DISTRIBUTION AGREEMENT
1.0 Agreement
1.1 This agreement is made as of June 1, 1997 between PaperClip Software,
Inc. ("Developer"), incorporated under the laws of the state of
Delaware and having its principal place of business at ▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and Access Solutions
International, Inc., ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Distributor") under the laws of the state of Rhode Island.
2.0 Appointment and Authority of Distributor
2.1 APPOINTMENT. Developer hereby appoints the Distributor and the
Distributor hereby accepts to act for Developer as a non-exclusive
regional Distributor for solicitation of sales of Developer's products
("Products"), subject to terms, provisions and conditions hereof. This
Agreement shall become effective on the date it is accepted by
Developer and shall continue for one year on which date it shall
expire. This Agreement may be terminated by Developer or the
Distributor at anytime without cause upon 30 days' prior written
notice of termination to the other.
2.2 NO COMPENSATION. Distributor shall not be entitled to any compensation
from Developer. Its gross profit will be the excess (if any) of the
price at which it distributes the Products to its customers over the
price at which it licenses them from the Developer.
2.3 INDEPENDENT CONTRACTOR. The relationship of the Distributor to
Developer is that of an independent contractor and neither the
Distributor nor his agents, representatives, or employees shall be
considered employees of Developer. The Distributor shall pay all costs
and expenses of whatsoever nature incurred by him in connection with
his representation hereunder, including, but not limited to, any
commissions or other compensation paid to agents, representatives, or
employees engaged or employed by Distributor and expenses for travel,
entertainment, offices, or any other items.
2.4 INDEMNIFICATION. The Distributor agrees to indemnify Developer and
hold Developer harmless against any and all liability, damage or
expense, including costs and attorney's fees and expenses, arising out
of or relating to the acts or omissions of the Distributor or the
Distributor's employees, representatives, or agent in connection with
the services to be rendered by the Distributor under the Agreement,
including, without limitation, liability resulting from injury to
person or property. The provision of this paragraph shall survive the
termination of this Agreement.
2.5 SALES TO RESELLERS. During the term of this Agreement: Developer
grants the Distributor the non-exclusive right to market and sell the
Products provided by Distributor under this Agreement, in unaltered
form, to dealers and resellers located in the United States and
internationally. The Distributor may sell the Products only to dealers
and resellers. No right or license to use, copy, or alter the Products
is granted by this Agreement, except that Distributor may use a
reasonable number of copies of each Product purchased pursuant to this
Agreement for the purpose of demonstrating the Product to dealers and
resellers.
3.0 Purchase Orders and Delivery
3.1 ORDERS AND ACCEPTANCE. Distributor will initiate purchases under this
Agreement by telephone, facsimile or by written purchase order anytime
after the effective date of this Agreement to the following,
Paper Clip Software, Inc.
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Tel. No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (20l) ▇▇▇-▇▇▇▇
All purchase orders shall be governed by the terms and conditions of
this Agreement, irrespective of the provisions of Distributors
invoice, purchase orders or other business forms. Purchase orders
initiated by phone or facsimile must be confirmed in writing to
Developer by means of a purchase order within seven (7) days and are
subject to approval by Developer. All purchase orders shall contain
the price, quantity, product description, requested delivery date and
shipping instructions. No purchase order is binding by Developer until
written acceptance by Developer retains the right to refuse any order
if the Distributor is outside his line of credit or is not within
current standings.
3.2 DELIVERY. Developer shall use reasonable efforts to ship Products
within three (3) working days of the date requested in the purchase
order provided Developer receives the written purchase order at least
fifteen (15) working days prior to the requested delivery date.
Developer will notify Distributor if for any reason Developer cannot
meet the scheduled delivery date.
4.0 Shipments, Title and Freight.
4.1 SHIPMENTS. All Products delivered under the terms of this Agreement
shall be suitably packed and marked with the Distributors address as
specified on the purchase order. The forwarding carrier will be chosen
by Developer except in the case of "freight collect" orders. Shipment
will be F.O.B. Developer's warehouse and upon pick-up by the carrier
at that point, all risk of loss passes to the Distributor, and all
insurance and any other shipping expenses will be the responsibility
of the Distributor.
4.2 SECURITY INTEREST. Until the purchase price and all related charges
payable to Developer hereunder have been received in full, Developer
retains and Distributor hereby grants to Developer a purchased money
security interest in the Products delivered to the Distributor and any
proceeds therefrom. Distributor agrees to perfect and protect all such
security interests.
4.3 CONTINENTAL US LOCATIONS FREIGHT. Products will be shipped freight
prepaid and freight charges will be billed to the Distributor by
Developer.
