ZIM TECHNOLOGIES INTERNATIONAL INC.
INTERNATIONAL DISTRIBUTION AGREEMENT
This Agreement is made as of the 22 day of November ,2000,
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BETWEEN:
ZIM TECHNOLOGIES INTERNATIONAL INC., a corporation
incorporated under the laws of Canada and having its
principal place of business at 20 Colonnade Road, Suite 200,
Nepean, Ontario, Canada, K2E 7M6
(hereinafter "ZTI")
AND:
IGM/SP , a corporation incorporated under the laws of
Netherlands and having its principal place of business at
Postbus 92, Usselstein 3400AB, Netherlands
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(hereinafter "Distributor")
WHEREAS ZTI has developed a range of proprietary computer software products;
AND WHEREAS Distributor markets and distributes various computer software
products;
AND WHEREAS Distributor desires to be appointed a distributor of certain of
ZTI's proprietary computer software products and to be granted a right to market
and distribute such products to Distributor's customers and authorized
sub-distributors within a defined territory, and ZTI is willing to make such an
appointment and to grant such a right on the terms and subject to the conditions
set forth in this Agreement;
NOW THEREFORE, in consideration of the terms of this Agreement, ZTI and
Distributor agree as follows:
1. DEFINITIONS
The following terms shall have the meanings set forth below:
"AGREEMENT" means this ZTI International Distribution Agreement, including all
exhibits hereto;
"CUSTOMER" means any end user to whom Distributor or one of its Sub-distributors
has distributed one or more of the Products pursuant to a ZTI Software License
Agreement;
"DOCUMENTATION" means the user manuals and other documentation which ZTI
generally provides to its customers together with the Software;
"PRODUCTS" means the Software together with the Documentation;
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"PRODUCT MAINTENANCE" means Product maintenance and support under ZTI's "Mission
Assistance Program" or "MAP", as more particularly described in Exhibit G
hereto;
"SOFTWARE" means the computer software products listed in Exhibit A hereto, in
the form delivered by ZTI to Distributor under this Agreement;
"SUB-DISTRIBUTOR" means a sub-distributor appointed and licensed by Distributor
to market and distribute the Products;
"TERRITORY" means the geographical areas described in Exhibit B hereto;
"UPDATE" means any new release that maintains the same version number (ex. 5.x
to 5.x) that ZTI may release from time to time with respect to any of the
Products; and
"UPGRADE" means any new release that reflects a change in the version number
(ex. 5.x to 6.0) that ZTI may release from time to time with respect to any of
the Products; and
"ZTI SOFTWARE LICENSE AGREEMENT" means the end user software license agreement
in Exhibit E hereto, as amended from time to time by ZTI in its sole discretion.
2. APPOINTMENT OF DISTRIBUTOR AND GRANT OF LICENSE
(a) Appointment and Grant:
----------------------
In accordance with the terms and subject to the conditions of this
Agreement, and with effect from the date first set forth above, ZTI hereby
appoints Distributor as a distributor of the Products and, as such, grants to
Distributor a limited, non-exclusive, non-transferable right:
(i) to market the Products to potential Customers within the
Territory;
(ii) to distribute the Products to Customers within the Territory
in accordance with the ZTI Software License Agreement;
(iii) to provide maintenance and support to Customers in respect of
the Products;
(iv) to sub-license the rights described in clauses (i) to (iii)
above to its Sub-Distributors.
(b) No Transfer of Rights:
----------------------
Distributor acknowledges and agrees that all right, title and interest
in and to the Products, including all intellectual property rights therein, are
vested in and shall remain vested in ZTI or its licensers. Nothing in this
Agreement shall be construed as transferring ownership of any rights of ZTI or
its licensers in the Products to Distributor or its Sub-Distributors.
(c) General Restrictions on Rights:
-------------------------------
Except as specifically permitted herein, no right to modify, adapt,
integrate, manufacture, copy, distribute, sell, rent, license, maintain or
support the Products, in whole or in part, or to sub-license any of the rights
set forth in clause (a), is hereby granted. Distributor shall not permit its
Sub-Distributors to further sub-license any rights in the
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Products, except to Customers pursuant to the terms and conditions of the ZTI
Software License Agreement.
3. ORDERS
(a) Placement:
----------
Distributor shall place orders in writing for Products and/or Product
Maintenance directly with ZTI at the address set out in Section 30 of this
Agreement. Each order shall specify the following information:
(i) the name. The address, contact name, phone number, and fax
number for each of the Customer, Sub-Distributor (if
applicable) and Distributor shall be provided at ZTI's
request.
(ii) the type and quantities of Products and/or Product Maintenance
ordered;
(iii) the fee payable by Distributor to ZTI for each unit of
Products and/ or Product Maintenance ordered;
(iv) the configuration of the proposed systems on which the
Software will be installed;
(v) the number of users authorized to have access to the Software;
(vi) a purchase order number; and
(vii) the products licensed to Customer and the serial numbers of
such Products for Product Maintenance orders.
(b) Acceptance:
-----------
ZTI shall use its best efforts to respond to any order within fifteen
(15) days of the date of receipt; however, ZTI reserves the right to reject any
order at any time. An order shall be deemed to be accepted upon the earlier of
(i) the date Distributor receives written acceptance of the order from an
authorized representative of ZTI or (ii) the date ZTI ships the Product to
Distributor. No order shall be binding upon ZTI prior to acceptance. Following
acceptance by ZTI, an order shall be binding on Distributor and ZTI and subject
to the terms and conditions of this Agreement.
4. SPECIAL ORDERS FOR PRODUCTS
(a) Distributor's Demonstration Copies of Products:
-----------------------------------------------
Distributor may order a single copy of any Product for the purposes of:
(i) demonstrating the Product to potential Customers;
(ii) providing technical support to Customers in respect of the
Product; and
(iii) training its staff in the operation and technical support of
the Product.
