EXHIBIT 4.7
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 15th day of January, 2003
BETWEEN :
(1) BOSCOM LTD. registered in Israel , registration number 512236431, whose
registered office address is at Xxxxx Xxxxx, Xxxxxxxx Xxxxxxxxxx Xxxx, X.X.
Xxxxxx 00000 (the "COMPANY"), and
(2) BOSANOVA INC., a corporation duly organised under the laws of the State of
Nevada, and having offices at 0000 Xxxx Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx
00000 (the "DISTRIBUTOR"),
W I T N E S S E T H :
(A) The Company is the designer, manufacturer and producer of certain Products
(as hereinafter defined);
(B) The Company wishes to appoint Distributor as a non-exclusive distributor of
Products in the Territory on the terms and conditions hereinafter set forth
; and
(C) Distributor wishes to be appointed as a distributor of the Products on the
terms and conditions set out below;
NOW, THEREFORE, the parties hereto have agreed as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context requires otherwise the following
expressions shall have the following meanings:
"BUSINESS LOGO" means the business logo reproduced in Schedule 2
"INTELLECTUAL PROPERTY" means patents, trade marks (including the Trademarks), service marks,
registered designs, applications for any of the foregoing, copyright,
database, sui generis rights, moral rights, Know-How, confidential
information, trade or business names and any other similar protected
rights in any country
"KNOW-HOW" means know-how, drawings, circuit diagrams, computer programs,
expertise, designs, processes, specifications, techniques and any other
information relating to the design and manufacture of the Products and
all other technical information which might reasonably be of commercial
interest to either party in the development, design, manufacture, sale
or supply of the Products
"MARKETING FUNDS" means the funds contributed by the Company for use by the Distributor
for marketing purposes
"PRODUCTS" means the products listed in Schedule 1
"PRODUCT DOCUMENTATION" means the operating manuals and other literature accompanying the
Products for use by end-users, customers and distributors and any
amendments issued by the Company from time to time
"SALES TARGETS" means the sales targets set out in Schedule 4 which shall include any
revised sales targets agreed by the parties from time to time
"TERRITORY" means USA, Canada & Mexico
"TRADEMARKS" means BOS Better On-Line Solutions Inc and BOScom, a BOS company
1.2 The headings used in this Agreement are included for convenience only and
are not to be used in construing or interpreting this Agreement.
1.3 Any reference to one gender shall include all genders and any reference to
a person shall include people and partnerships, firms, limited liability
companies, corporations, and other unincorporated bodies and companies and
corporate bodies and all other legal entities of whatever kind and however
constituted.
1.4 Any reference to a clause or a schedule shall (unless otherwise
specifically provided) be to a clause or schedule of this agreement and any
reference in a schedule to a paragraph shall unless otherwise specifically
provided mean a reference to a paragraph of that schedule.
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2. APPOINTMENT
2.1 The Company hereby;-
2.1.1 appoints the Distributor as a non-exclusive distributor of Products
in the Territory; and
2.1.2 grants to the Distributor a non exclusive licence to use the Business
Logo and the Trademarks in connection with the sale of the Products on
the terms and conditions and conditions set out below.
2.2 The Distributor shall perform its obligations hereunder in accordance with
the terms of this Agreement and shall comply with all reasonable
instructions relating to the Products which the Company may give to the
Distributor from time to time.
2.3 The Distributor shall not be entitled to assign any of its rights or
obligations under this agreement but shall be entitled to appoint
sub-distributors to perform such obligations in the Territory provided that
(1) the prior written consent to the appointment of the sub-distributor is
obtained, (2) the appointment is made by a written sub-distributorship
agreement that sets forth the same confidentiality provisions with regard
to the Company's information as is set forth herein and is subject to the
written consent of the Company and (3) the Distributor shall at all times
remain responsible to the Company for the performance and obligations of
its sub-distributors..
2.4 The Distributor shall not be entitled to any priority of supply of the
Products over the Company's other customers but the Distributor will be
entitled to an allocation of production and delivery not worse than that
indicated by the date of delivery of its orders to the Company as compared
to the date of delivery of orders to the Company by other customers.
2.5 The Distributor represents and warrants to the Company that it has the
ability and experience to carry out the obligations assumed by it under
this Agreement.
