Exhibit 28
This Agreement dated September 10, 1997 is made between Maxbase, Inc., a
corporation of the State of New Jersey whose address is 000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxx, referred to as "MAXBASE" and All Communications
Corporation, a corporation of the State of New Jersey whose address is 000
Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx referred to as "ALL".
WHEREAS, MAXBASE is the owner of a certain Patent issued by the United States
Patent Office on June 25, 1996 under #5,530,951 covering a telephone line
sharing device, (the "Patent"); and
WHEREAS, MAXBASE manufactures a product as described in the Patent
incorporating the line sharing device; and
WHEREAS, MAXBASE desires to appoint ALL as its exclusive distributor of the
product which it manufactures under the Patent including variations and
improvements; and
WHEREAS, ALL is presently engaged in the marketing and sale of
telecommunications and videoconferencing products; and is agreeable to acting
as the exclusive distributor of MAXBASE products;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth the parties agree as follows:
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1. Purpose
This agreement is made to establish ALL as the exclusive distributor of the
MAXSHARE 2 product manufactured under the Patent within the United States and
such other countries where the Patent may become effective. This agreement
shall also set forth the products along with the respective duties,
obligations and responsibilities of the parties.
2. Relationship Between Parties
The relationship between the parties shall be that of buyer and seller.
Neither party shall be considered the agent or representative of the other
party. Neither party shall have the right to bind the other contractually to
any third party in any respect whatsoever.
3. Exclusive Distributorship
MAXBASE appoints ALL as the exclusive and sole distributor of the MAXSHARE 2
product effective immediately upon execution of this agreement and for an
initial period of two years, which period shall not commence to run until ALL
receives its first shipment of product under the terms of this agreement.
ALL shall be reappointed for succeeding one year periods, providing that ALL
has fulfilled its sales quotas under the terms of this agreement. So long as
ALL performs all its duties, obligations and responsibilities under the terms
of this agreement MAXBASE shall not be permitted to make any direct or
indirect sales to any customer whatsoever. In addition, upon execution of
this agreement, MAXBASE shall deliver to ALL its customer base list and all
backlogs of orders. Unless this agreement is terminated pursuant to the
provisions of Paragraph 6 hereunder MAXBASE shall not license or otherwise
authorize the manufacture or sale of any products described in the Patent,
directly or indirectly, to any third party.
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4. MAXBASE represents that:
a. That it is the sole owner of U.S. Patent 5,530,951 and that there
are no other claims or liens against it, and that the only challenge to said
Patent is that now presently pending in the United States District Court for
the District of New Jersey, wherein MAXBASE has instituted an action for
infringement of the Patent and is defending a counterclaim of invalidity of
the Patent.
b. That there are no other agreements appointing any third parties as
agent for the sale of its products.
c. That it presently maintains product and general liability insurance
coverage in a minimum of $1,000,000.00 per incident. Prior to the first
delivery of product hereunder MAXBASE shall deliver a copy of the above
described insurance policies.
d. Before the first sale, its products will be approved or certified by
the Federal Communications Commission and the Underwriters Laboratory.
e. That it has the exclusive right to market the products covered by
this agreement in the United States and has the right to grant exclusive and
non-exclusive rights to others to market such products in the United States.
f. MAXBASE has obtained all necessary licenses and registrations for
the use of its tradenames from appropriate governmental authorities.
5. Use of Tradename
ALL shall be allowed to use the tradename Maxshare, and may add to the
product label the words "Made exclusively for All Communications Corporation"
or a similar legend for the term of this agreement. The tradename
registrations will remain the property of MAXBASE.
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6. Termination
This Agreement may only be terminated by the parties hereto for failure of
another party to perform any duty, obligation or responsibility required
hereunder.
7. Termination -- Obligations of the Parties
Upon termination of this agreement, ALL shall cease to be the distributor of
MAXBASE products, provided however that ALL shall have the right to continue
the use of the tradenames and trademarks of the MAXBASE product until it
disposes of its inventory or the expiration of 30 days following the
termination date, whichever is earlier.. MAXBASE may purchase from ALL any
of the products at a mutually agreed upon price, but not in excess of the
cost to ALL.
