EXHIBIT 10.8
PRODUCT SALES AGREEMENT
Between Seller, Inc., a Delaware corporation with principal offices at
00000 Xxxxxxxxxxx Xx., Xxxxxxxxxx, XX 00000-0000 ("Seller") , and Diamond
Telecom ("Reseller"), a Brazilian corporation with a principal place of business
at Xxx Xxxxxxxxxxx 0/000, Xxx xx Xxxxxxx, XX, Xxxxxx,
WHEREAS, Seller is the manufacturer of a product called Telecom
2000(TM), and
WHEREAS, Reseller wishes to make purchases of Telecom 2000(TM) for
resale, and
WHEREAS, the parties believe that it would be mutually beneficial for
them to cooperate in order for Reseller 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.
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.
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 Reseller, and Reseller accepts, a
non-transferable and non-exclusive license to resell or sublicense Seller
Product, subject to and controlled by Attachment A, Special Terms and Conditions
Number 3.
2.2 Restrictions on Use. All purchase, use, and resale by Reseller of
Seller Product is restricted as follows:
(a) Reseller is strictly prohibited from reverse engineering, reverse
compilation, or reverse assembly of Seller Product;
(b) Reseller is strictly prohibited from making a copy or copies of
Seller Product;
(c) Reseller shall not misuse the trademarks or trade names of Seller,
but Reseller may use the trademarks or trade names of Seller in advertising
Seller Products;
(d) Reseller 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) Reseller 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. The foregoing is subject to and controlled by Attachment A,
Special Terms and Conditions Number 8.
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 Reseller does not pay Seller any amount due hereunder or
otherwise materially breaches this Agreement, or if Reseller violates any
material term hereof, including specifically but not as a limitation its
restrictions under 2.0 and its duties under Section 3.0. Reseller 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. Reseller shall
immediately cease representing itself as a reseller 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 RESELLER
3.1 Reasonable Best Efforts Services and Minimum Commitment. In
consideration of the license granted above and discounting schedules extended in
Attachment A, Reseller 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
Reseller 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 Reseller to meet and/or exceed sales goals.
3.2 Sales Capability. Reseller shall maintain offices as sales
locations, which offices shall be staffed by a sufficient trained capable sales
and technical staff, adequate to provide Reseller'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, Reseller will forecast expected sales to be made in the
upcoming three month period on a "rolling" basis.The Reseller 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 known to Reseller, or (ii) any complaints of users of the Seller Product
regarding the quality, functionality or performance of Seller Product which
become knownto Reseller.
3.4 Insurance Coverages. Based upon Seller's determination, Reseller
shall acquire reasonable insurance coverages related hereto of the kinds and in
the amounts specified by Seller, at Reseller's expense, with loss payees and
subrogation as specified by Seller.
4.0 ORDERING, DELIVERY, ACCEPTANCE, FEES, PAYMENT, AND SUPPORT
4.1 Ordering and Delivery. Individual firm funded purchase orders of
Reseller 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 Reseller 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 Reseller'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 Reseller. Reseller 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
Reseller in writing during the 15 business days verification period have been
replaced by Seller.
4.2 Acceptance. The Seller Product shall be accepted by Reseller if the
Seller Products perform substantially as described in their current
documentation. Failure of Reseller to inform Seller of acceptance or
non-acceptance within thirty (30) days following completed delivery or
commercial use of the deliverables by Reseller 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 Reseller.
4.3 After-Sale Support of Products. Following delivery of the
Deliverables, Reseller 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. Reseller agrees to pay Seller the amounts
shown on Attachment A for Seller Product. Seller will have the right through its
independent auditors to inspect Reseller 's facilities and records to verify the
amounts and fees charged to Reseller's customers hereunder. Reseller shall keep
records regarding its resales and sublicenses to Reseller'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 Reseller 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 Reseller a written notice thereof
effective immediately, and the decrease shall apply to all unused unopened
inventory purchased by Reseller 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, Reseller 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 Reseller.
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 Reseller from Seller of an invoice. If Reseller fails to
pay any amount due by the due date, Reseller 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
4.7 Taxes. In addition to Seller 's fees hereunder, Reseller 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 Reseller '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 Reseller.
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 Reseller. 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 Reseller. Reseller 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.
5.2 Proprietary Rights. Reseller acknowledges that Telecom 2000(TM) is
proprietary and confidential and constitutes valuable trade secrets of Seller.
Reseller agrees to safeguard Telecom 2000(TM) with not less than the same degree
of care as is exercised in connection with Reseller'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 Reseller 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
Reseller 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, Reseller 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 Reseller, 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 RESELLER.
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 RESELLER MAY BE FOUND SO LIABLE TO SELLER FOR ANY
DAMAGES ARISING OUT OF OR RELATING TO RESELLER'S INTENTIONAL OR GROSSLY
NEGLIGENT VIOLATION OF CLAUSES 2.2.
6.2 Indemnification by Seller . Seller shall indemnify, defend and hold
Reseller 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 Reseller by Seller.
Following notice of a claim or a threat of actual suit, Seller, at its
sole option, shall as Reseller's sole remedy (except as otherwise provided for
in this section):
(a) procure for Reseller the right to continue, as provided herein, to
use, distribute and sublicense Seller Product at no additional expense to
Reseller; or
(b) provide Reseller with a non-infringing version of Seller Product.
