THIS DISTRIBUTION AGREEMENT is made and dated for reference effective of the
20th day of January 1999.
BETWEEN:
ASIAN PACIFIC COMPANY LTD.
(the "Distributor")
OF THE FIRST PART
AND:
UNITED DIGITAL COMMUNICATIONS LIMITED
(the "Producer")
OF THE SECOND PART
WHEREAS:
A. The Producer has developed a unique and useful portable palm-type
computer called the "Pulselink 1000". The "Pulselink 1000" can provide
real time stock quotations with charts and which can also be used a
pager, daytime organizer, address book and calculator.
B. The Distributor desires to obtain the non-exclusive right to distribute
and market the Pulselink 1000 (the "Product") in the United States of
America and Canada (the "Area");
C. The Producer has agreed to grant and the Distributor desires to obtain
the rights from the Producer (collectively the "Rights") with respect
to the Product or in respect of any invention or discovery by the
Producer of any product or device similar in design and/or function to,
or designed or appropriate for use with, or improving on the Product
for the distribution and sale of the Product (including the Pulselink
1000 as it may be improved in the future and any product or device
similar in design and/or function, or improving on the Pulselink 1000)
throughout the Area;
D. In order to maintain the Rights in good standing in accordance with the
terms of the Agreement the Distributor will be required to purchase at
least $250,000 worth of the Product from the Producer during the first
year term of this Agreement, and should the Distributor fail to
purchase at least $250,000 worth of the Product during the initial term
of this Agreement then the Distributor shall have thereby, without any
further act, immediately terminated its Rights under this Agreement
and, thereupon, the parties hereto acknowledge and agree that all
residual and contingent rights and obligations of both parties under
the terms of this Agreement shall also immediately terminate;
E. In order to maintain the Rights in good standing in subsequent years,
the Producer and Distributor agree to set amounts to be purchased (the
"Target") no later than January 1 of each subsequent year the Agreement
is in effect.
F. If the Producer and Distributor fail to agree to Target, for the term
of this Agreement, the Target will be set at a level 25% higher than
that of the previous calendar year.
G. The Distributor acknowledges that the Rights to market and distribute
the Product are unique and valuable assets of the Producer; and
H. The parties hereto wish to commit to writing the terms, covenants and
conditions of their respective rights and duties with respect to the
aforesaid.
NOW THEREFORE THIS AGREEMENT WITNESSETH that is consideration of the mutual
covenants and agreements herein contained, and subject to the terms and
provisions hereinafter set out, the parties hereto covenant and agree each with
the others as follows:
ARTICLE 1
GRANT
1.1 GRANT OF RIGHTS
The Producer hereby grants to the Distributor the Rights during the
continuance of this Agreement to distribute and market the Product,
within the Area, using the Product and such other items as the Producer
may hereafter offer for sale in connection with the Product.
ARTICLE 2
DISTRIBUTION AND SUPPLY
2.1 SUPPLY AND PRICING OF THE PRODUCT
The Product will be supplied by the Producer to the Distributor, at
prices published by the Producer from time to time, on the following
basis:
(A) The Distributor shall be responsible for and shall pay all
taxes or levies payable, if applicable, in connection with
the sale of the Product;
(B) Discount of 40% of the published prices will be provided to
the Distributor;
(C) The Producer shall be required to advise the Distributor at
least thirty days before any proposed increase in the price of
the Product and associated products to be charged by the
Producer to the Distributor under the terms of this Agreement;
(D) Subject to delays beyond the control of the Producer, shipment
of the Distributor's order shall be made by the Producer
within thirty days of the receipt of a purchase order from the
Distributor with respect to the supply of the Product and
associated products;
(E) All shipments of the Product and associated products to the
Distributor shall be delivered by the Producer to the
Distributor at the Distributor's designated place of business,
factory or warehouse located in the Area and such shipment
shall only be FOB such designation if such shipment has an
invoiced price in excess of $10,000; and
(F) All purchase order given by the Distributor to the Producer at
the time of delivery of Product shall be accompanied for each
such order by payment in either cash or by certified cheque,
money order or bank draft unless otherwise agreed to between
the parties hereto. There shall be no term of credit advanced
from the Producer to the Distributor unless the same is agreed
upon by the parties hereto in writing.
