EXHIBIT 10.22
ORIGINAL EQUIPMENT MANUFACTURE AGREEMENT WITH EDUTEK EDUCATIONAL SYSTEMS, INC.
ORIGINAL EQUIPMENT MANUFACTURER AGREEMENT
Between Seller, Inc., a Delaware corporation with principal offices at 00000
Xxxxxxxxxxx Xx., Xxxxxxxxxx, XX 00000-0000 ("Seller") and __Edutek ORIGINAL
EQUIPMENT MANUFACTURER AGREEMENT (OEM), with a principal place of business at
0000 X.X. 00xx , Xxxxxxxxxxx, XX,
WHEREAS, Seller is the manufacturer of a product called
Telecom 2000(-TM-), and
WHEREAS, OEM wishes to make purchases of Telecom 2000(-TM-)
to incorporate additional products or capabilities to produce an
enhanced product for which it certifies herein that it is the Original
Equipment Manufacturer, for resale or other purposes, and
WHEREAS, the parties believe that it would be mutually
beneficial for them to cooperate in order for OEM to resell Telecom
2000(-TM-),
NOW, THEREFORE, in order to establish the terms and conditions
under which the parties' respective goals may be accomplished, in
exchange of the mutual covenants and premises here in below, the
parties agree as follows:
1.0 DEFINITIONS
Seller Product shall mean those products listed in Attachment
A hereto. Seller Product consists of both hardware and software
products.
Telecom 2000(-TM-) shall mean the intellectual property underlying Seller
Product related to or derived from Telecom 2000(-TM-) and / or related to or
derived from US Patent No. 5, 526, 353 including specifically, for purposes
of clarification and not limitation, algorithms, electronic computer
protocols, routines, subroutines or programs developed by or on behalf of
Seller or otherwise owned by or in the custody of Seller. The Products may
shall be sold on an OEM's label basis, where OEM will badge the Product
according to the Specification. The Specification is: Paint of the units will
be identical to the color and texture of the Seller ____ product line
e-Net logo will appear on the front of all chassis, less prominent than OEM's
label, but in a reasonably conspicuous size and location
2.0 LICENSE AND SCOPE OF AGREEMENT
2.1 LICENSE RIGHTS AND SCOPE. Subject to the terms and
conditions set forth herein, Seller hereby grants to OEM, and OEM
accepts, a non-transferable and non-exclusive license to use, resell,
or sublicense Seller Product which are software products.
2.2 RESTRICTIONS ON USE. All purchase, use, and resale by OEM
of Seller Product is restricted as follows:
(a) OEM is strictly prohibited from reverse engineering,
reverse compilation, or reverse assembly of Seller Product;
(b) OEM is strictly prohibited from making a copy or copies of
Seller Product;
(c) OEM shall not misuse the trademarks or trade names of
Seller, but OEM may use the trademarks or trade names of Seller in
advertising Seller Products;
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(d) OEM shall not make any foreign sales without full
compliance with United States import/export laws and restrictions, and
shall be responsible to Seller and indemnify Seller for any failure to
abide with this clause; and
(e) OEM shall not make any government contract sales that
impair the rights of Seller hereunder, and must take all necessary
steps to insure compliance with the intellectual property ownership
rights of Seller hereunder, and shall be responsible to Seller and
indemnify Seller for any failure to abide with this clause.
2.3 TERM. This Agreement shall be for a term of one year,
subject to termination by either party at any time in accordance with
the terms hereof.
2.4 TERMINATION. Subject to Section 4.6 hereof, the Agreement
may be terminated by Seller if OEM does not pay Seller any amount due
hereunder or otherwise materially breaches this Agreement, or if OEM
violates any material term hereof, including specifically but not as a
limitation its restrictions under 2.0 and its duties under Section 3.0.
OEM shall have the right to terminate this Agreement if Seller fails to
provide support as described in Attachment B, or if Seller otherwise
materially breaches this Agreement. Either party may terminate this
Agreement if a force majeure event continues for more than ninety (90)
days or if the other party becomes insolvent or bankrupt or makes an
assignment for the benefit of creditors.
2.5 DUTIES UPON TERMINATION. Upon the termination or
expiration of this Agreement for any cause, the parties agree to
continue their cooperation in order to effect an orderly termination of
their relationship. OEM shall immediately cease representing itself as
a OEM of Seller Product, and shall accept no new orders for Seller
Product except pursuant to firm, outstanding bids or quotations.
