AMENDED AND RESTATED DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT, made this 15th day of April, 2000, is by and between
PENSAR TECHNOLOGIES, LLC, a Texas Limited Liability Company with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Pensar"); and INTERNATIONAL TEST SYSTEMS, INC., a Delaware corporation having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ("Distributor") (together Pensar and Distributor may be referred to as the
"Parties"). This Agreement amends and restates the Distributorship Agreement
between the INTERNATIONAL TEST SYSTEMS, INC., a (Texas corporation and
predecessor of Distributor) and Pensar dated June 19, 1999.
W I T N E S S E T H :
WHEREAS, Pensar is the owner of a certain proprietary technology that
enables the design and production of hardware and software products that, when
coordinated, are used to test and troubleshoot components of printed circuit
boards (the "Intellectual Property"); and
WHEREAS, Pensar acquired its ownership of the Intellectual Property on
from the predecessor of the Distributor by virtue of a corporate resolution of
Distributor dated June 16, 1999 (a copy of which is annexed hereto as Exhibit A
and made a part hereof) to transfer its assets and liabilities to Pensar; and
WHEREAS, Distributor is engaged in the business of, among other things,
marketing and selling products used to test and troubleshoot components of
printed circuit boards (the "Products"); and
WHEREAS, subject to the terms and conditions contained herein, Pensar
desires to engage Distributor, and Distributor desires to be so engaged, as
Pensar's sole and exclusive distributor of the Products throughout the World
(the "Territory").
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, and for such other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. Recitals: The recitals set forth above are hereby incorporated into the
body of this Agreement and made a part hereof.
2. Description of the Intellectual Property: The Intellectual Property is the
source code of Pensar's proprietary technology of copyrighted Windows based
software applications developed to compile databases of printed circuit
board measurements in multiple digital formats e.g. text, numerical, image,
video, and audio, that are icon drive. The software provides customization
applications and capabilities that enable new printed-circuit-board test
products to be developed. Printed circuit boards are ubiquitous and
typically each one has a different configuration of components. The
Intellectual Property is a software platform that can be customized to
design and develop new products to test different printed circuit board
configurations as they are developed. The software source code is protected
from duplication and modification by the installation of a Programmable
Array Logic (PAL) chip in each firmware-testing product.
3. Engagement. Subject to the terms and conditions set forth herein below,
Pensar hereby engages Distributor and Distributor hereby accepts said
engagement as Pensar's sole and exclusive distributor of the Products in
the Territory. The scope and exclusivity of this Agreement shall apply to
all improvements, modifications and extensions of the Intellectual Property
and Products, as well as new products and technology developed by Pensar
during the Term hereof. Pensar shall be entitled to sell the remainder of
its current inventory as identified by serial number on Exhibit B hereto
without sharing proceeds therefrom from ITS.
4. Method of Transacting Sales. In order to effect sales of the Products from
Pensar to Distributor hereunder, Distributor shall issue purchase orders to
Pensar for the specific Products and quantities desired. Pensar shall
fulfill each such purchase order according to the reasonable terms
contained therein. Pensar shall undertake to design, produce, manufacture
and ship the Products (including all assembly and finishing work) to
Distributor in accordance with all purchase orders. Pensar agrees to
provide Distributor with sufficient quantities of the Products free of
charge for Distributor to use in demonstrations and sales calls.
5. Exclusivity. Pensar agrees not to engage the services of any other
distributor for the Products in the Territory for the Term of this
Agreement, subject to the express conditions hereof.
6. Consideration:
(a) Advance Payment: Upon execution of this Agreement by all parties,
Distributor shall pay Pensar Five Thousand Dollars ($5,000.00) as a
non-refundable, recoupable advance.
(b) The amounts set forth above shall be paid in addition to the amounts
invoiced by Pensar to Distributor pursuant to the purchase orders
submitted to Pensar, which shall be as follows:
1. Commissions on all sales where Distributor uses a
sub-distributor:
product purchases up to a total of $45,420:
Product Suggested Retail Price Price to Sub-Distributor Commission to Distributor
CircuiTest 2000S $5,995 $3,297.25 $1,400
CircuiTest 2100 Scanner $2,995 $1,317.80 $ 500
product purchases over $45,420
Product Suggested Retail Price Price to Sub-Distributor Commission to ITS
CircuiTest 2000S $5,995 $2,997.50 $1,200
CircuiTest 2100 Scanner $2,995 $1,198.00 $ 350
2. Commissions the use of a sub-distributor:
product purchases up to a total of $45,420:
Product Suggested Retail Price Price to Distributor
CircuiTest 2000S $5,995 $3,297.25
CircuiTest 2100 Scanner $2,995 $1,317.80
product purchases over $45,420
Product Suggested Retail Price Price to Distributor
CircuiTest 2000S $5,995 $2,997.50
CircuiTest 2100 Scanner $2,995 $1,198.00
(c) Distributor agrees to pay Pensar an additional Five Thousand Dollars
($5,000.00) upon the completed filing of a Registration Statement
which is declared effective by the Securities and Exchange Commission
and Distributor's stock is listed on the NASD OTC Bulletin Board.
