EXCLUSIVE DISTRIBUTORSHIP AGREEMENT EXTENSION
Exhibit
10.5
VIDATECH
Kft.
EXCLUSIVE
DISTRIBUTORSHIP AGREEMENT EXTENSION
This
exclusive distributorship agreement (hereinafter:
Agreement) is an extension of a previous agreement
entered into on June 15, 2006 by and between
▇▇▇▇
▇▇▇▇▇▇, 1237 Budapest, Nyír u.
30. 1/12., Hungarian citizen, hereinafter:
PRINCIPAL), on the one hand,
and
VIDATECHTechnológiai
Kutató,
Fejlesztő és Szolgáltató Korlátolt
Felelősségű Társaság (head office: ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ út 94-96.; registered by the [Budapest] Metropolitan Court as Court of
Registration under No. ▇▇-▇▇-▇▇▇▇▇▇, represented by: ▇▇▇ ▇▇▇▇▇▇, Managing
Director; hereinafter: AGENT), on the other
hand
(referred
to hereinafter separately as Party and collectively as Parties).
Whereas
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Parties
wish to extend the previous agreement by granting additional exclusive
distribution rights to the agent as set fort
below
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The
Parties agreed this day under the following terms and conditions:
I. Definitions
used in the Agreement
Plan
Documentation shall be interpreted by the Parties as the full technical
description and design of TothTelescope.
Measurement
Units shall be interpreted by the Parties as the metric system.
II. Objective
of the Agreement
The
objective of this Agreement shall be that the Principal assigns the exclusive
distribution right relating to the telescope named PUT 1.0 (hereinafter:
Product) to the Agent for the purpose that the Agent manufactures the Product,
has it manufactured, utilises it in manufacturing processes, acquires purchase
orders, satisfies market demands, searches for manufacturing partners and
subcontractors and finances the costs to be incurred with the involvement
of
venture capital.
In
the
framework of further cooperation the development of the basic Product, the
industrial rights protection, patents, product developments should by financed
by the agent. Furthermore, the Agent may potentially transfer the exclusive
right of utilisation to a third party and the Parties should proportionately
share in the fees payable by such third party.
The
Agent
will continue to maintain the e-commerce website developed for the direct
distribution of the product.
III. Subject-matter
of the Agreement
Based
on
the Agreement the Principal grants a licence for the sales and utilisation
of
the Product and the Agent shall pay a fee for this licence.
IV. Handover
– takeover of rights
1.
What will be covered by the assigned right?
The
Agreement shall cover all methods and extents of utilisation for 2 (two)
additional years reckoned from signature, without any territorial
restriction.
The
Principal shall warrant during the full term of the Agreement that no third
party has any right preventing or restricting the utilisation.
2.
Exclusivity, transferability
On
the
basis of the express agreement of the Parties the Agent acquires, by this
Agreement, an exclusive right for the utilisation of the Product and the
Parties
expressly exclude that the Principal himself or any other third party should
utilise the Product.
The
Parties expressly agree that the Agent will be entitled to assign the rights
embodied and transferred through this Agreement to any third party, and/or
to
grant a right of use to any third party without any further permission or
consent.
3.
Obligation of training
The
Principal shall inform the Agent as user on any possible rights and important
circumstances relating to the Product and transfer the economic, technical
and
organisational know-how and experience related to the implementation of the
invention.
In
case
of the assignment of the rights to a third party the Principal will be charged
by the obligation set out in this Clause towards such third party. The Principal
as trainer will be responsible for the success of the training.
4.
Patent register
The
Parties will proceed for the sake of the registration of this Agreement in
the
patent register kept by the Hungarian Patent Office. In the framework thereof
they will request the recording of an exclusive licence of utilisation for
the
benefit of the Agent.
The
Principal undertakes the obligation to make and/or to obtain the declarations
required for the Principal’s being recorded in the patent register, furthermore,
he will make all legal acts, which are required for the acquisition of right
by
the Agent and the performance of which will be possible for the Agent without
undertaking any or materially big difficulties.
