Exhibit 10.3
Baseband Fader Agreement
between
Xxxxxx Electronics Company LLC and
Micronetics Wireless, Inc.
October 2000
Micronetics Wireless, Inc. ("Micronetics")
and Xxxxxx Electronics Company LLC ("HEC")
collectively enter in a teaming agreement
involving the design, development, manufacture
and sale of series of Noise and Channel
simulation products. The products are defined
as the Baseband fader, the Stand-alone Remote
Controllable Digital Noise Generator, and a
Stand-alone Baseband Carrier to Noise Generator.
For this agreement, the Baseband fader will be
known as "the product". HEC and Micronetics are
partnering together on this opportunity because
each company has unique skills and core
competencies that collectively strengthen the
chance of success in this area. Primary
responsibilities for HEC will include the design,
development and manufacturing of the product.
Primary responsibilities for Micronetics will
include the marketing, sales and support of
the product. The basis for this agreement is
detailed below:
1. Table 1.0 lists the major activities and
responsibilities in the New Product Introduction
process of the Baseband fader. The ownership of
completing these activities and responsibilities
will be shared by Micronetics and HEC as detailed
in Table 1.0.
2. The target sales price of the product is
set forth on Table 3.0(a) per unit for quantity of one.
See pricing table 2.0 for discount schedule for sale
of multiple units. If there is potential sale below
the target pricing as listed in table 2.0,
Micronetics will provide documentation (purchase
orders) such that Micronetics and HEC can work
together to obtain acceptable margins for both
companies.
3. The HEC development costs for the product
is estimated as set forth on Table 3.0(b). Three (3)
units will be built in this first development phase.
Micronetics will be responsible for the amount set
forth on Table 3.0(c) of the development costs.
a. The first of the 3 units will be a prototype
that will reside at HEC for support and upgrades of
this product unless the unit is needed by Micronetics
or HEC for specific sales and marketing activity such
as a trade show or a customer demonstration.
b. Micronetics will receive two (2) additional
completed units for sale to customers. The proceeds
from the sale of the two (2) units will be equally
divided between Micronetics and HEC.
c. If the support and upgrade activity for this
development effort is complete and both parties
agree that the first prototype unit will be sold
to a customer, then the proceeds will be split
equally. If the unit does not get sold, then HEC
retains ownership.
d. The milestone deliverables for this
development activity are listed in Table 3.0.
4. After the first three (3) units have been
developed and delivered and for each additional
unit that is sold by Micronetics, Micronetics
will pay upon receipt of a written purchase order
from the customer, 20% of the amount due HEC,
per the pricing table 2.0. The additional 80%
will be due Net 10 days from receiving the
customer's payment to Micronetics.
5. In the development of the baseband fading
product, HEC will retain ownership of their
contribution of the design and Micronetics will
retain ownership of their contribution to the design.
6. HEC agrees provide the product exclusively
to Micronetics for 2 years from date of the first
deliverable unit in condition to be sold to a
third party customer. Micronetics agrees to
use its best efforts to promote the sale and
use of and to secure orders for the product so
as create the largest volume of profitable
business for HEC and Micronetics commensurate with
the opportunities available. HEC will continue
this exclusive agreement provided that Micronetics
acquires 10 units for HEC in the prior 12 months
prior to the two year anniversary.
7. Micronetics has the option to take over
the manufacturing of the product after 2 years
from the first deliverable unit and pay HEC a
royalty fee on each unit sold. The primary reason
that Micronetics would take over manufacturing
is for non-performance of HEC. HEC and
Micronetics will after 6 months from the date of
first deliverable unit, meet and come to agreement
(within 60 days of that meeting) agree upon the
following:
a. Cost of the documentation package that
is necessary to transition the manufacturing to
Micronetics.
b. An hourly rate to be paid to HEC for consultation
for application and manufacturing support activity.
Design support would still be required pursuant to
paragraph 5.
c. Royalty structure on products manufactured
other than by HEC.
8. Warranty repair support will be the
responsibility of either HEC or Micronetics
dependent on which company manufactured the unit
and will be for 1 year from the date of sale of
each unit. HEC agrees to provide design support
for a minimum of 2 years from the sale of the
last unit. This will be dependent on access
to the technology required to do so.
9. Each company has a bi-directional right
of first refusal for next generation products.
If either company decides to pursue next
generation products, then either company has
the right to pursue such products outside of
this agreement but must notify the other in
writing 3 months prior to doing so.
10. HEC will with in 6 months after
delivery of the 3 units provide a
manufacturing documentation package to be
held in escrow by a mutually agreeable party.
Costs for escrow party will be shared
equally between Micronetics and HEC.
11. Terms/Termination
a. The Agreement may be terminated by
either party upon thirty days written notice to
the other by registered mail or certified mail
after the end of the Initial term of this
Agreement or Renewal Term.
b. This Agreement may be terminated at any
time by Mutual Agreement.
c. The Agreement may be terminated by either
party in the event that the other shall or
has filed against him a petition in bankruptcy,
or makes an assignment for the benefit
of Creditors.
d. If any of the terms or conditions of
this agreement are substantially breached and are
not corrected within ninety (90) days after
written notice thereof is given by the
complaining party, then the complaining
party will have the option to terminate this
Agreement by giving written notice thereof to
the other party. If either party breaches
this agreement, than the other party will be
entitled to refund of their contribution of
development costs and will own design rights
to the product.
11. Disputes and Arbitration
The parties agree that any disputes or
questions arising hereunder, including the
construction or application of the Agreement,
shall be settled by arbitration in accordance
with the rules of the American Arbitration
Association then in force. The decision of the
arbitrator shall be final and binding upon the
parties, both as to law and to fact, and shall
not be appealable to any court in any jurisdiction,
except as provided by New Hampshire's Arbitration
Statutes then in effect or the Federal Arbitration
Act. The expense of the arbitrator shall be shared
equally by the parties, unless the arbitrator
determines that the expenses shall be otherwise
assessed. The arbitration shall take place in the
state of New Hampshire and any action in respect
of this shall be filed in the state of New Hampshire.
12. Additional Attachments
Technical abstract describing the concept
and functionality of the Baseband fader is Table 4.
It is understood and agreed that no failure or
delay by HEC or Micronetics in exercising any right,
power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further
exercise thereof or the exercise of any right,
power or privilege hereunder.
This letter agreement shall inure to the
benefit of any successor in interest to HEC or
Micronetics.
The letter agreement may be modified or waived
only by a separate writing by HEC and Micronetics,
which expressly modifies or waives this letter
agreement.
This letter agreement may be executed in two
or more counterparts, each of which shall be
deemed to be an original, but all of which
shall constitute the same agreement.
This letter agreement shall be governed by,
and construed in accordance with, the substantive
laws of the State of New Hampshire, without
giving effect to the conflict of laws provisions
thereof. This letter agreement shall inure to
the benefit of any successor in interest to
HEC or the Micronetics.
Either Micronetics or HEC will not solicit
the other parties customers or employees during
the term of this agreement.
Micronetics Wireless, Inc.
By: /s/Xxxxx Xxxxxxx
__________________________
Name: Xxxxx Xxxxxxx
Date: 11/30/00
Title: Vice President
Noise Products
Xxxxxx Electronics Company LLC
By: /s/Xxxxxxx Xxxxxxxx
__________________________
Name: Xxxxxxx Xxxxxxxx
Date: 11/3/00
Title: General Manager
