DISTRIBUTION AND SALES AGREEMENT
DATED for reference the 1st day of November, 1999.
BETWEEN:
SIDEWARE INTERNATIONAL SRL, organized pursuant to the laws of
Barbados, and having an office at 0xx Xxxxxx, Xxxxxxxx, Xx.
Xxxxx, Barbados, West Indies
("Sideware")
OF THE FIRST PART;
AND:
SIDEWARE CORP., a company incorporated pursuant to the laws of
the State of Washington, U.S.A., and having an office at
#000-000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, X.X.X.
(the "Distributor")
OF THE SECOND PART;
WHEREAS:
A. Sideware has developed computer software described in Schedule "A"
hereto which provides real-time communication support and services to
internet users and which is called Xx. Xxxx Version 3.0 (the
"Software");
B. Sideware has appointed the Distributor, and the Distributor has agreed,
to market and distribute the Software in the 50 United States, the
District of Columbia, and Puerto Rico (the "Authorized Area") on the
terms and conditions contained herein.
IN CONSIDERATION of the mutual promises and covenants contained herein,
the parties record their agreement as follows:
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1.0 GRANT OF DISTRIBUTION RIGHTS
1.1 Subject to the terms of this Agreement, Sideware hereby grants to the
Distributor a non-exclusive right to market, sell and distribute the
Software in the Authorized Area to end users, value-added resellers,
distributors and original equipment manufacturers ("OEMS") for the Term
of this Agreement, as defined herein.
1.2 Notwithstanding paragraph 1.1, the Distributor shall have the right to
sell and distribute the Software outside the Authorized Area provided
that Sideware has consented in writing to each such sale.
1.3 Sideware shall deliver to the Distributor copies of the Software for
sale and distribution to end users, resellers, distributors and OEMS in
accordance with section 3.0 herein. Sideware shall provide to the
Distributor one (1) copy of the Software for demonstration purposes
free of charge, and the Distributor shall be entitled to make copies
thereof solely for demonstration and backup purposes only.
1.4 SOFTWARE CHANGES - Sideware may make changes to the Software as
Sideware deems necessary or advisable without advance notice to
Distributor, except that Sideware shall give the Distributor at least
thirty (30) days written notice before discontinuing the sale or
distribution of the Software pursuant to this Agreement.
2.0 TERM
2.1 TERM - The Term of this Agreement shall commence November 1, 1999, and
subject to earlier termination in accordance with this Agreement, shall
expire on December 31, 2001. The Term shall automatically be renewed
for one (1) year periods thereafter unless either party gives notice to
the other party, at least sixty (60) days before the end of the then
current year period, of its desire to let the Agreement expire at the
end of such year period (the "Term").
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3.0 PURCHASE ORDERS
3.1 The Distributor shall order copies of the Software from Sideware by
issuance of a written purchase order to Sideware. Each purchase order
shall state components of the Software required in each copy ordered, a
requested shipment date, the method of shipment, and the location to
which each unit of Software should be shipped.
3.2 Sideware will use its best efforts to meet the requested shipment date
in the Distributor's purchase order, but will not be liable to the
Distributor or to any other person if it fails to meet the requested
shipment date. Orders without a requested shipment date will be
processed for shipment according to Sideware's then current shipping
schedule.
3.3 Shipping charges shall be paid by the Distributor and will be shown
separately on Sideware invoices.
4.0 SOFTWARE PRICES
4.1 SIDEWARE PRICE - The price payable by Distributor for each copy of the
Software shall be equal to Sideware's then current list price for the
Software less the Distributor's Discount. Sideware's current list price
schedule and the Distributor's Discount are contained in Schedule "B"
hereto. All prices are quoted F.O.B. Sideware's shipping point,
exclusive of taxes, shipping, and insurance charges, which shall all be
the Distributor's costs.