5.
Starting date of utilisation
15
July
2007
6.
Consideration, compensation
50%,
say
fifty percent of all revenues due to the Agent in consequence of the utilisation
of the Product (including the fees payable by the third party, if the Agent
assigns the exclusive right of utilisation to a third party) shall be due
to the
Principal, as gross licence fee, i.e. based on the express agreement of the
Parties the licence fee shall include the amount of the general turnover
tax
[VAT] payable and also that of the deductible taxes and other public
dues.
All
costs
in connection with the utilisation of the Product and/or with the assignment
of
the related rights (expenditures in the nature of materials and in personal
nature, out-of-pocket expenses, fees, stamp duties, etc.) shall charge the
Agent.
The
costs
related to the manufacturing activity connected to the Product, to the
manufacturing processes and to the sales of the Product shall be borne jointly
by the Parties, i.e. in the event of direct manufacture and sales (or in
the
event of manufacture and sales with the involvement of subcontractor) it
will be
50%, say fifty percent of the operational result derived from this activity
of
the Agent and not the revenue of the Agent, which will be due to the
Principal.
7.
Performance of payment obligations, payment
securities
The
Agent
shall provide a written notice (settlement of accounts) to the Principal
on the
amount of the fee regulated in Clause IV. 6. above inclusive the last day
of
each month, within 10 (ten) business days following the given month. The
Principal will approve in writing or may dispute in writing the settlement
of
accounts within 10 (ten) business days of receipt, in the absence of which
the
settlement of accounts will be deemed to have been expressly accepted and
approved. The Principal may dispute the settlement of accounts subsequently
exclusively with reference to the fact that he was mislead in respect of
the
facts serving as basis for the settlement of accounts.
8.
Checking of the business books
The
Principal will be entitled to check the conformity of the settlement of accounts
defined in Clause IV. 7. above and to inspect the financial certificates
related
to this Agreement at the head office (premises) of the Agent.
V. Sales
of the Product
1.
Exclusive mandate
By
signing this Agreement the Principal grants an exclusive mandate for the
Agent
in order to sell the Product, i.e. all rights granted in this Agreement,
related
to the Product, to third parties. The Parties will understand by the mandate
under this Clause that the Agent will be entitled to conduct negotiations
on
this subject in lieu and in the name of the Principal, furthermore, it will
be
entitled to sign an agreement on the sales of the Product in lieu and in
the
name of the Principal, if the agreement to be executed is presented to the
Principal, who will make sure that the agreement wished to be entered into
will
not violate in any form whatsoever the contents and the substance of this
Agreement, or any other rights of the Principal, and the exact settlement
of
financial accounts to be made with the third party has been elaborated.
Nevertheless, the Principal undertakes the obligation to execute himself
any
agreement on the sales of the Product, entered into by the Agent.
2.
Sharing in the incomes
Following
the sales of the product 50%, say fifty percent of all revenues shall be
due to
the Principal and 50%, say fifty percent thereof shall be due to the Agent,
as
gross fee of agency, for 2 (two) yeasr reckoned from the execution of the
Agreement.
All
costs
in connection with the sales of the Product and the related rights shall
charge
the Agent, including expressly the costs related to the expansion of the
territorial scope of the patent protection (and of any possible patenting
abroad).
3.
Indemnity
If
the
Principal sells the Product and all rights related to the Product to a third
party with the circumvention of the Agent, in violation of the exclusive
mandate
granted in Clause V.1, he shall pay 50% of all his revenues derived therefrom
as
liquidated damage to the Agent during the effectiveness of this
Agreement.
VI. Miscellaneous
provisions
1.
Territorial scope of the Agreement
The
territorial scope of the Agreement shall cover all countries of the Earth
without any restriction.
2.
Term of the Agreement, expiry of the Agreement
The
Parties conclude the Agreement for the definite term of 2 (two) year reckoned
from the execution.
The
Agreement shall cease to exist for the future
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after
the elapse of the 2 (two) years;
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when
all rights related to the Product have been sold to a third party
based on
Clause V of this Agreement.
