EXHIBIT 10.24
SUPPLY AGREEMENT(s)
This Agreement is dated as of May 1, 1998, by and between NETsilicon,
Inc., having an address at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxx, XX ("NSI"), and
Osicom Technologies, Inc., having an address at 0000 00xx Xxxxxx, Xxxxx Xxxxxx,
XX ("Osicom").
1. Term: The term of this Agreement shall be five (5) years from the
date set forth above, and may be terminated only upon the mutual consent of both
parties hereto.
2. Agreement to Supply: For as long as this Agreement or any renewal or
extension thereof is in effect, Osicom shall purchase from NSI, and NSI shall
sell to Osicom, the products identified on Schedule A attached hereto and as
revised by mutual agreement from time to time ("NSI Products"), for resale to
present and future customers of Osicom. For as long as this Agreement or any
renewal or extension thereof is in effect, Osicom (or any subsidiary of Osicom)
shall manufacture NSI Products on behalf of NSI as long as they as price
competitive.
3. Prices:
A. Osicom shall pay to NSI for all NSI Products delivered
hereunder an amount equal to the price as identified on Schedule A attached
hereto. The price for the NSI Product shall increase or decrease in proportion
to any increase or decrease, as the case may be, in NSI's Landed Costs, as
hereinafter defined, such that NSI shall maintain the same gross margin
percentage for each unit, provided, however, that NSI shall not offer to sell or
sell any NSI Product at a lower price or upon more favorable terms than the
price and terms offered to Osicom. "Landed Costs" shall be equal to costs to NSI
from their supplier.
B. NSI shall pay Osicom for all NSI Products manufactured by
Osicom for NSI at Osicom's best price, which will be determined by the parties
from time to time.
4. Invoicing and Payment: Each party shall invoice the other for their
respective products, indicating in each case a shipping date and billing date.
Payment shall be due on a net cash basis thirty (30) days from the billing date.
5. Delivery of Products: Each party will provide products in accordance
with their usual and customary methods. Orders will be received in accordance
with each party's usual and customary procedures for accepting orders, which
procedures have been communicated to by NSI to Osicom and by Osicom to NSI and
may change from time to time in either party's reasonable discretion. In the
event that either party orders any products in quantities substantially greater
or less than the quantities normally ordered, such order must be placed in time
as will reasonably permit the supplying party to fulfill that order (if greater)
or to dispose of any excess quantity of product (if lesser) which the supplying
party may have obtained.
6. Force Majeure: Each party shall not be liable for any failure to
deliver products if such failure has been occasioned by the occurrence of any
act of war, fire, accident, casualty, embargo, strike, civil commotion,
government prohibitions or pre-emptions, failure of any supplier to supply
necessary products or ingredients, labor difficulties, equipment malfunction,
shortages of ingredients, fuel or energy, or any other circumstance beyond such
party's control.
7. Miscellaneous:
7.1 Notices given under this Agreement shall be in writing, and shall
be deemed given when delivered by a recognized overnight service, or three (3)
days after deposit by certified mail, return receipt requested, addressed to a
party at the address given above, or to another address specified by a party.
7.2 Each party (the "Indemnifying Party") agrees to protect, indemnify,
and hold the other, its successors and assigns, harmless from and against any
and all losses, liabilities, claims damages and expenses, including attorney's
fees, which Indemnifying Party may hereinafter incur, suffer or be required to
pay, and which arise out of Indemnifying Party's negligence or willful
misconduct.
7.3 This Agreement shall be governed by Massachusetts law. The parties
consent to exclusive jurisdiction of courts sitting in Massachusetts for all
disputes arising under this Agreement. Service of process is effective if served
in the manner a notice may be given under this Agreement.
7.4 Neither NSI nor Osicom shall not assign this Agreement to any other
person or entity, without the prior written consent of the other party, which
consent shall not be unreasonably withheld, provided, however, that Osicom may
assign all or any part of this Agreement to any of its subsidiaries without the
prior consent of NSI.
7.5 This Agreement contains the entire understanding of the parties and
may be changed or waived only in writing. Waiver of a breach of this Agreement
shall not operate as a waiver of any other breach. This Agreement is binding
upon and inures to the benefit of the parties hereto and their successors and
assigns. Invalidity of any provision of this Agreement shall not affect other
provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
Attest: NET SILICON, INC.
By: /s/ Xxxxxxxxx Xxxxxxxx
-----------------------------
Xxxxxxxxx Xxxxxxxx, President
OSICOM TECHNOLOGIES, INC.
By: /s/ Xxxxxxxxxxx X. Xxx
-----------------------------
Xxxxxxxxxxx X. Xxx,
Vice-President of Finance
Schedule A
Products
PRODUCTS PRICE
--------------------------------------------------------------
Osicom Purchases from NETsilicon
NET+ARM chips $19.00
Novell runtime licenses $3.50
-3-
INTERCOMPANY AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 1st
day of May, 1998, by and between NETsilicon, Inc., having an address at 000
Xxxxxxxx Xxxx Xxxx, Xxxxxxx, XX ("NSI") and Osicom Technologies, Inc., having an
address at 0000 00xx Xxxxxx, Xxxxx Xxxxxx, XX ("Osicom").
