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[XYBERNAUT LOGO] EXHIBIT 10.17
PURCHASE AGREEMENT BETWEEN ADAPTIVE SYSTEMS INC. AND XYBERNAUT CORPORATION
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XYBERNAUT Corporation desires to purchase Application Specific Integrated
Circuits (ASIC) chips from ADAPTIVE SYSTEMS INCORPORATED (ASI). This purchase
agreement replaces and supersedes in its entirety the Memorandum of
Understanding (MOU) signed by both companies on Oct. 9, 1996.
1. Adaptive Systems will provide or have provided ASIC chips to Xybernaut's
designee. Xybernaut will build and sell systems containing the ASIC chips
to Xybernaut customers.
2. The cost that Xybernaut's designee pays for the chips will be based on the
following quantities:
Order Quantity Cost for 520001
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25,000 or less $29.00
25,001 - Plus $15.00
These fees are cumulative, that is, for an order of 75,000 ASIC chips the
fee allowed would be:
25,000 x $29.00 = $725,000
50,000 x $15.00 = $750,000
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$1,475,000
3. The cost for the next generation ASIC chip will not exceed the higher
of: a.) the cost for the 520001 plus 25% or; b.) the actual cost of
the ASIC from the manufacturer plus 10%. The cost for the next
generation ASIC chips are not cumulative with quantities ordered for
the 52001 or any other ASIC chips from ASI. Accordingly, ASI agrees to
provide the next generation of the ASIC chips to Xybernaut, subject to
the terms and conditions herein.
4. At Xybernaut's request, ASI will deposit the applicable intellectual
Property into a mutually designated escrow for Xybernaut's use in
case ASI becomes unwilling or unable to support the product with a
maximum of three configuration releases during the base period of this
agreement. Priority and content of required releases will be mutually
determined. If Xybernaut uses the ASI Intellectual Property (IP) and
funds a significant amount of additional development, then Xybernaut
will pay a royalty to ASI in the amount of $25.00 for each system sold
that uses the subject IP.
5. ASI hereby grants an exclusive license to Xybernaut under U.S.Patent
Number 5,539,330 to use and sell the invention described in said
patent or improvements therein whether or not described in ASI patents
for computer equipment as protected by Xybernaut's Patent Number
5.305.244 and subsequent Xybernaut patents. Both parties will notify
the other in writing of all patents when issued.
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ASI will not knowingly license anyone else to use the ASIC chip and
related IP that may violate Xybernaut's patents.
6. Xybernaut's forecast for Mobile Assistant II (586) is as follows:
March '97 -150 April '97 -200 May '97 -425
June '97 -550 July '97 -650 August '97 -700
September '97 -900 October '97 -900 November '97 -1025
December '97 -1100 January '88 -1150 February '98 -1200
March '98 -1200
The systems may be manufactured by Hi-Tech Manufacturing and Solectron
Corporation, or other manufacturers designated by Xybernaut. The
manufacturer will order the ASIC chips directly from ASI. Each system
will require six (6) ASIC chips.
7. This Agreement is for a base period of one (1) year, plus a one (1)
year option at the option of Xybernaut. Not withstanding the term of
this agreement, the right to use and sell shall be in effect for as
long as Xybernaut's patents are in effect.
8. ASI will provide updated quote packages to Xybernaut for transmittal
to contract manufacturers selected by Xybernaut for the actual board
production and component mounting.
9. This Agreement shall be governed by and construed in accordance with
the laws of the state of Delaware.
10. If any claim arises out of this Agreement, the parties shall make a
good faith attempt to resolve the matter. In the event that the claim
cannot otherwise be settled after a good faith attempt, the claim
shall be submitted to arbitration in accordance with the American
Arbitration Association Arbitration Rules. Neither ASI nor Xybernaut
shall unreasonably object to transfer or assignment of this agreement
by the other party to a successor or assignee.
11. Either party shall have the right to terminate this Agreement upon
written notice to the other, if it is determined that the other party
is in material breach of any term, condition or covenant of this
Agreement and fails to cure that breach within sixty (60) days of
receipt of written notice of such alleged breach, provided such cure
can reasonably be affected within 60 days. If such cure cannot be
reasonably effected within 60 days, then one additional 30 day period
will be allowed to effect such cure. If cure is not affected in such
period, the party in breach shall be considered in default.
/s/ XXXXXX X. XXXXXX /s/ XXXXXXX X. XXXXXXXX
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Date: 12/28/96 Date: 12/30/96
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Xx. Xxxxxx X. Xxxxxx Xx. Xxxxxxx X. XxXxxxxx
President & CEO President & CEO
Xybernaut Corporation Adaptive Systems Inc.
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