8. Minimum Purchase Requirements
ALL shall purchase from MAXBASE during the first two years of this agreement,
10,000 units of the MAXSHARE 2 product.
a. During the First Contract Year ALL will purchase a minimum of 2,500
MAXSHARE 2 units. The initial delivery shall be 250 units for which
production shall commence immediately upon the execution of this agreement
and delivery of the deposit and Purchase Order. Within 30 days of the
execution of this agreement, ALL will deliver a Purchase Order for a minimum
of 2,500 MAXSHARE 2 units.
b. During the Second Contract Year ALL shall purchase the balance of
the product not purchased during the First Contract Year at a monthly rate of
not less than one twelfth (1/12) of the remaining balance not purchased in
the First Contract Year.
c. This exclusive distributorship shall automatically renew at ALL's
option for additional one year periods providing ALL purchases at least
10,000 units in each preceding
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Contract Year after the initial two year period described in subparagraphs a.
and b. of this paragraph.
d. ALL shall have the right to terminate all or part of its purchase
requirements under subparagraph b. above in the event the present litigation
described in Paragraph 4 a. is concluded adversely to MAXBASE.
All purchases shall be at the rate of $210.00 per unit. The parties
recognize that the cost of production may be significantly reduced by the
size of ALL's commitment. Therefore, the parties agree that any reduction in
cost of production below $140.00 as a result of these economies shall be
shared on a sixty percent to forty percent basis, the sixty percent share
being used to reduce ALL'S purchase price. Cost of production shall be
defined as cost of component parts and contract manufacturer charges only.
MAXBASE shall deliver to ALL a report under its president's certification of
its cost of production within 30 days after each production run. ALL will
deliver to MAXBASE purchase orders in accordance with the quotas above set
forth. Each purchase order after the initial 250 units shall be accompanied
by a Letter of Credit issued by The Bank of New York which represents a
deposit of $140.00 multiplied by the number of units ordered. The Letter of
Credit may only be drawn upon to pay for the costs of manufacture and
components to outside third parties, and shall be deemed the funds of ALL
until drawn upon. MAXBASE agrees at any time when requested by ALL to
execute and file a security agreement under the Uniform Commercial Code
recognizing ALL's interest in the inventory and work in progress. The
balance of purchase price will be paid within 30 days of delivery without
restriction.
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9. Advertising
ALL shall be solely responsible for all advertising and marketing expenses
and efforts regarding the products covered by this agreement. MAXBASE will
cooperate with ALL in providing for advertising and promotional materials of
MAXSHARE 2.
10. Product Warranties
MAXBASE sells the products with the intent that they are free of defects in
manufacture and workmanship at the time of sale. MAXBASE warrants that each
of its products will be free of defects in material and workmanship under
normal use and service. However, the obligation of MAXBASE under this
warranty shall be limited to the requirement that it make good at its place
of business the repair or replacement of any unit it deems defective which
are returned to the Company within 365 days from the date of delivery to the
purchaser. Such return of the product to MAXBASE must be made with
transportation charges prepaid. Any and all warranties or guarantees shall
immediately cease and terminate as to any products or parts thereof which are
altered, or modified, or otherwise misused without the prior express and
written consent of MAXBASE.
11. Customer Complaints
ALL agrees to handle all of the complaints of its customers. ALL realizes
that it must properly fulfill its responsibility in this regard in order to
protect the goodwill of MAXBASE and ALL in the sale of the products. ALL
shall report to MAXBASE all complaints which it is unable to resolve
promptly. MAXBASE shall provide technical training and instruction to ALL
personnel to operate a help desk and to create a service manual for MAXBASE
products.
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12. Infringement
MAXBASE agrees to keep in force its present right to use the tradename,
trademark, labels, copyrights, pending Patents, and Patents affiliated with
the products covered by this agreement. MAXBASE reserves the right to
exercise, at its own expense, and at its sole discretion, its common law and
statutory rights against any infringements of its right to so use such
tradename, trademark, labels, copyrights, pending Patents, and Patents. .
13. Sales Efforts by ALL
ALL will develop the marketing and sales of the products covered by this
Agreement. ALL will provide an adequate sales staff and customer relations
organization. ALL may market the products through dealers, catalogs, direct
marketing or any other method it chooses. ALL will maintain adequate
inventories of the products and promote the sale of same vigorously and
effectively.
14. No Assignment
Neither party to this agreement may assign any right or interest in this
agreement without the written consent of the other party provided however
that ALL shall have the right to assign this agreement to a wholly owned
subsidiary, provided ALL remains liable under the terms of this agreement.
15. Option to Purchase
Provided that ALL is not in default hereunder, it shall have the option upon
30 day's written notice at any time during the term of this agreement, and
subject to the approval of its shareholders, if required, to purchase all the
assets of MAXBASE free and clear of all liens, claims and charges for the
cash price of $2,000,000.00 plus $70.00 for every unit under
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10,000 units which ALL has not purchased under the provisions of Paragraph 8.