The order, delivery and use of such demonstration copy by Distributor
shall be subject to the terms and conditions of this Agreement and the ZTI
Software License
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Agreement, except that ZTI's list price for such demonstration
copy shall be deemed to be a nil amount. Distributor shall not provide such
demonstration copy or any copies thereof to any third party nor use the
demonstration copy to create any new applications for its own commercial
purposes not connected directly with the purposes of this Agreement.
(b) Distributor's Copies of the Products for Other than Demonstration
Purposes:
---------
Distributor may also order any of the Products for its own commercial
purposes not connected directly with the purposes of this Agreement. The order
and delivery of such Products by Distributor shall be subject to the terms and
conditions of this Agreement, and the product fees payable to ZTI in respect of
such Products shall be calculated in accordance with Section 8(b) of this
Agreement. The use of such Products by Distributor as end user shall be subject
to the terms and conditions of the ZTI Software License Agreement.
5. DELIVERY OF PRODUCTS
(a) Shipment:
--------
Within seven (7) days of acceptance of an order for Products, ZTI shall
ship the Products to Distributor at the address set out in Section 30 of this
Agreement. Distributor shall be responsible for all shipping, handling and
in-transit insurance costs for delivery of Products by ZTI to Distributor. All
shipments of Products by ZTI to Distributor shall be F.O.B. Ottawa, Ontario,
Canada, with shipping, handling and insurance charges prepaid and added to the
invoice or charged directly to the Distributor's shipping account.
(b) Risk of Loss:
-------------
ZTI shall have no liability to Distributor for any loss, damage or
expense due to late delivery of any Products due to causes beyond ZTI's control.
All risk of loss or damage to Products shall pass to Distributor upon delivery
of Products to a common carrier at ZTI's distribution point in Ottawa, Ontario,
Canada. The common carrier shall not be deemed to be an agent of ZTI.
(c) Clearing Customs and Export/Import Permits:
-------------------------------------------
Distributor shall be responsible for (i) obtaining all permits required
to import the Products into the Territory and to distribute the Products within
the Territory, and (ii) clearing the Products through local customs upon arrival
of the Products in the Territory. ZTI shall be responsible for obtaining all
permits required to export the Products from Canada.
(d) Inspection:
-----------
Distributor shall inspect the Products upon arrival in the Territory
and shall immediately notify ZTI in writing of any damage to the Products or any
discrepancy between the Products received and the shipping documents.
Distributor shall retain any damaged Products in the original packaging for
inspection by ZTI or its agent or insurer. Any insurable claim not reported to
ZTI in writing within fifteen (15) days after arrival may be denied.
6. OBLIGATIONS OF DISTRIBUTOR
(a) Best Efforts to Market Products:
-------------------------------
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Distributor shall use its best efforts to promote the distribution of
the Products throughout the Territory. If Distributor has appointed
Sub-Distributors pursuant to the term and conditions of this Agreement,
Distributor shall use its best efforts to ensure that each such Sub-Distributor
promotes the distribution of the Products throughout that part of the Territory
assigned to it.
(b) Marketing Materials:
--------------------
Distributor shall use ZTI's marketing materials referred to in Section
7(a) herein. Subject to ZTI's prior written approval, Distributor shall be
permitted to make copies of such marketing materials, provided Distributor's
copies maintain the same or better quality as those provided by ZTI. Depending
on availability, Distributor may purchase from ZTI copies of ZTI's marketing
materials, in such quantities as required, at prices to be determined by ZTI in
its sole discretion.
Subject to ZTI's prior written approval, Distributor may, at its own
expense, translate ZTI's marketing materials into the languages spoken in the
Territory and make copies of such translations for distribution in the
Territory. ZTI shall own all rights in any such translations. Distributor
represents and warrants that any such translations shall be a complete and
accurate translation of the English language version of the marketing materials
provided to Distributor by ZTI. Distributor shall ensure that ZTI's copyright
notice is affixed to all such translations and any copies thereof. In the event
of any dispute among ZTI, Distributor or a Customer arising from the use of
ZTI's marketing materials or any translations thereof, the English language
version of such materials shall be referred to exclusively in the settlement of
such dispute and shall prevail over any translations of such materials.
Distributor and its Sub-Distributors shall have the right to
incorporate into their own marketing materials excerpts from ZTI's marketing
materials referred to in Section 7(a) herein, provided Distributor first submits
English language specimens of the proposed materials to ZTI for written
approval. Any marketing materials prepared by Distributor or its
Sub-Distributors in respect of the Products shall acknowledge ZTI as being the
owner and developer of the Products referred to therein. Notwithstanding the
foregoing, any marketing materials prepared by Distributor or its
Sub-Distributors for mass distribution, which make reference to the Products or
to ZTI, shall be submitted to ZTI, in an English language version, for written
approval prior to distribution.
(c) Business Plan:
--------------
Distributor shall, on the effective date of this Agreement and at least
ninety (90) days prior to the expiration of each twelve (12) month period of
this Agreement, submit to ZTI a detailed business plan for the next calendar
year in respect of distribution of the Products, which plan shall include,
without limitation: projected licensing revenues and expenses; marketing and
other efforts planned; and personnel to be assigned throughout that year to
support Product marketing and distribution. The business plan also shall include
the information described in Exhibit E to this Agreement. ZTI may make a
reasonable request, from time to time, for an update to the business plan, and
Distributor shall provide such update within ten (10) days of the date of such
request.
(d) Monthly Billing Report:
-----------------------
Distributor shall provide ZTI with a monthly billing report, which
report shall include:
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(i) the revenue payable or paid to ZTI by Distributor in the
subject month, on a per Product, per Sub-Distributor and per
Customer basis;
(ii) the revenue forecasted for the three (3) months immediately
following the subject month, on a per Product basis; and
(iii) any other information which may be required pursuant to
Exhibit F hereto.
