Exhibit 99.4(x)
Distribution Agreement - HA.LO Canada Inc.
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT made as of the 10th day of December, 1998 between
MICRA SOUNDCARDS INC. ("Micra"), a corporation incorporated under the laws of
the Province of Ontario having its principal place of business at 000 Xxxx
Xxxxxx Xxxxx Xxxx, Xxxxxxxx Xxxx, Xxxxxxx and HA-LO CANADA INC. ("HA-LO"), a
corporation incorporated under the laws of the Province of Ontario having its
principal place of business at 000 Xxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx.
WHEREAS MICRA is engaged primarily in the development and manufacture of certain
talking trading cards products (collectively, "Micra Products");
AND WHEREAS HA-LO is in the business of marketing, selling and distributing
specialty advertising products;
AND WHEREAS HA-LO is desirous of acquiring the worldwide right and license to
sell the Products for corporate promotions ("Corporate Promotions"), with or
without corporate logos, whereby corporate clients of HA-LO ("HA-LO Clients")
purchase Micra Products from HA-LO for the purpose of consumer promotions, in
packs, give-aways, incentive program premiums, advertising specialities or for
any other related promotional purpose;
NOW THEREFORE IN CONSIDERATION of the premises and mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Grant of Licenses. Subject to the terms and conditions hereof, Micra hereby
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grants to HA-LO the non-transferable, worldwide right and license to market,
distribute and sell the Micra Products to HA-LO Clients for Corporate
Promotions:
(a) on an exclusive basis in connection with the 2000 Summer Olympics to be
held in Sydney, Australia and the 2002 Winter Olympics to be held in Salt Lake
City, Utah; and
(b) on a non-exclusive basis in connection with any other events or for any
other Corporate Promotion purpose, provided that upon receipt of written
notification by HA-LO satisfactory to MICRA that HA-LO has secured an order or
that HA-LO reasonably expects to secure within one month an order for MICRA
Products from a HA-LO Client, HA-LO shall thereafter have the non-transferable,
worldwide right and license to market, distribute and sell the Micra Products to
that HA-LO Client on an exclusive basis and MICRA shall thereafter cease to
market, distribute or sell or offer to market, distribute or sell Micra Products
to that HA-LO Client or any company or other business entity identified by HA-LO
as a competitor of that HA-LO Client.
2. Rights Retained by Micra. For greater certainty, HA-LO acknowledges and
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agrees that the rights and licenses granted to HA-LO hereunder are limited to
Corporate Promotions and that no provision hereof shall prevent, restrict, limit
or otherwise affect MICRA's right and ability to market, distribute and sell
"licensed" Micra Products for which Micra is required to obtain a license from
or pay a royalty to a third party or Micra Products which are sold on a "retail"
basis.
3. Term. This Agreement shall remain in full force and effect for a term (the
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"Term") of approximately three (3) years commencing on the date hereof and
expiring on December 31, 2001.
4. Covenants of HA-LO. HA-LO hereby covenants and agrees:
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(a) to use its best commercial efforts to market, distribute and sell the Micra
Products to the HA-LO clients for Corporate Promotions on a worldwide basis;
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(b) to meet with MICRA at least once every six (6) months during the Term to
review HA-LO's efforts hereunder, discuss pending orders and identify any HA-LO
Clients in respect of which exclusivity is required in accordance with
subsection 1(b) hereof;
(c) to obtain all necessary consents, approvals, licenses, sub-licenses and
other rights (collectively, the "Approvals") necessary in connection with all
images, sounds, logos, trademarks and other markings incorporated in or on any
Micra Products ordered by HA-LO;
(d) to indemnify and save harmless Micra and its directors, officers,
shareholders, employees, agents, affiliates, associates and other
representatives from and against all claims, demands, costs, expenses, actions,
causes of actions and other liabilities whatsoever arising from any failure by
HA-LO to obtain all necessary Approvals; and
(e) not to market, distribute or sell or offer to market, distribute or sell,
and to use its reasonable best efforts to ensure that its agents, contractors
and other representatives do not market, distribute or sell or offer to market,
distribute or sell, any other "talking trading card" or products reasonably
similar to or competitive with Micra's Products.
5. Covenants of Micra. MICRA hereby covenants and agrees:
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(a) to provide a minimum one year replacement or full refund warranty on all
Micra Products;
(b) to make all necessary arrangements to ensure the availability of Micra
Products in sufficient quantities to meet HA-LO's orders promptly;
(c) not to retain the services or otherwise sell or offer to sell Micra
Products to any company or entity whose principal business activity is Corporate
Promotions;
(d) to provide HA-LO with a list of all companies or entities which Micra or
any of its agents or representatives have contacted or are in discussions with
in respect of Corporate Promotions and, where Micra deems appropriate on the
advice of HA-LO, to cease such discussions and/or refer such company or entity
to HA-LO;
(e) not to sell or offer to sell Micra Products directly to any HA-LO Client
from whom HA-LO has previously secured or reasonably anticipates securing an
order for Micra Products; and
(f) to indemnify and save harmless HA-LO and its directors, officers,
shareholders, employees, agents, affiliates, associates and other
representatives from and against all claims, demands, costs, expenses, actions,
causes of actions and other liabilities whatsoever arising from or in respect of
any of MICRA's patents, trademarks or other intellectual property;
6. Pricing and Payment Terms. Pricing of the Micra Products shall be
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negotiated in good faith by MICRA and HA-LO in the context of each order placed
by HA-LO during the Term. Each order shall be payable, as to thirty per cent
(30%) of the purchase price, in cash and as to the balance of the purchase
price, by an irrevocable, transferable letter of credit of a recognized
financial institution, in each case, delivered with the purchase order.