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3.
Causes of termination. Stipulation of the right of termination by extraordinary
notice
The
Agreement may not be terminated by ordinary notice.
The
Agreement may be terminated by either party in writing, by extraordinary
notice
of termination with immediate effect, if the other party violates the Agreement
seriously, despite a written warning relating to the consequences. The Parties
shall deem the following circumstances to be a serious breach:
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The
Principal fails to meet his warranty obligations defined in Clause
IV.1 of
this Agreement in any respect;
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The
Agent fails to pay the fee based on the revenue derived from sales,
approved by the Principal, despite a written notice, within 30
(thirty)
days of notice;
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The
Agent fails to meet its obligations set out in this Agreement in
any
respect.
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4.
Stipulation of the applicable law
In
the
issues not regulated in the Agreement the Parties deem the provisions of
Hungarian law and of the Civil Code to be compulsory for
themselves.
5.
Amicable settlement of legal disputes resulting from the Agreement. Stipulation
of jurisdiction
In
the
event of any potential legal disputes related to the Agreement the Parties
will
make efforts for settlement through negotiations. Should this have no result,
the Parties stipulate already now the exclusive jurisdiction of the [Budapest]
Metropolitan Court.
6.
Confidentiality
The
Contracting Parties agree that the facts, data and information they become
aware
of relating to each other in the course of the conclusion and performance
of the
Agreement shall qualify as business secret, and they shall handle them
confidentially, according to the rules relating to business secrets. This
obligation shall cover the employees, representatives, subcontractors, etc.
of
the Parties and in general each person, who/which obtains the business secret
with the cooperation of the given Party in the interest of the fulfilment
of the
Agreement.
The
protection of business secret shall also cover the obligation that neither
Party
will be entitled to make accessible or to make known to a third party any
information or document related to the Agreement, particularly the information,
business ideas, plans, designs or methods qualifying as confidential, having
become known to him or it on the business or marketing activity of the other
Party, without the written consent of the other Party.
The
Contracting Parties lay down that also the information acquired with the
cooperation of a person having been in a fiduciary relation or business contact
with the other Party at the date of or prior to the acquisition of the secret
shall also qualify as violation of the business secret, if this occurred
without
the consent of the other Party.
The
provisions of confidentiality will survive the termination of the Agreement
by
the elapse of 5 (five) years.
7.
Notices
The
notices related to the Agreement will be forwarded to the party concerned
in
writing, in registered letter, through hand delivery or via telefax message
to
the address defined hereinbelow, or to the address previously communicated
by
the other party for this purpose.
For
the
Principal:
Name:
▇▇▇▇ ▇▇▇▇▇▇
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇.
1/12.
E-mail:
▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Telephone:
▇▇-▇▇-▇▇▇-▇▇▇▇
Telefax:
-
For
the
Agent:
Name:
Vidatech Kft.
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ út 94-96
E-mail:
▇▇▇▇@▇▇▇.▇▇
Telephone:
▇-▇▇▇-▇▇▇▇
Telefax:
▇-▇▇▇-▇▇▇▇
Any
change in the addresses defined in this Clause and/or in the person to be
notified – which does not require any amendment to the Agreement – shall be
communicated by the Parties to each other in writing without delay.
The
notices shall be deemed to have been delivered at the following dates and
times:
in case of hand delivery when the consignee takes over the consignment; in
case
of mailing when the recipient signs the acknowledgement of receipt; if the
acknowledgement of receipt is not signed, then on the fifth business day
following the second attempt of delivery; in case of telefax communication
when
the confirmation is received at the end of transmission on the successful
transmission; in case of an e-mail message when the sender received a
confirmation of the arrival of the message.
After
having read and interpreted this Agreement the Parties signed it approvingly,
as
a deed in full conformity with their will.
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Dated
in Budapest, on 15 July 2007
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/s/
▇▇▇▇▇▇ ▇▇▇▇
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/s/
▇▇▇▇▇▇ ▇▇▇, ▇▇.
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Principal
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Agent
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