Exhibit 10.7
Memorandum of Understanding
BETWEEN
NetSat Express, Inc. and Applied Theory Communications, Inc.
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This Memorandum of Understanding is made this 18 day of December, 1996 by and
between NetSat Express, Inc., a corporation organized under the laws of the
State of Delaware, with a principal place of business at 000 XXXX XXX, Xxxxx
000, XXXXXXXXX, XX 00000 (hereinafter referred to as NSX).
And
Applied Theory Communications Inc., a corporation organized under the laws of
the State of New York, with a principal place of business at 00 Xxxxxx Xxxx
Xxxx, Xxxxx 000, Xxxxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as
AppliedTheory).
Hereinafter referred to individually as "Party" and collectively as "the
Parties".
WITNESSETH:
WHEREAS NSX wishes to be a full service International Satellite Internet
Provider (SIP) and AppliedTheory is an experienced Internet Provider and
Internet Solutions partner,
NSX and AppliedTheory want to expand in the domestic and International satellite
Internet market through strategic alliance with each other which is intended to
result in a joint venture.
NOW THEREFORE IT IS AGREED AS FOLLOWS:-
1. Definitions
o "Commencement Date" shall mean the date of the Memorandum.
o "Project" shall mean any venture falling within the mission of either
Party where opportunity for joint participation seems to exist.
o "Proposal" shall mean a formal and written document providing
technical, financial and commercial information and conditions to a
Customer for fulfilling a specific requirement.
2. General Scope of Responsibilities
The purpose of this MOU is to delineate an initial service and engineering
scope of responsibilities for the NSX/AppliedTheory relationship which will
include the following:
A. Internet Network Operations Center (NOC)
B. Internet Access
C. Internet Backbone
D. Support of Regional Customer Locations
E. Web Services
F. Intraneting Services
G. Training Services.
The details of these elements are described in Appendix A.
3. Joint Marketing and Bidding
3.1 The parties will market their capabilities individually and jointly to all
their existing and potential customers wherever such a capability is
interpreted as having a potential for applications. The services provided
Internationally shall be marketed under the NetSat name but with full and
proper disclosure of the strategic alliance between NSX and AppliedTheory
as a major benefit to the customer.
3.2 The Parties will jointly investigate and analyze requirements and prepare
Proposals on a case by case basis.
3.3 The parties may agree to jointly undertake and implement Projects with both
being equally responsible or with them mutually agreeing to divide
responsibility for different aspects of the project.
4. Jointly awarded Contracts
4.1 For each contract jointly awarded to the parties a separate agreement
hereinafter referred to as a Project Agreement) will be concluded
pertaining to the roles and responsibilities of each Party, the
organizational structuring of the individuals involved, financial
arrangements and commercial terms and conditions between the Parties.
4.2 Each of the Parties agrees that if it ("the first Party") is awarded a
prime contract arising from a proposal, the first party shall procure the
participation of the other Party ("the second Party") or the second's
Party's acceptable nominee through a sub-contract or otherwise. The terms
and conditions of all sub-contracts or any other form of sub-participation
shall be negotiated in good faith. In the event that the said sub-contract
or sub~participation is subject to
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the approval of the first party's customer/client, the first Party shall
use its best endeavors to secure the participation of the second party.
4.3 The terms of the sub-contract or other participation shall include, along
with other conditions mutually acceptable to the Parties, whatever
provisions are required by law or regulation and the Parties specific
compliance to those clauses of the prime contract that are mandatory for
incorporation in the subcontract.
5. Non Participation
Where the Parties can work jointly on any project or contract, they will do
so. The Parties, however, reserve the right to independently pursue
projects within the scope of their unique expertise.
6. Terms and Termination of Memorandum
This Memorandum shall be deemed effective from the date hereof and shall
continue in force until terminated by one of the following events:
6.1 The parties dissolve this Memorandum by mutual consent expressed in writing.
6.2 Upon one of the Parties serving a notice of termination on the other Party
in the event of such other Party filing a petition for compulsory or
voluntary liquidation or entering into a scheme of arrangement or
compromise with its creditors.
6.3 Upon the execution of a subsequent agreement or contract that is stated to
supersede this Memorandum.
