Exhibit 10.11
THIS AGREEMENT is effective as of the 15th day of June, 1997 (the
"Effective Date"), by and between Xxxxxxx Systems, Inc. (hereinafter "Xxxxxxx"),
a video products manufacturer having its principal offices at 0000 Xxxxxx Xxxx,
Xxx Xxxx, XX 00000 and Celerity Systems Inc. (hereinafter "Remarketer"), a video
products/services supplier having principal office at 0000 Xxxxxxxxx Xxxx Xxxxx,
Xxxxxxxxx, XX 00000.
WITNESSETH:
WHEREAS, Xxxxxxx manufactures certain compression equipment and produces
certain computer software programs compatible with such compression equipment,
which Xxxxxxx is willing to provide to Remarketer on the terms and conditions
set forth herein; and
WHEREAS, Remarketer has an established channel of distribution to market
such compression equipment and computer programs to end-users and/or systems
integrators;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 "Agreement." This , including any and all Exhibits
attached hereto.
1.2 "Compression Equipment." The computer hardware products (including all
models, conversions, elements, and accessories) listed in the attached Exhibit A
as amended from time to time to include new products.
1.3 "Customer." A customer of Remarketer for Products.
1.4 "Documentation." The documentation provided to Remarketer for
Remarketer's use in creating an End-User Installation and Operations Guide.
1.5 "End-User License Agreement." The agreement under which Remarketer
grants an end-user Customer the right and license to use Licensed Programs as
part of an OEM Product. The End-User License Agreement shall contain, at a
minimum, terms and conditions substantially similar to those set forth in
Exhibit B hereto.
1.6 "Upgrade(s)." Computer program modifications or additions, other than
Maintenance Modifications, that provide new functions or alterations of
functionality of the Licensed Programs.
1.7 "Licensed Programs." The computer software programs, in Object Code
format, listed in the attached Exhibit A, and any and all Maintenance
Modifications and Upgrades thereto to the extent the same are provided by
Xxxxxxx under the terms of this Agreement.
1.8 "Maintenance Modification(s)." Computer software changes integrated
with the Licensed Programs to correct any Program Errors therein, but which do
not materially alter the functionality of the Licensed Programs or add
significant new functions thereto.
1.9 "Minerva's Products." The Encoding System(s) set forth in Exhibit A
hereto.
1.10 "Object Code." Computer software programs assembled or compiled in
magnetic or electronic binary form which are readable and usable by machines,
but are not generally readable by humans without reverse assembly, reverse
compiling, or reverse engineering.
1.11 "Products." The combination of Compression Equipment and Licensed
Programs as sold by Remarketer.
1.12 "Program Error." A defect that prevents the Licensed Programs from
performing in accordance with the published specifications or user manuals
pertaining thereto.
1.13 "Blocking Error" shall mean a major Program Error which prevents the
use of the Licensed Programs or impairs material functionality.
1.14 "Severe Error" shall mean a major Program Error which makes the
Licensed Programs or part of them usable only by means of software bypasses or
patches.
1.15 "Sub distributor License Agreement." The agreement under which OEM
distributes the Licensed Programs as part of an OEM Product to third party
system integrators ("Sub distributors"), not for their own use as an end-user
but for resale. The Sub distributor License Agreement shall contain, at a
minimum, terms and conditions substantially similar to those set forth in
Exhibit D hereto.
1.16 "Territory." The world.
SECTION 2
REMARKETER CERTIFICATION
2.1 Remarketer hereby certifies and agrees that, in consideration of the
benefits of this Agreement, Remarketer will use reasonable efforts to promote
and market the Compression Equipment and Licensed Programs to its end-user
customers and/or systems integrators under the Xxxxxxx or such other label as
the parties may mutually approve, and shall offer such products along with its
video server and related products and services, including (without limitation)
training, installation assistance, and other forms of customer support. In the
event that any of the foregoing representations and undertakings prove untrue at
any time during the term of this Agreement,
2
Xxxxxxx shall have the right to terminate this Agreement as to any or all
further shipments to Remarketer or which termination shall be in the manner
prescribed in Section 16 hereof.
SECTION 3
LICENSES GRANTED
3.1 Licensed Programs. Subject to the terms and conditions of this
Agreement, Xxxxxxx hereby grants to Remarketer a non-exclusive, nontransferable
right (except pursuant to Section 21) and license, without right of sublicense,
to (i) distribute Licensed Programs on serially numbered diskettes in the
Territory, and (ii) to perform and display Licensed Programs in the Territory
solely for marketing and demonstration purposes and for the training of
Customers. Notwithstanding anything contained herein, Xxxxxxx reserves the right
to market the Xxxxxxx Products on its own or through other resellers or
distributors; provided that Xxxxxxx shall make a good faith effort not to market
to Remarketer's Customers for same application.
Remarketer shall have no rights to the source code of the Licensed Program
and shall not modify or prepare derivative works of the Licensed Program.
Remarketer shall not reverse engineer, reverse assemble, decompile or otherwise
attempt to derive source code from the Licensed Programs. Remarketer shall
maintain records of the location and customer of each serially numbered
diskette, and shall provide a copy of such records to Xxxxxxx promptly upon
Minerva's request; provided that Xxxxxxx shall not request that such records be
provided more than once within a calendar quarter.
3.2 Compression Equipment. Subject to the terms and conditions of this
Agreement, Xxxxxxx hereby grants to Remarketer a non-exclusive, nontransferable
(except pursuant to Section 21) right to obtain Compression Equipment from
Xxxxxxx and to market and distribute such Compression Equipment in the
Territory.
