EXHIBIT 10.19
Purchase Agreement
THIS PURCHASE AGREEMENT ("Agreement") made this 22 day of May, 2002, by
and between M-Wise m-Wise Inc., US corporation with its principal place of
business at 1013 Centre Road, Wilmington, Delware (hereinafter "Seller") and
Comtrend Corporation with its principal place of business at 3F-1, 10 Lane 609,
Chung Hsin Road, Section 5, San Chung City, Taipei Hsien, Taiwan 241, R.O.C.
(hereinafter "Buyer").
WHEREAS, Buyer desires to acquire the MOMA gateway Platform for the
purpose of conveying Short Message Service ("SMS") to be made available to
Service Users; and
WHEREAS, Seller desires to supply the software, applications, and provide
associated services of SMS subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. Interpretation
1.1 Definitions
The following expressions shall have these meanings:
"Commissioning" means that the Platform is ready for
operation after the satisfactory completion
of all the Tests Runs.
"Documents" means the written materials and
specifications concerning to the MOMA gateway
Platform or SMS.
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"Final Acceptance" means completion of continuous and
satisfactory Commissioning operation of the
whole Platform for a period of six-month;
"Platform" means the MOMA gateway Platform comprised of
Software and Documents, made available from
time to time by Seller for the purpose on
conveying SMS.
"Project" means the provision of the Platform and the
undertaking of the SMS.
"Services" means supply, set-up, integration, testing,
Training, commissioning, Technical Support
and all other ancillary activities required
for meeting the Specifications or completing
the Project.
"Service User" means a person who is connected to the mobile
operators.
"Short Message" means a message comprising numerals and/or
text provided by content provider to Service
User by means of the internet and leased line
link any delivery of which is initiated by
the Service User by making a telephone call
to mobile operators.
"Specifications" means the technical requirements set forth in
Annex 2;
"Software" means software and applications developed or
acquired by the Seller and delivered to Buyer
by Seller under this Agreement. Software
contains (1) machine-executable instructions;
(2) the micro-code (firmware) embedded in the
Equipment; (3) all related user
documentation; (4) any update and revision of
these instructions, micro-code and/or the
related user documentation; (5) any copy of
these items.
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"Test Runs" means the tests to be performed by the
Parties according to Specifications.
"Training" means the Training courses concerning to the
MOMA gateway Platform and SMS.
1.2 General
Except as otherwise provided, in this Agreement,
(1) headings are for convenience only and do not affect interpretation;
(2) references to "notice" means a written notice;
(3) a reference to a law includes any amendment or modification
thereof; and
(4) a reference to a "day" means a calendar day.
1.3 Priority of Terms and Conditions
In the event of any conflict, vagueness or ambiguity between the terms and
conditions of this Agreement or its Annexes or documents referred to in this
Agreement, the descending order of priority will be:
(1) Clauses of this Agreement;
(2) Memorandum of Understanding;
2. Scope of Work
2.1 Major Tasks
Seller shall perform the following major tasks:
(1) Performing, set-up, integration with existing equipments,
integration with operators and content providers, testing, and
optimization of the Platform;
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(2) Providing Services and all other incidental and ancillary
activities necessary to meet the Specifications;
(3) Cooperating with Buyer for any inspections or other action required
by Buyer.
2.2 Non-exhaustive Annexes
Though the Annexes hereto specify Seller's major obligations under this
Agreement, they shall not be deemed exhaustive. If any item is required for
completing the Project but not specified in this Agreement (including the
Annexes), it shall be Seller's obligation to carry out the item as may be
necessary to complete the Project. The Agreement includes annexes as follows:
Annex 1 Specifications
Annex 2 Training Plan
Annex 3 Maintenance Plan
4. Pricing
4.1 Contract Price
The breakdown of the contract price, set forth in Annex 1, is the total amount
Buyer is to pay for the Platform and Services offered by Seller. Except as
otherwise provided herein, the contract price includes the provision of any and
all ancillary products and services, all international and local transportation
charges, pre-shipment inspection costs, customs duties, taxes (including R.O.C.
business tax), any governmental charges related to the performance of the
Agreement, rental, insurance, surcharges for emergency deliveries, operation of
Seller's warehouses and the cost of any special tooling, test equipment and
facilities.
4.2 Additional Orders
Buyer shall be entitled to purchase, by placing an additional order, any items
of the Platform and/or Services from Seller at the prices not more than those
set forth in the Annex 1 hereto. The prices listed in Annex 1 hereto shall not
be increased for a period of five years from the effective date of the
Agreement.
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4.3 Taxes
In the event of any change of tax rates or tax structures, any resulting
increased or decreased cost will not be reflected in the contract price.
5. Payment
5.1 General
The Buyer will pay each valid invoice issued in accordance with the Agreement
within thirty (30) days after its receipt of the invoice concerned. Buyer will
make payment by banker's draft or wire transfer at Buyer's option. If there is a
dispute over an amount to be paid, Buyer shall pay the amount not in dispute and
the Parties shall promptly meet to resolve the disputed amount.