2.6 SURVIVAL. Upon the termination or expiration of this
Agreement for any cause, the paragraphs which by their plain meaning,
including specifically but not as a limitation provisions which protect
the intellectual property rights of Seller shall survive.
2.7 BREACH OR DEFAULT. Neither party may terminate this
Agreement for breach or default of the other party unless and until the
party seeking to terminate has specified the breach or default in
writing and such breach or default has not been cured by the receiving
party within thirty (30) days after receipt of written notice.
3.0 OBLIGATIONS OF OEM
3.1 REASONABLE BEST EFFORTS SERVICES AND MINIMUM COMMITMENT.
In consideration of the license granted above and discounting schedules
extended in Attachment A, OEM agrees to exert its reasonable best
efforts to resell Seller Product, to meet agreed-upon sales goals, and
to purchase the Minimum Commitment of Seller Product outlined in
Attachment A. In consideration of the OEM efforts, the Seller agrees to
exert its reasonable best efforts to a deliver high quality product in
conformance with its published specifications, within a reasonable
period of time related to agreed upon delivery dates, in order for the
OEM to meet and/or exceed sales goals.
3.2 SALES CAPABILITY. OEM shall maintain offices as sales
locations, which offices shall be staffed by a sufficient trained
capable sales and technical staff, adequate to provide OEM's customers
with assistance and instructions on setup, installlation, and use of
Seller Product.
3.3 SALES REPORTS, SALES ESTIMATES, AND PRODUCT PERFORMANCE
DATA. Periodically, as agreed, OEM will forecast expected sales to be
made in the upcoming three month period on a "rolling" basis.The OEM is
required to forward to Seller any reports from users of the Seller
Product regarding either (i.) any outages or failures experienced by
users of the Seller Product which become
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known to OEM, or (ii) any complaints of users of the Seller Product
regarding the quality, functionality or performance of Seller Product
which become knownto OEM.
3.4 INSURANCE COVERAGES. Based upon Seller's determination,
OEM shall acquire reasonable insurance coverages related hereto of the
kinds and in the amounts specified by Seller, at OEM's expense, with
loss payees and subrogation as specified by Seller.
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4.0 ORDERING, DELIVERY, ACCEPTANCE, FEES, PAYMENT, AND SUPPORT
4.1 ORDERING AND DELIVERY. Individual firm funded purchase
orders of OEM issued to Seller shall be effective upon acceptance and
order receipt verification in writing by Seller at its headquarters at
Germantown, Maryland, USA. All Seller Products are listed in the
initial form of Attachment A with prices and the purchase orders of OEM
must reflect the description, prices, and model numbers contained
therein. The terms and conditions of this Agreement override those of
the purchase orders, with the exception of OEM's rights to return
ordered product (if any) after acceptance has occurred under the
provisions of 4.2 below. All Seller Products shall be delivered on or
about the delivery date set forth in the order receipt verification in
writing by Seller. Shipment will be at the risk of OEM. OEM shall have
15 business days to verify that all deliveries have been received.
Delivery of the Seller Products shall be conclusively deemed to be
completed at the end of the 15 business days verification period or at
such time as missing deliverables identified by OEM in writing during
the 15 business days verification period have been replaced by Seller.
4.2 ACCEPTANCE. The Seller Product shall be accepted by OEM if
the Seller Products perform substantially as described in Attachment C,
"Product Specifications". Failure of OEM to inform Seller of acceptance
or non-acceptance within thirty (30) days following completed delivery
or commercial use of the deliverables by OEM shall constitute
acceptance. Purchase prices and license fees shown in the initial form
of Attachment A are due and payable upon acceptance. Until full payment
is received, Seller retains a purchase money security interest in and
to Seller products. After full payment is received, title is
transferred to OEM.
4.3 AFTER-SALE SUPPORT OF PRODUCTS. Following delivery of the
Deliverables, OEM shall be exclusively responsible for the
installation, testing, modification, management, and control of its
resales of Seller Product, except for Seller's Warranty responsibility
in clause 5.3 below and After-Sale Support of Products responsibility
defined in Attachment B hereto.
4.4 PRICES AND PRICE CHANGES. OEM agrees to pay Seller the
amounts shown on Attachment A for Seller Product. Seller will have the
right through its independent auditors to inspect OEM's facilities and
records to verify the amounts and fees charged to OEM's customers
hereunder. OEM shall keep records regarding its resales and sublicenses
to OEM's customers hereunder in detail to permit Seller to make such a
verification. Seller may change the price of any Seller Product
subsequent to the date of this agreement. If prices are increased,
Seller will give OEM a written notice thereof effective immediately
upon increase.Firm funded purchase orders accepted by Seller before the
written notice of price increase is issued shall be honored at the old
(lower) price so long as the scheduled shipment date therefore is not
later than thirty (30) days after the date of the written notice of
price increase. If prices are decreased, Seller will give OEM a written
notice thereof effective immediately, and the decrease shall apply to
all unused unopened inventory purchased by OEM during the previous
thirty (30) days, as well as to orders-in-process.