3.3 Documentation. Subject to the terms and conditions of this Agreement,
including without limitation Remarketer's confidentiality obligations of Section
14.1 hereof, Xxxxxxx hereby grants to Remarketer a non-exclusive, right and
license to use the Documentation for its internal use in understanding the
operation of Minerva's Product and in creating Remarketer's End User
Installation and Operations Guide. In addition, Remarketer may copy the
Documentation for distribution to its customers and Remarketer may incorporate
portions of the Documentation in any end user documentation created by
Remarketer for distribution in connection with Products. Xxxxxxx shall ship the
Documentation to Remarketer within ten (10) days of its completion by Xxxxxxx,
and will reasonably cooperate to make substantially completed and accurate
drafts thereof available for Remarketer's internal use.
3.4 Distribution of Licensed Programs. Distribution of the Licensed
Programs to end-user Customers shall in all cases be subject to an End-User
License Agreement signed by the end-user Customer or, where signing is not
commercially feasible, subject to (i) a "shrink-wrap" or "break-the-seal"
End-User License Agreement packaged with the Licensed Program (ii) the inclusion
of a postcard in such package which prompts the end-user Customer to provide its
name, address, telephone number, and date of purchase; and (iii) Remarketer's
acceptance of purchase orders or other offers to purchase by end-user Customers
being expressly conditioned on the inclusion of the
3
terms of the End-User License Agreement. Remarketer shall promptly provide
Xxxxxxx with a copy of all End-User License Agreements.
SECTION 4
ORDER, DELIVERY, AND ADMINISTRATION
4.1 The terms and conditions of this Agreement, and Minerva's warranty set
forth in Section 12, shall control any and all procurement of Compression
Equipment and Licensed Programs by or on behalf of Remarketer hereunder and
shall supersede the terms of any purchase orders or like documents for
Compression Equipment and/or Licensed Programs submitted by Remarketer at any
time.
4.2 Remarketer shall place periodic orders for Minerva's Products during
the term of this Agreement. Remarketer shall submit purchase orders to Xxxxxxx
at least thirty (30) days prior to the date of shipment requested by Remarketer.
All orders must be for delivery to one location in one shipment unless otherwise
agreed to in writing. Order revisions or cancellations of which Xxxxxxx receives
written notice at least one (1) month prior to order shipment are permitted.
Xxxxxxx and Remarketer will cooperate in good faith to accommodate purchase
orders with a lead time of less than 30 days and cancellations and/or order
deferrals requested less than one month prior to shipment. If an order is
canceled less than 30 days before a scheduled shipment date, the following
schedule sets forth Remarketer obligation on such canceled orders:
Days Prior to Scheduled Shipment Percentage of Price
-------------------------------- -------------------
More than 30 days 0%
15 - 30 days 5%
Less than 15 days 10%
4.3 All orders submitted by Remarketer are subject to acceptance by
Xxxxxxx, which acceptance will not be unreasonably withheld. Xxxxxxx shall ship
Minerva's Products subject to the constraints of Minerva's available production
volume and established shipping priorities; provided, so long as Remarketer is,
in the discretion of Xxxxxxx, providing competent training and technical support
to Customers, Maintenance Modifications, and maintenance training, etc. to
customers, and meeting its Section 7.1 requirements, then Xxxxxxx shall ship
Xxxxxxx Product at a similar level of preference as other purchasers of similar
products and volumes.
4.4 The price to Remarketer for Minerva's Product is set forth in the
attached Exhibit A. Xxxxxxx shall have the right at any time to revise the
prices in Exhibit A upon thirty (30) days' advance written notice to Remarketer,
and such revisions shall apply to all orders received after the effective date
of revision. Price increases shall not affect unfulfilled purchase orders
accepted by Xxxxxxx prior to the effective date of the price increase. Price
decreases shall apply to pending purchase orders accepted by Xxxxxxx prior to
the effective date of the decrease but not yet shipped.
4.5 Remarketer's purchase prices are payable in full to Xxxxxxx without
deduction and are net of taxes (including any withholding tax) and customs
duties. In addition to such amounts, Remarketer shall pay sums equal to taxes
(including, without limitation, sales, value-added and similar
4
taxes) and customs duties paid or payable, however designated, levied, or based
on amounts payable to Xxxxxxx hereunder, but exclusive of United States federal,
state, and local taxes based on Minerva's net income.
4.6 All amounts are stated in U.S. dollars and shall be paid in that
currency.
4.7 All prices are F.O.B. Minerva's plant or warehouse. Remarketer is
responsible for all freight, insurance and other shipping expenses and
import/export and any other customs duties or taxes associated with the shipment
of Minerva's Products. Xxxxxxx will upon Remarketer specific request, arrange
insurance for Remarketer at Remarketer expense. Remarketer shall have the option
of specifying its own carrier or freight forwarder in the USA. However, if in
Minerva's discretion, the Remarketer-designated carrier is not available for
pick-up within a reasonable period, Xxxxxxx shall have the option to select the
carrier provided that Xxxxxxx provides Remarketer prior notice of such selection
and allows Remarketer to select an alternative carrier.
4.8 Title to and risk of loss or damage of the Minerva's Products (except
title to the Licensed Programs) purchased under this Agreement shall pass to
Remarketer upon shipment of such Minerva's Products to Remarketer from Minerva's
plant or warehouse. Xxxxxxx shall use reasonable care in packaging of Product
for shipment to Remarketer.
4.9 Remarketer agrees that acceptance of Minerva's Products shall be
accomplished by Minerva's performance of established test procedures with
respect to such products at Minerva's facility, prior to their shipment to
Remarketer. Acceptance shall be deemed to occur at the time of completion of
final tests at Minerva's facility. If Remarketer has provided Xxxxxxx with a
written request to allow Remarketer to witness the performance of final tests on
Remarketer's order, Xxxxxxx shall give Remarketer prior notice of such tests and
allow Remarketer to witness such tests. Remarketer shall be responsible for its
expenses incurred in witnessing such tests. In the event that any Minerva's
Products fail the acceptance tests, Xxxxxxx shall, at its option, repair or
replace the affected Minerva's Product or part thereof. Nothing in this Section
4.9 shall affect Minerva's warranty obligations as specified in Section 12 and
as otherwise required by applicable law.