7. Exclusivity
Where the Parties have agreed to pursue a project jointly, neither party shall,
enter into any negotiations, discussions, deliberations, agreements or
arrangements whatsoever with a third party (other than a shareholder of either
Party or a House Account) with respect to any proposal or Project that the said
Party is currently undertaking in collaboration with the other Party or that
would compete with the capabilities, products or stated business objectives of
the Parties except if mutually agreed upon. In the event a Shareholder or House
Account shall suggests a joint project to either party, that party will utilize
its best efforts to ensure the participation of both parties.
8. Costs
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Each party shall bear its own costs and expenses incurred in the performance of
this Memorandum unless otherwise previously agreed by both parties in writing.
It is anticipated that any resulting joint venture will provide for profit
sharing between the parties according to a mutually agreed formula after all
expenses have been paid.
9. Publicity
No publicity or advertising relating to this Memorandum shall be released by any
Party hereto without the prior written approval of the other Party.
10. Assignment
Neither party hereto shall be entitled to cede or assign any of its rights, or
delegate any of its obligations hereunder, except to a corporate affiliate,
without the prior written consent of the other Party first being obtained, which
shall not be unreasonably withheld.
11. Non-solicitation
APPLIEDTHEORY and NSX will not seek or offer employment to each others
employee base.
12. Law of the Memorandum
The validity, interpretation and performance of this memorandum shall be
governed by the laws of the State of New York.
13. Dispute Settlement
13.1 The Parties shall first use their best endeavors to resolve through mutual
consultation through such negotiation or conciliation any dispute,
difference or question arising between the Parties or their respective
representatives or assigns which arise out of or in connection with the
validity, interpretation, implementation of alleged breach of this
Agreement.
13.2 In the event that a controversy or claim cannot be resolved within thirty
(30) days subsequent to the commencement of such mutual consultation,
either party may submit such controversy or claim to binding arbitration.
All disputes arising in connection with the present agreement shall be
finally settled under the Rules of Conciliation and Arbitration of the
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U.S. Chamber of Commerce in Washington, D.C. by one or more arbitrators
appointed in accordance with said Rules.
14. Notice
The Parties shall each designate a single person in their respective
organizations to receive written disclosures and identifications and to be
responsible for ensuring the observance of this Memorandum.
For NetSat Express, Inc. that address and person shall be: -
Xx. Xxxxxx X. Xxxxxx
President
NetSat Express, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
For AppliedTheory that address and person shall be: -
Xx. Xxxxxxx Xxxxxxxxxx
President
AppliedTheory Communications, Inc.
00 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Signed this 18th day of December, 1996 by:
Applied Theory Communications, Inc.
/s/ Xxxxxxx Xxxxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxxxx
President
NetSat Express, Inc.
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
President
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Attachment "A"
to the
NetSat/AppliedTheory MOU
Version 5
04-December-96
General Scope of Responsibilities
The purpose of this document is to outline an initial service and engineering
scope of responsibilities for the NSX/AppliedTheory relationship. This document
does not imply or discuss funding, capital costs or business relationships. The
use of words such as provide, responsible and manage are used to define
functional ownership only.
A. NetSat Express Internet Network Operations Center
The Internet Network Operations Center is multi-function Center that
includes IP server based services, LAN and WAN interconnects and systems,
monitoring and management controls and support services for customers. NOC
functions are described in various sections of this document.
1. AppliedTheory will design the Internet components of the NetSat USA
NOC in the WSI/NSX facility in Hauppauge, New York. This includes
Internet Access, Backbone Connectivity, Router configuration and
maintenance and integration of Internet Services.
2. NSX engineering will take an active role in this design.
3. NSX will be responsible for the building of this facility.
AppliedTheory will advise on the construction of the Internet related
equipment and interfaces.
4. AppliedTheory will be responsible for the initial management and
operations of the Internet aspects of facility until they can train
the NetSat staff for a technology transfer. Both AppliedTheory and NSX
will be responsible for supplying staff during this period. The time
period of this technology transfer has not been determined, but will
primarily focused on handing off the responsibilities to NSX quickly.
5. Upon completing this technology transfer, AppliedTheory will provide
phone support and under emergency situation could supply on-site help.