2.6 The Distributor shall be entitled to describe itself as the Company's
authorised Distributor for the sale of the Products in the Territory, but
shall not hold itself out as the Company's agent for the sales of the
Products. The Distributor shall not have the right to bind the Company in
any way and shall not represent nor hold itself out as having the right to
bind the Company in any way.
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2.7 The Company may from time to time advance to the Distributor amounts to be
used by the Distributor for Co-op advertising. Such amounts shall be due
and owing by the Distributor to the Company until paid and applied to Co-op
advertising. An initial amount of $100,000 shall be advanced promptly after
execution of this Agreement. The Distributor shall keep detailed books and
records throughout the term of this Agreement with regard to unpaid and
unapplied amounts advanced by the Company for Co-op advertising and shall
send a copy of its Co-op advertising account (including all unpaid and
unapplied amounts) to the Company each Monday during the term of this
Agreement, updated through the previous Friday.
3. TERM OF AGREEMENT
This Agreement shall commence on the date hereof and unless sooner
terminated in accordance with the provisions of this Agreement shall
continue in effect for an initial period of one year and successive renewal
periods of one year thereafter unless one party gives to the other a
written notice that it intends not to renew the term of the Agreement not
less than 60 days prior to the termination of the then current term of the
Agreement.
4. SALE AND PURCHASE OF THE PRODUCTS
4.1 The provisions of Schedule 3 shall apply to all Products sold to the
Distributor by the Company and if there is any inconsistency between the
provisions of Schedule 3 and the other provisions of this Agreement then
the latter shall prevail.
4.2 All orders for Products must be forwarded to the Company on the Company's
usual form Order Form, a copy of which is attached hereto as Exhibit A
unless the Distributor obtains written consent in advance from the Company
to place an order for the Products in another manner.
5. TRAINING
5.1 The Company shall provide any necessary training to the Distributor or its
personnel in accordance with its standard scale of charges in force from
time to time and the Distributor will pay the Company for such services at
such rate.
5.2 The Distributor shall ensure that all personnel engaged in the sale,
distribution and installation of the Products attend such of the Company's
training courses (at the Distributor's expense) as the Company deems
necessary from time to time.
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5.3 The Distributor shall offer to (and shall use reasonable efforts to
persuade) all of its customers to take such training in the use of the
Products as the Company shall recommend for particular products. The
training shall be paid for by the Distributor. The Company shall charge the
Distributor for such training such amounts as are in accordance with the
Company's standard scale of charges for training as shall be in effect from
time to time
6. DISTRIBUTOR'S OBLIGATIONS
6.1 The Distributor shall:
6.1.1 place all of its orders for Products only with the Company and use
reasonable efforts to promote and sell the Products throughout the
Territory;
6.1.2 at all times conduct its business in a manner which reflects
favourably on the Products and on the good name and reputation of the
Company;
6.1.3 neither by itself nor with others participate in any illegal,
deceptive, misleading or unethical practices which may be detrimental
to the Products, the Company or the public interest;
6.1.4 if any dispute shall arise between the Distributor and any of its
customers in respect of the Products (or their installation or
support) promptly inform the Company and comply with all reasonable
directions of the Company in relation thereto;
6.1.5 at all times employ a sufficient number of sales and technical staff
having sufficient training and expertise properly to demonstrate, sell
and instruct customers in the use of the Products and capable of
addressing customer enquiries and needs regarding the Products;
6.1.6 at all times maintain adequate demonstration facilities for the
Products;
6.1.7 supply to the Company such reports, returns and other information
relating to orders and projected orders for the Products as the
Company may from time to time reasonably require;
6.1.8 not make any promises or representations or give any warranties or
guarantees in respect of the Products except such as are consistent
with those which accompany the Products or as expressly authorised by
the Company in writing;
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6.1.9 use the Company's Trademarks only in the registered or agreed style
and only in connection with the marketing and sale of the Products
except with the written consent of the Company and not use the
Company's Intellectual Property in connection with any other products
or services;
6.1.10 except with the Company's prior written consent, not alter, obscure,
remove, interfere with or add to any of the trade names, Trademarks,
Business Logo, markings or notices affixed to or contained in the
Products or the Product Documentation at the time at which they are
delivered to the Distributor;
6.1.11 except with the Company's prior consent, not alter or interfere with
the Products or the Product Documentation;
6.1.12 if it installs the Products, properly install them, following the
Company's installation guidelines, and be responsible to the Customer
for the proper installation of the Products;
6.1.13 offer product support contracts to customers the form of which have
been approved by the Company, and comply therewith;
6.1.14 not offer or undertake any installation work in respect of the
Products that it does not have the expertise to perform and
immediately advise the Company of the potential installation work;
6.1.15 provide efficient after-sales service in respect of the Products;
6.1.16 observe all applicable laws and regulations in respect of the
Products and obtain all necessary licences, consents and permissions
required for the storage, marketing and sale of the Products in the
Territory;
6.1.17 obtain prior written consent from the Company for any advertising
for the Products or any advertising which includes or refers to any of
the Company's Intellectual Property;
6.1.18 achieve the sales targets;
6.1.19 comply with the terms of schedule 3; and
6.1.20 not sell any product which it has not obtained from the Company and
that is competitive with the Products.