SECTION 5
PAYMENT
5.1 All sales of Minerva's Products will be on a cash-in-advance of
shipment basis or on credit in Minerva's sole discretion. In the event of a sale
on credit, Xxxxxxx shall submit an invoice to Remarketer upon each shipment to
Remarketer. Xxxxxxx reserves the right to halt shipments to Remarketer or to
make only partial shipments of Remarketer's orders in the event of any
delinquency in payment for any prior order or shipment; provided, however that
Xxxxxxx will notify Remarketer of any intent to halt or change a shipment and
provide Remarketer with a reasonable opportunity to cure any such delinquency
prior to shipment.
5.2 Minerva's terms are net thirty (30) days from the date of invoice. An
interest charge of one and one-half percent (1.5%) per month, prorated on the
basis of a thirty (30) day month, will be assessed on all delinquent payments.
Any change in payment terms must be pre-approved by Xxxxxxx in writing.
5
SECTION 6
SECURITY INTEREST
6.1 Remarketer hereby grants to Xxxxxxx, and Xxxxxxx hereby reserves, a
purchase money security interest in and to all Minerva's Products delivered to
Remarketer under this Agreement from time to time, and all proceeds from the
disposition thereof, as security for the payment by Remarketer of the purchase
price therefor under this Agreement. Remarketer agrees to assist and cooperate
fully with Xxxxxxx in the perfection and enforcement of such security interest.
Such security interest will be released on a Product by Product basis as payment
is made for the related invoice.
SECTION 7
EXHIBIT C AMOUNTS
7.1 This section is not applicable.
SECTION 8
RESELLER EXEMPTION CERTIFICATION
8.1 Remarketer hereby certifies that it either holds or will acquire,
prior to providing Products to Customers, a valid Reseller Exemption Certificate
issued by each taxing jurisdiction or entity in the Territory where such
certificate is required as a condition for the avoidance of applicable sales or
use taxes, covering any Compression Equipment to be resold and any Licensed
Programs to be licensed or sublicensed under this Agreement. Prior to any
shipment of Products under this Agreement, Remarketer will provide Xxxxxxx with
a copy of each such certificate, thereby entitling Remarketer to be treated by
Xxxxxxx as exempt from collection of tax on such Products in each jurisdiction
or entity from which a certificate is obtained. Remarketer shall promptly notify
Xxxxxxx of any additions, deletions, or changes to such certificates. Remarketer
shall indemnify and hold harmless Xxxxxxx from and against any taxes, duties,
tariffs, or other assessments levied by or on behalf of any taxing jurisdiction
or entity arising out of the failure to obtain or a dispute concerning the
validity or coverage of, any such exemption certificates.
SECTION 9
EXPENSES
9.1 It is expressly understood and agreed that Xxxxxxx is under no
obligation or requirement to reimburse Remarketer for any expenses or costs
incurred by Remarketer in the performance of its responsibilities under this
Agreement. Any costs or expenses incurred by Remarketer, shall be at
Remarketer's sole risk and upon its independent business judgment that such
costs and expenses are appropriate.
6
SECTION 10
ADDITIONAL OBLIGATIONS OF REMARKETER
10.1 Remarketer shall submit, quarterly within the last five (5) days of
each quarter (upon receipt of notice from Xxxxxxx), a nonbinding six (6) month
forecast for the ensuing six (6) months, showing each order by number of
Minerva's Products and intended submission date.
SECTION 11
TECHNICAL SUPPORT
11.1 By Xxxxxxx: Xxxxxxx shall provide Remarketer with the following
maintenance, technical support, and training with respect to Compression
Equipment and Licensed Programs: Xxxxxxx shall provide a reasonable amount of
initial technical support and training to technical personnel, with respect to
the operation and specifications of Minerva's Product. Such training shall not
exceed three (3) person-days by Minerva's personnel during the six (6) month
period following the Effective Date. As used herein, a "person-day" shall be
equivalent to one person working eight hours. All such training and support
shall be performed at Minerva's facility in San Jose, CA, USA unless another
site is mutually agreed upon. Remarketer shall pay all expenses of its
personnel, including travel, food, and lodging, incident to their attendance at
such training. In addition, Xxxxxxx shall, during the term of this Agreement,
provide Remarketer with a reasonable amount of technical support over the
telephone (utilizing an 800 number provided by Xxxxxxx) during Minerva's regular
business hours (Monday - Friday; 9:00am-5:00pm California time), with respect to
the operation of Minerva's Products or Remarketer's development efforts for the
Products. Remarketer's shall be entitled to one person-day of free technical
training per major software release conditioned upon Remarketer's continued
qualification for no-charge support set forth in Section 7.1 herein. Upon
Remarketer's reasonable request, Xxxxxxx shall provide Additional training at
its then-current published rates.
11.2 Remarketer shall provide its Customers with all maintenance,
training, and support.
SECTION 12
PRODUCT WARRANTY
12.1 Xxxxxxx warrants to Remarketer that (i) the Compression Equipment
will conform in all material respects to Minerva's published specifications
pertaining to the Compression Equipment, respectively and (ii) the Compression
Equipment will be free from material operating defects under normal and
anticipated use in the operating environment as specified in the published
specifications (the "Hardware Warranty"), commencing on the Effective Date and
ending ninety (90) days from the date of shipment by Xxxxxxx to Remarketer.
12.2 Xxxxxxx warrants to Remarketer that the Licensed Programs will
conform to Minerva's published specifications (the "Software Warranty"),
commencing on the Effective Date and ending ninety (90) days from the date of
shipment by Xxxxxxx to Remarketer. Xxxxxxx does not warrant that the functions
contained in the Licensed Programs will meet a Customer's requirements, or that
the operation of the Licensed Programs will be uninterrupted or error-free, or
that all defects in the Licensed Programs will be corrected. Repaired or
replaced Product shall be warranted against defects for a period of 90 days from
shipment.