4.2 CHANGE IN LIST PRICE - The Distributor hereby acknowledges that
Sideware may change the list price for the Software in Schedule "B" by
giving written notice to the Distributor no less than thirty (30) days
prior to the effective date of such changes. Any such written notice
given by Sideware shall set forth the new effective date and shall be
attached hereto as an Amended Schedule "B". Upon Sideware making
changes to the list price for the Software, the Distributor may request
a renegotiation of the Distributor's Discount specified in Schedule
"B".
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4.3 If any change in the suggested list price and Distributor's Discount
results in a higher price to the Distributor, Sideware agrees to honour
the previous lower price for purchase orders based on the Distributor's
outstanding quotations to customers executed within ninety (90) days of
the price change. The Distributor will provide a list of outstanding
proposals within ten (10) working days of receiving notice of the
change.
4.4 RESALE PRICES - The Distributor is free to determine its own resale
prices for the Software.
4.5 TAXES AND DUTIES - The prices listed in Schedule "B" are exclusive of
all applicable taxes and duties. The Distributor shall pay all taxes
and duties associated with the sale and delivery of the Software,
exclusive of taxes based on Sideware's income. If claiming tax
exemption, the Distributor must provide Sideware with valid tax
exemption certificates.
4.6 PAYMENT TERMS - Payment to Sideware for delivered copies of the
Software shall be made no later than thirty (30) days after the invoice
date.
4.7 NO WITHHOLDING OR SET-OFF - The Distributor shall not withhold any
amount due and owing pursuant to this Agreement either on the basis
that the Distributor disputes some issue in respect of, or its
obligations under, this Agreement, or as a set-off of obligations which
are allegedly owing to the Distributor by Sideware.
4.8 CURRENCY - All payments due hereunder to Sideware shall be made in
United States currency by wire transfer or cheque drawn on a United
States bank, unless otherwise specified by Sideware.
4.9 OVERDUE ACCOUNTS - Overdue payments for Software will bear interest at
the rate of 1.5% per month.
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5.0 RECORDS
5.1 ACCESS TO RECORDS - During the Term and for one (1) year following the
termination of this Agreement, the Distributor shall keep at its
principal place of business full, accurate and complete records and
books of account relating to the Software, and shall make them
available for examination, inspection and audit at all reasonable times
by Sideware or duly authorized independent accountants designated by
Sideware. Sideware and the accountants shall also be entitled to
investigate generally all the business transactions carried on by the
Distributor relating to this Agreement, to call for all vouchers
supporting the account documentation, including orders received, work
sheets, invoices, bank account documentation, and all other relevant
documents, and to make notes and copies of any information.
6.0 END USER LICENSE AGREEMENTS
6.1 All copies of the Software sold by the Distributor directly to end
users or indirectly to end users through resellers shall be subject to
the software license agreement provided by Sideware to the Distributor
from time to time, including any modifications or amendments thereof
(the "Software License Agreement"). The Distributor shall not install,
nor permit any of its resellers to install, a copy of the Software
until the end user purchasing the Software has executed the Software
License Agreement. The Distributor shall utilize the latest version of
the Software License Agreement when selling the Software directly to
end users or otherwise require the resellers to utilize the latest
version.
7.0 SUBDISTRIBUTION AGREEMENTS
7.1 APPOINTMENT OF SUBDISTRIBUTORS - The Distributor may appoint
subdistributors of the Software provided that such subdistributors
enter into the subdistributor agreement provided by Sideware to the
Distributor with respect to the marketing, sale, installation and
integration of the Software (the "Subdistributor Agreement"). Sideware
reserves the
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right to change the Subdistributor Agreement from time to time, and
the Distributor shall utilize the latest version of such agreement
when appointing subdistributors.
8.0 DISTRIBUTOR'S RESPONSIBILITIES
8.1 INSTALLATION, INTEGRATION AND TRAINING - The Distributor will be
responsible for the installation and integration of all copies of
Software the Distributor sells directly to end users. The Distributor
shall further provide training to its subdistributors regarding the
installation, integration and use of the Software.
