EXHIBIT 10.13
EXCLUSIVE SUPPLY AGREEMENT
THIS AGREEMENT is made and entered into as of the 20th day of December,
2001, by and between Source Technologies, Inc., a North Carolina corporation
with offices at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxxx, XX 00000 ("STI") and Web
Tools International, Inc., a California corporation with offices at 0000 Xxx
Xxxxxx Xxxxxx Xxxxx 000, Xxxxxxx Xxxxx, XX 00000 ("WTI").
WHEREAS, STI is engaged in the business of designing, developing,
marketing, integrating, distributing and selling, inter alia, desktop digital
laser printing technology, toner cartridges and integrated voting technology
solutions; and
WHEREAS, WTI desires to have specially manufactured for its exclusive
use a version of STI's product described as follows: AccuPoll electronic voting
hardware solution and toner cartridges (the "Products"); and
WHEREAS, WTI desires to purchase Products exclusively from STI for
resale and distribution in the Territory, and STI is willing to sell Products
exclusively to WTI, all upon the terms and subject to the conditions set forth
in this Agreement;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions.
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(a) Products shall mean the integrated AccuPoll hardware described more
fully in the STI AccuPoll Specification set forth in Schedule A herein as
amended, any subsequent specifications applicable to the Products (the
"Specifications") and any improvements to such Products made during the term of
this Agreement, which Products comprises a printer, touch screen, computer
processing unit, integrated case, power supply and all related control software
to be used in conjunction with the AccuPoll software.
(b) Pre-Existing Intellectual Property shall mean all intellectual
property worldwide including, but not limited to, all discoveries, inventions,
designs, formulae, algorithms, processes, software, technical information, data,
test results, apparatus and methods, whether or not patentable, and all patents,
copyrights, trade marks, mask works, trade secrets, know-how and all other forms
of intellectual property which are owned or controlled by either party prior to
this Agreement, or contemporaneously with this Agreement but not arising from
the performance of work under this Agreement.
(c) Developed Intellectual Property" shall mean all intellectual
property worldwide, including but not limited to, all discoveries, inventions,
designs, formulae, algorithms, processes, software, technical information, data,
test results, apparatus and methods, whether or not patentable, and all patents,
copyrights, trade marks, mask works, trade secrets, know-how and all other forms
of intellectual property conceived or first-reduced to practice or made during
the performance of work under this Agreement.
(d) Work performed by STI shall include the research and development
pursuant to the Specifications for the development of the Products.
(e) Field shall mean voting and elections systems worldwide.
2. Exclusivity.
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(a) Upon the terms and subject to the conditions contained herein, STI
hereby agrees to manufacture and sell to WTI such quantities of Products
pursuant to the specifications set forth in Schedule A to this Agreement (the
"Specifications") as WTI shall require for use and resale solely in the Field.
(b) WTI acknowledges and agrees that it shall acquire such Products exclusively
from STI and that it will use and resell the Products solely in the Field. If
STI is unable to produce and deliver on time the required quantity of Products,
WTI may obtain Products from another supplier.
(c) Nothing herein shall preclude STI from selling or otherwise providing
printers or printer-based solutions with different specifications or
customizations, to any other third party, government or businesses, including
for use or sale in the Field.
3. Purchase of Products.
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(a) STI shall sell Products to WTI at the prices set forth on Schedule
B, which may be amended from time to time at STI's sole discretion, upon sixty
(60) days after written notice thereof is given to WTI.
(b) The Product prices are exclusive of all taxes and all insurance,
freight, transportation, portage and similar charges and expenses, each of which
shall be the sole responsibility of WTI, and each of which will be added to
STI's invoices as a separate charge to be paid by WTI.
(c) All orders shall be placed by WTI in the form of a written purchase
order.
(d) All sales are final; except for warranty returns, no returns shall
be allowed. Due to the exclusive nature of this Agreement and the unique
specifications for the Products, WTI acknowledges that the Products are
customized goods sold by STI are unique to WTI and its customers and could not
be resold by STI. If WTI wrongfully rejects or revokes acceptance of such
Products or any part of them, or fails to purchase Products for which it has
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caused manufacturing to be commenced or raw materials to be procured, STI shall
invoice WTI, and may hold the goods and materials at WTI's risk and maintain an
action for the price.