7. Shipping. Micra shall use its best reasonable efforts to promptly and
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timely ship, and custom imprint where applicable, the Micra Products ordered by
HA-LO in order to meet the delivery dates requested by HA-LO.
8. Termination. This Agreement may be terminated by either party:
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(a) on 60 days prior written notice given to the other party; or
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(b) immediately if the other party is declared bankrupt or insolvent, files for
voluntary bankruptcy, insolvency or similar creditor protection or otherwise
ceases to carry on its business.
9. Intellectual Property.
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(a) All patents, trade secrets, copyright, trademarks, trade names, service
marks, quality designations and other proprietary words, symbols and technology
of MICRA (collectively, "Intellectual Property") are and remain the exclusive
property of MICRA, whether or not specifically registered or recognized under
applicable law. HA-LO will not take any action that jeopardizes MICRA's rights
in, or acquire any right to, the Intellectual Property except the limited rights
specified below in subsection 9(b).
(b) HA-LO may use the trademarks, tradenames, service marks and quality
designations (collectively, the "Trademarks") exclusively to advertise and
promote the Micra Products. All advertisements and promotional materials shall
(i) clearly identify MICRA as the owner of the Trademarks, (ii) conform to
MICRA's current trademark and logo type guidelines, and (iii) otherwise comply
with any applicable notice or marking requirement.
(c) Before publishing or disseminating any advertisement or promotional
material bearing a Trademark, HA-LO shall deliver a copy of the advertisement or
promotional materials to MICRA for approval. If MICRA gives notice within five
(5) business days of delivery that the proposed use of its Trademark is
inappropriate, HA-LO shall refrain from placing the advertisement or promotional
materials in circulation.
(d) HA-LO shall immediately notify MICRA if it learns (i) of any potential
infringement of MICRA's right in and to the Intellectual Property by a third
party, or (ii) the use of Intellectual Property may infringe the proprietary
rights of a third party.
10. Confidentiality.
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(a) Each party acknowledges that it may disclose to the other, in connection to
the performance of this agreement, data or other information which is
confidential or proprietary, the disclosure of which to or use by any
unauthorized party may be damaging (collectively, the "Confidential
Information"). No Confidential Information (which shall be deemed to include the
content of this Agreement) of a party shall be disclosed by the other party to
any person, except those of its employees or agents having a need to know for
the purposes contemplated by this agreement. If either party discloses any of
its Confidential Information to the other party, the party receiving the
Confidential Information shall (i) maintain it in confidence; (ii) use at least
the same degree of care in maintaining its secrecy as it uses in maintaining the
secrecy of its own proprietary confidential and trade secret information, but in
no event with less care than is reasonable given the nature of the information;
(iii) use it only to fulfil its obligations under this agreement unless
hereinafter agreed in writing by the other party; and (iv) return all copies,
notes, packages, diagrams, computer memory media and other materials containing
any portion of the Confidential Information to the disclosing party upon its
reasonable request given the rights and obligations of the parties hereunder.
(b) Neither party shall have any obligations of non-disclosure concerning any
portion of the Confidential Information of the other party of which (i) is known
or independently developed by the non-disclosing party before receipt, directly
or indirectly, from the disclosing party; (ii) is lawfully obtained, directly or
indirectly, by the non-disclosing party under no obligation of confidentiality
from a third party acting in good faith; or (iii) is or becomes publicly
available other than its result to act or failure to act by the non-disclosing
party, its agent or employees.
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11. Notice. Any notice required to be given in writing under this Agreement
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shall be delivered or telecopied to the respective address or telecopier number
of the parties set forth below:
HA-LO Canada Inc. Micra Soundcards Inc.
000 Xxxxxx Xxxxx Xxxx 000 Xxxx Xxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxxxxx
X0X 0X0 L45 1C6
Attention: Xxxxxx Xxxx Attention: Xxxxxx Xxxxxxxxxx, President
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
12. General.
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(a) This Agreement shall be governed by the laws of the Province of Ontario and
the parties hereby irrevocably attorn to the exclusive jurisdiction of the
Courts of the Province of Ontario in respect of the subject matter hereof.
(b) MICRA and HA-LO are independent contractors and neither is the agent,
representative, partner or joint venturer of the other.
(c) If any provision of this Agreement is deemed to be invalid or
unenforceable, that provision shall be severed from this agreement and the
remainder of this letter agreement shall remain in full force and effect. If
such severed provision is fundamental to the relationship governed by this
Agreement, then either party shall have the right to terminate the
distributorship and related rights as if the severance of such provision was a
material breach of this letter agreement and such termination may only be
effected in accordance with section 8 above.
(d) This Agreement contains the entire understanding between the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous written or oral negotiations and agreements. This Agreement may
be amended only in writing signed by both parties.
(e) Neither party may transfer or assign this Agreement, or any part hereof,
without the prior written approval of the other, not to be unreasonably
withheld; provided, however, that MICRA may transfer or assign this agreement to
a third party without the prior written consent of HA-LO so long as the
assignment or transfer is in connection with the sale or transfer of all or
substantially all of the assets of MICRA and the assignee agrees in writing to
be bound by the terms and conditions of this Agreement.
(f) This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns.
(g) The provisions of sections 4(d), 9, 10 and 12(a) shall survive any
termination of this Agreement.
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(h) This Agreement may be executed in one or more counterparts and may be
executed and delivered by facsimile transmission and such counterparts and
facsimile transmissions, when taken together, shall be deemed to constitute one
and the same binding agreement.
DATED as of this 10th day of December, 1998.
HA-LO CANADA INC.
Per: (signed) "Xxxxxx Xxxx"
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Authorized Signing Officer
MICRA SOUNDCARDS INC.
Per: (signed) "Xxxxxx Xxxxxxxxxx"
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Authorized Signing Officer
