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EXHIBIT 10.2
The full unredacted copy of this Agreement is subject to a request for
confidential treatment. Confidential portions have been omitted and the full
unredacted copy of this agreement has been filed separately with the Securities
and Exchange Commission.
THE WIDECOM GROUP INC.
55 CITY CENTRE DRIVE, SUITE 500
MISSISSAUGA, ONTARIO, CANADA L5B 1M3
PH: (905) 712 0505
FAX: (905) 712 0506
PRIVATE-LABEL / OEM AGREEMENT
THIS AGREEMENT is made on the 8th day of September, 1996 between The WideCom
Group Incorporated, a company incorporated under the laws of the Province of
Ontario, Canada whose registered office is at 55 City Centre Drive, Suite 500,
Mississauga, Ontario, Canada, L5B 1M3 (hereinafter called "WideCom"), and Scan
Group (1991) Ltd. whose registered office is at P.O.Box 10525, Haifa Bay 26114,
Israel, Hereinafter called "SGI".
Whereas
(A) SGI manufactures high end wide-format color scanners.
(B) Widecom manufactures low cost wide-format monochrome and color
scanners.
(C) SGI is desirous of reselling Widecom color scanners under its own brand
name, and incorporating Widecom color-scanner engine in a product to be
created by SGI.
(D) Both firms wish to co-operate in joint marketing efforts, and joint
promotions, as necessary.
1. Definitions
1.1 In this agreement:
(a) "Product or Base Product" means the SLC436-Color Scanner
hereto as manufactured and marketed by WideCom from time to
time or as may be amended from time to time by agreement in
writing.
(b) "Pure Direct Competition" means products based on Widecom's
scan engine, that have no difference, or no real value
differentiation, over Widecom's stand alone scanner.
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(c) "Applications" shall mean the applications of the Production
for purposes other than that of a stand alone scanner.
(d) "OEM" shall mean private labeling or branding of equipment.
2. Product Scope
SGI will take Widecom's base product and create products for the following
applications:
(a) Color separation card and or software, for Windows and Unix
Platforms, as a primary function of the unit.
(b) SCSI interface card and software for Windows and UNIX
Platforms. Note: Widecom will not develop a competitive
SCSI/UNIX interface for at least 3 years, and will resell this
interface to its customers, and offer it to its other OEMs.
(c) Vectorisation on the fly Software and Hardware for Windows and
UNIX Platforms.
SGI may use ATIL to do these product developments, but will
insure that ATIL signs and abides to the non-disclosure and
non-compete agreements.
3. Prospect Protection
Both parties agree not to encroach
upon or undermine the other party's efforts in recruiting
specific dealers, distributors or OEMs. In this regard,
Widecom recognizes that SGI has had an ongoing relationship
with the following firms, and that SGI wishes to approach
such firms with products created from Widecom's base
scan-engine technology, and Widecom will support these
actions within the term defined hereunder
USA: *
Europe: * - Germany
- Germany
- Germany
- Austria
- Slovakia
SGI must show progress in its efforts to recruit these firms
as resellers on a bi-monthly basis, to maintain such
protection. The protection will be for a period of a maximum
of 6 months if SGI has not been able to finalize an agreement
with the above noted firms within that period. Extended
protection beyond the six months will require bi-monthly
updates that show real progress is being made to Widecom's
satisfaction. If any of these firms approach Widecom directly,
and an agreement is entered upon within 5 years of this date
then Widecom will provide SGI an override commission for
purchases by that firm from Widecom. This commission will be
$40.00 per unit.
4. Mutual Marketing Actions
4.1(a) Widecom offers SGI access to one of its U.S. offices (Atlanta, Chicago
or other), where SGI may at its option establish its primary U.S.
*THIS ITEM HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR CONFIDENTIAL TREATMENT.
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facility. Widecom will allow SGI staff temporary access to its
showrooms and meeting rooms in its other facilities, based on mutual
convenience.
4.1(b) If needed, SGI may at its own cost install call forwarding or call
answering services at other offices.
4.1(c) The only costs that Widecom will be responsible for is provision of
space for the primary SGI office, whereas SGI will be responsible for
the rest of its costs (e.x. telephone, e.t.c.).
4.1(d) Widecom will not be obligated to maintain an office for more than one
year, or provide this service beyond this period, unless mutually
agreed.