(e) Lead time for purchases shall be set forth on Purchase Orders to be
submitted by WTI as mutually agreed. To the extent practical, all Products shall
be produced on a made-to-order basis; to meet other production schedules,
however, STI may, but shall not be required to, build a finished goods
inventory, in which case no storage charges shall apply (WTI may, however,
specifically request manufacture and storage of larger quantities, which shall
be charged in accordance with STI's then current storage formula; billing will
be upon delivery into storage in such instance, unless STI and WTI elect a
different alternative). WTI shall endeavor to provide forecasts of requirements,
and of spikes or troughs in demand. STI shall rely upon WTI's forecasts in
obtaining raw materials, and WTI shall compensate STI for all finished goods,
dedicated raw materials or work in process manufactured or purchased as a result
of such forecasts (not to exceed a one-month supply, unless WTI shall have
forecast a larger amount), after 12 months have passed from manufacture of any
goods or purchase of any raw materials.
4. Payment.
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Commercially reasonable Payment Terms for all Products will be set forth on
Purchase Orders to be issued by WTI and will be not dissimilar to standard STI
Payment Terms which are net 30 days cash upon receipt of invoice, F.O.B.
shipping point, freight collect or freight prepaid and added to the invoice,
unless otherwise agreed in a joint writing. Invoices not paid within 30 days of
invoice date are subject to late fees at 1.5% per month or the highest rate
allowed by law (if lower). Payments shall be tendered without deduction or
offset.
5. Warranty.
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(a) STI has all rights necessary to sell, distribute and exploit the
Products, and no other person has any interest therein or claims with regard
thereto. The Products do not infringe on the rights of any third party, whether
patent, trademark or copyright and no future sales of the Products by STI
pursuant to the terms hereof shall infringe on any third party patents.
(b) There are no claims, suits, actions or proceedings pending or,
threatened against STI, or in connection with the Products which could adversely
affect the transactions contemplated by this Agreement.
(c) WTI shall have good title to all Products sold by STI to WTI;
transfer and delivery of such goods to WTI shall be rightful and shall
effectively convey title to such goods to WTI free and clear of all liens,
claims, encumbrances and rights of third parties.
6. Limitation Of Liability.
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EXCEPT AS PROVIDED IN PARAGRAPH 6. BELOW, IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER, WHETHER IN CONTRACT, TORT OR UNDER ANY OTHER LEGAL THEORY,
FOR LOST PROFITS OR REVENUES, LOSS OF USE OR SIMILAR ECONOMIC LOSS, OR LOSS OF
GOODWILL, FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR SIMILAR
DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE SALE, DISTRIBUTION, DELIVERY,
NONDELIVERY, CONDITION, USE, OWNERSHIP, POSSESSION, OPERATION, TRANSPORTATION,
LOADING, UNLOADING OR RETURN OF THE PRODUCTS, OR FOR ANY CLAIM MADE AGAINST
EITHER PARTY.
7. Indemnification.
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(a) STI agrees to indemnify and hold WTI harmless from and against any
and all claims, demands, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys' fees), irrespective of the theory upon
which based (including, without limitation, negligence and strict liability),
arising out of any breach of STI's warranties hereunder, including claims of
infringement of patents, copyrights or other proprietary rights of third
parties.
(b) WTI agrees to indemnify and hold STI harmless from and against any
and all claims, demands, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys' fees), irrespective of the theory upon
which based (including, without limitation, negligence and strict liability),
arising out of any breach of WTI's warranties hereunder, including claims of
infringement of patents, copyrights or other proprietary rights of third
parties.
8. Confidentiality.
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The parties shall maintain and preserve during the Term of this
Agreement and at all times thereafter the confidentiality of all information
concerning the other, its business and Products. The parties agree that they
will not, and will not permit any of their employees or agents to use or
disclose to any third person any confidential information, except to the extent
necessary to perform their obligations hereunder during the Term of this
Agreement as provided herein. The provisions of this paragraph shall survive any
expiration or termination of this Agreement.
9. Term.
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Unless sooner terminated as provided herein, this Agreement shall
commence on the date hereof and shall continue for five years from the date of
execution ("Initial Term"). Upon the expiration of such Initial Term, this
Agreement shall be automatically renewed for successive one-year terms, unless
sooner terminated as provided herein or unless either party gives the other
party written notice of cancellation at least ninety (90) days prior to the
expiration of the then current term. The Initial Term of this Agreement and any
renewals is referred herein as the "Term."
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10. Intellectual Property.
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(a) Each party's Pre-existing Intellectual Property shall remain the
exclusive property of such party, and except for the license rights to use
certain Pre-existing Intellectual Property expressly provided herein, neither
party acquires any right, title or interest in the other party's Pre-existing
Intellectual Property. Each party shall promptly notify the other of any actual
or threatened misappropriation or infringement of the other party's Pre-existing
Intellectual Property rights which comes to such party's attention.