Such reports shall be submitted to ZTI on the dates set out in Exhibit
F and shall be substantially in the form set forth in the attachment to Exhibit
F.
In addition, Distributor shall, no later than the first (1st) day of
June during each year of this Agreement, provide ZTI with a forecast of the
Product maintenance and support fees payable by Distributor to ZTI for the
period commencing on such date and ending the thirtieth first (30th) day of May
in the following year.
(e) Distributor to Use ZTI Software License Agreement:
--------------------------------------------------
Distributor and its Sub-Distributors approved by ZTI shall provide
Products directly to Customers using the ZTI Software License Agreement set
forth in Exhibit D to this Agreement. Distributor shall ensure that each
Customer clearly acknowledges and agrees that it understands and accepts the
terms and conditions of the ZTI Software License Agreement prior to delivery of
the Products to such Customer. Distributor shall use its best efforts to ensure
that each Customer complies with the terms and conditions of the ZTI Software
License Agreement. Distributor shall notify ZTI immediately upon learning that
any Customer has breached or potentially breached any of the terms and
conditions of the ZTI Software License Agreement and shall provide reasonable
assistance to ZTI in dealing with such breach, including any legal proceedings
commenced by ZTI for seizure or injunctive relief.
Distributor may, at its own expense, translate the ZTI Software License
Agreement into the languages spoken in the Territory and make copies of such
translations for distribution of the Products in the Territory. ZTI shall own
all rights in any such translations. Distributor represents and warrants that
any such translations shall be a complete and accurate translation of the ZTI
Software License Agreement set forth in Exhibit D hereto. In the event of any
dispute among ZTI, Distributor or a Customer concerning the permitted use of any
Product, the English language version of the ZTI Software License Agreement
shall be referred to exclusively in the settlement of such dispute and shall
prevail over any translations of such agreement.
(f) Contents of Sub-Distribution Agreements:
---------------------------------------
Distributor agrees and shall ensure that the provisions of any
sub-distribution agreement entered into between Distributor and a
Sub-Distributor shall be no less onerous than the provisions contained in this
Agreement in respect of:
(i) ZTI's proprietary and other rights in the Products;
(ii) confidentiality and non-disclosure of the Products;
(iii) marketing and distribution of the Products;
(iv) provision of first line maintenance and support to Customers
in respect of the Products;
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(v) participation in ZTI training sessions in respect of the
operation, demonstration and technical support of the
Products;
(vi) compliance with laws, rules and regulations;
(vii) use of ZTI's trade-marks, trade name, corporate name and
logos;
(viii) restrictions on representations and warranties;
(ix) limitation of ZTI's liability; and
(x) the effects of termination of this Agreement.
In addition, such agreement shall provide that the Sub-Distributor
shall keep records as will show in detail the number and type of Products
distributed to and additional maintenance and support purchased by its Customers
and will permit verification of fees due Distributor. Such agreement shall also
provide that ZTI shall have the right to audit such Sub-Distributor records,
which right shall be similar in form and content to that set out in Section 8(f)
of this Agreement.
(g) Provision of Updates to Customers:
----------------------------------
From time to time ZTI will advise Distributor of the availability of
Updates to the Products that are installed in the Territory. If requested by
Distributor, ZTI shall provide Distributor with copies of such Updates.
Distributor shall then distribute the Updates, at no charge, to those Customers
who are entitled to maintenance and support of such Products. This paragraph
shall not be interpreted to require ZTI to develop and release Updates or to
customize Updates to satisfy the particular requirements of any Customer.
The Updates shall not include any Software that ZTI decides, in its
sole discretion, to make available generally as a separately priced release,
Upgrade or option. ZTI may add any such release, Upgrade or option to the list
of Products in Schedule A to this Agreement. The suggested retail price for each
copy of such release, Upgrade or option shall be determined by ZTI in its sole
discretion.
(h) Provision of Maintenance and Support to Customers:
--------------------------------------------------
Distributor shall provide first line maintenance and support of
Products delivered to its Customers, in accordance with Distributor's
maintenance and support obligations set forth in Exhibit C. During the Warranty
Period (as defined in Section 12(a) of this Agreement) in respect of any such
Product, maintenance and support for that Product shall be provided by
Distributor at no charge to Customer.
(i) Additional Product Maintenance Available to Customers:
------------------------------------------------------
Distributor and its Sub-Distributors shall offer Product Maintenance to
all Customers to whom Products have been distributed.
(j) Training of Distributor's Representatives:
------------------------------------------
ZTI provides a maximum of three (3) days basic training to
Distributor's personnel in respect of the marketing and servicing of the
Products within the Territory. Unless otherwise agreed by ZTI, such training
will be offered at facilities designated by ZTI and in
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accordance with a schedule to be determined by ZTI. At least one (1) of
Distributor's sales, marketing and technical personnel shall participate in each
of these training sessions, unless ZTI determines in respect of any particular
training session that Distributor's participation is not required. Distributor
shall be responsible for all travel, living and out-of-pocket expenses incurred
by its personnel in attending at such training. ZTI shall be responsible for all
other expenses associated with the conduct of such training.
Distributor may request ZTI to provide additional training in respect
of the Products. Subject to availability of training resources, ZTI will provide
such additional training at locations and schedules mutually acceptable to the
parties. The training shall be provided at ZTI's then current per diem rates;
however, Distributor shall be responsible for all travel, living and
out-of-pocket expenses incurred by its personnel in attending at such training.
7. OBLIGATIONS OF ZTI
(a) Marketing Materials:
--------------------
ZTI may prepare marketing and technical literature which may assist
Distributor in its efforts to market the Products. ZTI agrees to provide to
Distributor, at no charge, a reasonable number of copies, determined by ZTI in
its sole discretion, of such marketing and technical literature. Upon the
written request of Distributor, ZTI shall provide to Distributor additional
copies of ZTI's marketing materials, in such quantities as required, at prices
to be determined by ZTI in its sole discretion.