8.2 MAINTENANCE AND SUPPORT - The Distributor will be responsible for
operating telephone and Internet support systems to provide maintenance
and support to all end users and resellers of the Software. The
Distributor and Sideware will consult from time to time on the scope
and content of the support systems to be provided by the Distributor.
8.3 Notwithstanding the above, Distributor may subcontract the provision of
maintenance and support to end users and resellers of the Software.
8.4 FEES - The Distributor may, at its discretion, determine the fees to be
charged to end users and subdistributors with respect to the
installation, integration, training, maintenance and support services
provided by the Distributor.
8.5 MARKETING - The Distributor will use its best efforts to actively
promote, market and sell the Software in the Authorized Area. From time
to time as requested by Sideware, the Distributor will meet with
Sideware for review and consultation regarding the Distributor's
marketing plans and activities. For purposes of such review, the
Distributor will make available to Sideware such information concerning
the Distributor's marketing plans and activities as Sideware may
reasonably request.
8.6 SALES LITERATURE - The Distributor shall be responsible for developing
and producing its own literature for the promotion and marketing of the
Software, however, Sideware will
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provide samples of its sales literature to the Distributor at no
charge. The Distributor may purchase Sideware's sales literature at
Sideware's cost.
8.7 The Distributor agrees to conduct its marketing and sales of the
Software in a manner that reflects favourably on the Software and on
the reputation and good will of Sideware.
9.0 INTELLECTUAL PROPERTY RIGHTS
9.1 OWNERSHIP OF SOFTWARE - The Distributor acknowledges that all title and
intellectual property rights, copyright, moral rights, and patent
rights in and to the Software (including but not limited to any images,
photographs, animation, video, audio, music, text and "applets"
incorporated into the Software, and all written materials relating to
the Software) are owned or licensed by Sideware. Nothing in this
Agreement shall constitute a grant, transfer, or assignment to the
Distributor of any of the foregoing rights.
9.2 The Distributor warrants that neither it nor any of its employees will
knowingly convert to their own use or to the use of any other party any
industrial secrets or trade secrets owned or licensed by Sideware in
relation to the Software.
9.3 The Distributor acknowledges that Sideware would be irreparably harmed
by any breach of the Distributor's covenants in this section 9.0 and
accordingly, would be entitled to equitable and injunctive relief. The
Distributor also acknowledges that Sideware has developed and uses
valuable technical and non-technical information and trade secrets in
the Software. The Distributor will use its best efforts not to effect
or permit the removal or alteration of any trade names or marks,
warning labels, serial numbers or other similar markings affixed to the
Software.
9.4 The Distributor shall not disclose, and shall keep confidential, all
confidential and proprietary information provided by Sideware or
relating to the Software. This provision shall not apply to information
which (i) is or becomes part of the public domain through no act or
omission of the Distributor, (ii) the Distributor receives from a third
party acting
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without any obligation or restriction of confidentiality in favour
of Sideware, (iii) Sideware releases from confidential treatment by
written consent, or (iv) the Distributor is required by any applicable
law or court order to disclose. The provisions of this clause shall
survive the termination of this Agreement.
10.0 WARRANTIES
10.1 Sideware's warranties with respect to the Software are limited to the
warranties set out in the Software License Agreement referred to in
section 6.0. Except as expressly set out below, Sideware makes no
separate warranty to the Distributor.
10.2 Sideware warrants to the Distributor that Sideware has all right,
title, ownership interest and/or marketing rights necessary to provide
the Software to the Distributor.
10.3 THE WARRANTIES AND COVENANTS SET FORTH ABOVE ARE COMPLETE AND ARE IN
LIEU OF ALL OTHER WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR
IMPLIED BY STATUTE, USAGE, CUSTOM OF THE TRADE OR OTHERWISE.