6. Both Engineering groups believe it is necessary to jointly more
explicitly define the following items before relevant technical design
can progress.
a. Services provided from this NOC such as News, Mail, FTP and
administrative services including the initial and long-term
volume and capacities required.
b. Interfaces to the Xxxxxx Network System DirecpC and PES Networks
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c. DNS server responsibilities
d. Distribution of Internet Servers and services (FTP, DNS, etc.)
function between USA NOC and Regional Uplink Facilities.
e. Monitoring, management and trouble tracking systems
B. Internet Access
1. AppliedTheory will provide Internet access from their Deer Park POP to
the NetSat Express/WSI facility. Upgrades and redundancy will be
added as required.
2. AppliedTheory is responsible for solving Internet problems with this
link and other parts of the public Internet.
3. AppliedTheory will provide the Backbone Router at the NetSat Express
facility. The Backbone router will be considered part of the
AppliedTheory Backbone Network.
Both groups agree that CISCO are the routers of choice.
Both AppliedTheory and NSX will jointly engineer the Backbone Router
at the NSX facility. Xxx Xxxxxxx and Xxxx Xxxx will jointly agree on
the details and capabilities of this router. CISCO Series 4000 and
7000 routers will be considered. Sparing and Cisco maintenance will
also be determined at this time.
AppliedTheory will software manage this router. NSX will hardware
manage the router with the help of AppliedTheory. There will be a
joint installation. AppliedTheory and NSX will jointly maintain the
router.
NSX will provide a POTS (phone) line and modem at the router location
so that AppliedTheory can have out-of-band access to the router.
NSX/WSI will have SNMP and read access to this router. AppliedTheory
will have read/write and SNMP access to this router.
AppliedTheory will use this router to train NSX in the use and
configuration of Backbone routers. Both parties should keep in mind
that this router will likely be carrying commercial traffic during
periods of training and the training sessions can not disrupt the
daily operations of the network. (This router will be treated as a
"production" router.)
AppliedTheory will retain long term soffware management of this router
and other AppliedTheory Backbone routers.
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4. The Internet Connectivity of the WSI corporate network will be
transitioned from PSI to AppliedTheory. WSI and AppliedTheory will
coordinate this effort. WSI will cut over from PSI to AppliedTheory
during or after the building move. (Estimated date is 01-April-97.)
WSI and NSX will be using this router and Internet link for their
companies' business purposes (in addition to the eventual NOC and
customer Internet traffic).
AppliedTheory will consider WSI to be a NSX customer and the WSI use
will be limited to its corporate Internet business unless mutually
agreed arrangements are addressed. WSI will be limited in bandwidth
based on WSI requirements, NSX management of hardware configuration
and AppliedTheory pricing.
C. NetSat Express Backbone Requirement
1. AppliedTheory will provide the management of both Router to Router
terrestrial and satellite Backbone links between the NSX NOC and their
Regional Uplink Facilities for a period of one year (to be reviewed
quarterly). AppliedTheory will train NSX on the Backbone Circuit
Management for the eventual technology transition.
2. AppliedTheory will provide Backbone router software management,
configurations, monitoring, reporting on all Backbone routers and
their interfaces for a period of one year (to be reviewed quarterly).
NSX/WSI will have SNMP and read access to the Backbone routers.
AppliedTheory will have read/write and SNMP access to the Backbone
Routers. AppliedTheory will train NSX on the Backbone Router
Management for the eventual technology transition.
3. Both AppliedTheory and NSX will jointly engineer the Backbone Routers.
Xxx Xxxxxxx and Xxxx Xxxx will jointly agree on the details and
capabilities of this router. Sparing and Cisco maintenance will also
be determined at this time.
4. NSX is responsible for Router to Router configuration across the
satellite links. AppliedTheory will support NSX with problem solving
and trouble-shooting.
5. Both parties agree that CISCO is the router of choice for the Backbone
network.
6. The responsibility of ordering, payment and "Letter of Agency" for
Backbone routers and terrestrial circuits will be determined.
7. NSX will manage and maintain the Local Area Networks inside the USA
NOC and Regional Uplink Facility. AppliedTheory will provide advise.
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8. Router installation and hardware maintenance inside the Regional
Uplink Facility will be the responsibility of NSX with phone support
from AppliedTheory
9. NSX will provide POTs line and modem to router locations inside the
Regional Uplink Facilities.