(b) Provision of Maintenance and Support:
-------------------------------------
ZTI shall provide second line maintenance and support of the Products
in accordance with ZTI's maintenance and support obligations set forth in
Exhibit C.
(c) Training of Distributor's Representatives:
------------------------------------------
ZTI shall provide a maximum of three (3) days total of basic
Product-related training to Distributor's sales, marketing and technical
personnel in accordance with the provisions of Section 6 of this Agreement.
(d) On-Site Visits:
---------------
From time to time, ZTI may send to Distributor's facilities, at no
charge to Distributor, certain of ZTI's marketing and service personnel to
advise, consult and assist Distributor in the marketing and servicing of the
Products. The parties shall schedule such visits at mutually acceptable times,
subject to availability of ZTI personnel. ZTI shall be responsible for any and
all travel, living and out-of-pocket expenses that its personnel may incur in
connection with such visits. At Distributor's request, ZTI may provide
unscheduled on-site technical support to Distributor. Unless agreed otherwise on
a case-by-case basis, Distributor shall pay ZTI the current per diem ZTI rate
and reimburse ZTI for all reasonable travel, living and out-of-pocket expenses
that ZTI's personnel may incur in connection with such unscheduled on-site
technical support.
8. PAYMENT TERMS, TAXES AND AUDIT
(a) ZTI's Suggested Retail Prices and Discounts:
--------------------------------------------
ZTI's suggested retail prices for the Products and for additional
maintenance and support of the Products are set out in Exhibit A of this
Agreement. The prices may be
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changed by ZTI, in its sole discretion, upon thirty (30) days prior written
notice to Distributor and such changes shall be deemed to amend Exhibit A
accordingly.
Distributor's discounts for the Products and for additional maintenance
and support of the Products are set out in Exhibit A.
(b) Product Fees Payable by Distributor to ZTI:
--------------------------------------------
Subject to the provisions of Sections 4(b) and 8(i) of this Agreement,
for each copy of a Product delivered by ZTI to Distributor pursuant to this
Agreement, Distributor agrees to pay to ZTI a fee equal to:
A x [1 - B]
where: "A" is ZTI's suggested retail price for the Product in effect at the
time the Product is licensed to the Customer; and
"B" is the applicable discount (converted from a percentage to a
decimal number) in Exhibit A.
Each such fee shall be paid to ZTI by Distributor within thirty (30)
days of the date on which ZTI invoices Distributor for such fee.
(c) Product Maintenance Fees Payable by Distributor to ZTI:
--------------------------------------------------------
For each unit of Product Maintenance purchased by a Customer from
Distributor or one of its Sub-Distributors, Distributor agrees to pay to ZTI a
fee equal to:
C x [1 - D]
where: "C" is ZTI's suggested retail price for the unit of Product Maintenance
in effect at the time the Product Maintenance is sold to the Customer;
and
"D" is the applicable discount (converted from a percentage to a
decimal number) in Exhibit A.
Each such fee shall be paid to ZTI by Distributor within thirty (30)
days of the date on which Distributor invoices the Customer.
ZTI agrees to provide Distributor with Product Maintenance in respect
of all Products ordered by and delivered to Distributor pursuant to Section 4 of
this Agreement ("In-House Products"). The annual flat fee for such services,
regardless of the types and quantities of In-House Products ordered by
Distributor shall be as set out in Exhibit A hereto. The first such annual flat
fee shall be paid by Distributor to ZTI within thirty (30) days of the effective
date of this Agreement. Payment of each annual flat fee also entitles
Distributor to send two (2) of its personnel to attend at any of ZTI's Product
user conferences held during the period to which such fee is applicable.
(d) Transfer of Payment:
--------------------
All dollar amounts shown in this Agreement shall be deemed to be in
United States Dollars, unless specified otherwise in writing by ZTI.
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All monies due ZTI hereunder shall be payable in United States Dollars,
unless ZTI specifies otherwise in writing, and shall be paid by Distributor to
ZTI by wire transfer to an account designated by ZTI, or by cheque made payable
to ZTI at its current business address, or by direct deposit to an account
designated by ZTI.
(e) Interest and Overdue Payments:
------------------------------
Distributor agrees to pay interest at the rate of one and one-half
percent (1.5%) per month, being eighteen percent (18%) per annum, on any unpaid
amounts from the date due to the date upon which the balance is discharged, such
interest to accrue from day to day and be compounded on a monthly basis. If
Distributor shall at any time be overdue on payments, then immediately upon
notice from ZTI, ZTI may delay shipments of the Product, cancel outstanding
orders or demand payments be prepaid until Distributor is current on all
payments.
(f) Records and Audit:
------------------
Distributor shall maintain complete and accurate records of (i) its
marketing and services activities under this Agreement, (ii) a current list of
the Customers of the Products, (iii) the number and type of Products distributed
to each Customer and the platforms on which the Products are installed, and (iv)
additional maintenance and support purchased by each Customer. Such records
shall permit verification of fees due ZTI hereunder and shall be open to
inspection and available for copying by representatives of ZTI, including ZTI's
independent certified public accountants, at all reasonable times and upon
reasonable notice. The cost of such inspection shall be borne by ZTI, unless
such inspection discovers underpayments for any calendar quarter in excess of
five percent (5%) of the fees due ZTI for such quarter, in which case
Distributor shall bear the cost of such inspection. ZTI shall provide
Distributor with a copy of any report generated in respect of such inspection.
(g) Taxes, Other Charges and Gross-Up:
----------------------------------
Distributor agrees to pay all custom duties, excise taxes, assessments
or other governmental taxes and charges which may be directly or indirectly
imposed or based upon the distribution, transportation, delivery, use, or
maintenance of the Products or may otherwise arise in connection with this
Agreement. Any payments of fees required to be made to ZTI under this Agreement
shall be net of all such taxes and charges.