2.2 Delay
The Producer shall not be liable for any delays in delivery beyond the
control of the Producer, and shall endeavor to meet any delivery date
requested by the Distributor.
2.3 Risk
Except with respect to the Product and associated products which is
found to be defective or with respect to damage which is caused to such
Product in transport and outside the control of the Distributor, all
the Product and associated products shipped by the Producer to the
Distributor shall be at the risk of the Distributor following shipment
from the location or locations specified by the Producer in paragraph
"2.1(E)" hereinabove.
2.4 Warranties, Etc.
Any warranty, terms of sale or other promises made by the Distributor
to a customer of the Distributor, or to any other person, which is not
included in the Producer's warranty shall be the Distributor's
responsibility to fulfill, and the Producer shall have and take no
obligation or responsibility to the Distributor or its customers with
respect to the same.
ARTICLE 3
NAME OF THE PRODUCER'S SYSTEM AND OF THE PRODUCT
3.1 Ownership of Trade Marks
The distributor agrees that the trade xxxx and/or trade name "Pulselink
1000", other trade marks or trade names used in connection with the
Producer's business are owned by the Producer and identify the wares
and services produced and performed by the Producer. Neither this
Agreement nor the operation of the distribution business contemplated
by this Agreement confers or shall be deemed to confer upon the
Distributor any interest in the trade marks or trade names now or
hereafter owned or adopted by the Producer (the "Producer's Trade
Marks") including, without limiting the generality of the foregoing,
the trade xxxx and/or trade name.
3.2 Prohibition against Disputing Producer's Rights
The Distributor covenants and agrees not to, during or after the term
of this Agreement, contest the title to the Producer's trade Marks, in
any way dispute or impugn the validity of the Producer's Trade Marks or
take any action to the detriment of the Producer's interest therein.
The Distributor acknowledges that by reason of unique nature of the
Product and the Producer's aforesaid property rights and by reason of
the Distributor's knowledge of and association with the Product and
associated products during the term hereof, the aforesaid covenant,
both during the term of this Agreement and thereafter, is reasonable
and commensurate for the protection of the legitimate business
interests of the Producer.
3.3. Infringement of Trade Marks
The Distributor shall immediately notify the Producer of any
infringement of or challenge to the Producer's use of any of the
Producer's Trade Marks as soon as it shall become aware of the
infringement challenge.
ARTICLE 4
DISTRIBUTOR IS INDEPENDENT AND NOT AGENT
4.1 Independent Contractor
The Distributor shall be an independent contractor and not an employee
of the Producer, and the Producer assumes no obligations, contractual
or otherwise, existing or which may arise with respect to the
Distributor's operations. Nothing contained herein shall constitute a
partnership or joint venture between the parties hereto, and all sales
made by the Distributor shall be in the Distributor's name without
reference to the Producer if deemed so.
4.2 Distributor not Agent
The Distributor shall have no right to pledge the credit of the
Producer, and the Distributor is not, and shall not describe itself as,
the agent of the Producer or the manufacturer of any of the Product.
ARTICLE 5
DURATION OF AGREEMENT
5.1 Commencement
The Agreement shall be effective as and from the date of execution
hereof.
5.2 Expiration
Subject to earlier termination for failure to meet Target, the
Agreement will expire on the 10th anniversary of the date of execution
of this Agreement.
5.3 The First Year
For the purpose of this Agreement, the first year is defined as January
1, 1999 to December 31, 1999.
5.4 Subsequent Years
Subsequent years will mean calendar year starting on January 1,2000.
ARTICLE 6
CERTAIN COST OF PRODUCER
6.1 Cost Related to Assistance
Where the Producer provides training or sales promotion assistance
within the Area at the Distributor's request, the Distributor shall pay
to the Producer the Producer's actual costs incurred in connection
therewith.
ARTICLE 7
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PRODUCER
7.1 Producer will Supply
The Producer agrees to supply the Product and associated products to
the Distributor, upon the request of the Distributor, pursuant to the
terms of this Agreement.