4.4 RETURN SHIPMENTS. Unless agreed to by Developer in writing prior to
shipment, Distributor shall assume freight responsibility for Products
reshipped by Distributor to Developer pursuant to Developer warranty
provisions.
4.5 PRODUCT ACCEPTANCE. Distributor has the option to inspect all units
received to determine conformance to Developer published
specifications. If no Notification of Rejection is received within
three (3) days after Distributors receipt of a unit, the unit shall be
deemed as accepted by Distributor.
5.0 Payment Terms
5.1 DEBIT MEMOS. Developer shall not accept any Debit Memos issued to
Developer by Distributor unless expressly authorized in writing by
Developer. Distributor shall not be entitled to any credit taken
pursuant to any unauthorized Debit Memo issued by Distributor.
6.0 Rescheduling and Cancellation
6.1 PURCHASE ORDERS. Distributor may reschedule delivery or cancel orders
for standard Products (as defined in Exhibit A herein) at no charge
provided written notice of such rescheduling or cancellation is
received by Developer at least thirty (30) days prior to the scheduled
shipment date of the affected Products. Standard Products scheduled
for delivery within thirty (30)days after receipt of Distributor's
notice may not be rescheduled or canceled unless otherwise agreed to
by Developer.
7.0 Pricing
7.1 Developer's price for the Products sold to Distributor pursuant to
this Agreement shall be 45% of PaperClip's list price and is subject
to terms and conditions contained in this Agreement.
7.2 Distributor shall not, in connection with the sale or service of any
Developer's Product, engage in any acts prohibited by State or Federal
statutory or common law, including but not limited to State or Federal
antitrust or unfair trade practices laws. Failure to comply with this
Section 7.2 shall give Developer the right to terminate this Agreement
immediately without prior notice. Nothing herein shall be considered
to limit Distributor's discretion to charge any lawful price for
Developer's products.
For the purpose of this Agreement, Product cost shall be defined
herein as the Distributor's cost for the Product, less credits.
7.3 Price Increase. Developer reserves the right to increase the prices
for its Products with thirty (30) days written notice to Distributor.
Such price increase will apply to all purchase orders received after
the effective date of the price increase, but shall not affect any
purchase orders accepted by Developer before the effective date of the
price increase.
Distributor may order any quantity of Product during the thirty (30)
day notification period for delivery within sixty (60) days of the
date of notification at the old price. Products scheduled for delivery
more than sixty (60) days from the date of such notification shall be
invoiced at the new price.
7.4 Price Decrease. In the event Developer decreases the price of a
Product, such decrease shall apply to all unshipped Products. As well
as all products in Distributors inventory. A credit for the difference
will be applied to the amount.
7.5 Stock Rotation. Distributor shall have the right to return Developer's
Products for stock rotation which have been shipped within the
previous ninety (90) day period. Products subject to stock rotation
must be unused, undamaged, sealed in their original packages, and free
of liens, and must be shipped transportation prepaid to Developer upon
receipt of written return authorization from Developer. The amount of
Products subject to any particular stock rotation shall not exceed 20%
of the total dollar value amount of products invoiced to Distributor
during the preceding three months, less debit amounts credited. Stock
rotation may occur only one time per calendar quarter.
7.6 Taxes and Other Exclusions. All prices described herein are exclusive
of federal, state and local excise, sales, use and similar taxes. The
prices for Products as set forth herein do not include fees for
forwarding agents. Distributor shall be liable for and shall pay all
applicable taxes invoiced by Developer, or shall provide Developer
with a properly executed tax exemption certificate prior to any
delivery.
7.7 Product Price. Schedule is included in attachment A herein.
8.0 Distributor's Monthly Sales Report
8.1 Distributor shall provide Developer with a monthly sales report, by
the fifteenth (15th) day of each month, which report shall include:
(A) the zip code and state of the customer, (B) price of the Products
purchased, (C) quantity of Products, purchased during the preceding
month and identified by model number and (D) the dates of shipment to
Distributor's customers. Upon giving Distributor reasonable notice,
Developer may appoint a representative to perform an audit on the
sales report.
9.0 Product Changes
9.1 Additional Products. Developer may, from time to time, and other
Products for sale to the Distributor to the Agreement on terms and
conditions announced by Developer. Sales of such Products; shall be
subject to pricing pursuant to Section 7.0 hereof.
9.2 Deletion of Products. Developer may delete any of its Products carried
by the Distributor effective thirty (30) days after written notice to
Distributor of such deletion.