5.2 Milestone Payment
Seller is entitled to invoice Buyer for the applicable payments according to the
following schedules:
(1) Twenty percent (20%) of the license and set-up fees once the
arrival of the software in Taiwan.
(1) Twenty percent (20%) of the license and set-up fees upon the
Commissioning of the Platform;
(2) Sixty percent (60%) of the license and set-up fees once the Final
Acceptance certificate is issued.
6. Test Run, Commissioning and Acceptance
6.1 Test Runs
6.1.1 Test Runs shall be carried out in accordance with the Test Run Plan to
ensure that the Platform comply with the Specifications. When
conducting Test Runs, Seller shall perform the Test Runs at its own
cost and provide the records of test results.
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6.1.2 If the Platform is proved to meet the Specifications, Buyer will
certify to Seller that the Platform has been properly installed and is
ready for Commissioning.
6.2 Final Acceptance
Platform shall be deemed accepted when the performance of the Platform is proven
in a stable way after the six-month Commissioning period. Thereafter, Buyer
shall issue a certificate of Final Acceptance.
6.3 Defective Items
Buyer may reject any item of the Platform or any part thereof which is found to
be defective inferior in quality or not compliant to the Specifications. If an
item of the Platform is rejected, Buyer may:
(1) require Seller to remedy the defects at Seller's expense; in such
event, the Commissioning period will re-start from the
rectification of the defects; or
(2) without prejudice to any other rights which Buyer may have against
Seller, reject the Platform and cancel the Agreement or a purchase
order in question. Any money paid by Buyer to Seller in respect of
the Agreement or an order in question shall be refunded to Buyer
with interest.
7. Documents
7.1 Complete Documentation
All Documents supplied by Seller shall be complete and up to date and shall
allow Buyer to understand, operate and maintain the Platform. Seller shall
provide Buyer with all Documents and other information in English covering
technical description, Specifications, operation and maintenance, operational
testing and utility software information. Documents shall include a glossary of
all terms, definitions and abbreviations which are not in common use in the
telecommunications industry. Seller shall supply all Documents in hard copies or
soft copies as specified by Buyer. Buyer shall be entitled to reproduce a
reasonable number copies of any Documents (in hard copy or in soft copy) only
for internal use.
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7.2 Up-to-date Documentation
In the event any modification of Hardware, firmware, Software and/or Documents
are required, Seller shall provide Buyer, free of charge during the warranty and
thereafter, with amended Documents giving details of (a) the changes involved,
(b) the reasons for the changes, and (c) advice on the changes properly
numbered.
8. Technical Support
Seller shall provide Buyer with Technical Support service. Upon Buyer's request,
Seller shall take immediate actions, free of charge, to make modification or
upgrade Software/firmware required for improving Platform performance and
reliability and/or to make the Platform comply with changes in international
standards.
9. Training
Seller shall provide Buyer, free of charge, with Training services required for
the operation and maintenance of the Platform in accordance with Training Plan
as set forth in Annex 3. Seller shall provide Buyer with additional training
courses whenever Buyer raises its request. The documentation and materials used
in training courses will be provided by Seller.
10. Warranty
10.1 Software Warranty
Seller warrants that the Software and application shall be operational on the
equipments that Seller recommended Buyer and fully support the requirements
(including function and performance requirements) set forth in the Specification
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10.2 Service Warranty
Seller warrants that the Services (including maintenance services after warranty
period) be performed with professional care and skill.
10.4 Warranty Period
The warranty period is twelve (12) months after Final Acceptance. If, during the
warranty period, any part or parts of Software or Services prove defective or do
not function as warranted, Seller shall, upon receipt of Buyer's notice,
immediately remedy such defective part(s) at its own cost.
11. Intellectual Property
11.1 License
Seller shall grant licenses to Buyer or acquire for Buyer from third party to
use in perpetuity the Software, application, Documents and training materials.
Buyer may copy and distribute the first 20 applications engines to its customer
without paying any license fees.
11.2 Indemnity By Seller
(1) If a third party claims that any item of the Platform supplied by
Seller infringes that party's patent, trademark, copyright or other
intellectual property rights, Seller shall indemnify and hold
harmless Buyer from and against all damages, losses, costs and
legal expenses incurred by Buyer.
(2) Buyer shall give Seller prompt written notice of any action, claim
or threat of an infringement suit, either oral or written, or the
commencement of any infringement suit against Buyer relating to the
Project performed hereunder by Seller.
(3) If the use of any such item or any part thereof should be enjoined,
Seller shall take any of the following courses of action:
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A. to procure for Buyer the right to continue using such items;
B. to replace said item with non-infringing item of comparable or
superior capacity and performance;
C. to modify the item, so that it becomes non-infringing, provided
such modified item shall be equal or superior to the infringing
item.
12. Termination
12.1 Termination for Cause
(1) Without prejudice to any right or remedy available to non-defaulting Party,
non-defaulting Party may terminate the Agreement in any of the following
events:
A. a Party becomes insolvent or is subject to any bankruptcy,
liquidation or winding-up or receivership proceeding or any similar
action;
B. Seller breaches a warranty;
C. a Party fails to comply with any other provision of the Agreement.
(2) Defaulting Party shall be given a written notice and a thirty-day period of
time to cure its default.