(b) During the Term of this Agreement, STI grants to WTI a
non-exclusive, perpetual, royalty-free, paid up, world-wide license, under all
of STI's Pre-existing Intellectual Property (as such STI Intellectual Property
is included in the Products) and to any third party technology which has been
incorporated into the Products, for the purpose of using, selling and
distributing the Products within the Field.
(c) During the Term of this Agreement, WTI grants STI a non-exclusive,
non-transferable, perpetual, royalty-free, paid up, world-wide license to the
WTI Intellectual Property (as such WTI Intellectual Property is included in the
Products) for the sole purpose of using, selling and distributing the Products
worldwide so at WTI's request and does not directly compete with WTI worldwide.
(d) In view of the confidential relationship contemplated between STI
and WTI, and provided that WTI makes payment in full to STI for all expenses
reasonably and directly related to the Developed Intellectual Property, the
parties hereby agree and represent that all right, title and interest in
Developed Intellectual Property conceived or first reduced to practice or made
during the performance of the work under this Agreement, including copyright
renewal rights, are assigned and will be assigned to WTI, and such Developed
Intellectual Property shall be and shall remain the exclusive property of WTI,
whether or not patented or copyrighted, and without regard to any expiration or
termination of this Agreement.
(e) WTI grants to STI a non-exclusive, perpetual, royalty-free,
paid-up, worldwide license to WTI's Developed Intellectual Property necessary to
sell, lease or distribute the Products at WTI's request.
11. Miscellaneous.
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(a) NOTICES. All notices, requests, demands or other communications
required or permitted to be given or made hereunder shall be in writing and
delivered personally or sent by pre-paid, first class, certified or registered
air mail (or the functional equivalent in any foreign country), return receipt
requested, or by facsimile addressed to the intended recipient thereof at the
address and facsimile number set out below (or to such other address or
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facsimile number as either party may from time to time duly notify the other).
Any such notice, demand or communication shall be deemed to have been duly given
immediately if given or made by confirmed facsimile, or three (3) days after
mailing if given or made by letter. The addresses and facsimile numbers for the
parties for purposes of this Agreement are:
to WTI: Xxxxxx Xxxxxx
President
Web Tools International
0000 Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
to STI:
Miles Xxxxx
President
Source Technologies, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
000-000-0000 Direct Voice
000-000-0000 Facsimile
(b) WAIVER. No failure to exercise, and no delay in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
No express waiver or assent of any breach of or default in any term or condition
of this Agreement shall constitute a waiver of or an assent to any succeeding
breach of or default in the same or any other term or condition hereof.
(c) GOVERNING LAW/FORUM. Regardless of the place of contracting, place
of performance or otherwise, this Agreement and the rights of the parties
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of North Carolina, without regard to conflicts of laws
principles. If any controversy or claim between the parties arises under or
relates to the transactions contemplated herein, only federal or state courts in
North Carolina shall have jurisdiction to hear and decide such matter. STI
hereby irrevocably (a) submits to the exclusive jurisdiction of such courts, and
(b) waives any and all jurisdictional defenses STI may have to the institution
of any such action in any such court.
(d) SEVERABILITY. All rights and restrictions contained herein may be
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and they are intended to be limited to the
extent necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any term of this Agreement shall be held to be illegal,
invalid or unenforceable by a court of competent jurisdiction, it is the
intention of the parties that the remaining terms hereof shall constitute their
agreement with respect to the subject matter hereof and all such remaining terms
shall remain in full force and effect.
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(e) ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof and
this Agreement contains the sole and entire agreement between the parties with
respect to the matters covered thereby. This Agreement may not be modified or
amended except by an instrument in writing signed by both parties.
(f) ASSIGNMENT. The obligations and benefits, rights and duties created
by this Agreement are specific and personal and shall not be assigned or
delegated by either party, except that the same shall be assigned in the event
of a merger in which the assigning party is not the surviving entity, or a
transfer or sale of all or substantially all of the assets or ownership
interests of STI or of WTI or business to another entity that is not a direct
competitor of the non-assigning party. If either party assigns this Agreement to
a direct competitor of the other party by merger, operation of law or otherwise,
the non-assigning party shall have the right to terminate this Agreement. This
Agreement enures to the benefit of and binds the parties and their respective
successors and permitted assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed under seal as of the day and year first written above.
Source Technologies, Inc. Web Tools International
By: /s/ Miles Xxxxx By: /s/ Xxxxxx Xxxxxx
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Miles Xxxxx Xxxxxx Vadura
President President