10. AppliedTheory will provide routing protocol specifications for both
IGP and EGP routing functions. AppliedTheory will provide a scaleable
network routing plan for the Backbone network
D. NetSat Remote Customer Locations
1. NSX will be responsible for support of the equipment at the customer
sites.
2. In customer locations which have routers, AppliedTheory will advise on
router selection and configurations (set a series of standard hardware
and software configurations).
3. NSX will install, manage and maintain the routers at these sites.
4. NSX is responsible for the satellite links to and from these sites.
5. AppliedTheory should not be responsible for local ISP connectivity
problems when remote DirecPC users select local ISPs as their path
from the customer site to the Internet.
6. AppliedTheory will provide recommendations on the equipment, software
and configurations for routers, Internet servers, terminal servers,
modems and any other components for the proposed "cookie cutter" ISP
sites.
E. Customer Support and NOC Staffing
1. Remote sites are NSX customers.
2. NSX is responsible for billing these customers. AT will help extract
and collect this data.
3. AppliedTheory will provide a NOC Staffing Plan to NSX for 7X24
customer support.
AT will document the "Support Plan" for NSX. The Support Plan will
include:
a. Mission
b. Staffing Plan
c. Equipment and software requirements
d. Job Description
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e. Schedule Plan
f. Training Plan
g. Outline Procedures and Policies
AppliedTheory will provide temporary customer support while NSX builds
its own support infrastructure. This support could be provided out of
the AppliedTheory support headquarters in Syracuse or NYC.
AppliedTheory to NSX customer support can be transitioned on a shift
by shift basis as NSX grows.
NSX strongly desires that all calls directed to this 7x24 customer
support have the phone answered as "NetSat Express". NSX and AT will
jointly address this issue.
In order to support the services and products supplied by
AppliedTheory, even after the above mentioned transition period, the
AppliedTheory customer support facility will be available to NSX
employees. NSX believes this support should also extend to specified
"NSX Teaming Partners" at Regional Uplink Facilities.
NSX and AT will work jointly to develop a support plan that allows the
'NSX Teaming Partners' at the Regional Uplink Facilities to be
supported by the terms and conditions of the MOU and contracts.
Before AppliedTheory can provide any future or temporary customer
support functions for NetSat Express's customers, a definition of the
Products and Services offered and formal procedures and guidelines
relating to this customer service need to be jointly established. Also
these procedures and guideline must address the "escalation pathes"
which must be followed when a customer service issue warrants a level
of support for which the support staff is not normally prepared to
handle.
4. End-user documentation is the responsibility of NSX.
5. AppliedTheory will provide to NSX documentation and specifications for
services that are designed by AppliedTheory or jointly. This
documentation may be incorporated into NSX end-user manuals.
6. AppliedTheory will be responsible for monitoring and trouble-shooting
the entire network segment from the Internet to the Backbone Routers
at the NOC and Regional Uplink Facilities. Since NSX will often have
personnel at these sites, they will be available to provide
assistance.
7. AppliedTheory will provide daily monitoring reports via Web interface
for all AppliedTheory monitored and managed interfaces.
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8. AT has provided NSX with the "Director of Support Services Job
Description" with salary range and "Recruitment Plan". These two
documents are attached.
NSX will hire the Directors of Support Services as quickly as is
possible. As stated in the "Recruitment Plan", AT will actively
participate in the recruitment and hiring.
F. Provisioning
1. AppliedTheory will be responsible for the procurement through InterNic
(or the appropriate authority) of IP addresses and domain names unless
NSX requests otherwise. AppliedTheory may not be able to provide
address and name assignments where countries have independent control
and limitations.
AppliedTheory has obtained from InterNIC the Domain Name "xxxxxxx.xxx"
for use by NSX.
2. AppliedTheory will supply to NSX a recommendation for test equipment
and tools.
3. Both parties will be responsible for jointly testing new connections
and services.
G. Internet Services
1. DNS, News, Mail and FTP servers need further specification including:
a. Product Description
b. Customer needs and capacities
c. Customer and market differentiation
d. AppliedTheory will design and implementation these services to
specifications.
e. AppliedTheory will train NSX on maintenance and management of
these services.
f. NSX will provide maintenance and management of these services.
g. NSX will take care of the capital costs (hardware and software)
for these services.