4.5 TRAINING, UPDATES, MAINTENANCE & SUPPORT FEES. Except as
expressly provided in this Agreement, including the Attachments, all
training and support services provided by Seller shall be at an
additional fee in accordance with Seller's then current standard
rates. Unless otherwise stated, OEM shall reimburse Seller for all
reasonable travel and other out-of-pocket expenses incurred by Seller
in connection with the assistance furnished hereunder, provided same
have been approved and pre-authorized by OEM.
4.6 PAYMENT. All checks will be in U.S. currency unless
otherwise agreed and shall be drawn on U.S. banks. Except as otherwise
stated herein, based upon credit approval in the sole discretion of
Seller, all payments including license fees shall be due and payable
within thirty (30) calendar day after the receipt by OEM from Seller of
an invoice. If OEM fails to pay any amount due by the due date, OEM
shall pay late charges of 1.5% per month, but not more than the highest
rate permitted by law, together with all Seller's expenses and
collection charges
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4.7 TAXES. In addition to Seller's fees hereunder, OEM is
obligated to pay any federal, state, provincial, county, local or
governmental taxes, (including but not limited to sales tax and value
added taxes), duties fees and amounts in lieu thereof, now or hereafter
applied on the licenses granted or products sold herein or OEM's
production, storage, transportation, import, export, licensing or use
of Seller Product. Any such taxes, duties, fees and amounts payable in
lieu thereof, including interest and penalties thereon, paid or payable
at any time by Seller, exclusive of taxes based solely on Seller's net
income, shall be reimbursed by OEM.
5.0 OWNERSHIP AND PROPRIETARY RIGHTS
5.1 OWNERSHIP. All rights, title and interest to Telecom
2000(-TM-) shall at all times remain the exclusive property of Seller,
except for Seller Product fully paid for by OEM. All applicable
copyrights, trade secrets, patents and other intellectual property
rights in Seller Product and Telecom 2000(-TM-) shall remain the
exclusive property of Seller. No title to Telecom 2000(-TM-) is
transferred to OEM. OEM shall not remove the copyright, trademark and
proprietary rights notices of Seller, and shall prohibit any such
removal by its officers, agents, employees, and contractors. This
provision does not apply to applications, inventions, designs, or other
intellectual property developed after ther date hereof by any party.
Any party so developing shall be presumed to be the owner of such
applications, inventions, designs, or other intellectual property
developed after ther date hereof
5.2 PROPRIETARY RIGHTS. OEM acknowledges that Telecom
2000(-TM-) is proprietary and confidential and constitutes valuable
trade secrets of Seller. OEM agrees to safeguard Telecom 2000(-TM-)
with not less than the same degree of care as is exercised in
connection with OEM's own most proprietary and confidential materials.
All aspects of Telecom 2000(-TM-), including without
limitation, programs, methods of processing, specific design and
structure of individual programs and their interaction and unique
programming techniques employed therein, if any, shall remain the sole
and exclusive property of Seller, and shall not be used, sold,
revealed, disclosed or otherwise communicated, directly or indirectly,
by OEM to any person, company, or institution other than as set forth
herein, excepting such technical and business development
communications, products demonstrations, and detailed technical
discussions as OEM reasonably may deem necessary to perform the
reselling duties described herein.
5.3 WARRANTY AND DISCLAIMER OF WARRANTY. Seller Product
Hardware is warranted as free from defects in materials and workmanship
for a period of one year after shipment. In the event of warranty
claims hereunder, OEM shall return ship to seller, prepaid, with a
written description of the basis for warranty claim for a final
determination by Seller. Warranty-covered items shall be repaired or
replaced by Seller and shipped to OEM, at Seller's expense. All Seller
Product Software is delivered "AS IS". SELLER MAKES NO EXPRESSED OR
IMPLIED WARRANTIES WHATSOEVER WITH RESPECT TO SELLER PRODUCT. IN
PARTICULAR, AND WITHOUT LIMITING THE FOREGOING, THE PARTIES AGREE THAT
THERE IS NO EXPRESSED OR IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE OR OF MERCHANTABILITY. SELLER SHALL NOT BE FOUND LIABLE FOR ANY
MONETARY DAMAGES OF ANY KIND WHATESOEVER RELATED TO THE USE OF SELLER
PRODUCTS, AND ANY AND ALL RISK OF SUCH USE IS HEREBY SPECIFICALLY
ASSUMED BY OEM.