If any taxes shall be required by law to be deducted or withheld from
any fee payable hereunder by Distributor to ZTI, Distributor shall, after making
the required deduction or withholding, increase such fee payable as may be
necessary to ensure that ZTI shall receive an amount equal to the fee it would
have received had no such deduction or withholding been made.
(h) No Price Restrictions:
----------------------
Nothing in this Agreement shall be construed as restricting in any way
the prices at which Distributor distributes the Products or maintenance and
support of the Products to its Customers or Sub-Distributors.
(i) Special Distribution Arrangements:
----------------------------------
Distributor acknowledges and agrees that the applicable discount
referred to in Section 8(b) of this Agreement shall apply only in situations in
which the distribution of a Product is by Distributor to a Customer:
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(i) in the Territory; or
(ii) in a territory outside the Territory, but there is no other
ZTI distributor assigned to that territory,
and such distribution is the result primarily of the marketing and sales efforts
of Distributor and not the marketing and sales efforts of either ZTI or a third
party.
Whether the distribution of a Product inside or outside the Territory
is or is not the result primarily of the marketing and sales efforts of
Distributor shall be determined by ZTI in its sole discretion acting reasonably.
9. COMPLIANCE WITH LAW AND PROHIBITION ON EXPORT
(a) Compliance with Law:
--------------------
In performing its obligations under this Agreement, Distributor shall
comply, and shall ensure its Sub-Distributors comply, with the laws, rules and
regulations of the Territory in which activities of Distributor and its
Sub-Distributors are to be performed and shall defend, indemnify and hold ZTI
harmless from the Distributor's and its Sub-Distributors' failure to do so.
Furthermore, if this Agreement, the relationship created hereby or the
performance thereof, is determined by a court of competent jurisdiction to be
contrary either (i) to the laws, rules, regulations of the Territory now or
hereafter in effect, or (ii) to Distributor's representations and warranties set
forth in this clause (a), ZTI may terminate this Agreement immediately without
refund of any fees paid by Distributor to ZTI.
In this regard, Distributor recognizes that ZTI is not fully familiar
with the laws, rules, regulations, policies and customs of the Territory and has
relied on the following representations made by the Distributor. Distributor
hereby represents and warrants to ZTI that:
(i) neither this Agreement, the relationship created hereby, nor
the performance hereof, is contrary to the current laws, rules
or regulations of the Territory or any jurisdiction within it;
and
(ii) it understands and agrees that ZTI will comply with any legal
provision requiring disclosure, by affidavit or otherwise, of
the identity of any payments made or to be made to
Distributor.
(b) Prohibition on Export:
----------------------
Distributor shall ensure that neither it nor any of its
Sub-Distributors will export, directly or indirectly, any Product, or any
application created with the use of such Product, to any country:
(i) outside the Territory;
(ii) inside the Territory, but designated by the laws of Canada as
a prohibited destination; or
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(iii) inside the Territory, but for which an export or import permit
or other permit is required, unless such permit has been
obtained by Distributor and/or the applicable Customer.
10. USE OF ZTI'S TRADE-MARKS, TRADE NAME, CORPORATE NAME AND LOGOS
(a) Rights of ZTI:
--------------
Distributor hereby recognizes the exclusive right of ZTI in and to all
the trade-marks, trade names, corporate name and logos of ZTI applied to the
Products or otherwise used in ZTI's business (the "Marks"). No right in or
license to any Mark is granted by or is to be inferred from any provision in
this Agreement except as expressly provided herein. Distributor shall not take
any action which jeopardizes ZTI's rights in the Marks. Distributor shall not
register, directly or indirectly, any trade-marks, trade names, corporate names
or logos which are identical to or confusingly similar to the Marks or any
translations thereof. Distributor shall, upon ZTI's request, execute any
instruments that may be required to register, maintain or renew the registration
of any of the Marks in the Territory.
(b) Use by Distributor:
-------------------
ZTI hereby grants to Distributor, and to each Sub-Distributor, the
right to use ZTI's trade-marks, trade name, corporate name and logos applied to
the Products, such use being solely for the purpose of promoting the marketing
of the Products.
Distributor agrees that it and its authorized Sub-Distributors shall
not use, make reference to, or otherwise designate, either orally or in writing,
ZTI's trade-marks, trade name, corporate name or logos except as they may be
used for the benefit of ZTI in the marketing of the Products. ZTI's trade-marks,
trade name, corporate name and logos, even though used for the benefit of ZTI,
are not to be used by Distributor or its Sub-Distributors in printed materials
without first submitting specimens of such materials to ZTI for written
approval, which approval shall not be unreasonably withheld.
Distributor shall leave in place, and shall ensure that its
Sub-Distributors leave in place, any labels or other designations of ZTI's
trade-marks, trade name, corporate name and logos on the Products and to leave
in place any label or other designation indicating development and/or ownership
of the Products by ZTI.
(c) Notice of Trade-mark:
----------------------
Distributor shall ensure that wherever Distributor or any of its
Sub-Distributors is permitted to employ any trade-mark of ZTI in any form of
printed material, a footnote shall be placed appropriately in such material
which reads "Trademark of Zim Technologies Inc. used under license" or, in the
case of registered trade-marks, "Registered Trademark of Zim Technologies Inc.
used under license".
(d) Infringement:
-------------
Distributor will immediately notify ZTI if Distributor learns of any
potential or actual infringement of the Marks by a third party or that the use
of the Marks within the Territory may infringe the proprietary rights of a third
party. ZTI shall determine the steps to be taken in these circumstances, and
Distributor shall take no steps without ZTI's prior written approval.
Distributor shall provide ZTI with the assistance that ZTI may reasonably
request in dealing with any potential or actual infringement.