7
12.3 Minerva's sole and exclusive liability, and Remarketer's sole and
exclusive remedy for a breach of the Software Warranty, shall be for Xxxxxxx to
provide Remarketer with Maintenance Modifications and Upgrades (for the purpose
of correcting program errors) during the Software Warranty Period. Minerva's
sole and exclusive liability, and Remarketer's sole and exclusive remedy for a
breach of the Hardware Warranty, shall be for Xxxxxxx to use reasonable efforts
to, at its option, repair or replace the Compression Equipment within ten (10)
days of Minerva's receipt of the Compression Equipment or Replacements Parts
from Remarketer. If Xxxxxxx is unable, for any reason, to so repair or replace
any Compression Equipment, then Xxxxxxx shall refund to Remarketer the price
paid by Remarketer (less a reasonable amount for the use of defective hardware
or media) for such equipment, upon return of such equipment to Xxxxxxx.
12.4 To obtain repair or replacement of the Compression Equipment,
Remarketer shall, during the Hardware Warranty Period, return the defective
product, freight prepaid, in either the original carton or a similar package
affording an equal degree of protection, to Xxxxxxx or to a facility designated
by Xxxxxxx, for examination and testing. A Return Merchandise Authorization
(RMA) number must be obtained from Xxxxxxx prior to, and must be included with,
the shipment. In the event Minerva's examination and testing discloses a defect,
Xxxxxxx will return the replaced or repaired Compression Equipment or
Replacement Part freight prepaid to Remarketer. Xxxxxxx is not obligated to
provide Remarketer with a substitute unit during the Hardware Warranty Period or
at any time.
12.5 In all cases, Minerva's liability under this warranty is subject to
the following additional conditions:
(i) Xxxxxxx shall not be liable under this warranty if its testing and
examination by Xxxxxxx disclose that Compression Equipment have been modified or
altered in any material manner after shipment by Xxxxxxx;
(ii) Xxxxxxx shall not be liable under this warranty if its testing and
examination disclose that the alleged defect in the Compression Equipment does
not exist, or was caused by Remarketer or any third party's misuse, neglect,
improper installation or testing or unauthorized attempts to repair the
Compression Equipment or the Replacement Part, or the subjection of the
Compression Equipment or Replacement Part to unusual physical or electrical
stress, or any other cause beyond the range of its intended use;
(iii) Xxxxxxx shall not be liable under any warranty under this agreement
with respect to any Compression Equipment that are not returned in their
original shipping container or a functionally equivalent container;
(iv) If Minerva's testing and examination do not disclose a defect ("NTF"-
no trouble found) warranted under this agreement, then Xxxxxxx shall so advise
Remarketer and shall return such Compression Equipment to Remarketer in
accordance with Remarketer's instructions and at Remarketer's cost, and
Remarketer shall reimburse Xxxxxxx for its expenses in testing and examining the
Compression Equipment, calculated at Minerva's then-current published rates,
currently at $100 per hour as of date of execution of this agreement. If, in its
reasonable discretion Xxxxxxx determines
8
that such NTF is isolated in nature or otherwise not due to lack of Remarketer
diligence, then Xxxxxxx may waive assessments under this clause on a
case-by-case basis.
12.6 At the time of submitting a purchase order to Xxxxxxx hereunder for
Licensed Programs or Compression Equipment, Remarketer shall have the option to
purchase for resale to any Customer, an extension to Minerva's warranty. This
extension will extend both the Hardware Warranty Period and the Software
Warranty Period to cover the twelve (12) months following the date of shipment
from Xxxxxxx to Remarketer. The price to Remarketer for such extended warranty
shall be ten percent (10%) of Remarketer's then-current purchase price of
Minerva's Product. Following the expiration of any such extended warranty,
Remarketer's customer shall be entitled to purchase a service contract on
Minerva's then current terms and conditions. Attached hereto as Exhibit D are
Minerva's service terms and prices as of the Effective Date.
12.7 In the event that a Customer's Licensed Program is no longer within
the Software Warranty Period, but such Customer desires to upgrade its Licensed
Program(s), Xxxxxxx shall provide the latest upgrade of such Licensed Program(s)
to such Customer at a price equal to eighty percent (80%) of Minerva's
then-current price for its extended warranty described in Section 12.6 above.
12.8 Except for the warranties set forth in Sections 12.1 and 12.2 above,
XXXXXXX MAKES, AND REMARKETER, ITS SUBDISTRIBUTORS AND END USERS RECEIVE, NO
WARRANTIES, EXPRESS, IMPLIED, STATUTORY, IN ANY COMMUNICATION WITH XXXXXXX OR
OTHERWISE, WITH RESPECT TO MINERVA'S PRODUCTS, AND XXXXXXX SPECIFICALLY
DISCLAIMS ANY IMPLIED WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
SECTION 13
TITLE
13.1 Title to all Licensed Programs shall at all times remain and vest
solely with Xxxxxxx and its licensers. Remarketer agrees that it will not claim
or assert title to any such materials or attempt to transfer any title to
Customers or any third parties, except to the extent that Remarketer is a
licenser of Xxxxxxx.
SECTION 14
CONFIDENTIALITY OF INFORMATION; PROTECTION AND SECURITY
14.1 Remarketer agrees that as between Remarketer and Xxxxxxx, Xxxxxxx
owns all right, title, and interest in the product line that includes Minerva's
Products and in all Minerva's patents, inventions, trademarks, trade names,
copyrights, know-how, and trade secrets relating to the design, development,
manufacture, operation, marketing or service of Minerva's Products.
14.2 Remarketer shall use all reasonable efforts to protect the
proprietary nature of the Licensed Programs. Except as expressly provided
otherwise in this Agreement, Remarketer shall not copy, modify, transcribe,
store, translate, sell, lease, or otherwise transfer or distribute any of the
Licensed Programs, in whole or in part, without prior authorization in writing
from Xxxxxxx.