6.0 INDEMNIFICATION
6.1 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE
LIABLE TO THE OTHER OR TO ANY OTHER THIRD PARTY BASED ON CONTRACT, TORT
OR OTHERWISE FOR LOSS OF REVENUES, LOST PROFITS, LOST SAVINGS, OR
INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES
ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT, EXCEPT THAT
OEM MAY BE FOUND SO
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LIABLE TO SELLER FOR ANY DAMAGES ARISING OUT OF OR RELATING TO OEM'S
INTENTIONAL OR GROSSLY NEGLIGENT VIOLATION OF CLAUSES 2.2.
6.2 INDEMNIFICATION BY SELLER. Seller shall indemnify, defend
and hold OEM harmless from any claims, damages or judgments, including
all reasonable attorney's fees, directly or indirectly resulting from
any claimed infringement or violation of any US copyright, US patent or
other US intellectual property right with respect to Seller Product.
Seller shall have no liability for any such claims or liabilities based
on use of: (i) any version, modification or adaptation of Seller
Product, if such infringement would have been avoided by the use of a
then current unaltered release of Seller Product ; or (ii) a
combination of Seller Product with any product or data not included in
Seller Product when delivered to OEM by Seller.
Following notice of a claim or a threat of actual suit,
Seller, at its sole option, shall as OEM's sole remedy (except as
otherwise provided for in this section):
(a) procure for OEM the right to continue, as provided herein,
to use, distribute and sublicense Seller Product at no additional
expense to OEM; or
(b) provide OEM with a non-infringing version of Seller
Product.
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7.0 PUBLICITY
7.1 ISSUANCE OF PUBLICITY. Any and all publicity of any kind
whatsoever with regard to this Agreement shall be determined by Seller
in its sole discretion, except that with respect to the use of the
trademarks and trade names, any publicity is subject to the approval of
the party whose trademarks and trade names are to be used, only to the
extent of the use of such trademarks and trade names and with respect
to the portions of the publicity bearing any such trademarks and trade
names.
8.0 GENERAL
8.1 COMPLIANCE WITH LOCAL LAWS. OEM shall be exclusively
responsible at its own expense for compliance with all local laws
relating to Seller Product and the use thereof hereunder by OEM. OEM
shall indemnify and save harmless Seller from any claim by a third
party arising out of or related to non-compliance with local laws by
OEM.
8.2 JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
Xxxxxxxxxx County, Maryland being the venue for all disputes, except
for Federal jurisdiction disputes, the venue for which shall be the
Eastern District of Virginia.
8.3 DISPUTE RESOLUTION. Any controversy arising under or
related to this Agreement, or any disputed claim by either party
against the other under this Agreement shall be settled in Washington,
DC, USA, by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association and judgment upon the
award rendered by the arbitrators shall be binding upon the parties and
may be entered by either party in the court or forum, state or federal,
having jurisdiction. In any action or proceeding to enforce rights
under this Agreement, the prevailing party will be entitled to recover
costs and reasonable attorneys' fees. Notwithstanding anything to the
contrary, nothing in this Agreement shall be deemed as preventing
either party from seeking injunctive relief (or any other provisional
remedy) from any court having jurisdiction over the parties and the
subject matter of the dispute as necessary to protect either party's
name, proprietary information, patents, copyrights, trade secrets,
know-how or any other proprietary rights.
8.4 INDEPENDENT CONTRACTORS. It is expressly agreed that
Seller and OEM are acting hereunder as independent contractors, and
under no circumstances shall any of the employees of one party be
deemed the employees of the other for any purpose.
8.5 NOTICE. Any notice required to be given by either party to
the other shall be deemed given ten (10) days after being deposited in
the postal system in registered or certified form with return receipt
requested, postage paid, addressed to the notified party at the address
set forth above.
8.6 ASSIGNMENT. A party may not assign this agreement or any
portion thereof without the approval of the other party, which shall
not be unreasonably withheld.
8.7 AMENDMENT; WAIVER. Any provision of this Agreement may
only be amended or waived if such amendment or waiver is in writing;
and, if an amendment, executed by all parties hereto and, if a waiver,
executed by the party which is waiving the term, condition or right.