7. Intellectual Property Rights. Distributor hereby acknowledges and agrees
that Pensar is the sole owner of all copyrights, trademarks, patents, trade
secrets and other proprietary information relating in any way to the
Intellectual Property and the Products, including but not limited to all
software, hardware, processes, methods, techniques, and know-how.
Distributor shall not, directly or indirectly, take any action inconsistent
with such ownership, including but not limited to opposition or
cancellation proceedings. Pensar acknowledges and agrees that Distributor
is the sole and exclusive owner of any and all copyrights, trademarks,
servicemarks, patents, trade secrets and other proprietary information
relating to the sale of the Products or Distributor's own operations.
Pensar shall not, directly or indirectly, take any action inconsistent with
such ownership, including but not limited to opposition or cancellation
proceedings. Pensar further represents and warrants that it has applied for
and obtained all necessary patent, trademark and copyright protection to
sufficiently protect the Intellectual Property for the Term of this
Agreement.
8. Warranty and Indemnifications. Each party warrants and represents that it
is a valid corporation or Limited Liability Company duly organized under
the laws of the jurisdiction which it stands, in good standing, and has
obtained any and all necessary approvals and or resolutions necessary to
execute and carry out the terms of this Agreement. Furthermore, each party
represents and warrants that in performing their respective obligations
under this Agreement, they will not be breaching or violating any third
parties' or governmental agency's rights, property, contracts, orders,
judgments, decrees, or otherwise. In this regard, Pensar warrants and
represents that it is the sole and exclusive owner of the Intellectual
Property, that there is no pending or threatened litigation or other
proceeding or investigation against it which does or could have an affect
on its ownership of the Intellectual Property or its right to enter into
and perform the terms of this Agreement. Each party hereby indemnifies and
holds harmless the other, their officers, directors, employees, agents,
heirs and successors from and against any and all loss, damage, expense,
liability (including reasonable attorney's fees) which arise as the result
of the breach of any provision or warranty contained herein.
9. Compliance With Applicable Laws: Each party agrees to perform its duties
and obligations hereunder in compliance with all applicable federal, state
and local laws, rules, regulations and ordinances.
10. No Partnership, etc. Neither party shall have the right, power or authority
to contract in the name of the other, or to otherwise bind or pledge the
assets of the other. This Agreement does not create a partnership, joint
venture or franchise Agreement.
11. Default. In the event either party defaults in any of its obligations under
this Agreement, the non-defaulting party shall send written notice to the
defaulting party setting for the nature of the alleged default and the
provision of this Agreement allegedly violated. In the event the defaulting
party has not cured the default within thirty (30) days of notice of
default, then the non-defaulting party may pursue any remedies at law or
equity it deems appropriate. Both parties hereby acknowledge and agree that
a breach of this Agreement could result in irreparable harm to the other
and, as such, agrees to the issuance of injunctive relief (including
preliminary injunction and temporary restraining orders) to prevent further
breaches and/or damages.
12. Term. This Agreement shall commence on the date it is fully and duly
executed by both parties, and shall endure for a period of ten (10) years
(the "Term"). In addition, Distributor shall have the option to renew this
Agreement on the same terms and conditions for an additional five (5) years
by sending Pensar written notice of its election to exercise said option
within sixty (60) days prior to the end of the original Term. Distributor
shall have the right to terminate this Agreement on thirty (30) days
written notice to Pensar.
13. Escrow of Technology: Upon execution of this Agreement, Pensar shall reduce
the Intellectual Property (including but not limited to all source codes)
to writing or some other form and format which is retrievable and readable
by Distributor so that Distributor can duplicate, reproduce and ascertain
same in the event of the demise, death, incompetency or other unforseen
extended or permanent unavailability of the individuals at Pensar with
knowledge of said information (the "Disclosure"). Said Disclosure shall be
deposited in trust with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq. (the "Escrow Agent"). The
Escrow Agent shall hold said Disclosure in confidence and safe-keeping, and
shall, only to the extent necessary for Distributor to reasonably carry out
the terms and intentions of this Agreement, release the information from
safe-keeping to Distributor upon the death, demise, incapacity or other
unforseen extended or permanent unavailability of the individuals at Pensar
with knowledge of said information upon the written request of Distributor.