NOTWITHSTANDING ANY OTHER OR PRIOR STATEMENT, WRITTEN OR ORAL, SIDEWARE
MAKES NO OTHER WARRANTIES REGARDING THE SOFTWARE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, SIDEWARE EXPRESSLY DISCLAIMS WARRANTIES OR
REPRESENTATIONS OF WORKMANSHIP, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, LACK OF NEGLIGENCE, DURABILITY, ACCURACY OR
COMPLETENESS OR RESPONSES, LACK OF VIRUSES, THAT THE SOFTWARE WILL MEET
ANY OF A CUSTOMER'S NEEDS, OR THAT THE SOFTWARE WILL OPERATE ERROR
FREE.
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11.0 INFRINGEMENT INDEMNIFICATION
11.1 INDEMNIFICATION FOR THIRD PARTY RIGHTS - Sideware shall indemnify and
hold harmless the Distributor, from any claim that the Software
supplied hereunder infringes a patent, copyright, trade secret, or
similar proprietary right of a third party. If such claim occurs, or in
Sideware's judgment is likely to occur, the Distributor agrees to allow
Sideware, at Sideware's option, to procure the right for the
Distributor to continue using the Software in accordance with the terms
hereof or to replace or modify the Software in a functionally
equivalent manner so it becomes non-infringing. If neither of the
foregoing is available on terms that are reasonable in Sideware's
judgment, the Distributor, upon written request by Sideware, shall
return the Software to Sideware and Sideware shall have no further
obligations under this indemnity.
11.2 INDEMNIFICATION BY DISTRIBUTOR - The Distributor shall indemnify and
hold harmless Sideware, its shareholders, officers, directors or agents
against any and all losses which they may suffer or incur in connection
with any claim arising out of, as a result of, or relating in any
manner whatsoever to the Distributor's breach of any covenant,
representation or warranty contained in this Agreement.
11.3 INDEMNIFICATION BY SIDEWARE - Sideware shall indemnify and hold
harmless the Distributor, its shareholders, officers, directors or
agents against any and all losses which the Distributor may suffer or
incur in connection with any claim arising out of, as a result of, or
relating in any manner whatsoever to Sideware's breach of any covenant,
representation or warranty contained in this Agreement.
11.4 The foregoing indemnities shall be contingent upon the following:
(a) the party seeking indemnity shall give prompt written notice
to the other party for any claim, demand, or action for which
indemnity is sought;
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(b) the party seeking indemnity shall fully co-operate in the
defence or settlement of any such claim, demand or action and
shall make no admission without the indemnifying party's
consent; and
(c) the party seeking indemnity shall obtain the prior written
agreement of the indemnifying party to any settlement or
proposal of settlement which agreement shall not be
unreasonably withheld, providing such settlement or proposal
does not conflict with the terms of this section.
12.0 DAMAGES AND LIABILITY
12.1 TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES AGREE
THAT IN NO EVENT SHALL SIDEWARE BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
INDIRECT, OR CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING, BUT NOT
LIMITED TO, DAMAGES FOR LOSS OF PROFITS OR CONFIDENTIAL OR OTHER
INFORMATION, FOR BUSINESS INTERRUPTION, FOR PERSONAL INJURY, FOR LOSS
OF PRIVACY, FOR FAILURE TO MEET ANY DUTY INCLUDING OF GOOD FAITH OR OF
REASONABLE CARE, FOR NEGLIGENCE, AND FOR ANY OTHER PECUNIARY OR OTHER
LOSS WHATSOEVER) ARISING OUT OF OR IN ANY WAY RELATED TO THE USE OF OR
INABILITY TO USE PRODUCTS DEVELOPED PURSUANT TO THIS AGREEMENT, EVEN IN
THE EVENT OF THE FAULT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY,
BREACH OF CONTRACT, OR BREACH OF WARRANTY OF SIDEWARE, AND EVEN IF
SIDEWARE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO
EVENT WILL SIDEWARE'S TOTAL LIABILITY, IN DAMAGES OR OTHERWISE, EXCEED
THE AMOUNTS ACTUALLY RECEIVED BY SIDEWARE FOR DEVELOPING THE PRODUCTS.