4.2(a) Widecom intends to participate at the following tradeshows over the
next six months:
Show: Dates Location Booth Size
GovCAD'96 September 23 to 25 Virginia 20x30
A/E/C Systems Fall October 29 to 31 Florida 20x20
AutoFact November 12 to 14 Detroit 20x20
GIS/LIS'96 November 19 to 21 Colorado 10x20
Widecom invites SGI to participate in these tradeshows at Widecom booth.
4.2(b) Widecom will allow SGI one overhead sign on the channel joining two
columns (as depicted in appendix-A). Along with the overhead sign, SGI
can put up two posters on the columns of size 3'x4'. All signage must
be pre-approved by
Widecom, to insure no conflicting message is portrayed. It is
understood that the product that SGI will display can be competitive to other
Widecom products in the booth, as long as such product incorporates Widecom's
scan-engine. Widecom will not be able to provide overhead signage if the booth
is less than 20'x20'.
4.2(c) For the show participation, SGI will be responsible for its own
shipping, drayage or staff costs. Widecom will only be responsible for
providing the space on the booth, carpet, and its standard booth. All
other costs will be borne by SGI. Joint participation in tradeshows
other than the above, will be mutually agreed upon by both parties, as
necessary, on an ongoing basis.
4.2(d) SGI will inform Widecom in writing at least 60 days prior to each
tradeshow, of its intent to participate. If SGI fails to attend at a
tradeshow, after confirming its intent to participate, Widecom may
withdraw its invitation to participate in future trade shows.
4.3 Lead sharing: Both parties agree to share leads that are more suited to
the other party's Widecom-based product. That is, for the products that
are in pure direct competition, neither party is obligated to share
leads. Both parties agree to share leads for Widecom- technology-based
products that either party has developed that can better meet the
specific demands of a customer. For example, if the SGI labeled product
contains a special vectorization boards or other related imaging
enhancements, that are not offered by Widecom, and are required by the
customer, then Widecom will pass this lead to SGI.
4.4 SGI agrees to the use of its name and reference in Widecom advertising
and testimonial literature. That is, Widecom wishes to use advertising
and testimonial literature that conceptually says that SGI provides the
best & highest quality color scanner on the market, and uses that to
enhance its credibility, since SGI has chosen the Widecom technology
for its low cost product. This will be created in a manner
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that enhances both SGI & Widecom's stature in the market, and does not
take away or hinder anything from SGI's products that are in
pure-competition with Widecom. Widecom will use this to promote its
technology, and no specific finished product. Each one the
advertisements or literature will have to be approved by SGI.
5. Non-disclosure/Non-compete Both parties have entered into a mutual
non-disclosure agreement, which is attached as appendix-B. SGI affirms
that other than with respect to the proposed business relationship
between the parties, it is neither engaged in nor intends to be engaged
in either directly or in directly any business involving single line
contact scanning module technology. SGI agrees not to enter any such
business during the 5 (five) year period following the date of this
agreement.
6. Production/Sub-contract Widecom will consider favorably the possibility
of producing the new SGI scanner (based on Widecom technology) at their
plant in India. SGI will provide all documentation needed for this
production. The new scanner developed by SGI will be owned solely by
SGI and its production rights will not be allowed to be handed to a
third party.
7. Territory, Commitment, Price & Quality Assurance
7.1 Territory: For the European market, the basic unit that Widecom
supplies is limited in the form of a Color-Separation-Scanner or
SCSI/UNIX-Scanner or Vectorisation-Scanner unit. For the first 12
months, the stand-alone scanner base-unit will not be sold by SGI in
the European market, except for the above noted
application/configuration.
7.2 Commitment: SGI agrees to commit to 200 units for the first 18 months,
and subsequent annual commitments will be mutually agreed upon by both
parties.
7.3 Price: The purchase price per unit for the 200 units will be: *.
Widecom undertakes that for similar quantity purchases, no other
Company will be offered a better price and if they are offered a better
price, then it will reduce the SGI price accordingly (but this will not
be retroactive). For any quantity of machines under 2,000, Widecom
undertakes that the price to any other customer will not be more than
10% lower, in which case it will reduce the SGI price.
7.4 Product Updates: In case that Widecom will change the specifications of
the scanner in the future, they will update SGI with the full hardware
and software documentation prior to introducing the new product to the
market.
7.5 *
7.5 Quality Assurance: Widecom undertakes to provide to SGI units that will
show image that resolves the test chart created by both parties, and
attached in appendix-C. The scanner specifications will be as follows:
a. The scanner should support scanning in RGB mode of at least 24
bit per pixel.
b. The scanner should be able to produce consistent colors.
c. Scanning area of at least A0 for every color mode.
d. The scanner should scan in true 400 dpi resolution.