7.2 Product Liability Insurance
If required, the Producer agrees to provide to the Distributor, not
more frequently than annually and upon the Distributor's written
request to do so, with evidence of product liability insurance.
ARTICLE 8
ADDITIONAL COVENANTS AND AGREEMENTS OF THE DISTRIBUTOR
8.1 Restriction to Area
The Distributor covenants and agrees with the Producer that the
Distributor will not at any time deal in the Product and associated
products or sell or solicit sale for the Product and associated
products except within the Area agree upon.
8.2 Standards of Operation, Record, Etc
During the currency of this Agreement the Distributor shall:
(A) Maintain a proper place of business, including a telephone
answering service, easily accessible to purchasers or
potential purchasers of the Product and associated products
form the Distributor during normal business hours in different
time zones;
(B) Service the Product and associated products at all
distribution locations in the Area efficiently and at
reasonable and competitive rates, such services to include
attending each distribution location at least once every month
unless otherwise agreed to in writing by the Producer;
(C) Maintain sufficient stock to service and properly replace all
of the Product and associated products sold by the
Distributor; and
(D) Make diligent efforts to sell the Product and associated
products within the Area.
8.3 Claims Etc. against the Producer
The Distributor hereby covenants and agrees to indemnify and save
harmless the Producer from and against all claims, demands, damage,
loss, costs and expense incurred by reason of any act, neglect, default
or representation of or by the Distributor, its employees or otherwise
arising in connection with the use and employment of the Product and
associated products or the sales of the Product and associated
products, save where the same is caused solely by the act or omission
of the Producer.
ARTICLE 9
ASSIGNMENT
9.1 Assignment by Distributor
The Distributor shall not assign this Agreement or any rights hereunder
in whole or in part unless it shall have first requested and obtained
the consent in writing of the Producer to such proposed assignment.
9.2 Assignment by Producer
This Agreement and all rights hereunder may be assigned or transferred
by the Producer at any time provided that the Producer's assignee
agrees to expressly honor the terms and conditions of this Agreement.
9.3 Deemed Assignment
The change in control of the Distributor shall be deemed to be an
assignment of this Agreement and therefore subject to paragraph 9.1
hereinabove.
ARTICLE 10
INDEMNIFICATION
10.1 In consideration of the premises and as an inducement to the Producer
to enter into this Agreement with the Distributor, the Distributor does
hereby covenant and agree with the Producer:
(A) To make the due and punctual payment of all monies and charges
payable under this Agreement;
(B) To effect prompt and complete performance of all and singular
the terms, covenants, conditions and provisions of this
Agreement contained on the part of the Distributor to be kept,
observed and performed; and
(C) To indemnify and save harmless the Producer from any loss,
costs or damages arising out of any failure to pay monies and
charges due under this Agreement to the Producer and/or the
failure of the Distributor to perform any of the terms,
covenants, conditions and provisions hereof.
10.2 This indemnity is absolute and unconditional and the obligation of the
Distributor shall not be released, discharged, mitigated, impaired or
affected by:
(A) Any extension of time, indulgences or modifications which the
Producer may extend or make the Distributor in respect of the
performance of any of the obligations of the Distributor under
any one or more of the provisions of this Agreement;
(B) Any waiver by or failure of the Producer to enforce any of the
terms, covenants, conditions and provisions of this Agreement;
(C) Any assignment of this Agreement or its rights hereunder by
the Distributor or by any trustee, receiver or liquidator, or
(D) Any consent which the Producer may give to any such
assignment.
ARTICLE 11
DEFAULT AND TERMINATION
11.1 Default of Distributor
This Agreement may be terminated, at the sole option of the Producer,
without prejudice to any other right or remedy of the Producer herein
or existing at law, upon the happening of any of the following events.
(A) The failure of the Distributor to effect prompt and complete
performance, within sixty days of written notice from the
Producer to do so, of all and singular the terms, covenants,
conditions and provisions in this Agreement contained on the
part of the Distributor to be kept, observed and performed; or
(B) The Distributor ceasing to carry on business or threatening
to cease carrying on business.