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7. COMPANY'S OBLIGATIONS
7.1 The Company shall:
7.1.1 provide the Distributor with such marketing and technical assistance
that is reasonably required to assist the Distributor with the
promotion, sale and installation of the Products;
7.1.2 use its best efforts to provide the Distributor with adequate
quantities of the Products as ordered by Distributor;
7.1.3 give reasonable advance written notice of any significant change to
any of the Products or of the Company's intention to discontinue
selling any of the Products to the Distributor;
7.1.4 offer to the Distributor any product of the Company which can
reasonably be regarded as a replacement for or successor to any
Product which the Company discontinues;
7.1.5 provide the Distributor promptly with all information and assistance
necessary to enable the Distributor properly to perform its
obligations hereunder in respect of any modified or enhanced versions
of the Products;
7.1.6 invoice the Distributor for the Products to the Distributor and for
any product support required by a customer;
7.1.8 provide necessary training to customers if requested to do so by the
Distributor or the customer, at the expense of the Distributor.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 All Intellectual Property rights in or relating to the Products and the
Product Documentation are and shall remain the property of the Company or
its licensors. The parties hereby agree that any improvements, innovations
or discoveries made by the Distributor in connection with the Products
and/or the Product Documentation shall be the sole and exclusive property
of the Company. The Distributor hereby agrees that it shall co-operate
fully with the Company to procure the registration and ownership of such
improvements, innovations or discoveries ("Developments") in the name of
the Company, including having its employees sign such documentation
relating to the ownership of Developments.
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8.2 The Distributor shall:
8.2.1 not cause or knowingly permit anything to be done which may damage or
endanger any of the Intellectual Property rights or assist others to
do so;
8.2.2 notify the Company immediately if the Distributor becomes aware of
any illegal or unauthorised use of any of the Products or the Product
Documentation or any of the Intellectual Property rights and assist
the Company (at the Company's expense) in taking all steps necessary
to defend the Company's rights therein;
8.2.3 affix such notices to the Products or their packaging or advertising
associated therewith or the Product Documentation as the Company may
reasonably require;
8.2.4 indemnify the Company for any liability incurred to third parties for
any use by the Distributor and its customers or any of them of the
Products or the Product Documentation or any of the Intellectual
Property rights therein or relating thereto otherwise than in
accordance with this Agreement;
8.2.5 acknowledge that any goodwill or reputation for the Product generated
by this Agreement will belong to the Company and, upon termination of
this Agreement for whatever reason, the Distributor shall not be
entitled to claim recompense or compensation for such enhanced
goodwill or reputation. The provisions of this clause shall survive
the termination of this Agreement;
8.2.6 affix its own trademarks, service marks, trade names or other form of
marking to the Products only if it obtains the prior written consent
of the Company.
9. CONFIDENTIALITY
9.1 Neither party shall use or divulge or communicate to any person (save where
permitted by this Agreement or with the written authority of the other
party or as may be required by law):
9.1.1 any confidential information concerning the Products, customers,
business, accounts, Know-How, finance or contractual arrangements or
other dealings, transactions or affairs of the other party and its
affiliates and subsidiaries which may come to the party's knowledge
during the continuance of this Agreement (each party shall use its
best efforts to prevent the unauthorised publication or disclosure of
any such information or documents containing such information and to
ensure that any person to whom such information or documents are
disclosed by such party is aware that the same is confidential to the
other party); or
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9.1.2 any of the terms of this Agreement.
9.2 Each party shall ensure that its employees are aware of and comply with the
confidentiality and non-disclosure provisions contained in this Article 9
and shall indemnify the other party against loss or damage which the other
may sustain or incur as a result of any breach of confidence by any such
party's employees.