W I T N E S S E T H:
WHEREAS, NSI is currently a wholly owned subsidiary of Osicom;
WHEREAS, NSI and Osicom are in the process of registering NSI's common
shares with the U.S. Securities and Exchange Commission for the purposes of
selling rights to purchase NSI's common shares to the public (the "Rights
Offering");
WHEREAS, after the Offering, Osicom will continue to be a substantial
stockholder of NSI;
WHEREAS, the parties deem it advisable at this time to provide for the
terms and conditions of the business relationship between the parties after the
Rights Offering;
NOW, THEREFORE, in consideration of the premises and mutual
undertakings herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by each of the parties hereto,
the undersigned parties hereby agree as follows:
1. NSI hereby assigns, and Osicom hereby accepts the assignment of, the
right to manufacture and market those products, commonly referred to by
the parties as commercial products, listed on Schedule A attached
hereto (the "Assigned Products").
2. NSI hereby assigns all of its right, title and interest in the
following assets to Osicom:
a. The names, addresses, phone numbers, principal contacts and sales
history for the period through the close of the month immediately
preceding the Closing Date with respect to all of NSI's
commercial customers and all of NSI's sales leads and prospect
lists together with copies of all relevant documents such as
customer contracts, sales records, agreements, and the like;
b. All accounts receivable with respect to the Assigned Products
accruing after July 31, 1998;
c. NSI's inventory of Assigned Products. Osicom shall have the
option to purchase from NSI all of NSI inventory of Assigned
Products existing on July 31, 1998 at a price equal to NSI's cost
of manufacturing, developing and shipping such Assigned Products.
NSI shall ship such Assigned Products inventory to Osicom at such
a location as Osicom shall designate in such quantities and at
such time as shall be requested by Osicom. Osicom will pay NSI on
terms available to its most favored customers within thirty (30)
days after the end of each calendar month for those Assigned
Products which have been shipped to Osicom by NSI during such
previous calendar month. No later than nine (9) months after the
effective date of this Agreement, both parties will reconcile any
remaining monies owed to NSI by Osicom, and Osicom will pay NSI
any balance due.
d. Furniture, fixtures, equipment and computer software as set forth
on the attached Schedule B.
3. Osicom hereby assigns, and NSI hereby assumes, all of Osicom's right,
title and interest in and to the trademark "NET+ARM", including, but
not limited to those rights arising from a Trademark License Agreement
dated July 14, 1998 by and between Osicom and ARM Limited. Osicom shall
use its best efforts to obtain ARM Limited's consent to assignment of
the Trademark Licensing Agreement prior to the commencement of the
Rights Offering.
4. The parties acknowledge that Osicom is owed by NSI the approximate sum
of $4,100,000 arising from the parties prior parent/subsidiary
relationship. NSI agrees to pay all indebtedness in full to Osicom upon
completion of the Rights Offering .
5. During the term of this Agreement, NSI shall provide to Osicom
manufacturing and engineering support with respect to the Assigned
Products on an "as needed" basis. Osicom will pay NSI for such support
at a rate of one hundred and ten percent (110%) of the actual labor
costs to NSI. The costs of any materials provided to Osicom by NSI with
respect to manufacturing support provided by NSI shall be reimbursed by
Osicom at a rate of one-hundred and ten (110%) of the actual cost of
material incurred by NSI. NSI will invoice Osicom quarterly for NSI
support and materials. Payment shall be due from Osicom to NSI on a net
cash basis thirty (30) days from the billing date.
6. The parties acknowledge that in connection with the assignment of the
Assigned Products, certain mutually agreeable employees will cease
performing services for NSI and shall thereafter perform services for
Osicom (the "Transferred Employees"). Transferred Employees shall be
transferred to Osicom's payroll as of July 31, 1998. However,
Transferred Employees shall remain on NSI's health insurance plan. NSI
will forward an invoice each month to Osicom which shall indicate the
amount of premium payment made by NSI with respect to such Transferred
Employees as well as documentation of their continued coverage under
NSI's health plan. Payment shall be due from Osicom to NSI on a net
cash basis thirty (30) days from the billing date. Notwithstanding
anything to the contrary in this Agreement, the terms of this Section 5
shall survive the termination of this Agreement.
7. Osicom shall provide to NSI certain MIS computer services at NSI place
of business at Waltham, Massachusetts, including, without limitation,
the maintenance of data lines. In consideration for such services, NSI
shall pay to Osicom the sum of one thousand dollars ($1,000) per month,
payable on the first day of each calendar month as long as NSI requires
such services.
8. Osicom and NSI agree that Osicom shall have co-ownership of the
intellectual property listed on Schedule C attached hereto (the
"Intellectual Property"), completed as of the commencement of the
Rights Offering, for Osicom's product development needs, provided,
however, that the Intellectual Property shall become a part of a
value-added Osicom product provided, further that Osicom shall not
resell, license, transfer or assign to any third party all or any part
of the Intellectual Property or any derivative thereof.