14. Right of First Refusal; Right of Repurchase:
(a) Pensar hereby grants Distributor a right of first refusal to purchase the
assets, Intellectual Property or units of ownership interest in Pensar
(i.e. shares of stock, membership interests, etc.) in the event of a
proposed sale, transfer or assignment of any such items by Pensar. In such
event, Pensar shall provide Distributor with written notice of its
intention to sell, assign, transfer or convey its business, assets or the
Intellectual Property containing the identity of the
purchaser/transferee/assignee and all of the terms of the proposed sale,
transfer or assignment. Distributor shall have thirty (30) days to exercise
its right to consummate the transaction on the same terms and conditions as
those contained in the notice hereunder by delivering written notice of its
intention to do so. The failure of Distributor to notify Pensar within said
thirty (30) day period of its intention to exercise its rights hereunder
shall be deemed an election not to exercise its right hereunder. In the
event Distributor does not exercise its right hereunder, Pensar shall be
free to consummate the proposed transaction as proposed in the notice to
Distributor only on the EXACT SAME TERMS AND CONDITIONS AS THOSE CONTAINED
IN THE ORIGINAL NOTICE. In the event said transaction does not close within
ninety (90) days of the receipt of the original notice by Pensar,
Distributor's rights hereunder shall be renewed and Pensar must comply with
the terms of this Paragraph again. Notwithstanding the foregoing, any
proposed sale by Pensar to a third party shall contain a provision that the
consummation of the transaction is conditioned upon the assignment of this
contract to the purchaser, which is subject to the approval by Distributor.
(b) Pensar hereby grants Distributor a right to purchase the assets,
Intellectual Property or units of ownership interest in Pensar (i.e. shares
of stock, membership interests, etc.). The price to be paid shall be 25%
less than the fair value as determined by appraisal. Pensar and Distributor
shall jointly select an appraiser to value the assets or interests to be
purchased. In the event the parties do not agree on an appraiser, each of
Pensar and Distributor shall select an appraiser. The two appraisers
together shall select a third party appraiser. In the event Distributor
chooses to purchase assets or interests, Distributor shall provide Pensar
with written notice of its intention to purchase the business, assets or
the Intellectual Property. The parties agree to use their best efforts to
cause the appraisal to occur within thirty (30) days of notice and the
closing to occur within thirty (30) days thereafter. The consideration
shall be cash unless Pensar allows otherwise.
14. Force Majeure: It is understood and agreed that in the event of an act of
the government, war, fire, flood or other natural disaster, or labor or
manufacturing strikes which prevent the performance of this Agreement, such
nonperformance will not be considered a breach of this Agreement, and such
nonperformance shall be excused while, but not longer than, the conditions
described herein prevail. The period of Force Majeure shall not exceed
eighteen (18) months.
15. Notices: All notices, whenever required in this Agreement, will be in
writing and sent by certified mail, return receipt requested. Notices will
be deemed to have been given three (3) days after being mailed. A copy of
all notices to Distributor shall be sent via regular mail to: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇.
16. Controlling Law: This Agreement shall be construed in accordance with the
laws of the State of New York, United States of America and jurisdiction
over the parties and subject matter over any controversy arising hereunder
shall exclusively be in the Courts of the State and County of New York,
County or the Federal courts therein. Both parties hereby irrevocably
consent to said jurisdiction and venue.
17. Assignment: This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement, nor any of the rights, interests or
obligations hereunder shall be assigned by either party without the prior
written consent of the other party, and any attempts to do so without the
consent of the other party shall be void and of no effect. Notwithstanding
the foregoing, ITS shall have the absolute right and authority to
subcontract any and all of its rights and obligations under this agreement
to any subcontractor, value-added reseller or other distributor.
18. Entire Agreement: This writing constitutes the entire agreement and
understanding between the parties. No other oral or written agreements or
representations exist or are being relied upon by either party. Any
modifications or additions hereto must be made in writing and signed by
both parties. This Agreement specifically supersedes and cancels any and
all prior agreements between the parties.
19. Miscellaneous:
(a) The paragraph headings used herein are for reference purposes only and
do not effect the meaning or interpretation of this Agreement. If any
provisions of this Agreement are for any reason declared to be invalid
or illegal, the remaining provisions shall not be affected thereby.
(b) The failure of either party to enforce any or all of its rights
hereunder as they accrue shall not be deemed a waiver of those rights,
all of which are expressly reserved.
(c) This Agreement may be executed in more than one counterpart, all of
which shall be deemed to be originals.
(d) This Agreement shall not be binding unless a fully executed
counterpart has been delivered to all parties.
WHEREAS, the parties have set their hand and executed this Agreement of
____ (6) pages plus exhibits with the intention of being fully bound hereby.
PENSAR TECHNOLOGIES, LLC INTERNATIONAL TEST SYSTEMS, INC.
By:_____________________________ By:___________________________________
Title:____________________________Title:__________________________________