MEMORANDUM OF UNDERSTANDING (MOU)
1) Agreement by and between (A) Educational Video Conferencing, Inc.
(EVC) and (B) VSI Enterprises, Inc. (VSI).
A) EVC is marketing and technological bridge between (a) higher
education institutions seeking increased adult student enrollment ("Educational
Providers") and (b) corporations and governmental entities that want to enhance
employee educational and skill levels by providing them with accredited college
courses and degree programs, continuing education and job-related training
programs.
B) VSI is a leading provider of interactive video conferencing
solutions, offering an array of telecommunications software, products and
service sot customers throughout the world. Customers include Fortune 1000
corporations, governmental entities and higher education institutions.
2) Co-Marketing/Co-Promotion:
A) EVC will promote the use of VSI video conferencing equipment
and services and conduct video conferencing demonstrations at EVC's offices in
Westchester County (35 E. Grassy Sprain Road, Suite 504, Yonkers, NY 10710).
B) EVC agrees, at its sole cost and expense, to develop a two-four
page, two-four color brochure marketing EVC's Telecommute to College Program
which EVC will distribute to potential corporate, governmental and institutional
customers. Said brochure will include promotional photos of VSI's video
conferencing equipment.
C) VSI will promote EVC's Telecommute to College program to VSI's
existing video conferencing equipment customers and prospective purchasers of
video conferencing equipment.
D) VSI agrees, at its sole cost and expense, to develop a two-four
page, four color marketing brochure announcing the VSI/EVC Telecommute to
College Program making EVC's distance learning products and services available
to VSI customers. Said brochure will be distributed by VSI to existing and
potential VSI corporate, governmental and institutional customers, and will be
included in the VSI folder enclosing brochures of VSI's video conferencing
products and services.
E) EVC will provide adequate space, at EVC's expense, to house a dual
monitor Omega Executive video conferencing system and a single monitor Omega
Flex Plus
video conferencing system. EVC will arrange and pay for the installation of
three ISDN BRI lines in its Westchester office required for said video
conferencing demonstrations.
F) VSI will deliver and install, at VSI's expense, video conferencing
demo systems in EVC's Westchester office consisting of an Omega Executive 35
video conferencing system and a dual monitor Omega Flex Plus video conferencing
system. EVC agrees to include the purchase of said video conferencing demo
systems in its initial purchase order and to pay for said video conferencing
demo systems with a note due in 12 months without interest.
3) Telecommute to College "Open House Demonstrations":
A) EVC agrees to use its best efforts to arrange 6 to 10 "Open
House Demonstrations" per year demonstrating and promoting EVC's Telecommute to
College Program featuring VSI equipment. EVC will be responsible for: (1)
arranging for the venue for each VSI-EVC "Open House Demonstration", (2)
inviting an audience of potential corporate, governmental and institutional
customers, and (3) providing the availability of three ISDN lines or other
telecommunications medium to facilitate multi-point video conferencing.
B) VSI will be responsible, at its sole cost and expense, for
providing and installing a 32" dual monitor Omega Flex Plus system at and for
the use of, the "Open House Demonstrations".
4) Product:
A) EVC agrees to use Omega products in its product offerings and
will issue a valid purchase order to VSI Omega products. Such purchase order, in
the range of $800,000 in the third and fourth quarters of 1997.
B) VSI agrees to sell VSI products to EVC at a price equal to its
most favorable price charged by VSI to any VSI customer. VSI agrees to begin
shipping products ordered within 30 days of receipt of the order.
C) Payment Terms:
Payment terms for EVC's initial purchase order, attached hereto,
shall be as follows:
Total initial purchase order: $800,000
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Office Demo Systems 95,177 1 year note
EVC shares (117,647) applied
as a credit 400,000
To be paid prior to shipment
of equipment 250,000
Balance due on completion of
installation 54,823
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Total $800,000
Subsequent purchase orders shall be either (a) pursuant to approved lease
purchase agreement or (b) pursuant to VSI's standard sales agreement: 50% on
acceptance of the purchase order, 40% upon shipment and 10% balance on
completion of installation.
6) Common Stock Purchase:
A) VSI agrees to purchase 117,647 shares of EVC common stock
($400,000/$3.40) pursuant to the subscription agreement attached hereto. Payment
for the stock may be netted against amounts owed to VSI by EVC.
B) EVC agrees to issue warrants to VSI in the same proportion and
ont he same terms as are issued to other parties who enter into subscription
agreement to purchase EVC common stock on similar terms.
7) Including the equipment purchased to paragraph 4 above, EVC
anticipates purchasing approximately 20 VSI video conferencing systems (Omega
Executive, Omega Flex Plus, Omega Flex or, when required by an EVC customer, a
video conferencing system incorporating a code of another manufacturer such as
Picture Tel) and one or more MCU's over a 12-month period.
8) Board Membership: EVC's Chairman agrees to nominate Xxxxxxx X.
Xxxxxxxx to fill a position on EVC's Board of Directors.
9) Each party will bear its own costs and expenses in executing the
documents for this transaction.
10) Confidentiality: Each party agrees to abide by the terms of this
paragraph with respect to its treatment of any confidential information
concerning the other party which is furnished by one party to the other
hereunder. All information exchanged will be used solely for the purposes of
evaluating the merits of the transaction contemplated herein, and will be kept
confidential by the receiving party.
11) Publicity: Neither party will make any announcements nor will any
party discuss this proposal with any third, other than with such party's
accountants, lawyers, investment advisers and investment bankers or similar
representatives, without the prior written consent of the other party.
Acknowledged and Agreed to:
VSI Enterprises, Inc. Educational Video Conferencing, Inc.
/s/ Xxxxxxx X. Xxxxxxxx /s/ Xx. Xxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx Xx. Xxxx X. Xxxxxxxx
Chairman & CEO Chairman & CEO
