on
terms that are reasonable in Sideware's judgment, the Distributor, upon
written request by Sideware, shall return the Software to Sideware and
Sideware shall have no further obligations under this indemnity.
11.2 INDEMNIFICATION BY DISTRIBUTOR - The Distributor shall indemnify and hold
harmless Sideware, its shareholders, officers, directors or agents
against any and all losses which they may suffer or incur in connection
with any claim arising out of, as a result of, or relating in any manner
whatsoever to the Distributor's breach of any covenant, representation or
warranty contained in this Agreement.
11.3 INDEMNIFICATION BY SIDEWARE - Sideware shall indemnify and hold harmless
the Distributor, its shareholders, officers, directors or agents against
any and all losses which the Distributor may suffer or incur in
connection with any claim arising out of, as a result of, or relating in
any manner whatsoever to Sideware's breach of any covenant,
representation or warranty contained in this Agreement.
11.4 The foregoing indemnities shall be contingent upon the following:
(a) the party seeking indemnity shall give prompt written notice to
the other party for any claim, demand, or action for which
indemnity is sought;
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(b) the party seeking indemnity shall fully co-operate in the defence
or settlement of any such claim, demand or action and shall make
no admission without the indemnifying party's consent; and
(c) the party seeking indemnity shall obtain the prior written
agreement of the indemnifying party to any settlement or proposal
of settlement which agreement shall not be unreasonably withheld,
providing such settlement or proposal does not conflict with the
terms of this section.
12.0 DAMAGES AND LIABILITY
12.1 TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES AGREE THAT
IN NO EVENT SHALL SIDEWARE BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
INDIRECT, OR CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING, BUT NOT LIMITED
TO, DAMAGES FOR LOSS OF PROFITS OR CONFIDENTIAL OR OTHER INFORMATION, FOR
BUSINESS INTERRUPTION, FOR PERSONAL INJURY, FOR LOSS OF PRIVACY, FOR
FAILURE TO MEET ANY DUTY INCLUDING OF GOOD FAITH OR OF REASONABLE CARE,
FOR NEGLIGENCE, AND FOR ANY OTHER PECUNIARY OR OTHER LOSS WHATSOEVER)
ARISING OUT OF OR IN ANY WAY RELATED TO THE USE OF OR INABILITY TO USE
PRODUCTS DEVELOPED PURSUANT TO THIS AGREEMENT, EVEN IN THE EVENT OF THE
FAULT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF CONTRACT,
OR BREACH OF WARRANTY OF SIDEWARE, AND EVEN IF SIDEWARE HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL SIDEWARE'S TOTAL
LIABILITY, IN DAMAGES OR OTHERWISE, EXCEED THE AMOUNTS ACTUALLY RECEIVED
BY SIDEWARE FOR DEVELOPING THE PRODUCTS. NO ACTION REGARDLESS OF FORM,
ARISING OUT OF OR IN ANY WAY CONNECTED WITH PRODUCTS DEVELOPED BY
SIDEWARE MAY BE BROUGHT BY THE DISTRIBUTOR MORE
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THAN TWO (2) YEARS AFTER THE CAUSE OF AN ACTION HAS ACCRUED OR SUCH
SHORTER STATUTORY PERIOD AS MAY BE APPLICABLE.
13.0 TERMINATION
13.1 TERMINATION UPON NOTICE - Sideware may terminate this Agreement forthwith
upon written notice to the Distributor if:
(a) the Distributor is in breach of, or attempts to breach, any of its
obligations under this Agreement;
(b) the Distributor is in breach of any of its representations and
warranties under this Agreement;
(c) the Distributor has failed to protect the confidentiality and
proprietary rights of Sideware, or has otherwise failed to take
reasonable steps to protect such confidentiality and proprietary
rights as required herein; and/or
(d) the Distributor is unable to pay its debts when due or is
insolvent, is ordered or adjudged to be a bankrupt, is placed in
the hands of a receiver, enters into any scheme or composition
with its creditors, is dissolved, liquidated or wound up, makes an
assignment for the benefit of its creditors or takes the benefit
of any statutory protection for its debts.
13.2 TERMINATION FOR CONVENIENCE - Either of the parties may in its sole
discretion terminate this Agreement at any time without cause on sixty
(60) days written notice to the other party, such termination to become
effective at the conclusion of such sixty (60) day period.
13.3 CONSEQUENCES OF TERMINATION OR EXPIRATION - In the event of the
termination or expiration of this Agreement, the Distributor shall have
no further rights except those expressly
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granted by this section. Upon termination or expiration of this
Agreement, the Distributor shall:
(a) cease all marketing, sale and distribution of the Software;
(b) at Sideware's option and at the Distributor's expense, deliver to
Sideware all of the Software;
(c) refrained from stating or implying that the Distributor is
authorized to market, sell and distribute the Software;
(d) pay all amounts invoiced by Sideware notwithstanding that such
amounts may not yet be due to Sideware; and
(e) at Sideware's request, execute all such documents and do such
further acts and things which are necessary to assign and transfer
the Distributor's rights and obligations in any and all agreements
with end users, resellers, distributors or OEMS relating to the
Software to Sideware.