NO ACTION REGARDLESS OF FORM, ARISING OUT OF OR IN ANY WAY CONNECTED
WITH PRODUCTS DEVELOPED BY SIDEWARE MAY BE BROUGHT BY THE DISTRIBUTOR
MORE THAN TWO (2) YEARS AFTER THE
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CAUSE OF AN ACTION HAS ACCRUED OR SUCH SHORTER STATUTORY PERIOD AS
MAY BE APPLICABLE.
13.0 TERMINATION
13.1 TERMINATION UPON NOTICE - Sideware may terminate this Agreement
forthwith upon written notice to the Distributor if:
(a) the Distributor is in breach of, or attempts to breach, any of
its obligations under this Agreement;
(b) the Distributor is in breach of any of its representations and
warranties under this Agreement;
(c) the Distributor has failed to protect the confidentiality and
proprietary rights of Sideware, or has otherwise failed to
take reasonable steps to protect such confidentiality and
proprietary rights as required herein; and/or
(d) the Distributor is unable to pay its debts when due or is
insolvent, is ordered or adjudged to be a bankrupt, is placed
in the hands of a receiver, enters into any scheme or
composition with its creditors, is dissolved, liquidated or
wound up, makes an assignment for the benefit of its creditors
or takes the benefit of any statutory protection for its
debts.
13.2 TERMINATION FOR CONVENIENCE - Either of the parties may in its sole
discretion terminate this Agreement at any time without cause on sixty
(60) days written notice to the other party, such termination to become
effective at the conclusion of such sixty (60) day period.
13.3 CONSEQUENCES OF TERMINATION OR EXPIRATION - In the event of the
termination or expiration of this Agreement, the Distributor shall have
no further rights except those expressly
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granted by this section. Upon termination or expiration of this
Agreement, the Distributor shall:
(a) cease all marketing, sale and distribution of the Software;
(b) at Sideware's option and at the Distributor's expense, deliver
to Sideware all of the Software;
(c) refrained from stating or implying that the Distributor is
authorized to market, sell and distribute the Software;
(d) pay all amounts invoiced by Sideware notwithstanding that such
amounts may not yet be due to Sideware; and
(e) at Sideware's request, execute all such documents and do such
further acts and things which are necessary to assign and
transfer the Distributor's rights and obligations in any and
all agreements with end users, resellers, distributors or OEMS
relating to the Software to Sideware.
14.0 GENERAL
14.1 NOTICE - Any notice required or permitted to be given under this
Agreement shall be deemed to have been well and sufficiently given only
if delivered at the address of the other party herein before set forth
or to such other address as the other party may direct in writing.
14.2 MODIFICATION - No amendment to or modification of this Agreement shall
be effective unless set forth in writing and signed by both Sideware
and the Distributor.
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14.3 FURTHER ASSURANCES - The parties shall execute all such further
documents and do such further acts and things as are necessary or
convenient to carry out the full intent of this Agreement.
14.4 SUCCESSORS AND ASSIGNS - This Agreement shall be binding upon and shall
enure to the benefit of the parties hereto, their successors and
permitted assigns.
14.5 WAIVER - No waiver by either party of any default hereunder shall be
deemed as a waiver of any prior or subsequent default of the same or
other provisions of this Agreement.
14.6 SEVERABILITY - If any provision hereof is held invalid or unenforceable
by a court of competent jurisdiction, such invalidity shall not affect
the validity or operation of any other provision and such invalid
provision shall be deemed to be severed from the Agreement.
14.7 ASSIGNABILITY - The rights and license granted hereunder to the
Distributor may not be assigned by any act of the Distributor or by
operation of law without the consent of Sideware, such consent may be
arbitrarily withheld.
14.8 GOVERNING LAW - This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by,
the laws of the United States.
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14.9 ENTIRE AGREEMENT - This Agreement constitutes the entire understanding
of the parties, and revokes and supersedes all prior agreements between
the parties and is intended as a final expression of their agreement.
IN WITNESS WHEREOF the parties hereto have recorded their agreement on
the above terms this 14TH day of DECEMBER, 1999, intending the agreement
to be effective from November 1, 1999.