10.0 Market Development Funds (MDF)
10.1 Distributor shall be eligible to participate in a MDF Program which
will entitle Distributor to reimbursement of certain marketing costs
provided Distributor agrees to abide by the provisions within
Developer's MDF Program.
11.0 Warranty
11.1 Express Warranties. Developer warrants that the Products purchased
hereunder by any end user will be free from defects in materials and
workmanship for 90 days from the date of purchase by such end user.
11.2 Exclusions. The express warranties set forth in Section 11.1 above
specifically exclude and do not apply to defects in a Product that are
(A) caused through no fault of Developer during shipment to or from
Distributor, (B) caused by the use or operation of Products in an
application or environment other than that intended or recommended by
Developer, (C) caused by modifications or alterations made to the
Products by Distributor or any third party, (D) caused by unauthorized
maintenance performed on the Products by Distributor or any third
party, (E) caused by failure of Distributor to comply with any of the
return procedures specified in this Agreement or (F) which are the
result of Products being subjected to unusual physical or electrical
stress.
11.3 DISCLAIMER, EXCEPT FOR THE ABOVE EXPRESS LIMITED WARRANTIES OR
CONDITIONS, DEVELOPER MAKES AND DISTRIBUTOR RECEIVES NO WARRANTIES ON
THE PRODUCTS, EXPRESS, IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION
OF THIS AGREEMENT OR COMMUNICATION WITH DISTRIBUTOR, AND DEVELOPER
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR CONDITION OF MERCHANT
ABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL
DEVELOPER BE LIABLE FOR ANY DAMAGES, INCLUDING LOST PROFITS, OR
INCIDENTAL OR CONSEQUENTIAL DAMAGES, ARISING OUT OF THE USE, OR
INABILITY TO USE PRODUCTS. DEVELOPER'S SOLE RESPONSIBILITY SHALL BE TO
REPLACE ANY DEFECTIVE PRODUCT, OR, AT ITS OPTION TO REFUND THE
PURCHASE PRICE THEREFOR.
11.4 Warranty Procedures. Distributor shall send Products with defects
covered by the foregoing warranty to Developer repair center at the
following address.
Paper Clip Software, Inc.
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Distributor shall request return authorization from Developer prior to
the return of each defective Product for repair or replacement by
Developer upon request. Developer will require detailed information as
to the customer and the nature of the return. Developer will provide
Distributor with a Return Authorization (RA) number to be prominently
displayed on the shipping container for any defective Product. Once
Developer authorizes the return of any defective Product, Distributor
shall ship such product to tile repair facility, freight prepaid. If
such defective Product is received by Developer during the applicable
warranty period, Developer shall, at its sole option and expense,
repair or replace such Product, employing at its option, new or used
parts or Products to make such repair or replacement, and shall ship
the repaired or replaced Product to Distributor, freight prepaid. The
foregoing states the sole liability and obligation of Developer
arising out this warranty.
All Products returned to Developer shall be packed in their original
shipping container, or in a container purchased from Developer. Unless
otherwise provided for in this Agreement, all Products must be shipped
by a carrier experienced in handling sensitive freight. All Product
returned for repair must include with them a report indicating the
type of failure. Developer will not be responsible for removing
adhesive tapes, labels, permanent markings or other residue applied to
the Product by Distributor or its customer.
11.5 Indemnification by Distributor. Distributor agrees to indemnify
Developer against any damages, costs (including attorney's fees and
costs) or other liability arising from claims by any other party
resulting from Distributor's representation of the products in a
manner inconsistent with Developer Product descriptions and
warranties.
12.0 Obligations of Distributor
12.1 Promotion Efforts. Distributor will make use of promotional material
supplied by Developer. Distributor is encouraged to actively promote
and market the Products including without limitation, advertising and
promotions of the Products in leading industry magazines and
publications and marketing the Products in Distributor's catalogs.
Developer shall provide the Distributor with demonstration units of
each Product at a price and in quantities as are determined reasonable
and necessary by Developer to support the sale of such Products. The
Distributor shall be fully responsible for any loss or damage to such
samples except for ordinary wear and tear. Product literature will
initially be provided with each product in reasonable quantities at no
cost. Additional quantities of literature will be made available at
reasonable cost.
12.2 Sales Personnel. Distributor will employ sufficient sales personnel
having the knowledge and training necessary to properly inform
customers concerning the Products.