9.3 If either party becomes aware of any breach of confidence by any of its
employees or any other Person, it shall promptly notify the other party and
give the other party all reasonable assistance in connection with any
proceedings which the other party may institute.
9.4 The provisions of this Article 9 shall survive the termination of this
Agreement but the restrictions contained in sub-clause 9.1 shall cease to
apply to any information which may come into the public domain otherwise
than through unauthorised disclosure by the receiving party or its
employees.
10. RESERVATION OF RIGHTS
10.1 The Company reserves the right:
10.1.1 to make modifications or additions to the Products or the Product
Documentation or the packaging or finish thereof in any way whatsoever
as the Company may in its discretion determine;
10.1.2 to discontinue selling any of the Products to the Distributor; and
10.1.3 to require the Distributor not to use or to cease to use any
advertising or promotional materials in respect of the Products which
the Company considers not to be in the Company's best interests;
10.1.4 to refuse to accept any orders for Products from the Distributor;
and
10.1.5 to set aside marketing funds (as defined in schedule 5).
11. TERMINATION
11.1 Notwithstanding anything else contained herein, this Agreement may be
terminated by the Company forthwith on giving notice in writing to the
Distributor if:
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11.1.1 the Distributor shall (or shall threaten to) sell, assign, part with
or cease to carry on its business or that part of its business
relating to the marketing, sale and installation of the Products; or
11.1.2 control (as defined for the purposes of the United Kingdom Income
and Corporation Taxes Xxx 0000, s 416) of the Distributor shall be
transferred to any person or persons other than the person or persons
in control of the Distributor at the date hereof (but the Company
shall only be entitled to terminate within a period of 60 days after
the Company has been notified in writing of the change in control);
11.2 Notwithstanding anything else contained herein, this Agreement may be
terminated by either party forthwith on giving notice in writing to the
other if:
11.2.1 the other party commits any material or persistent breach of any
term of this Agreement and (in the case of a breach capable of being
remedied) shall have failed, within 30 days after the receipt of a
request in writing from the other party so to do, to remedy the
breach;
11.2.2 the other party shall have a receiver or trustee appointed over it
or over any part of its assets or shall pass a resolution for winding
up or a court of competent jurisdiction shall make an order to that
effect, or if the other party shall make an assignment for the benefit
of its creditors or shall become insolvent.
11.3 Either Party shall have the right to terminate this Agreement upon sixty
(60) days advance written notice to the other Party, with or without cause.
11.4 Each order for the Products that is accepted by the Company shall be
regarded as a separate contract of sale and no default under any such order
shall be grounds for terminating this Agreement.
12. EFFECT OF TERMINATION
12.1 On the termination of this Agreement, all rights and obligations of the
parties under this Agreement shall automatically terminate except for such
rights of action as shall have accrued prior to such termination and any
obligations which expressly or by implication are intended to come into or
continue in force on or after such termination
12.2 The Distributor shall, immediately on termination:
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12.2.1 eliminate from all its literature, business stationery,
publications, notices and advertisements all references to its being
an authorised Distributor of the Company; and
12.2.2 cause any software products held for demonstration purposes relating
to the Company or the Products to be erased from all computers of or
under the control of the Distributor and shall certify to the Company
that the same has been done;
13. LIABILITY AND RISK
13.1 Notwithstanding anything else contained in this Agreement, the Company
shall not be liable to the Distributor for loss of profits or contracts or
other indirect or consequential loss or damage whether arising from
negligence, breach of contract or any other course of action relating to
this Agreement. This provision does not exclude liability for death or
personal injury caused by the Company's negligence.
13.2 Except as expressly provided in this Agreement, no warranty, condition,
undertaking, or term, express or implied, statutory or otherwise, as to the
condition, quality, performance, durability or fitness for purpose of the
Products is given or assumed by the Company and all such warranties,
conditions, undertakings and terms are hereby excluded.
14. INDEMNITIY
14.1 The Company shall indemnify, keep indemnified and hold harmless the
Distributor against any and all losses, claims, damages, costs, charges,
expenses, liabilities, demands, proceedings and actions which the
Distributor may sustain or incur or which may be brought or established
against it by any Person and which in any case arise out of or in relation
to or by reason of:
14.1.1 any claim or allegation that any of the Products infringes any
intellectual property rights of any third party;
14.1.2 any claim that the Products are not of warranted quality and which
are not due to the Distributor's action or any breach of its
obligations under this Agreement.