2. Web Hosting Services and Products
a. NSX and WSI has agreed to move the NSX and WSI websites (and Home
Page) to the AppliedTheory Facility.
b. NSX will have the option of selling the standard Web Services and
Products. These services and products consists hosting customer
websites at the AppliedTheory facilities in Syracuse and NYC.
c. AppliedTheory will provide Product Description, Marketing
Materials, product training, Sales Broker and order forms for
this product.
d. AppliedTheory may directly provide customer support for these
products.
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e. AppliedTheory emphasizes that these services and products are
tightly integrated and dependent on the current AppliedTheory
facilities and hosting system and can not be easily modified.
f. NSX NO LONGER desires that these services or products have an
exclusive NetSat identity.
g. Both NSX and AppliedTheory recognize that NSX end-users will
require these services and products to be hosted at the Regional
Uplink Facilities. Since this area has significant potential
opportunities for both, this capability will be jointly
addressed.
3. Security
a. Needs better description and definition of customer requirements.
b. Firewall implementation is perceived to be an optional product
c. AppliedTheory has a security product (Gauntlet) that may be
integrated based further requirements study.
4. Access and other IP based NSX product descriptions and services
(Gopher, Xxxxxx, Email (POP, SMTP, MIME), Listserv, News, Telnet, etc)
a. AppliedTheory will provide NSX with assistance during initial
product identification, descriptions and design.
b. NSX will document product descriptions.
c. NSX is responsible for all Access based marketing documents.
H. Training
1. AppliedTheory will provide on-going training to meet NSX requirements
and technology transfer.
2. AppliedTheory will offer employees from NSX the opportunity to be an
apprentice in the AppliedTheory Operations Facility in Syracuse.
3. AppliedTheory is offering a three day Internet training program for
their in-house technical staff. This class will be offer from December
19 to 21 in Syracuse. Three NetSat employees will attend. The class
will also be offered from January 6 to 9 in Syracuse. This class will
be repeated two or three times a year.
4. AppliedTheory also offers Internet Service Management courses,
Internet Orientation Users Classes and Internet Awareness Courses for
Managers. These courses will be available for NSX employees.
Two NetSat employees will attend the Internet Service Management
course in White Plains on December 10.
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5. AppliedTheory's Intranet and Training Products will also be available
for NSX for resale (branding is available).
6. NSX will provide employees with the necessary background and
familiarity with network communications over satellite and the
particulars of the HNS DirecPC and Personal Earth Stations.
7. The training of NSX customer service people, agents and regional joint
venture partners will supported by both AT and NSX.
I. Employment
1. AppliedTheory and NSX will not seek or offer employment to each others
employee base.
2. AppliedTheory and NSX may jointly recruit staff for training and or
employment by AppliedTheory and eventual employment by NSX.
J. Partners and Relationships
1. NetSat will be responsible for interfaces with Xxxxxx Network Systems
in matters concerning the DirecPC and PES.
2. AppliedTheory will be responsible for the interface with NYNEX and
Sprint.
3. NSX will be responsible for the technical assistance for the
International Marketing Support. AppliedTheory engineering staff will
be available for advice.
4. NSX Engineering will provide the majority of the technical support for
Proposals to potential customers. AppliedTheory engineering staff will
be available for advice.
5. If necessary, AppliedTheory will provide an Internet technical expert
to accompany NSX to Brazil.
K. Joint Development Team
In order to "jump start" this venture, a "Joint Development Team" will be
formed consisting of members of each organization. This team will initially
be responsible for developing the processes necessary for ensuring the
success of the project. Responsibilities also include system requirements
and product description documents, design documents, schedules, milestones
and project reviews. During the early stages, it is envisioned this team
meet frequently and converse on a daily basis. After which, bimonthly (or a
period to be determined) meeting will be held at alternating offices to
review the progress, direction and future ventures. This JDT will be
directed by a Engineering Team Leader from each group and these individuals
will also serve as
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"points of contact". Xxxx Xxxx and Xxx Xxxxxx will function as the initial
Team Leaders. The size and make up of this Team will be determined.
However, at least two members of each organization should be assigned.
AT has provided NSX with an initial description of the necessary project
tasks required for the implement the above plans. This description was
provided in a Microsoft Project formatted file.
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