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(e) No Implied Right:
-----------------
No right in or license to any copyright, trade-marks, trade name,
corporate name and logos of ZTI is granted by or is to be inferred from any
provision in this Agreement except as expressly provided herein.
11. PROPRIETARY RIGHTS AND CONFIDENTIALITY/NON-DISCLOSURE
(a) Proprietary Rights:
-------------------
Distributor acknowledges that all rights, title and interest in and to
the Products, and other personal property, either tangible or intangible, that
ZTI may furnish to Distributor pursuant to this Agreement, are vested in, and
shall remain vested in, ZTI or its licensers, and Distributor shall have no
title or right therein except as licensee hereunder. Distributor further agrees
that all right, title and interest in any goodwill associated with the Products,
including its components, shall endure to the sole benefit of ZTI.
Distributor shall take no action which might impair or interfere with
ZTI's rights in the Products, including, but not limited to, contesting the
validity of such rights or seeking any trade-mark, copyright, patent or
industrial design registration in any jurisdiction in respect of the Products.
(b) Confidentiality and Non-Disclosure:
-----------------------------------
Distributor acknowledges that the Products contain trade secrets and
confidential information of ZTI and/or its licensers. Distributor shall retain
the Products in the strictest confidence and shall not disclose to any person,
and shall cause its employees and agents not to disclose to any person, any
confidential or proprietary information of ZTI, including the Software and the
Documentation, or any other information provided to Distributor by ZTI.
Without limiting the generality of the foregoing, Distributor shall
take all steps consistent with the highest industry standards to prevent
unauthorized use of or access to the Products. Should Distributor become aware
that any of the Products has been wrongfully disclosed to a third party,
Distributor will immediately inform ZTI about the circumstances leading to the
disclosure known to Distributor and shall cooperate, as reasonably requested, in
any investigation of such disclosure.
The obligations in this Section 11 shall not apply to any information
which, at or after the date of this Agreement, is:
(i) information made available in the public domain other than by
reason of acts or omissions of Distributor or its employees or
agents;
(ii) information obtained by Distributor from a third party
entitled to disclose such information;
(iii) information which Distributor can demonstrate was developed by
Distributor independently of ZTI; or
(iv) information required to be disclosed by operation of law,
including an order of a court of competent jurisdiction.
(c) Prohibition Against Duplication, Modification and Reverse Engineering:
----------------------------------------------------------------------
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To the extent prohibited by the laws of the Territory, Distributor
shall not modify, revise, reverse engineer, decompile or disassemble the
Software.
12. WARRANTIES AND WARRANTY DISCLAIMER
(a) ZTI represents and warrants that Software delivered by Distributor or a
Sub-Distributor to a Customer shall function substantially in accordance with
the Documentation delivered with the Software, for a period of sixty (60) days
from the date of such delivery (the "Warranty Period"). Distributor agrees that
ZTI's entire liability for breach of this warranty shall be limited to providing
Customer with a replacement copy of the Software that does function
substantially in accordance with the Documentation delivered with the Software,
provided Distributor or Customer gives ZTI written notice of the defective or
inoperative Software during the Warranty Period. This warranty shall not apply
if:
(i) the Software is not used in accordance with ZTI's
instructions;
(ii) the Software has been altered or modified in any manner
without the prior written consent of ZTI;
(iii) the Software is defective or inoperative as a result of the
malfunction of the Customer's computer equipment;
(iv) the Software is used in combination with other software not
provided by ZTI; or
(v) any other cause within the control of the Distributor or the
Customer which results in the Software becoming defective or
inoperative.
(b) ZTI does not represent or warrant that the contents of the
Documentation or the operation of the Programs will be error free or that the
Software will meet the requirements of end users.
(c) All Updates are provided "AS IS", without any representation or
warranty of any kind.
(d) EXCEPT AS EXPRESSLY PROVIDED in clause (a) immediately above and in
Sections 14 and 25 of this Agreement, ZTI MAKES NO REPRESENTATIONS OR WARRANTIES
OR COVENANTS, EITHER EXPRESS OR IMPLIED, IN RESPECT OF THE PRODUCTS, INCLUDING
WITHOUT LIMITATION, STATUTORY OR IMPLIED WARRANTIES OR CONDITIONS OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE EXPRESSLY
DISCLAIMED AND EXCLUDED
13. LIMITATION OF LIABILITY
(a) Notwithstanding any other provision of this Agreement, ZTI's entire
liability to Distributor for damages from any cause whatsoever, and regardless
of the form of action or the cause of action, whether in contract or in tort,
including negligence, and whether in the nature of a fundamental breach or a
breach of a fundamental term, shall not exceed the amounts actually received by
ZTI from Distributor pursuant to this Agreement at the time the cause of action
arose.
(b) IN NO EVENT SHALL ZTI BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES OR LOSS TO
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EQUIPMENT, LOSS OF PROFITS OR REVENUE, LOSS OF GOODWILL, INCREASED EXPENSES OF
OPERATION, COST OF CAPITAL, OR THE CLAIMS OF THIRD PARTIES INCLUDING CUSTOMERS
OF DISTRIBUTOR, HOWSOEVER CAUSED, EVEN IF ZTI HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR SUCH DAMAGES ARE FORESEEABLE.
14. INDEMNITIES
(a) ZTI represents and warrants to Distributor that ZTI has no knowledge
of any person or business entity other than ZTI who may have any proprietary
rights whatsoever in the Products, or if any such rights exist, ZTI has secured
consent of the holder of such rights, or in any concept or idea or any
predecessor thereof underlying or which is part of or which has been
incorporated into the Products.