8. Termination
8.1 Either party may terminate this agreement forthwith by notice in
writing sent thirty (30) days in advance:
*THIS ITEM HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR CONFIDENTIAL TREATMENT.
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(a) upon bankruptcy, insolvency of liquidation of either party (except
for voluntary liquidation to effect a reconstruction on terms to which
the other party has previously consented to in writing);
(b) upon any material change to the ownership or management of either
party which the other party considers detrimental to its interest;
(c) if either party commits a irremediable breach of the terms of this
agreement.
8.2 Notwithstanding termination of this agreement SGI and ATIL shall remain
bound by the obligations to respect WideCom's confidential information,
non-competition and industrial property rights.
9. Applicable Law: This agreement shall be construed under and governed by
the law of the Province of Ontario, Canada. Further, the parties hereto
agree that any claims or controversy arising between them our of, or in
conjunction with the provisions of this agreement shall be finally
settled in accordance with the rules of conciliation arbitration of the
International Chamber of Commerce. In addition, the parties agree to
comply with the applicable laws of Canada and the territory regarding
disclosure requirements and limitations of payments imposed by subject
territories.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day
and year first above written.
/s/
- --------------------------------------- --------------------------------
On Behalf Of The Scan Group (1991) Ltd. Refoel Moshe
/s/
- --------------------------------------- --------------------------------
On Behalf Of The WideCom Group Inc. Suneet Tuli
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APPENDIX A
Picture of an overhead sign to be used by SGI in connection with certain
tradeshows which the Company has invited SGI to participate in with the use of
the Company's booth.
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APPENDIX B
NON-DISCLOSURE AGREEMENT
Made this 11th day of July 1996
By and among SCAN GROUP LTD., having a place of business at 22 Humusshim St.
P.O. Box 0425 Halfa 26114, Israel; and THE WIDECOM GROUP INC., having a place of
business at 55 City Centre Drive, Suite 500, Mississauga Ontario, Canada.
1. RECITALS. The parties hereto acknowledge that from time to time,
Widecom may make known to Recipient certain confidential information in
furtherance of mutual business interests which is deemed to be
confidential, secret and/or proprietary to Widecom.
2. DEFINITION. "Confidential Information" shall mean all information
designated as "Confidential Information", (as provided in Paragraph 3)
and disclosed by Widecom to Recipient, including, but not limited to,
any electronic configurations, component specification, logic diagrams
and equipment designs associated with the Scanner/Plotter/Facsimile
Project. The term "Confidential Information" shall not include any
information which:
2.1 Is now generally known or available or which hereinafter
through no act or failure on the part of Recipient becomes
generally known or available; and provided that the term
"generally known" shall not include piecemeal reconstruction
or reverse engineering of the "Confidential Information";
2.2 Is hereafter fumished to Recipient by a third party without
restriction on disclosure, where such third party legally
obtained such information and the right to disclose it to
Recipient or
2.3 is independently developed by Recipient without violation of
any legal rights which Widecom may have in such information.
3. DISCLOSURE and PROTECTION.
As to any information provided to Recipient by Widecom, such disclosure
shall be deemed "Confidential Information" if:
a) The confidential information in written or other tangible form
is marked "Confidential" or
b) Information disclosed orally is identified as confidential in
writing to Recipient within 72 hours of meeting and may not be
disclosed in any part prior to said Letter of Identification.
4. Recipient shall use "Confidential Information" for the purpose of this
Agreement only and shall not disclose "Confidential Information" or any
part thereof to any other person, corporation or other organization
without prior written authorization of an officer of Widecom.
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5. This Agreement shall remain in force and effect for two (2) years from
the date of the last transfer of "Confidential Information" between the
parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SCAN GROUP LTD. THE WIDECOM GROUP INC.
By: /s/ By: /s/
-------------------------------- --------------------------------
Rofoel Moshe Suneet Tuli
TITLE: President TITLE: Executive Vice President
Date: 11/7/96 Date: 11/7/96
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APPENDIX C
It is agreed that units of SLC 436-Color Scanner will be tested by both
companies using the test chart as follow:
Test Chart # .83.001
Test Chart maid by: EDMUND SCINTIFIC
Barlington
New Jersey 08607
USA
- ---------------------------- -------------------------
Scan Group Ltd. Widecom
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