Such purchase shall include the Patent and all rights thereunder, together
with all research, drawings, production, development, management and related
data pertaining to the MAXBASE products, as well as all trademarks and
tradenames. Assets shall not include any cash or cash equivalents held by
MAXBASE at the time such notice is given. After such notice, ALL shall have
six months to exercise due diligence in the investigation of MAXBASE. ALL
shall have free access to all of MAXBASE's books, records, personnel,
professionals and documents. If ALL is not satisfied from its investigation
it shall have the right at the end of the six month period in its sole and
absolute discretion to withdraw its notice of exercise of the option without
any liability whatsoever.
16. Insolvency
In the event that either party shall file a petition in any court for
protection under the bankruptcy laws, or such petition shall be filed by any
creditor or claimant against either party involuntarily, or has a receiver
appointed, or makes an assignment for the benefit of creditors, which is not
dismissed within 60 days, or becomes insolvent, than this agreement shall be
voidable at the option of the other party, and such avoidance may be deemed
retroactive to the time of the event giving rise to such rights should the
other party so choose. Furthermore, upon the occurrence of any event giving
rise to MAXBASE's right to avoid this agreement, MAXBASE shall have the right
to repossess any and all inventory held by ALL acquired under this agreement,
without notice to ALL, and ALL hereby waives any legal rights to prohibit
such repossession. In the event MAXBASE is subject to creditor action as
described above, then ALL shall be deemed in any such event to be the
exclusive licensee under the Patent and authorized to manufacture MAXBASE
products free of royalty.
17. Intentionally left blank.
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18. Binding Effect
This agreement shall benefit and be binding upon the successors and assigns
of the parties.
19. Attorney Fees
If either party brings a legal action or other proceeding to enforce this
agreement, or because of an alleged dispute, breach, default or
misrepresentation relating to this agreement, the successful or prevailing
party in such dispute shall be entitled to recover reasonable attorney's fees
and other costs incurred in such action or proceeding. Such relief shall be
in addition to any other relief to which that party may be entitled.
20. Notices
Unless otherwise requested by either party, all notices required or permitted
to be made under this agreement shall be made in writing and shall be sent to
the name and address indicated at the head of this agreement.
21. Complete Understanding
This agreement terminates and supersedes all prior agreements between the
parties, if any. This agreement sets forth the entire agreement between the
parties. This agreement may not be changed, altered, or amended except by a
writing signed by all parties.
22. Governing Law
The parties agree and intend that this agreement will be construed and
interpreted in accordance with the laws of the State of New Jersey.
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23. Severability
If any part of this agreement is void, voidable, invalid, or unenforceable,
for any reason, the agreement shall then be considered divisible as to such
part with the remainder of the agreement remaining as valid and binding as
though such part were not included in the agreement.
24. Signing.
Each person who signs this agreement warrants that he or she does so with the
full and legal authority to execute this agreement on behalf of the
respective parties to this agreement.
IN WITNESS WHEREOF, the parties execute this agreement on the date indicated.
ALL:
By: /s/Xxxxxxx X. Xxxxx
-------------------
XXXXXXX X. XXXXX,
President
MAXBASE:
By: /s/Xxxxxx Xxxxxxxx
------------------
XXXXXX XXXXXXXX,
President
00
Xxxxx xx Xxx Xxxxxx )
ss:
County of Union )
I CERTIFY that on September 10, 1997, Xxxxxxx Xxxxx came before me in
person and stated to my satisfaction, under oath, that:
this instrument was signed by Xxxxxxx Xxxxx who is the President of All
Communications Corporation . The entity named in this instrument and was
fully authorized to and did execute this instrument on its behalf.
Signed and sworn before me on
September 10, 1997
/s/Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx,
An Attorney at Law of the State of
New Jersey
State of New Jersey )
ss:
County of Union )
I CERTIFY that on September 10, 1997, Xxxxxx Xxxxxxxx came before me in
person and stated to my satisfaction, under oath, that:
this instrument was signed by Xxxxxx Xxxxxxxx who is the President of
Maxbase . The entity named in this instrument and was fully authorized to
and did execute this instrument on its behalf.
Signed and sworn before me on
September 10, 1997
/s/Xxxxxx Xxxxx Xxxxx
----------------------------------
Xxxxxx Xxxxx Xxxxx,
An Attorney at Law of the State of
New Jersey
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