9. The term of this Agreement shall be for a period of twelve (12) months
from the date set forth above. This Agreement may be sooner terminated
only upon the written agreement of both parties hereto.
10. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions
of this Agreement, which shall remain in full force and effect.
11. Notices given under this Agreement shall be in writing, and shall be
deemed given when delivered by a recognized overnight service, or three
(3) days after deposit by certified mail, return receipt requested,
addressed to a party at the address given above, or to another address
specified by a party.
12. This Agreement shall be governed by Massachusetts law. The parties
consent to exclusive jurisdiction of courts sitting in Massachusetts
for all disputes arising under this Agreement. Service of process is
effective if served in the manner a notice may be given under this
Agreement.
13. Neither NSI nor Osicom shall assign this Agreement to any other person
or entity, without the prior written consent of the other party,
provided, however, that Osicom may assign all or part of this Agreement
to any of its subsidiaries without the prior consent of NSI.
14. This Agreement contains the entire understanding of the parties and may
be changed or waived only in writing. Waiver of a breach of this
Agreement shall not operate as a waiver of any other breach. This
Agreement is binding upon and inures to the benefit of the parties
hereto and their successors and assigns. Invalidity of any provision of
this Agreement shall not affect other provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above
Attest: NET SILICON, INC.
By: /s/ Xxxxxxxxx Xxxxxxxx
-------------------------- ---------------------------------
Xxxxxxxxx Xxxxxxxx, President
OSICOM TECHNOLOGIES, INC.
By: /s/ Xxxxxxxxxxx X. Xxx
-------------------------- -----------------------------
Xxxxxxxxxxx X. Xxx,
Vice-President of Finance
Schedule A
Commercial Products assigned to Osicom
ALL MODELS OF THE FOLLOWING
NETPrint
JETXPrint
Netcommuter
Schedule B
Furniture, fixtures and equipment assigned to Osicom-leased or owned.
All such equipment whether owned by NSI or leased located in Suite 241 now
occupied by Osicom commercial sales at 000 Xxxxxxxx Xxxx Xxxx.
All software currently in use in Suite 241 as NSI has title therein.
Schedule C
NSI Intellectual Property available for Osicom use
All designs of products of NSI as of the date of commencement of the Rights
Offering.
The deliverables for hardware products of NSI are verilog design
models, CAD drawings for artwork, schematics for logic design, and
bills of materials.
The deliverables for software products are source code relating to
software and firmware.
All other hardware, software, firmware, documentation, bills of
material, test plans necessary for Osicom to either design, modify or
manufacture the components produced or to be produced by NSI.
OSICOM TECHNOLOGIES, INC.
0000 00XX Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
March 10, 1999
Xx. Xxxxxxxxx Xxxxxxxx VIII
President and CEO
NETsilicon, Inc.
000 Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxx. 00000
Dear Xxxx:
This letter confirms our agreement to amend the Intercompany Agreement (the
"Agreement") dated as of May 1, 1998 between NETsilicon, Inc. ("NSI") and Osicom
Technologies, Inc. ("Osicom") as set forth below. Osicom and NETsilicon hereby
agree that these amendments shall be effective as of May 1, 1998.
1. The term of paragraph 5 of the Agreement, as to engineering support
only, shall expire on June 30, 1999, subject, however, to the right of
Osicom to terminate such extension at any time on five (5) business
days prior written notice to NSI. The term of paragraph 5 of the
Agreement, as to manufacturing services, shall expire on April 30,
1999.
2. Paragraph 8 of the Agreement is hereby deleted and replaced in its
entirety by the following: NSI and Osicom shall jointly own the
intellectual property set forth on the attached Schedule C (the
"Intellectual Property") subject to the following limitations: (a)
Osicom's rights to the Intellectual Property shall be limited to its
use solely for the purpose of developing, manufacturing and selling
the commercial products listed on Schedule A to the Agreement; (b)
Osicom shall not use the Intellectual Property in any products that
directly compete with any NETsilicon products; and (c) Osicom shall
have no right to sell, license, transfer or assign to any third party
all or any part of its rights in the Intellectual Property or any
derivative thereof. Furthermore, Osicom acknowledges that, except as
provided herein, NETsilicon's rights to the Intellectual Property are
owned by NETsilicon without limitation.
3. Schedule C of the Agreement is hereby deleted and replaced it its
entirety by Schedule C attached to this letter and made a part hereof.
4. Except as amended by this letter, the Agreement remains in full force
and effect according to its terms.
If the foregoing correctly sets our agreement, please sign and return this
letter to me.
Very truly yours,
OSICOM TECHNOLOGIES, INC.
By: /s/ Par Xxxxxx
------------------------------------
Par Xxxxxx, Chief Executive Officer
Agreed to and accepted
this 10th day of March, 1999
NETsilicon, Inc.
/s/ Xxxxxxxxx Xxxxxxxx VIII
---------------------------
Xxxxxxxxx Xxxxxxxx, VIII
President and CEO