11.2 Default by Producer
Where the Producer has failed, following sixty days' written notice
from the Distributor to do so, to effect prompt and complete
performance of all and singular the terms, covenants, conditions and
provisions in this Agreement contained on the part of the Producer to
be kept, observed and performed, the Distributor may at its sole option
terminate this Agreement.
ARTICLE 12
GENERAL PROVISIONS
12.1 Notices
All notices, directions, or other instruments required to be given
hereunder shall be in writing and may be given by mailing the same by
prepaid registered mail or delivering the same to the party entitled to
receive the same at its address as indicated on the front pages of this
Agreement, or at such other address as a party hereto may in writing
advise. Any notice, direction or other instrument aforesaid if
delivered shall be deemed to have been given or made on the third
business day following the day on which it was mailed. During the
period of any mail strike notices shall only be given by personal
delivery.
12.2 Time of Essence
Time shall be of essence of this Agreement
12.3 Successor and Assigns
This Agreement shall ensure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors, the assigns of the Producer and the permitted assigns of
the Distributor.
12.4 Entire Agreement
This instrument contains the entire agreement of the parties hereto and
no representations, inducements, promises or agreements not embodied
herein shall be of any force or effect, unless the same are set forth
in writing signed by the parties hereto.
12.5 Invalid Provisions
Should any part of this Agreement for any reason be declared invalid or
unenforceable, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and
effect as if this Agreement had been executed with the invalid or
unenforceable portion thereof eliminated.
12.6 Applicable Law
This Agreement shall be construed in accordance with the laws of the
Province of British Columbia.
12.7 Number and Gender
All terms and words used in this Agreement, regardless of the number
and gender in which they are used, shall be deemed and construed to
include any other numbers, singular or plural, and any other gender,
masculine, feminine or neuter, or body corporate, as the contest or
sense of this Agreement may so require.
12.8 Captions
The captions appearing in this Agreement are inserted for convenience
of reference only and shall not effect the interpretation of this
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 20th day of
January 1999.
ASIAN PACIFIC COMPANY LTD.
-----------------------------
Per: Authorized Signatory
UNITED DIGITAL COMMUNICATION LIMITED
-----------------------------
PER: AUTHORIZED SIGNATORY
ADDEMDUM TO DISTRIBUTION AGREEMENT
BETWEEN:
ASIAN PACIFIC COMPANY LTD.
(the "Distributor")
AND: UNITED DIGITAL COMMUNICATIONS LIMITED
(the "Producer")
dated January 20, 1999.
1. This Addendum forms part of the aforementioned Distribution Agreement,
and terms defined therein have the same meaning in this Addendum.
2. The Distributor and Producer hereby agree as follows:
The requirement for the Distributor to purchase at least
$250,000 worth of product from the Producer during the first
year of the aforesaid Agreement shall be extended to the
subsequent year, which means the calendar year starting on
January 1, 2000.
Recital E on the first page is amended to waive the obligation to purchase
$250,000 of product during the first contract year, i.e., prior to
December 31, 1999, and such obligation is hereby imposed for the
calendar year ending December 31, 2000.
Dated this 30th day of December, 1999
ASIAN PACIFIC COMPANY LTD.
-------------------------
Per: Authorized Signatory
UNITED DIGITAL COMMUNICATIONS LIMITED
-------------------------
Per: Authorized Signatory
SECOND ADDENDUM TO DISTRIBUTION AGREEMENT
BETWEEN:
ASIAN PACIFIC COMPANY LTD.
(the "Distributor")
AND: UNITED DIGITAL COMMUNICATIONS LIMITED
(the "Producer")
dated January 20 1999.
1. This Second Addendum forms part of the aforementioned Distribution
Agreement, and terms defined therein have the same meaning in this
Addendum.
2. The Distributor and Producer hereby agree as follows:
The requirement for the Distributor to purchase at least
$250,000 worth of product from the Producer during the year
ending 2000 of the aforesaid Agreement shall be extended until
September 2003, and may be renewed for successive one-year
terms if both parties agree.
Dated this 1st day of May, 2000
ASIAN PACIFIC COMPANY LTD.
-------------------------
Per: Authorized Signatory
UNITED DIGITAL COMMUNICATIONS LIMITED
-------------------------
Per: Authorized Signatory