12.2 Effect of Termination
(1) Upon the termination by Buyer,
A. Buyer shall
a. determine which parts of the Platform and Service it will retain or
reject;
b. return the rejected parts to Seller at Seller's cost and expense;
c. pay Seller for the retain parts.
B. Seller shall pay or credit to Buyer the amount Buyer has paid for
the rejected parts of the Platform and Services.
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(2) Upon the termination by Seller, Buyer shall pay Seller any
outstanding amounts for the Platform delivered and Services
performed.
(3) Upon termination of the Agreement, the obligations under the
Agreement shall be terminated except those provisions herein headed
"WARRANTY", "INDEMNIFICATION", "CONFIDENTIALITY", "INTELLECTURL
PROPERTY" "ARBITRATION AND GOVERNING LAW" and such other provisions
as are necessary to resolve any post termination disputes.
13. Miscellaneous
13.1 Confidentiality
Buyer and Seller each agree to hold in strictest confidence any information and
material which is related to either party's business or is designated as
proprietary and confidential, herein or otherwise, by either party in connection
with the transactions contemplated by this Agreement. Each party agrees not to
make use of such designated information and material other than for the
performance of this Agreement. Proprietary and confidential information includes
information related to research, development, pricing, trade secrets, customer
lists, salaries or business affairs of the parties to this Agreement. The
parties' obligations of confidentiality under this Agreement shall survive
termination of this Agreement.
13.2 Force Majeure
The Parties shall not be liable for failure or delay in performance due to any
cause not reasonably foreseen by and beyond the control of either party.
However, the Parties shall have used their best efforts to avoid failure or
delay in performance, minimized the impact of the same, and rendered prompt
written notice thereof when first discovered, fully describing its probable
effect and duration. Buyer may, after ascertaining the facts and the extent of
the delay, extend the time for completing performance and amend the performance
schedule accordingly. Buyer shall not be liable for any increased costs,
including price escalation, beyond the original delivery date, due to causes
beyond either party's reasonable control.
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13.3 Notices And Requests
All notices or demands of any kind under this Agreement shall be in writing and
shall be served by personal service, by commercial courier with receipt
requested, by fax or by mail at the address of the receiving Party set forth
hereunder, or at such different addresses as may be designated by either Party
by written notice to the other Parties. All notices or demands by mail shall be
by certified or registered mail, return receipt requested, and shall be deemed
complete five (5) business days after the mailing.
Buyer: _______________________
Address: _______________________
_______________________
Attn: __________________________
TEL: __________________________
FAX: __________________________
Seller: _______________________
Address: _______________________
_______________________
Attn: __________________________
TEL: __________________________
FAX: __________________________
13.4 Assignment and Sub-contracting
(1) Seller shall not, without the consent in writing of Buyer, assign
or transfer the Agreement or any part of it to any other person
without Buyer's prior written approval.
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(2) Seller shall not, without the consent in writing of Buyer,
subcontract the Agreement or any part thereof. Any such consent
shall not relieve Seller of any of its obligations under the
Agreement.
13.5 Entire Agreement
Each party acknowledges that it has read this Agreement, understands it, and
agrees to be bound by its terms and further agrees that it is the complete and
exclusive statement of the agreement between the parties which supersedes and
merges all prior proposals, understandings and all other agreements, oral and
written, between the parties relating to the subject matter of this Agreement.
The Agreement may not be modified or altered except by a written instrument duly
executed by both parties.
13.6 Arbitration and Governing Law
This Agreement shall be subject to the substantive law in force in UK without
reference to its conflicts of law provisions. Any disputes arising out of or in
connection with this Agreement shall be referred to and finally settled by
arbitration. The arbitration shall be held in UK in accordance with the
Arbitration Rules of UK International Arbitration Center ("SIAC Rules") for the
time being in force which rules are deemed to be incorporated by reference to
this clause. The language of arbitration shall be English. The tribunal shall
consist three arbitrators to be appointed by the Chairman of SIAC.
13.8 Exclusiveness
Upon signing this Agreement, Seller shall grant Buyer an exclusive right to
provide SMS which powered by m-Wise in Taiwan market for a period of five (5)
years at least.
13.9 No Waiver
The failure of either party to exercise in any respect any right provided for
herein shall not be deemed a waiver of any right hereunder.
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13.10 Enforceability
If any provision of this agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement the date
and year first written above by their duly authorized representatives.
Seller |_| M-wise, Inc. Buyer |_| Comtrend Corporation
Date 5/22/02 Date 5/22/02
- -------------------------------- ----------------------------------------
By /s/ Jacob Marinka By /s/ Phil Chen
- -------------------------------- ----------------------------------------
Name Jacob Marinka Name Phil Chen
- -------------------------------- ----------------------------------------
Title Chief Operating Officer Title Chief Executive Officer
- -------------------------------- ----------------------------------------
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