(b) ZTI agrees that it shall at all times during and after the term of this
agreement indemnify and save harmless Distributor from and against any and all
liabilities, damages, losses, claims, demands, and expenses (including
reasonable legal fees) arising out of any claim by a third party in the
Territory that Distributor's possession, use, licensing or marketing, or
Customer's possession or use, of the Products infringes any Canadian or United
States copyright or patent, provided that:
(i) Distributor promptly notifies ZTI in writing of such claim and
furnishes ZTI a copy thereof;
(ii) ZTI has sole control over the investigation, litigation, and
negotiation of such claim; and
(iii) Distributor and/or its Customer cooperate fully in ZTI's
defense of such claim.
In the event of such claim of infringement, ZTI may, at its option and
expense, procure for Distributor and its Customers the right to continue using
the Software, modify the Software to make its use non-infringing or replace the
Software with non-infringing software, failing which ZTI will refund to
Distributor (i) a pro rata portion of the license fees paid by Distributor to
ZTI hereunder for the Software, based on a deemed three (3) year license term
and straight-line depreciation of the value of the Software from the date of
delivery of the Software to Customer, and (ii) a pro rata portion of the fees
paid by Distributor to ZTI for Product Maintenance for the period in which the
claim has arisen, which refunds to Distributor shall be conditional upon
Distributor first refunding to each of its Customers (i) a pro rata portion of
the license fee paid by each Customer to Distributor for the Software, based on
a deemed three (3) year license term and straight-line depreciation of the value
of the Software from the date of delivery of the Software to Customer and (ii) a
pro rata portion of the fee paid by each Customer to Distributor for Product
Maintenance for the period in which the claim has arisen. ZTI shall have no
liability for any claim of copyright or patent infringement based on the use or
combination of the Software with non-ZTI programs or data if such infringement
would have been avoided by the use or combination of the Software with other
programs or data.
(c) Distributor agrees that it shall at all times during and after the term
of this agreement indemnify and save harmless ZTI from and against any and all
liabilities, damages, losses, claims, demands, and expenses (including
reasonable legal fees) that ZTI may incur in respect of:
(i) any negligent act or omission by, or willful misconduct of,
Distributor's employees, agents or Sub-Distributors;
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(ii) any claim that Distributor's distribution or any other use, or
Customer's use, of any product which is licensed by
Distributor and coupled or combined with any of the Products,
infringes any copyright, patent or other intellectual property
right;
(iii) any warranty, condition, representation, indemnity or
guarantee granted by Distributor or provided by law with
respect to the Products that is in addition to or in lieu of
the limited warranties specified in Section 12 of this
Agreement;
(iv) any modification of or addition to the Products not approved
in writing by ZTI;
(v) any omission or inaccuracy in Distributor's advertisements or
promotional materials related to the Products;
(vi) any disclosure by Distributor or any of its Sub-Distributors
to third parties of any trade secrets or confidential
information of ZTI or its licensers in respect of the
Products, or any other information made available by ZTI to
Distributor pursuant to this Agreement; or
(vii) Distributor's breach of this Agreement, including, without
limitation, Distributor's failure to comply with Sections 9
and 10 hereof.
15. TERM
Subject to the provisions of Section 16 below, this Agreement shall
become effective on the date set out on the first page hereof, and shall remain
in effect for a period of two (2) years from such date. This Agreement shall
automatically continue in force thereafter provided however that either party
may terminate this Agreement at any time at or after the end of such two (2)
year period, for any reason, upon thirty (30) days prior written notice to the
other party.
16. TERMINATION
(a) Subject to Sections 16(b) to 16(c) below, either party may terminate
this Agreement if the other party is in default of any of its material
obligations under this Agreement and such default is not remedied within thirty
(30) days written notice to the party in default from the party not in default.
(b) ZTI may terminate this Agreement immediately upon written notice if
Distributor is in default of any of its obligations under Sections 2, 6, 8, 10
and 11 of this Agreement pertaining to the license grant, payment of fees, use
of ZTI's trade-marks, trade name, corporate name and logos, and confidentiality
of information, respectively.
(c) Either party may terminate this Agreement immediately upon written
notice to the other party if:
(i) the other party ceases to conduct business in the normal
course;
(ii) the other party becomes insolvent;
(iii) the other party becomes bankrupt (or the equivalent status
under the laws of any jurisdiction in which the Distributor is
located);
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(iv) the other party makes any assignment for the benefit of
creditors;
(v) proceedings are instituted by or against the other party
seeking relief, reorganization or rearrangement under any laws
relating to insolvency;
(vi) a receiver, liquidator or trustee is appointed in respect of
any property or assets of the other party; or
(vii) an order is made for the liquidation, dissolution or winding
up of the other party.
17. EFFECT OF TERMINATION
Termination of this Agreement for any reason shall terminate all
further rights and obligations of ZTI and Distributor hereunder. Notwithstanding
the foregoing, the parties agree that:
(i) upon such termination, Distributor shall promptly return to
ZTI any Products in its possession or in its Sub-Distributors'
possession, and any and all copies or portions thereof, and
all proprietary or confidential materials furnished to
Distributor by ZTI hereunder, and Distributor shall certify in
writing to ZTI within thirty (30) days of the date of
termination that it has compiled with this clause (i);
(ii) ZTI Software License Agreements with Customers shall survive
such termination unless terminated in accordance with the
provisions therein;
(iii) the indemnification and confidentiality provisions of this
Agreement shall survive such termination;
(iv) following such termination, Distributor shall not be relieved
of its then accrued payment obligations (including minimum
payment obligations prorated to the date of the termination)
whether or not invoiced by ZTI;
(v) following such termination, ZTI and Distributor shall continue
to fulfill their maintenance and support obligations set forth
in Exhibit C in respect of Product provided to Customers to
whom Distributor and its Sub-Distributors have outstanding
maintenance and support obligations at the date of such
termination;
(vi) after such termination, Distributor and its Sub-Distributors
shall not enter into any further agreements with Customers for
additional maintenance and support of the Products, nor shall
Distributor and its Sub-Distributors have the right to renew
any maintenance and support agreements, and Distributor and
its Sub-Distributors shall cease to receive any further
payments for maintenance and support; and
(vii) upon such termination, all agreements between Distributor and
its Sub-Distributors for the marketing and distribution of
Products shall be terminated, but Distributor shall ensure
that its Sub-Distributors shall continue to fulfill their
maintenance and support obligations in respect of Products
provided to Customers to whom the Sub-Distributors have
outstanding maintenance and support obligations at the date of
such termination.