9
14.3 Remarketer shall xxxx (or shall not remove) all Minerva's Products
incorporated into Products with (i) Minerva's copyright, patent and other
proprietary notices, except Minerva's trademarks and trade names, in the same
manner in which Xxxxxxx incorporates such notices on the Minerva's Products and
(ii) such other proprietary notices as Xxxxxxx may reasonably require.
14.4 Each party acknowledges that by reason of its relationship to the
other party hereunder it will have access to certain information and materials
concerning business, plans, customers, technology, and products that are
confidential and of substantial value to each party, which value would be
impaired if such information were disclosed to third parties. Each party agrees
that it shall not use in any way for its own account (except for the purposes
hereof or as may be expressly permitted herein) or the account of any third
party, nor disclose to any third party, any such confidential information
revealed to it by the other party so long as such information remain legally
protectable as a trade secret. Each party shall take every reasonable precaution
to protect the confidentiality of such information. Upon request by a party, the
other party shall advise whether or not it considers any particular information
or materials to be confidential. A party shall not publish any technical
description of the other party's Products beyond the description already
published.
SECTION 15
INDEMNIFICATION
15.1 By Xxxxxxx: Xxxxxxx hereby agrees to indemnify, defend and hold
harmless Remarketer from and against any claims, actions, or demands alleging
that any Minerva's Product, Replacement Part, trademark or trade name (where
such trademark and trade name are associated with Product and Replacement Part)
infringes any copyright, trademark, patent, trade secret or other proprietary
rights of any third party. Remarketer shall permit Xxxxxxx, at Minerva's option,
to replace or modify any affected Compression Equipment or Licensed Program or
Replacement Part so as to avoid infringement, or to procure the right for
Remarketer to continue its distribution of such items. If neither of such
alternatives is reasonably possible, the infringing items shall be returned to
Xxxxxxx, and Xxxxxxx shall refund amounts paid therefor by Remarketer. Xxxxxxx
shall not thereby be relieved of its obligations under the first sentence of
this section to pay any judgments or settlements resulting from the alleged
infringements. Xxxxxxx shall have no obligation hereunder for or with respect to
claims, actions, or demands alleging infringement which arise by reason of (i)
the combination of any Minerva's Product with any items not supplied by Xxxxxxx
or (ii) Minerva's compliance with Remarketer's specifications.
The foregoing provision states the entire liability and obligation of
Xxxxxxx and the sole and exclusive remedy of Remarketer and its Customers with
respect to any alleged infringement of any patent, copyright, trademark, trade
secret or other intellectual property rights by any product of Xxxxxxx.
15.2 By Remarketer: Remarketer hereby indemnifies and holds harmless
Xxxxxxx from and against any and all claims, actions, or demands arising with
respect to the use or distribution of any Products, with the sole exceptions of
those matters for which Xxxxxxx bears responsibility under Section 15.1 and
matters arising solely out of breach of this agreement by Xxxxxxx.
10
15.3 The foregoing obligations of each party are conditioned on (i) prompt
written notice of any claim, action, or demand for which indemnity is claimed to
the extent that failure to provide such prompt notice is materially
disadvantageous to the indemnifying party and, with respect to any obligation to
defend, (ii) complete control in the indemnifying party of the defense and
settlement thereof (provided that no settlement admitting Remarketer's liability
that does not also admit Xxxxxxx liability will be entered into without the
consent of the indemnified party (such consent may not be unreasonably withheld)
and (iii) cooperation of the indemnified party in such defense.
SECTION 16
TERM AND TERMINATION
16.1 This Agreement will commence on the Effective Date and, unless
earlier terminated as provided for below, will remain in effect until December
31st, 1998, and shall automatically renew for successive one year periods unless
either party shall give written notice at least 90 day prior to such renewal
dates notice of its intent to terminate.
16.2 Xxxxxxx may terminate this Agreement upon written notice to
Remarketer if Remarketer at any time fails to comply with the certification
required under Section 2 hereof.
16.3 Should either party commit a material breach of its obligations
hereunder, the other party may, at its option, terminate this Agreement by
giving at least thirty (30) days' prior written notice of termination, which
notice shall identify and describe the basis for such termination. If, prior to
the expiration of such period, the defaulting party cures such default,
termination shall not take place.
16.4 Should either party admit in writing its inability to pay its debts
generally as they become due, or make a general assignment for the benefit of
creditors, or institute proceedings to be adjudicated a voluntary bankrupt, or
consent to the filing of a petition of bankruptcy against it, or be adjudicated
by a court of competent jurisdiction as bankrupt or insolvent; or should either
party seek reorganization under any bankruptcy act, or consent to the filing of
a petition seeking such reorganization; or should either party have a decree
entered against it by a court of competent jurisdiction appointing a receiver,
liquidator, trustee, or assignee in bankruptcy or in insolvency covering all or
substantially all of such party's property or providing for the liquidation of
such party's property or business affairs; then the other party may, at its
option and without notice, terminate this Agreement, effective immediately.
16.5 Sections 3.4, 6.1, 12, 13, 14, 15, 16.6, 18 and 19 through 30 hereof
shall survive any expiration or termination of this Agreement. Any such
expiration or termination will not affect the rights of Customers to continue to
use the Products.