SIDEWARE INTERNATIONAL SRL
Per:
"signed"
-----------------------------
SIDEWARE CORP.
Per:
"signed"
-----------------------------
Schedule "A"
THE SOFTWARE
The Software is the Xx. Xxxx Software, Version 3.0 which consists of: (a)
instructions or statements in machine-readable object code, including the Server
Component, the CSR Interface Component, the Server Administration Component, and
the CSR Administration Component; a multiple server pack, an intelligent router,
and an enterprise reporting system, and (b) all user manuals, handbooks, and
other written materials relating to (a) above.
Schedule "B"
SUGGESTED LIST PRICE OF PRODUCTS
AS OF NOVEMBER 1, 1999
(all amounts in U.S. Dollars)
A.
------------------------------------ ----------------- ------------------- ------------- --------------- ---------------
Unix-based
Platform System/ Component Windows NT Windows NT IBM S390 IBM S390 IBM S390
multi-processor Small Average Large
------------------------------------ ----------------- ------------------- ------------- --------------- ---------------
------------------------------------ ----------------- ------------------- ------------- --------------- ---------------
Basic System $10,000 $25,000 $40,000 $70,000 $100,000
------------------------------------ ----------------- ------------------- ------------- --------------- ---------------
Multiple Server Pack $5,000 $12,000 $20,000 $35,000 $50,000
------------------------------------ ----------------- ------------------- ------------- --------------- ---------------
Intelligent Router $2,000 $4,000 $6,000 $8,000 $15,000
------------------------------------ ----------------- ------------------- ------------- --------------- ---------------
Enterprise Reporting System $4,000 $6,000 $8,000 $10,000 $20,000
------------------------------------ ----------------- ------------------- ------------- --------------- ---------------
B. DISTRIBUTOR'S DISCOUNT
1. For Xx. Xxxx Software Version 3.0 resold to end users, resellers, and
OEMS, the Distributor's Discount = 50%
C. DISCOUNT ADJUSTMENT
1. The parties have established the Distributor's Discount at what they
believe would be agreed between unrelated parties dealing at arm's
length in the same circumstances.
2. If the Internal Revenue Service or its authorized representatives or
any similar authority should assess or reassess either or both of the
parties on the basis that the Discount should be different than that
established by the parties, then the Discount shall be deemed to be
determined as follows:
(a) such amount as may be agreed upon by the parties and all of
the relevant government tax authorities; or
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(b) in the absence of any agreement pursuant to paragraph (a)
above, such amount as may be determined by a court having
jurisdiction in the matter (after all appeal rights have been
exhausted or all times for appeal have expired without appeals
having been filed) to be the Discount.
3. If at any time after the commencement of this Agreement, either of the
parties undertakes a transfer pricing study with respect to the
Discount and the results of the study indicate that the Discount should
be adjusted to comply with the arm's length requirement for
"transactions" between related parties (the "Proposed Adjustments"),
the other party may agree to make the Proposed Adjustments or reject
the Proposed Adjustments stating its reasons for rejecting the Proposed
Adjustments. After considering the other party's reasons for rejecting
the Proposed Adjustments, if any, the first party may propose Amended
Proposed Adjustments or obtain the opinion of an independent third
party expert on the matter. The other party shall:
(a) accept the Amended Proposed Adjustments; or
(b) reach some other agreement on the adjustments to the Discount
within forty-five (45) days of receiving the Amended Proposed
Adjustments; or
(c) accept the opinion of the third party independent expert.
4. Where the Discount is adjusted pursuant to paragraphs 2 or 3, the
parties will make whatever payments or refunds are required to fully
implement the terms of the adjustment.
5. Each of the parties shall bear their own costs with respect to any
actions taken by a party under this section relating to Discount
adjustment.
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DATED: November 1, 1999
BETWEEN:
SIDEWARE INTERNATIONAL SRL
OF THE FIRST PART;
AND:
SIDEWARE CORP.
OF THE SECOND PART;
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DISTRIBUTION AND SALES AGREEMENT
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