14.2 The Distributor shall indemnify, keep indemnified and hold harmless the
Company against any and all losses, claims, damages, costs, charges,
expenses, liabilities, demands, proceedings and actions which the Company
may sustain or incur or which may be brought or established against it by
any Person and which in any case arise out of or in relation to or by
reason of:
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14.2.1 any action in the performance of any of its obligations and/or in
connection with the installation and of the Products;
14.2.2 any action or omission of the Distributor or its employees;
14.2.3 the manner in which the Distributor markets, sells and installs the
Products (unless authorised by the Company);
14.2.3 the independent supply by the Distributor of any products or
services for use in conjunction with or in relation to the Products;
or
14.2.4 any breach or alleged breach of any applicable laws or regulations
relating to the storage, marketing or sale by the Distributor of the
Products
14.3 If any claim is made against either party for which indemnification is
sought under this Article 14, the indemnified party shall consult with the
other and shall co-operate with the other in relation to any reasonable
request made by the other in respect of such claim.
14.4 Any indemnification under this Article 14 shall include all court costs,
expenses of investigation, reasonable attorneys fees and all other
reasonable expenses relating thereto.
15. FORCE MAJEURE
Neither Party shall be liable for any failure to perform any of its
obligations hereunder (other than the payment of money) which results from
an act of God, the elements, fire, flood, component shortages, riot,
insurrection, industrial dispute, accident, war, embargoes, legal
restrictions or any other cause beyond the control of the Party.
16. ENTIRE AGREEMENT
The parties have read and understand this Agreement (including the
Schedules annexed hereto) and agree that it constitutes the complete and
exclusive statement of the agreement between them with respect to the
subject matter hereof (including the grant of a security interest by the
Distributor to the Company) and supersedes all proposals, representations,
understandings and prior agreements, whether oral or written, and all other
communications between them relating thereto.
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17. WAIVER
No delay or failure of either party in enforcing against the other party
any term or condition of this Agreement and no partial exercise by either
party of any right hereunder, shall be deemed to be a waiver of any right
of that party under this Agreement.
18. NOTICES
18.1 Any notice or other information required or authorised by this Agreement to
be given by either party to the other may be given by hand or sent (by
Federal Express or comparable courier service, facsimile transmission or
comparable means of communication) to the other party at the address
detailed at the beginning of this Agreement or such other address as may
from time to time be notified in writing by one party to the other.
18.2 Any notice or other information given by courier pursuant to Article 18.1
which is not returned to the sender as undelivered shall be deemed to have
been given two (2) business days after the envelope containing the same was
so posted; and proof that the envelope containing any such notice or
information was properly addressed, or pre-paid, and that it has not been
so returned to the sender shall be sufficient evidence that such notice or
information has been duly given.
19. ASSIGNMENT
This Agreement is personal to the parties and neither party may assign,
transfer, or otherwise part with this Agreement or any right or obligation
under it without the prior written consent of the other.
20. NO AGENCY
The relationship between the Company and the Distributor shall be that of
seller and buyer. The Distributor, its officers, agents and employees,
shall under no circumstances be considered the agents, employees or
representatives of the Company. Neither Party shall have the right to enter
into any contracts or binding commitments in the name of or on behalf of
the other Party in any respect whatsoever.
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21. SEVERABILITY
If any provision in this Agreement is found or held to be invalid or
unenforceable, then the meaning of such provision shall be construed, to
the extent feasible, so as to render the provision enforceable, and if no
feasible interpretation would save such provision, it shall be severed from
the remainder of this Agreement which shall remain in full force and effect
unless the severed provision is essential and material to the rights or
benefits received by either party. In such event, the parties shall use
their best efforts to negotiate, in good faith, a substitute, valid and
enforceable provision or agreement which most nearly effects their intent
in entering into this Agreement.
22. LAW
The validity, construction and performance of this Agreement shall be
governed by the laws of the State of Arizona, USA and shall be subject to
the exclusive jurisdiction of the courts of the State of Arizona and the
federal courts sitting therein.
23. AMENDMENT
This Agreement cannot be amended, terminated or discharged except in
writing signed by the party to be charged.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
BOSCOM LTD.
acting by
_____________________________
Office:
_____________________________
_____________________________
BOSANOVA INC.
acting by
_____________________________
Office:
_____________________________
_____________________________
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