12.3.Additional Covenants. Distributor will: (A) conduct business in a
manner that will enhance the image and reputation of Developer and the
Products; (B) comply with the applicable laws and regulations and
avoid deceptive, misleading, unethical or other illegal practices; and
(C) make no representations, warranties or guarantees to anyone with
respect to the Products that are inconsistent with those made by
Developer except as noted herein. The Distributor shall at no time
engage in any unfair trade practices and shall not make any false or
misleading statements or representations with respect to Developer's
or any of the Products covered by this Agreement or otherwise. The
Distributor shall make no warranties or representations with respect
to the Products covered by this Agreement, except as may be specified
on Product or as noted herein. Any breach of this Section 13.3 shall
be considered a material breach of this Agreement.
12.4 Monthly Inventory Reports. Distributor shall provide Developer with
VERBAL Inventory Reports as requested which shall include Products by
model number and quantities of such Product in Distributor's
inventory.
12.5 Trade Name. Distributor shall not use any of Developer's tradenames,
trademarks, service marks, logotypes or any other related
characteristics which closely resemble the same as part of the
Distributor's corporate or business name, or in any manner which may
be confusingly similar or misleading. Distributor may, however,
indicate on stationary, calling cards or other printed material that
it is an authorized distributor for Developer products, an may have
Developer's name listed in the classified section of telephone
directories on a cross-reference basis. Only authorized logos from
Developer should be used in any printed form.
13.0 Patent Indemnity
13.1 Developer agrees, at its expense to defend and indemnify Distributor
in any suit, claim or proceeding brought against Distributor alleging
that any Products sold pursuant to this Agreement under normal use
infringe a United States patent, United States copyright, United
States trademark or trade secret obligation of Developer provided that
Developer is promptly notified in writing of any such claim, given
reasonable assistance from Distributor and permitted the exclusive
control of the defense. Further, Developer agrees to pay any damage
and costs finally awarded against Distributor in any such suit by
reason of any such infringement, but Developer shall have no liability
for settlements or costs incurred without its consent. Should
Distributor's use of any such Products or any part thereof be
enjoined, or in the event that Developer desires to minimize its
liability hereunder, Developer will, at its option and expense, either
(a) substitute equivalent non infringing Products for the infringing
item (b) modify the infringing item so that it no longer infringes but
remains equivalent, or (c) obtain for Distributor the right to
continue using such item.
13.2 If none of the foregoing is feasible, Developer will accept a return
of the Products which are subject to the injunction and refund to
Distributor the purchase price, less reasonable depreciation, plus
shipping costs paid by Distributor. The foregoing indemnity shall not
apply if and to the extent that an alleged infringement arises from
the combination of any Product with Products or equipment not supplied
by Developer. Further, such indemnity shall not apply and Distributor
agrees to indemnify Developer against any damages and costs awarded
against or incurred by in any suit, claim or proceeding brought
against Developer in which and to the extent that an alleged
infringement arises from Developer manufacturer or assembly of any
item to the specification or design of Distributor.
THE FOREGOING STATES THE ENTIRE LIABILITY AND OBLIGATION OF DEVELOPER
WITH RESPECT TO INFRINGEMENT OR CLAIMS OF INFRINGEMENT OF ANY PATENT,
COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE
PRODUCTS OR ANY PART THEREOF.
14.0 Termination
14.1 Termination for Convenience. This Agreement may be terminated by
Developer for convenience by providing thirty (30) days prior written
notice to Distributor. Should Developer exercise this clause,
Distributor may return unopened, sealed, and undamaged product for
refund which had been purchased in the preceding 180 days.
14.2 Termination for Cause. Either party may without penalty, terminate
this Agreement or cancel any purchase order or portion thereof,
effective upon written notice to the other party in either on of the
following events:
(a) The other party materially breaches this Agreement and such
breach remains uncured for thirty (30) days following written
notice of breach by the non-breaching party;
(b) Any causes are set forth in Section 17.4 (Force Major) delays the
other party's performance for more than thirty (30) days; or
(c) A petition for relief under any bankruptcy legislation is filed
by or against the other party, or the other party makes an
assignment for the benefits of creditors, or a receiver is
appointed for all or a substantial part of the other party's
assets, and such petition, assignment or appointment is not
dismissed or vacated within thirty (30) days.
14.3 Effect of Termination or Expiration. In the event of a termination of
expiration of this Agreement, the provisions of this Agreement shall
continue to apply to all purchase orders accepted by Developer prior
to the effective date of such termination or expiration except for any
purchase order canceled. Termination or expiration of this agreement
shall not, however, relieve or release either party from making
payments which may be owing to the other party under the terms of this
Agreement.
14.4 Survival Provisions. The provisions Indemnification, Disclaimer,
Patent Indemnity, Effect of Termination of Expiration Proprietary
Rights, and Limitation of Liability shall survive the termination of
this Agreement for any reason.