16.6 Upon any expiration or termination of this Agreement, Xxxxxxx shall
have no obligation to ship Compression Equipment or Licensed Programs to
Remarketer and Remarketer's rights and licenses granted hereunder shall
terminate. Remarketer shall promptly provide Xxxxxxx with a statement indicating
the number of Minerva's Products in its inventory. Remarketer shall, at
Minerva's option (i) except as provided in (ii) below, return to Xxxxxxx all
Compression Equipment in Remarketer's inventory as Xxxxxxx may direct at its
sole discretion (excepting that Xxxxxxx may only direct the return of complete
systems) whereupon Xxxxxxx shall refund to Remarketer the
11
purchase price paid by Remarketer with respect thereto; or (ii) ship Computer
Equipment and Licenses Programs in its existing inventory in order to fulfill
any Customer purchase order therefore accepted by Remarketer prior to the
effective date of such termination, provided that Remarketer provides Xxxxxxx
with copies of such purchase orders and acceptances prior to such shipment. In
addition, Remarketer shall return to Xxxxxxx any and all tangible embodiments of
Minerva's confidential information in its possession.
SECTION 17
LIMITATION OF REPRESENTATIONS AND USE OF NAME BY REMARKETER
17.1 Remarketer shall make no representations concerning Xxxxxxx, the
Compression Equipment, or the Licensed Programs, except as set forth in
published specification or in the Documentation.
17.2 Remarketer shall not reproduce, reference, distribute or utilize any
trade name or trademark of Xxxxxxx, except solely for purposes of indicating to
the public in advertisements, promotions or publicity that it has incorporated
Minerva's Products into the Products. Without limiting the foregoing, in no
event shall Remarketer apply any trade name or trademark of Xxxxxxx to any OEM
Product. Remarketer shall submit to Xxxxxxx, for its approval, any and all
advertising, promotion, or publicity in which the trade names or trademarks of
the Xxxxxxx are used, or which is otherwise undertaken pursuant to this
Agreement, prior to any use, distribution, or disclosure of such advertising,
promotion or publicity; provided, however, that the foregoing shall not require
Remarketer to obtain prior approval for the use of Minerva's trade name or
trademarks for the purpose of specifying Xxxxxxx products in proposals or
providing standard Xxxxxxx product literature to Customers or potential
Customers. Xxxxxxx shall have the right to require, at its discretion, the
correction or deletion of any misleading, false, or reasonably objectionable
material or its trade names or trademarks from any such advertising, promotion,
or publicity.
17.3 Xxxxxxx and Remarketer will cooperate to determine specific
co-marketing items that will benefit both parties. A joint marketing plan will
be developed and reviewed on an annual basis.
SECTION 18
LIMITATION OF LIABILITY
18.1 EXCEPT FOR OBLIGATIONS ARISING UNDER SECTION 15.1, MINERVA'S
LIABILITY UNDER OR ARISING OUT OF THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNTS
PAID BY REMARKETER HEREUNDER. IN NO EVENT SHALL XXXXXXX BE LIABLE TO REMARKETER
OR ANY OTHER PERSON OR ENTITY FOR DAMAGES FOR LOST PROFITS, COSTS OF PROCUREMENT
OF SUBSTITUTE COMPRESSION EQUIPMENT OR SERVICES, OR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY, WHETHER CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, UNDER OR
ARISING OUT OF THIS AGREEMENT, REGARDLESS OF WHETHER XXXXXXX KNOWS OR HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS SHALL APPLY
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED
FOR HEREIN.
12
SECTION 19
INDEPENDENT CONTRACTOR STATUS
19.1 Remarketer is an independent contractor under this Agreement, and
nothing herein shall be construed to create a partnership, joint venture, or
agency relationship between the parties hereto, with the sole exception that
Remarketer acts as a licensing agent of Xxxxxxx with respect to Licensed
Programs as provided herein. Remarketer shall have no authority to bind or
obligate Xxxxxxx in any manner to any third party.
SECTION 20
COMPLIANCE WITH LAW
20.1 Remarketer shall comply with all applicable laws and regulations of
governmental bodies or agencies in its performance under this Agreement.
SECTION 21
NO ASSIGNMENT
21.1 Remarketer represents that it is acting on its own behalf and is not
acting as an agent for or on behalf of any third party, and further agrees that
it may not assign its rights or delegate its obligations under this Agreement
without the prior written consent of Xxxxxxx, except that Remarketer may assign
its rights and delegate its obligations hereunder in the event of a transfer of
ownership or control of substantially all of its assets, provided that such
assignee has assumed in writing or by operation of law Remarketer's obligations
hereunder.
SECTION 22
NOTICES
22.1 All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be considered effective
when deposited in the U.S. mail as registered mail, return receipt requested,
postage prepaid, and addressed to the party at the address noted above, unless
by such notice a different address shall have been designated in writing.
SECTION 23
GOVERNING LAW
23.1 All questions concerning the validity, operation, interpretation, and
construction of this Agreement will be governed by and determined in accordance
with the laws of the State of California, U.S.A., without giving effect to its
conflict of laws provisions. Remarketer hereby expressly consents to service of
process being effected upon it by registered mail sent to the address(es) set
forth at the beginning of this Agreement.
13
SECTION 24
NO WAIVER
24.1 Neither party shall by mere lapse of time without giving notice or
taking other action hereunder be deemed to have waived any breach by the other
party of any of the provisions of this Agreement. Further, the waiver by either
party of a breach of this Agreement by the other party shall not be construed
as, or constitute, a continuing waiver of such breach, or of other breaches of
the same or other provisions of this Agreement.
SECTION 25
FORCE MAJEURE
25.1 Neither party shall be in default if its failure to perform any
obligation hereunder, except any and all of Remarketer's payment obligations
hereunder, is caused solely by supervening conditions beyond that party's
control, including acts of God, civil commotion, strikes, labor disputes, and
governmental demands or requirements.
SECTION 26
SEVERABILITY
26.1 If any provision of this Agreement shall be found or be held to be
invalid, illegal or unenforceable in any jurisdiction in which this Agreement is
being performed, then the meaning of such provision shall be construed, to the
extent feasible, so as to render the provision enforceable, and if no feasible
interpretation would render it enforceable, such provision shall be severed from
the remainder of this Agreement, and the remainder of this Agreement shall
remain in full force and effect. In such event, the parties shall promptly
commence negotiations, in good faith, towards creating a substitute, valid and
enforceable provision which most nearly effects the parties' intent in entering
into this Agreement. In the event that the parties have not so agreed in writing
on a substitute provision within ninety (90) days of the finding or holding
which rendered the severed provision invalid, illegal or unenforceable, then
this Agreement shall immediately terminate without notice.
