END USER SOFTWARE PRODUCTS
DISTRIBUTION AND SALES AGREEMENT
DATED for reference the 1st day of January 2001.
BETWEEN:
SIDEWARE INTERNATIONAL SRL, organized
pursuant to the laws of Barbados, and
having an office at 0xx Xxxxxx, Xxxxxxxx,
Xx. Xxxxx, Barbados, West Indies
("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
0000 Xxxxxx Xxxxx Xxxxx, Xxxxxx, 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 (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.
C. This Agreement replaces the Distribution and Sales Agreement the
parties entered into effective November 1, 1999.
IN CONSIDERATION of the mutual promises and covenants contained
herein, the parties record their agreement as follows:
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 evaluation copies of the Software free
of charge for limited time periods following which the copies
must be returned or purchased.
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, 2001,
and subject to earlier termination in accordance with this
Agreement, shall expire on December 31, 2002. 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").
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 or Sideware's
manufacturing representative. 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 Software Prices - The prices payable by the Distributor for the
software are set out in Schedule "B" hereto. All prices are
quoted F.O.B. Sideware's shipping points, exclusive of taxes,
shipping, and insurance charges, which shall all be the
Distributor's costs.
4.2 Change in Prices - Distributor hereby acknowledges that Sideware
may change the prices for the Software contained 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".
4.3 If any change in the prices for the software results in higher
price to the Distributor, Sideware agrees to honour the
previously 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 the 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.
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 purchased by the Distributor 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 customer purchasing the
Software has agreed to the terms of the Software License
Agreement. The Distributor shall utilize the latest version of
the Software License Agreement when selling the Software directly
to customers or otherwise require the resellers to utilize the
latest version. The intention of the parties is that the
Distributor acquires each copy of the Software on the terms set
out in the Software License Agreement. Distributor and
Distributor's resellers may modify the Software License Agreement
on reselling the Software to an ASP to include additional
software products or services being supplied by the Distributor
or Distributor's resellers to the customer, and to restrict the
rights under the License Agreement granted by Sideware.
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 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, Distributor may subcontract the
provision of maintenance and support to end users and resellers
of the Software.
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.
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 For the purposes of this section 9.0, "Sideware" means Sideware
International SRL and Sideware Systems Inc.
9.2 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.
9.3 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.
9.4 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.
9.5 The Distributor shall not disclose, and shall keep confidential,
all confidential and proprietary information provided by Sideware
or relating to the Software. This provision 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 issued
by Sideware. 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.
11.0 INDEMNIFICATION
11.1 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.
11.2 The foregoing indemnities shall be contingent upon the following:
(a) Sideware shall give prompt written notice to the Distributor
for any claim, demand, or action for which indemnity is
sought;
(b) Sideware shall fully co-operate in the defence or settlement
of any such claim, demand or action and shall make no
admission without the Distributor's consent; and
(c) Sideware shall obtain the prior written agreement of the
Distributor 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 PURCHASED UNDER 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
SELLING THE PRODUCTS. NO ACTION REGARDLESS OF FORM, ARISING OUT
OF OR IN ANY WAY CONNECTED WITH PRODUCTS SOLD BY SIDEWARE MAY BE
BROUGHT BY THE DISTRIBUTOR MORE 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 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.
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 United States.
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 intending the agreement to be effective
from January 1, 2001.
SIDEWARE INTERNATIONAL SRL SIDEWARE CORP.
Per: Per:
"signed" "signed"
---------------------------- -------------------------
Authorized Signatory Authorized Signatory
Signed on: , 2001 Signed on: , 2001
Schedule "A"
The Software
Enterprise Interaction Suite (EIS) version 3.0 and subsequent updates
and new versions sold as a licensed product for an end user which
consists of (a) instructions and statements in machine-readable object
code for the modules purchased, and (b) all user manuals, handbooks,
and other written materials relating to (a) above.
Schedule "B"
A. Software Price for Sales to End Users and Resellers
The Software Price shall be equal to 87% of the Distributor's actual
selling price for the Software. To ensure that the selling price for
the Software is isolated from the other components of each sale to a
customer, the fair market values for hardware, Maintenance/Support
Fees, Installation and Training Services, and other items included in
the sale, shall be computed for each sale and deducted from the total
amount of each sale to a customer. The various components of each
sale will be valued as follows:
Hardware at Distributor's cost
Installation and Training Services an estimate of labour and
expenses as per the table
set out below
Maintenance/Support 20% of the license price charged,
provided that the discount from
Sideware Corp.'s suggested list price
for licenses cannot exceed 20%
Installation and Training charges on each sale of the Software shall
be determined as follows:
# Seats Licensed Installation Charge
5 $4,500
10 $5,000
20 $6,000
30 $7,000
40 $8,000
50 $9,000
75 $17,500
100 $25,000
150 $37,500
200 $50,000
300 $75,000
B. Software Price Adjustment
1. The parties have established the Software Price at what they
believe would be agreed between unrelated parties dealing at
arm's length in the same circumstances.
2. If the Internal Revenue Service or its authorized representatives
or any similar authority should assess or reassess either or both
of the parties on the basis that the Software Price should be
different than that established by the parties, then the Software
Price 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 Software Price.
3. If at any time after the commencement of this Agreement, either
of the parties undertakes a transfer pricing study with respect
to the Software Price and the results of the study indicate that
the Software Price 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
Software Price within forty-five (45) days of receiving the
Amended Proposed Adjustments; or
(c) accept the opinion of the third party independent expert.
4. Where the Software Price 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
Software Price adjustment.