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. Reseller shall be exclusively
responsible at its own expense for compliance with all local laws relating to
Seller Product and the use thereof hereunder by Reseller. Reseller 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 Reseller.
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. If either party wishes to commence litigation,
then either before or promptly after doing so, that party shall notify the other
party in writing by Federal Express or facsimile transmission of a request for
meeting. The request shall contain a description of the problem. Within fourteen
(14) days of receipt of the letter requesting the meeting, the parties shall
meet at a mutually convenient location in Xxxxxxxxxx County, Maryland. The
meeting shall be attended by an executive of each party having the authority to
resolve the problem. Each party may bring technical staff or other
representatives having information bearing on the problem; however, neither
party may bring an attorney or be represented in the meeting by an executive who
is an attorney unless agreed in advance in writing by the other party. In the
event such meeting fails to resolve issues in dispute, all actions relating to
dispute hereunder shall have as venue, Xxxxxxxxxx County, Maryland, except for
Federal jurisdiction disputes, the venue for which shall be the Eastern District
of Virginia.
8.4 Independent Contractors. It is expressly agreed that Seller and
Reseller 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.
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. Reseller - Diamond Telecom
------------------------ ------------------------
(Signature) (Signature)
------------------------ ------------------------
(Name) (Name)
------------------------ ------------------------
(Title) (Title)
------------------------ ------------------------
(Date) (Date)
ATTACHMENT A
Seller Product and Reseller Prices
Product Designation List Price Each
------------------- ---------------
T2000-TS $549
T2000-CO $795
T2000-IN (4 port BRI) $8495
T2000-DTI (single span T1/E1) $10,995
Gateways FXS 7300 (single span T1/E1) $29,995
*Network Management System (NMS) $10,000
*Billing System- Interface module only $10,000
(Query to CDR data only)
*Required to be paid as a license one time per network for one Network
Manager Station when the T2000-DTI (single span T1/E1) or the Gateways FXS 7300
(single span T1/E1) is acquired. Includes one copy of PC Anywhere software per
station.
10% Discount based on these Special Terms and Conditions. Discount is
reflected in T2000-DTI (single span T1/E1) and Gateways FXS 7300 (single span
T1/E1) price above, for which installation is included.
All prices herein are available for certified Resellers only, and are
subject to change by Seller in accordance with the Seller's contractual
agreements and standard practices and policies.
Service Fees ( See Attachment B):
A one-year maintenance contract is available upon initial
order for a fee of fifteen per cent (15%) of the order dollar value. Maintenance
service includes Standard Support as defined in Attachment B. Nonstandard
Support in the areas of enhanced installation service, training, customization,
and relocation is available on a per order basis, when accepted by e-Net, Inc.
Fees for Nonstandard Support are based upon $1500.00 per day, minimum of two
days, plus travel and living.
"Special Terms and Conditions" are outlined below:
1.) Diamond Telecom will order not less than $80,000 worth of product
to be delivered by April 30, 1998;
2.) Diamond Telecom will order not less than $400,000 worth of product
to be delivered by October 31, 1998;
3.) Diamond Telecom will have an exclusive right to use and resell
e-Net's products for data telephony services in the country of Brazil for one
year from the date of this agreement, subject to its compliance with its
purchase commitments hereunder, and Diamond shall use e-Net products exclusively
for data telephony services in the country of Brazil for one year from the date
of this agreement, subject to e-Net's products performance compliance with its
published specifications ;
4.) Either party can cancel the exclusivity granted in (3.) above at
any time by paying the other party an amount of money equal to the money
exchanged between the parties hereunder; and
5.) Payment Terms are consistent with clause 4.6 of the Agreement.
Initial payment terms are ten per cent (10%) cash down with each order, balance
due net 45 days after receipt or twenty (20%) cash down with each order, balance
due net 60 days after receipt.
6.) Installation of Gateway FXS 7300 hardware is $1500.00 per day for a
two-person installation team, plus travel and living.
7.) Each party agrees that it will not contract with, sell to, or
otherwise circumvent each other's accounts for a period of 5 (five) years from
the date hereof, such accounts introduced bya party to a party identified in
writing in advance by a party, unless the party receiving notice of such
identification disputes that an identified account was introduced to it by other
sources. The dispute should be announced within one business day. Any
circumvention that takes place will constitute a US$ 500,000 liquidated damage
plus compensatory damages.
8.) Notwithstanding anything to the foregoing, Reseller is authorized
hereunder to engage in sales activity hereunder with the Government of Brazil,
including Telebras. Reseller is solely responsible for compliance with all
applicable law with regard to such activity and furthermore Reseller must at all
times reasonably identify and give protection to the intellectual property
ownership rights of e-Net.
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 Reseller
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 Reseller or its Customer encounters a
problem (classified below) with the product, then Seller is required to respond
to the Reseller 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, Reseller 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. Reseller 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 Reseller 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, Reseller or its Customer may be required to provide
additional information to enable Seller to recreate the problem. Reseller 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.
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,
Reseller 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. Reseller or its Customer may be required to aid in
this task if the error can not be reproduced by Seller. Seller and Reseller 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:
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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.