14.0 GENERAL
14.1 NOTICE - Any notice required or permitted to be given under this
Agreement shall be deemed to have been well and sufficiently given only
if delivered at the address of the other party herein before set forth or
to such other address as the other party may direct in writing.
14.2 MODIFICATION - No amendment to or modification of this Agreement shall be
effective unless set forth in writing and signed by both Sideware and the
Distributor.
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14.3 FURTHER ASSURANCES - The parties shall execute all such further documents
and do such further acts and things as are necessary or convenient to
carry out the full intent of this Agreement.
14.4 SUCCESSORS AND ASSIGNS - This Agreement shall be binding upon and shall
enure to the benefit of the parties hereto, their successors and
permitted assigns.
14.5 WAIVER - No waiver by either party of any default hereunder shall be
deemed as a waiver of any prior or subsequent default of the same or
other provisions of this Agreement.
14.6 SEVERABILITY - If any provision hereof is held invalid or unenforceable
by a court of competent jurisdiction, such invalidity shall not affect
the validity or operation of any other provision and such invalid
provision shall be deemed to be severed from the Agreement.
14.7 ASSIGNABILITY - The rights and license granted hereunder to the
Distributor may not be assigned by any act of the Distributor or by
operation of law without the consent of Sideware, such consent may be
arbitrarily withheld.
14.8 GOVERNING LAW - This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
laws of the Province of British Columbia.
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14.9 ENTIRE AGREEMENT - This Agreement constitutes the entire understanding of
the parties, and revokes and supersedes all prior agreements between the
parties and is intended as a final expression of their agreement.
IN WITNESS WHEREOF the parties hereto have recorded their agreement on
the above terms this _____ day of ____________, 1999, intending the agreement to
be effective from January 1, 1999.
SIDEWARE SYSTEMS INC.
Per:
"signed"
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SIDEWARE CORP.
Per:
"signed"
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Schedule "A"
THE SOFTWARE
The Software is the Xx. Xxxx Software, version 2.0 which consists of: (a)
instructions or statements in machine-readable object code, including the
Server Component, the CSR Interface Component, the Server Administration
Component, and the CSR Administration Component; and (b) all user manuals,
handbooks, and other written materials relating to (a) above.
Schedule "B"
SUGGESTED LIST PRICE OF PRODUCTS
AS OF JANUARY 1, 1999
(all amounts in U.S. Dollars)
A.
1. Xx. Xxxx Software version 2.0 $ 10,000 U.S.
2. Price for each additional CSR Interface Component license:
6 to 10 $ 1,000 U.S. per license
11 to 20 $ 850 U.S. per license
21 to 50 $ 700 U.S. per license
51 to 100 $ 550 U.S. per license
101 to 200 $ 400 U.S. per license
Above 200 to be negotiated
NOTES:
1. Xx. Xxxx Software version 2.0 includes 1 Server Component, 5 CSR
Interface Components, 1 Server Administration Component, and 1 CSR
Administration Component.
B. DISTRIBUTOR'S DISCOUNT
1. On Xx. Xxxx Software version 2.0 resold to end users, resellers, and
OEMS, the Distributor's Discount = 50%
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C. DISCOUNT ADJUSTMENT
1. The parties have established the Distributor's Discount at what they
believe would be agreed between unrelated parties dealing at arm's length
in the same circumstances.
2. If the Minister of National Revenue or his authorized representatives or
any similar authority should assess or reassess either or both of the
parties on the basis that the Discount should be different than that
established by the parties, then the Discount shall be deemed to be
determined as follows:
(a) such amount as may be agreed upon by the parties and all of the
relevant government tax authorities; or
(b) in the absence of any agreement pursuant to paragraph (a) above,
such amount as may be determined by a court having jurisdiction in
the matter (after all appeal rights have been exhausted or all
times for appeal have expired without appeals having been filed)
to be the Discount.
3. If at any time after the commencement of this Agreement, either of the
parties undertakes a transfer pricing study with respect to the Discount
and the results of the study indicate that the Discount should be
adjusted to comply with the arm's length requirement for "transactions"
between related parties (the "Proposed Adjustments"), the other party may
agree to make the Proposed Adjustments or reject the Proposed Adjustments
stating its reasons for rejecting the Proposed Adjustments. After
considering the other party's reasons for rejecting the Proposed
Adjustments, if any, the first party may propose Amended Proposed
Adjustments or obtain the opinion of an independent third party expert on
the matter. The other party shall:
(a) accept the Amended Proposed Adjustments; or
(b) reach some other agreement on the adjustments to the Discount
within forty-five (45) days of receiving the Amended Proposed
Adjustments; or
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(c) accept the opinion of the third party independent expert.
4. Where the Discount is adjusted pursuant to paragraphs 2 or 3, the parties
will make whatever payments or refunds are required to fully implement
the terms of the adjustment.
5. Each of the parties shall bear their own costs with respect to any
actions taken by a party under this section relating to Discount
adjustment.