SECTION 27
SCOPE OF AGREEMENT
27.1 Each of the parties hereto acknowledges that it has read this
Agreement, understands it, and agrees to be bound by its terms. The parties
further agree that this Agreement is the complete and exclusive statement of
their agreement with respect to the subject matter hereof and supersedes all
proposals (oral or written), understandings, representations, conditions,
warranties, covenants, and all other communications between the parties relating
thereto. This Agreement may be amended only by a writing that refers to this
Agreement and is signed by both parties.
14
SECTION 28
LIMITATION OF ACTIONS
28.1 Remarketer agrees that all claims against Xxxxxxx shall expire and be
barred forever unless an action thereon is commenced in a court of competent
jurisdiction within eighteen (18) months following Remarketer's discovery of the
facts indicating to Remarketer that a cause of action on such claims may exist
against the Xxxxxxx.
SECTION 29
EXPORT CONTROLS
29.1 Remarketer understands and acknowledges that Xxxxxxx is subject to
regulation by agencies of the U.S. government, including, but not limited to,
the U.S. Department of Commerce, which prohibit export or diversion of certain
products and technology to certain countries. Any and all obligations of Xxxxxxx
to provide the Minerva's Products, any documentation pertaining thereto, or any
media in which any of the foregoing is contained, as well as any technical
assistance, shall be subject in all respects to such United States laws and
regulations as shall from time to time govern the license and delivery of
technology and products abroad by persons subject to the jurisdiction of the
United States, including the Export Administration Act of 1979, as amended, any
successor legislation, and the Export Administration Regulations issued by the
Department of Commerce, Bureau of Export Administration. Remarketer agrees to
cooperate with Xxxxxxx, including, without limitation, providing required
documentation, in order to obtain export licenses or exemptions therefrom.
29.2 Without in any way limiting the provisions of this Agreement,
Remarketer agrees that unless prior written authorization is obtained from the
Bureau of Export Administration or the Export Administration Regulations
explicitly permit the reexport without such written authorization, it will not
export, reexport, or transship, directly or indirectly, the Minerva's Products
or any technical data disclosed or provided to Remarketer, or the direct product
of such technical data, to country groups Q, S, W, Y, or Z, or to any other
country as to which the U.S. Government has placed an embargo against the
shipment of products, which is in effect during the term of this Agreement.
SECTION 30
ARBITRATION
30.1 Any dispute which arises between the parties which pertains in any
manner to this Agreement, except disputes arising under Sections 3, 13, 14, 15
or 17.2 hereof, shall be resolved through binding arbitration by one arbitrator
in Santa Xxxxx County, California, pursuant to the then-existing rules of the
American Arbitration Association. Judgment upon any award by such arbitrator
shall be binding and may be entered by any state or federal court having proper
jurisdiction. The parties hereto irrevocably submit to the jurisdiction of said
courts and waive any rights to object to or challenge the appropriateness of
said forums.
15
IN WITNESS WHEREOF, the parties have caused the Agreement to be duly
executed as of the Effective Date by their authorized representatives as set
forth below:
XXXXXXX SYSTEMS, INC. Celerity Systems, Inc.
By: /s/ Authorized Officer By: s/s Xxxxxxx X. Xxxxxxxx
--------------------------- -------------------------------
Name: Name: Xxxxxxx X. Xxxxxxxx
------------------------- -----------------------------
Title: Title: Vice President
-----------------------
16
EXHIBIT A
Products and Pricing
Compression Equipment
The OEM discount applied by Xxxxxxx increases as additional systems are
purchased. The additional discount only applies to individual units, and does
not apply retroactively to previous purchases.
The Compressionist products are complete turnkey MPEG encoding systems which
include: 19" rackmountable chassis; host computer with 4GB hard drive; monitor,
keyboard and mouse; MPEG 1 & MPEG 2 encoder and decoder; Exabyte tape drive;
picture resampling system, Component YUV, S-Video and Composite input; RGB,
S-Video or Composite Video output, and AES/EBU Digital or Balanced Analog Audio.
The Xxxxxxx Publisher product provides a desktop encoding system which includes:
the desktop chassis; MPEG 1 & MPEG 2 encoder and decoder; Component YUV, S-Video
and Composite input; RGB, S-Video or Composite Video output, and AES/EBU Digital
or Balanced Analog Audio.
Compressionist(R) Products:
Product Unit. Celerity
Name Purchased SRP Discount Price
---- --------- --- -------- -----
Compressionist 1 - 3 $65,000 25% $48,750
200 (MPEG 1&2) 4 - 10 30% 45,500
11 plus 35% 42,250
Advanced Video
Pre-Processing 1 - 3 $25,000 25% $18,750
Module 4 - 10 30% 17,500
11 plus 35% 16,250
D1 Video Capture 1 - 3 $10,000 25% $ 7,500
Input Module 4 - 10 30% 7,000
11 plus 35% 6,500
A-1
Xxxxxxx Publisher(TM) Products:
Product Unit. Celerity
Name Purchased SRP Discount Price
---- --------- --- -------- -----
MP-200 1 - 10 $29,995 25% $22,500
11 plus 30% 20,995
Desktop Pre- 1 - 10 $5,995 25% $ 4,400
11 plus 30% 4,195
Licensed Programs
Xxxxxxx Studio(TM) is included in system prices listed above.
REMARKETER ANNUAL SERVICE CONTRACT
(Terms and conditions as of June 15, 1997)
Product Celerity
Name SRP Price
---- --- -----
Compressionist $9,995 $6,000
200 (includes
all optional
features)
Xxxxxxx Publisher $4,500 $2,750
(MP200: includes
all optional features)
A-2
EXHIBIT B
Xxxxxxx Systems, Inc.
TERMS OF END-USER LICENSE AGREEMENT
Only a personal, nontransferable, and non-exclusive right to use the Licensed
Program is granted to such Customer;
Xxxxxxx retains all title to the Licensed Programs and all copies thereof, and
no title to the Licensed Programs, or any intellectual property in the Licensed
Programs, is transferred to such End-User;
The Customer may not copy (i) the Licensed Programs, except for one (1) copy for
backup or archival purposes only and only as necessary to use the Licensed
Programs and (ii) the Documentation, and all such copies are the proprietary
information of Remarketer and its licensers and suppliers and are subject to
their copyrights;
The Customer agrees not to reverse engineer, decompile, or otherwise attempt to
derive source code from the Licensed Programs. The Customer shall not modify or
prepare derivative works of the Licensed Programs;
Xxxxxxx Systems, Inc. is an intended third party beneficiary of the Customer
sublicense and is entitled to enforce it in its own name directly against the
End-User;
XXXXXXX WILL NOT BE LIABLE TO THE CUSTOMER OR ANY OTHER PERSON OR ENTITY FOR ANY
GENERAL, SPECIAL, DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR OTHER DAMAGES
ARISING OUT OF THE SUBLICENSE OF THE LICENSED PROGRAMS OR THE PROVISION OF THE
COMPRESSION EQUIPMENT;
Upon termination of the End-User License Agreement, the Customer will return all
copies of the Licensed Programs to Remarketer or Xxxxxxx;
Use, duplication or disclosure of the Licensed Programs by the U.S. Government
is subject to "Restricted Rights", as that term is defined in the Department of
Defense ("DOD") Supplement to the Federal Acquisition Regulations ("DFARS") in
paragraph 252.227-7013(c)(1) if to the DOD, or, if the Licensed Programs are
supplied to any unit or agency of the U.S. Government other than DOD, the
Government's rights in Licensed Programs will be as defined in paragraph
52.227-19(c)(2) of the Federal Acquisition Regulations ("FAR"). Contractor:
Xxxxxxx Systems, Inc., 0000 Xxxxxx Xxxx Xxxx, Xxxxx Xxxxx, XX 00000.
[Where packaged as a "shrink-wrap" or "break-the-seal" agreement]:
Customer shall, promptly after purchase, complete and mail the enclosed
postcard. Customer's failure to do so shall be a material breach of this
end-user license agreement.
EXHIBIT C
Xxxxxxx Systems, Inc.
MINIMUM AMOUNTS
This exhibit does not apply.
EXHIBIT D
Xxxxxxx Systems, Inc.
TERMS OF SUB DISTRIBUTOR LICENSE AGREEMENT
Each agreement between OEM and a Sub distributor will contain at a minimum the
following terms:
Sub distributor shall distribute the OEM Product to end users pursuant to
End-User License Agreements which (i) at a minimum contain the terms listed in
Exhibit B and (ii) are signed by such end users or, where signing is not
commercially feasible, subject to (a) a "shrink-wrap" or "break-the-seal"
End-User License Agreement packaged with the Licensed Program (b) the inclusion
of a postcard in such package which prompts the end-user Customer to provide its
name, address, telephone number, date of purchase and from whom the end-users
purchased Manufacturer's Product; and (c) OEM's acceptance of purchase orders or
other offers to purchase by end-user Customers being expressly conditioned on
the inclusion of the terms of the End-User License Agreement.
Sub distributor shall not remove, alter or cover the proprietary notices which
appear on and in the Licensed Program when shipped from OEM;
The Sub distributor will not export or re-export the Compression Equipment or
the Licensed Programs without the appropriate United States or foreign
government licenses;
Xxxxxxx is an intended third party beneficiary of the Sub distributor agreement
and is entitled to enforce the Sub distributor agreement in its own name
directly against the Sub distributor.
The Sub distributor agreement will be governed by the laws of the State of
California without giving effect to its choice of law provisions;
The following will appear in upper case letters:
OEM'S LICENSERS AND SUPPLIERS WILL NOT BE LIABLE FOR ANY DAMAGES SUFFERED
OR INCURRED BY SUB DISTRIBUTOR INCLUDING, BUT NOT LIMITED TO, GENERAL,
SPECIAL, DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
FROM OR IN CONNECTION WITH THE DELIVERY, USE, OR PERFORMANCE OF THE
LICENSED PROGRAM OR COMPRESSION EQUIPMENT;
The Sub distributor will not copy all or any part of the Licensed Program,
and on termination of the Sub distributor agreement, the Sub distributor will
discontinue distribution and destroy its inventory of the Licensed Program;
No title to the intellectual property contained in the Licensed Program is
transferred to Sub distributor and title to the Licensed Program is retained by
Xxxxxxx and its licensers;
Sub distributors may not decompile, reverse engineer or otherwise attempt
to derive source code from the Licensed Program and may not prepare derivative
works of the Licensed Program;
A term protecting the Licensed Program from governmental abuse. In the
United States, a statement similar to the following is acceptable:
United States Government Restricted Rights. Use, duplication or disclosure
of the Software by the U.S. Government is subject to "Restricted Rights",
as that term is defined in the DOD Supplement to the Federal Acquisition
Regulations ("DFARS") in paragraph 252.227-7013(c)(1)(ii) if to the
Department of Defense (DOD), or, if the Software is supplied to any unit
or agency of the U.S. Government other than DOD, the Government's rights
in Software will be as defined in paragraph 52.227-19(c)(2) of the Federal
Acquisition Regulations ("FAR"). Contractor: Xxxxxxx Systems, Inc., 0000
Xxxxxx Xxxx, Xxx Xxxx, XX 00000.
D-2