-18-
18. GOVERNMENTAL APPROVALS
In the event that this Agreement and the consummation of the
transactions contemplated herein require the consent of any official government
body in the Territory or Canada, Distributor shall use its best efforts to
obtain the approval of any such body in the Territory, and ZTI shall use its
best efforts to obtain the approval of any such body in Canada. Each party shall
notify the other party promptly of any such consent requirement. In the event of
failure to obtain any such consent, this Agreement shall be treated as never
having had any legal force, except that each party hereby agrees that it shall,
in that event, bear the expense and obligations which it has taken in relation
thereto.
19. INDEPENDENT CONTRACTORS
Neither the making of this Agreement nor the performance of its
provisions shall be construed to constitute either of the parties hereto as an
agent, employee, partner, joint venturer, or legal representative of the other.
All persons employed by either party shall be deemed to be employees of such
party only.
As a licensee of ZTI, Distributor shall at all times be deemed to be an
independent contractor, and Distributor shall have no right or authority to
assume or create any obligation or responsibility, or make any warranties in
respect of the Products which extend or are inconsistent with those provided
herein by ZTI, whether express or implied, on behalf of or in the name of ZTI.
20. FORCE MAJEURE
Neither ZTI nor Distributor shall be liable for damages for any delay
or failure of delivery arising out of causes beyond their reasonable control and
without their fault or negligence, including but not limited to acts of civil or
military authority, fires, riots, wars, or embargoes.
21. ENTIRE AGREEMENT
This Agreement and the exhibits attached hereto, set forth the entire
agreement of the parties with respect to the subject matter contained herein,
and no oral or written statement or representations not contained herein shall
have any force or effect. This Agreement may be modified only by a writing
subscribed to by both parties. The terms and conditions of any Distributor
purchase order shall be null and void to the extent they vary or add to, or
otherwise conflict with, the terms and conditions of this Agreement..
22. SEVERABILITY
If any term of this Agreement is found to be invalid, illegal or
unenforceable, in whole or in part, by a body of competent jurisdiction, that
term shall be deemed severed from this Agreement to the extent of such
invalidity, illegality or unenforceability, and such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other term of the Agreement.
23. ASSIGNMENT
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Distributor
shall not assign this Agreement without the prior written consent of ZTI.
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24. NO WAIVER
The failure of a party to insist upon strict adherence to any item of
this Agreement on any occasion shall not be considered a waiver or deprive that
party of the right hereafter to insist upon strict adherence to that term or any
other term of this Agreement.
25. CAPACITY AND AUTHORITY TO CONTRACT
ZTI and Distributor each represents and warrants to the other that it
has the full right, power and authority to enter into and carry out this
Agreement and has been and is on the date of this Agreement duly authorized by
all necessary and appropriate corporate or other action to execute this
Agreement.
26. INJUNCTIVE RELIEF
Distributor acknowledges that the breach by it of this Agreement may
give rise to irreparable injury to ZTI, inadequately compensable in damages.
Accordingly, Distributor agrees that ZTI shall be entitled to obtain injunctive
relief against the breach or threatened breach of this Agreement, in addition to
any other legal remedies which may be available to it.
27. ELECTION OF REMEDIES
The remedies accorded herein to ZTI and Distributor are cumulative and
in addition to those provided by law, and may be exercised separately,
concurrently, or successively.
28. HEADINGS
The headings of this Agreement are solely for convenience of reference
and shall not have any effect upon its interpretation.
29. GOVERNING LAW
(a) This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario, Canada and the laws of Canada applicable
therein, other than rules governing conflict of law. The courts of the Province
of Ontario shall have jurisdiction to entertain any legal proceedings arising
under this Agreement. The parties hereby submit to the jurisdiction of the
courts of the Province of Ontario, providing that nothing herein contained shall
prevent ZTI from proceeding, at its election, against Distributor in any other
jurisdiction under the laws of that jurisdiction.
(b) The parties agree that the UN Convention on Contracts for the
International Sale of Goods (Vienna, 1980) shall not apply to this Agreement nor
to any dispute or transaction arising out of this Agreement.
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30. NOTICES
(a) All notices and other information to be given by one of the parties to
the other shall be deemed sufficiently given when forwarded by facsimile to the
other party at the following addresses and facsimile numbers, as applicable:
If to ZTI: Zim Technologies International Inc.
20 Colonnade Road, Suite 200
Nepean, Ontario, Canada
K2E 7M6
Attn: Blake Batson, President
Tel: (613) 727-1397
Fax: (613) 727-9868
If to Distributor: IGM / SP
------------------------------------
Postbus 92, Usselstein 3400AB
------------------------------------
Netherlands
-----------------------------
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Attn: Niek Mollers
----------------------
Tel: 31-30-68809-88
-----------------------
Fax: 31-30-68809-66
------------------------
(b) Any notice of change of address by a party shall be effective only
upon receipt of a notice provided to the other party in accordance with the
provisions of clause (a) above.
31. TIME
Time shall be of the essence in this Agreement.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year written on the first page hereof.
ZIM TECHNOLOGIES INTERNATIONAL INC.
-----------------------------------
(Distributor)
Signature: Signature:
----------------------------- -------------------------
Name: (PRINT) Name: (PRINT)
-------------------------- ----------------------
Title: Title:
--------------------------------- -----------------------------