8.8 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforcable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforcability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
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8.9 HEADINGS. The headings of the various sections of this
Agreement have been inserted for ease of reference only and shall be
deemed not to be a part of this Agreement.
8.10 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties with relation to the subject matter
hereof, and may be amended only by a writing in accordance with clause
8.7 above.
MADE AND ENTERED INTO this _________ day of _________, 199__,
by the undersigned authorized representatives of the parties.
e-Net, Inc. OEM
------------------------ ------------------------
(Signature) (Signature)
------------------------ ------------------------
(Name) (Name)
------------------------ ------------------------
(Title) (Title)
------------------------ ------------------------
(Date) (Date)
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ATTACHMENT A
SELLER PRODUCT AND OEM PRICES
PRODUCT RE-
SELLER
PRICE
-----
T2000-TS $412.00
T2000-CO $562.00
Net Connect $119.00
TelSet Lite $ 224.00
T2000-DTI T1 Single Span Dual Span
PCM $7,147.00 $12,997.00
SX 7300 $19,498.00 $34,447.00
T2000-DTI E1 Single Span Dual Span
PCM $8,447.00 $12,997.00
SX 7300 $19,497.00 $37,697.00
MTS 8 Port $5300.00
MTS 12 Port $7000.00
Gatekeeper Software $3750.00
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ATTACHMENT B
SELLER'S AFTER-SALE SUPPORT OF SELLER PRODUCTS
SUPPORT
1.) "Warranty Only", equals no maintenance service unless a defect
in parts or workmanship causes a malfunction. See Clause 5.3. above.
2.) "Standard Support" for 15% of purchase price of ordered
item per year is specified in this attachment below under the title
"PRODUCT MALFUNCTION CORRECTION PROCEDURES".
3.) "Nonstandard Support" equals any customized services which
OEM requests and which Seller agrees to supply, at a cost of $1500 per
day plus Travel and Living, minimum of 2 days.
PRODUCT MALFUNCTION CORRECTION PROCEDURES
Problem Classifications - If OEM or its Customer encounters a
problem (classified below) with the product, then Seller is required to
respond to the OEM or its Sublicensee in the time specified below:
P1: CRITICAL SYSTEMS PROBLEM - Customer is unable to use the
product as documented, and a major operational problem or reliability
problem exists. Seller shall provide acknowledgment of the problem
within four (4) hours. At this time, OEM or its Customer may be
required to provide additional information to enable Seller to recreate
the problem. Seller shall use its best efforts to provide a work-around
(if a work-around is possible) for the problem and shall provide a plan
for resolution within one (1) day from the time at which the problem
can be reproduced by Seller. OEM or its Customer may be required to aid
in this task if the error can not be reproduced by Seller. A patch
release containing the fix shall be produced according to the plan
mentioned above. Status reports will be provided to OEM or its Customer
as required, but no less than twice a week.
P2: MINOR OPERATIONAL PROBLEM(S) - An intermittent `bug' in
the product exists, but it is not a critical systems reliability issue;
however, the product does not function as documented, and the `bug'
creates a minor operational impact. Seller shall provide acknowledgment
of the problem within one (1) business day. At this time, OEM or its
Customer may be required to provide additional information to enable
Seller to recreate the problem. OEM or its Customer may be required to
aid in this task if the error can not be reproduced by Seller. Seller
shall use its best efforts to provide a work-around (if a work-around
is possible) for the problem and shall provide a plan for resolution
within one (1) week from the time at which the problem can be
reproduced by Seller. Any fixes to address this problem shall be
incorporated into the next Maintenance Release.
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P3: ANNOYANCE TYPE PROBLEM - The use of the product produces a
user annoyance while the product is in application. Seller shall
provide acknowledgment of the problem within two (2) business days. At
this time, OEM or its Customer may be required to provide additional
information to enable Seller to recreate the problem. Seller shall use
its best efforts to provide a work-around (if a work-around is
possible) for the problem and shall provide a plan for resolution
within two (2) weeks from the time at which the problem can be
reproduced. OEM or its Customer may be required to aid in this task if
the error can not be reproduced by Seller. Seller and OEM or its
Customer will jointly determine if the annoyance is to be fixed. If it
is agreed upon that the annoyance is to be fixed, then Seller shall
provide a schedule for the next Scheduled Release and incorporate the
fix into that release.
DEFINITIONS:
1.) Scheduled release - includes new functionality
2.) Maintenance release - takes care of `bug' fixes
3.) Work-around - customer able to make alteration to
application or product as a temporary solution.
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