15.0 Proprietary Rights
15.1 Notices. All proprietary notices incorporated in, marked on, or fixed
to the Products by Developer shall not be removed or obliterated by
Distributor.
15.2 Trademarks. Developer authorizes Distributor to use Developer's
current and future trademarks, service marks and trade names
("Trademarks") solely in connection with the marketing and
distribution of the Products pursuant to this Agreement. Distributor
shall not alter or remove any Trademark applied by or on behalf of
Developer prior to delivery.
15.3 Upon termination or expiration of this Agreement Distributor will
return all materials to Developer and will cease to use the
trademark's previously used by it pursuant to this Agreement.
15.4 This Agreement shall not be construed to grant to Distributor any
right, title, or interest in any intellectual property rights embodied
in or associated with the Products, or any right to copy, modify, loan
or lease the Products. Under no circumstances shall Distributor or its
dealers, agents or employees decompile the object code portion of the
Products to a source code version of reverse-engineer the Products to
discover their origin. Distributor shall be authorized only to market
and distribute the Products in their form and packaging as delivered
by Developer in accordance with the terms; of this Agreement. All use
of the Products by Distributor shall be subject to the terms and
conditions of the End-User License Agreement included with each
Product.
15.5 Distributor acknowledges that any breach of its obligations under this
Agreement with respect to proprietary rights or confidential
information of Developer will cause irreparable injury for which there
are inadequate remedies at law, and therefore Developer will be
entitled to equitable relief in addition to all other remedies
provided by this Agreement or available at law.
15.6 The provisions of this Section 15 shall survive termination of this
Agreement.
16.0 Limitation of Liability
16.1 Purchase Price. Distributor agrees that Developer's liability under
this Agreement, regardless of the form of action, shall in no event
exceed the price paid by Distributor for the Products.
16.2 Limitation. IN NO EVENT WILL DEVELOPER BE LIABLE FOR COSTS OF
PROCUREMENT OF SUBSTITUTE PRODUCTS OR SERVICES, LOST PROFITS, OR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL, DAMAGES ARISING IN ANY
WAY OUT OF THIS AGREEMENT.
17.0 General Provision
17.1 Notice. Unless otherwise specified in this Agreement, any notice which
may be or is required to be given under this Agreement shall be in
writing. All written notices shall be sent certified or registered
mail, postage prepaid, return receipt requested. All such notices
shall be deemed to have been given when received, addressed in the
manner indicated on the first page of this Agreement or at such
addresses as the parties may substitute by written notice to the
other.
17.2 Confidentiality. Developer's confidential or restricted documents such
as service manuals, pricing policies, procedures, and unannounced
public relations information shall be treated by Distributor and by
Developer as each treats its own confidential information, and no
press release shall be made without the other party's approval.
17.3 Amendment. This Agreement may be amended only by written amendment
duly signed by authorized representatives of both parties.
17.4 Force Major. neither party shall be liable to the other for its
failure to perform any of its obligations hereunder during any period
in which such performance is delayed by circumstances beyond its
reasonable control including, but not limited to fire, flood, way,
embargo, strike, riot, inability to secure materials and
transportation facilities, or the intervention of any governmental
authority. If such delaying cause shall continue for more than ninety
(90) days, the party injured by the inability of the other to perform
shall have the right upon written notice to either (a) terminate this
Agreement pursuant to Section 14.2 or, (b) treat this Agreement as
suspended during the delay and reduce any commitment in proportion of
the duration of the delay.
17.5 Entire Agreement. This Agreement constitutes the entire Agreement of
the parties and supersedes any and all prior and contemporaneous oral
or written understanding and agreements as to the subject matter
hereof but does not supercede the asset agreement between the parties,
each dated April 15, 1997. This Agreement, its interpretation and
enforcement shall be governed by New Jersey law (without regard to
conflict of laws rules).
17.6 Assignment. Neither this Agreement nor any of the rights of the
Distributor under this, Agreement may be assigned, transferred, or
conveyed by operation of law, or otherwise, without the prior written
consent of Developer, nor shall this Agreement or any rights of the
Distributor inure to the benefit of any trustee in bankruptcy,
receiver, creditor, trustee or successor of the Distributor's business
or its property, whether by operation of law or otherwise, or to a
purchaser or successor of the entire business or substantially all of
the assets of the Distributor, without the prior written consent of
Developer.
Access Solutions International, Inc. PaperClip Software, Inc.
Distributor Developer
By___________________________ By_______________________________
Signature Signature
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Printed Name and Title Printed Name and Title
Date: Date: