Exhibit 10.27
OEM LICENSE AND PURCHASE AGREEMENT
THIS OEM LICENSE AND PURCHASE AGREEMENT, including the Exhibits
("Agreement"), effective as of December 24, 1997 ("Effective Date"), is hereby
made by and between Cisco Systems, Inc., a California corporation, having
principal offices at 170 West Tasman Drive, San Jose, California 95134-1706
("Cisco") and Osicom Technologies, Inc., a Delaware corporation, having
principal offices at 9020 Junction Drive, Annapolis Junction, MD 20701
("Seller").
RECITALS
A. Seller designs, manufactures and sells certain Products as set
forth on Exhibit A.
B. Seller desires to sell the Products and Cisco desires to
purchase the Products for resale on a stand-alone basis and as incorporated into
Cisco's products.
AGREEMENT
In consideration of the foregoing and the mutual promises and covenants
contained herein, the parties agree as follows:
1. SALES AND PURCHASES OF PRODUCTS
1.1 Products. Subject to the terms and conditions of this Agreement,
Seller shall sell to Cisco the Products which Cisco may order from Seller.
Products shall be manufactured by Seller according to the Product Specifications
set forth in Exhibit B and the Cisco Quality Plan set forth in Exhibit C, as
modified from time to time by written agreement of Cisco and Seller. Products
include hardware products and software. The software includes software imbedded
in hardware or provided separately on disks or other media or provided
electronically, user documentation, packaging and any enhancements,
modifications, updates, bug fixes, releases, patents, patent rights, copyrights,
trade secrets, know-how and other intellectual property related thereto
("Software").
1.2 Product Enhancements and New Products. At the earliest date possible,
Seller shall notify Cisco of any new products or enhancements to or advanced
versions of existing Products. Upon written agreement between Cisco and Seller
as to pricing, such products shall be considered Products under this Agreement
and shall be purchased and sold under the terms and conditions of this
Agreement. Cisco may convert any or all of its future orders of Products to any
enhancements to or advancements of existing Products. If Seller implements any
improved technology (e.g., without limitation, improved manufacturing
processes), Seller shall promptly so advise Cisco and, at Cisco's request,
discuss with Cisco the possibility and advantages of using such improved
technology to redesign any Products. At Cisco's request, Seller shall negotiate
any such redesign in good faith.
1.3 Upgrades. Seller shall keep Cisco informed of all Software upgrades,
enhancements, improvements and bug fixes. Seller shall make such items available
to Cisco no later than the date Seller releases such items to any of its other
customers and at no additional charge provided Seller provides such items to its
other customers at no additional charge.
1.4 Project Managers. Each party has appointed a single project manager
("Project Manager"). The names, addresses and telephone and fax numbers of the
Project Managers are attached to this Agreement as Exhibit D. The Project
Managers shall act as liaisons between the parties with respect to their
respective performances of this Agreement and shall provide the parties from
time to time with the names and telephone numbers of additional specific contact
persons (e.g., to communicate specific information regarding support,
enhancements, etc.) when such direct contact is preferable. In the event that
either party appoints a new Project Manager, such party shall promptly notify
the other. Neither party's Project Manager has the authority to make any changes
to this Agreement.
1.5 Agency Certification. Seller shall provide certification (including,
but not limited to, EMI, Safety, Immunity and Network) of the Products in
accordance with the terms and conditions as set forth in Exhibit C, Cisco
Quality Plan, Sections 6.0 and 6.1.
1.6 Global Supply Management Reviews. Reviews will be held on a quarterly
basis, after quarter-close per Cisco's fiscal quarters, to assess the
performance of the Parties against established objectives and criteria. Reviews
will include resetting of standards for subsequent periods, as well as
establishing, and measuring, Seller's performance record at Cisco, including, as
applicable, Seller's financial status. The location and/or meeting method will
be mutually agreed upon. If on-site meetings are determined to be appropriate,
the intent will be to alternate periodically between Seller's and Cisco's sites.
2. OWNERSHIP; GRANT OF RIGHTS
2.1 OEM Right. Seller hereby grants Cisco a nonexclusive, worldwide,
royalty free right and license to promote, market, resell and distribute the
Products as standalone products or as incorporated into or in connection with
Cisco's products.
2.2 Software License. Seller hereby grants Cisco a nonexclusive,
worldwide, royalty-free (except as provided below) license to use the Software,
in object and source code form, subject to the following conditions and for the
following purposes:
(a) For promotion, marketing and distribution (in object code form
only) to resellers and end users in connection with Cisco's
distribution of the Product;
(b) To provide customer support (including, without limitation, to
fix Software bugs); and
(c) To make derivative works of the Software for Product
enhancements for use with the Products.
Notwithstanding the above, all other rights, title, interest and ownership in
Seller's Software shall remain with Seller.
2.3 Cisco Property
(a) During the term of this Agreement Cisco may provide equipment,
designs, materials, software and other property of Cisco (collectively
"Cisco Property") to Seller for its use in fulfilling its obligations
hereunder. All Cisco Property furnished to Seller by Cisco or paid for by
Cisco in connection with this Agreement shall (i) be clearly marked or
tagged as the property of Cisco; (ii) be and remain personal property;
(iii) be subject to inspection by Cisco at any time during normal business
hours; (iv) be used only to provide Software to Cisco and Cisco's
authorized subcontractors, if any; (v) be kept free of liens and
encumbrances; (vi) be kept separate from other materials, tools, or
property of Seller or held by Seller; and (vii) not be modified in any
manner by Seller.
(b) Cisco shall retain all rights, title and interest in the Cisco
Property, and Seller shall treat and maintain the Cisco Property with the
same degree of care as Seller uses with respect to its own valuable
equipment, but in no event with less than a reasonable degree of care for
equipment of a similar kind and importance. Seller shall bear all risk of
loss or damage to Cisco Property until it is returned to Cisco. Upon
Cisco's request, Seller shall deliver all Cisco Property to Cisco in good
condition, normal wear and tear excepted, without cost to Cisco (exclusive
of freight costs); the parties shall determine the manner and procedure
for returning the Cisco Property, and Cisco shall pay the corresponding
freight costs. Seller waives any legal or equitable right it may have to
withhold Cisco Property, and Seller shall execute all documents, or
instruments evidencing Cisco's ownership of the Cisco Property as Cisco
may from time to time request.
3. PRICES: PAYMENT
3.1 Prices. Product prices, and discounts thereon, shall be as set forth
in Exhibit A. Such prices shall be fixed, commencing with the Effective Date of
this Agreement, except that if Sellers published list price for a Product is
reduced, a corresponding reduction in price (calculated by applying the same
percentage discount to the new published list price) shall be immediately
effective and shall apply to any Cisco bids, proposals, and customer orders
accepted or pending. Increased volume requirements of Cisco shall be cause for
price decreases, subject to negotiation between Cisco and Seller. All prices are
F.C.A. Origin.
3.2 Taxes. Prices stated in Exhibit A are in U.S. dollars and include any
withholding taxes and the like. Seller agrees that amounts paid pursuant to this
Agreement are not subject to sales and use tax. Cisco agrees to provide Seller
with satisfactory documentation (including but not limited to resale exemption
or other certificates) supporting such status.
3.3 Drawback. Cisco reserves all rights to duty drawback, if any, which
may be available. Seller shall provide to Cisco Certificates of Delivery and/or
Certificates of Manufacture as requested within ten (10) days of Cisco's
request.
3.4 Payment Terms. Seller shall invoice Cisco with each shipment. All
payments are due within forty (40) days from date of shipment to Cisco's
designated dock. Invoices shall be remitted to Cisco Systems, Inc. PO BOX
641570, SAN JOSE, CA 95164-1570, ATTN: ACCOUNTS PAYABLE; or via Electronic Data
Interchange (EDI). No invoice shall be submitted to Cisco until shipment to
Cisco of the Products covered by such invoice.
4. PURCHASE ORDERS
4.1 Purchase Orders. Cisco's purchase orders for Products shall be
submitted to Seller in writing or via EDI. Each purchase order shall include:
(a) Identification of Products ordered by Cisco part number and
descriptions;
(b) Quantity to be purchased;
(c) Price of Products ordered;
(d) Requested delivery dates; and
(e) Shipping and labeling instructions.
4.2 Forecasts. On a monthly basis, Cisco shall provide Seller with
rolling, non-binding one-hundred-twenty (120) day forecasts of its requirements
for Products.
4.3 Placement by Cisco. All purchase orders and invoices under this
Agreement shall be subject only to the terms and conditions hereof. Standard
lead-time shall be thirty (30) calendar days ARO. All deliveries from Seller to
Cisco will be in minimum lot sizes of fifty (50) units. In the event the terms
of any such purchase order, confirmation or similar document conflict with or
are additional to the terms of this Agreement, the terms of this Agreement alone
shall apply and shall govern regardless of execution of such document by one or
both parties, except that the parties may agree to negotiate non-preprinted
terms which shall be effective only if executed by both parties. Any other Cisco
or Seller terms and conditions shall not apply to this Agreement or the purchase
orders. Any forecasts of Products provided to Seller are non-binding; the orders
placed for Products pursuant to purchase orders shall be binding with respect to
the parties' obligations hereunder.
4.4 Acceptance by Seller. Subject to the establishment of mutually
agreeable delivery dates (any requested delivery date within the lead time set
forth above shall be conclusively deemed agreeable), Seller shall accept all
purchase orders submitted by Cisco in accordance with this Agreement and within
three (3) working days after receipt thereof. 'Working day" shall mean a regular
week day on which Cisco is open for business. Delivery shall be within 30
calendar days ARO or in accordance with accepted purchase orders, whichever is
later. Seller shall give prompt written notice to Cisco of any anticipated
delay.
4.5 Reschedules, Work Stoppage and Cancellations. Cisco may, at any time
prior to the delivery date, cancel any purchase order in whole or in part or
modify the delivery schedule set forth in any purchase order in accordance with
the terms of Exhibit E, provided that Cisco gives written notice thereof.
4.6 Order Increases. Upon written request from Cisco, and according to
reasonable commercial practices, Seller shall use its diligent efforts to: (i)
deliver on the requested date the number of items ordered by Cisco in excess of
that set forth in Cisco's estimated usage; and (ii) deliver items in less than
the
expected lead-time if so requested by Cisco. However the failure to perform
the foregoing shall not be considered a default under this Agreement.
4.7 Rush Orders. Cisco may, at its option, submit purchase orders
requesting immediate delivery within three (3) working days ("Rush Orders").
Seller shall use its best efforts to fill Rush Orders with Cisco being
responsible for any additional shipping expense.
4.8 On-Time Performance. Seller's on-time performance shall be measured as
three (3) working days early, one (1) working day late of Cisco's required
delivery date, as referenced in the Cisco Quality Plan.
4.9 Shipping. All items shall be shipped in the manner specified as set
forth in the Cisco Quality Plan or as specified in the separate purchase orders
issued hereunder and in accordance with standard commercial practices. In the
event a shipment shall not meet the delivery date, routing may be changed to
premium transportation at Cisco's request. In that event, Seller shall bear the
expense of any difference in freight costs for the premium transportation.
4.10 Delivery. Cisco reserves the right to refuse delivery of any quantity
of Products in excess of that specified in its purchase order and/or any
delivery made more than five (5) days in advance of the delivery date. Cisco, at
its option, may return, freight collect, all units received in advance or in
excess of the quantity specified on its purchase order line item, or may, at its
option, retain such units with payment therefore deferred until it would
otherwise be due.
4.11 Late Deliveries. In the event that the late delivery by Seller
results in an order change, reschedule or cancellation by Cisco or its customer,
Seller shall accommodate, without penalty, such schedule changes as required by
Cisco. Under no circumstances will Seller be liable for any late delivery
damages if it fails to deliver items that were ordered and scheduled for
delivery in shorter than the standard lead-time and Seller was unable to deliver
on time or in accordance with the standard lead time.
4.12 Allocation. Seller shall in any event use reasonable efforts to
maintain the ability to supply all Products that Cisco orders from Seller.
Seller agrees that, in the event of an allocation due to a Force Majeure event,
as specified in Section 16.1, Cisco's order(s), subject to normal lead-time
requirements, shall be filled according to an allocation plan no less favorable
than that provided to any other Seller customer. Seller shall provide Cisco with
as much notice as possible if it anticipates or has reason to believe that
Seller's output of the Product shall not be sufficient to meet all of Cisco's
requirements for any period.
4.13 Discontinuance. Seller shall continuously supply Products for a
minimum period of five (5) years following the date of release of the Products
(the "Supply Period") and in accordance with the Support Guidelines attached
hereto as Exhibit F. In the event that Seller intends to discontinue the
manufacture and sale of any Product after the end of the Supply Period, Seller
shall provide at least six (6) months prior written notice to Cisco. During such
six-month period (the "Discontinuance Period"), Cisco may place purchase orders
for such Product pursuant to this Agreement, provided however, the last delivery
date forsuch Product shall not be more than twelve (12) months after the end of
such Discontinuance Period. Seller shall continue to sell Products to Cisco as
long as such Products are made commercially available to any other of Sellers
customers. During the six (6) months immediately following Cisco's receipt of
notice, Cisco may place orders for Products which have been forecasted by Cisco
and which are not to be considered "end of life" purchases unless specified by
Cisco, provided such units are deliverable within twelve (12) months of the
Discontinuance Period.
4.14 Inventory and Stock Reguirements. Seller shall comply with the
inventory and stock requirements as set forth in Exhibit G.
5. PRODUCT ACCEPTANCE AND QUALITY
5.1 Inspection and Acceptance by Cisco. Notwithstanding any prior
inspection or payment by Cisco, all Products shall be subject to final
inspection and acceptance at Cisco's specified destination within sixty (60)
days after delivery by Seller. In addition, Cisco shall be entitled to inspect,
and accept or reject, by Product lot in accordance with the procedures specified
in the Cisco Quality Plan. Notwithstanding the foregoing to the contrary, if and
when Seller qualifies to bypass Cisco's incoming inspection requirement pursuant
to the Cisco Quality Plan, Cisco shall have the right to reject any Product
which Cisco determines
to be non-operable upon its removal from its original packaging and initial
check-out ("DOX), whether discovered by Cisco, its subcontractor or its
customer.
5.2 Rejection. If any Product is defective in material or workmanship, or
otherwise not in conformity with the requirements of Seller's published
Specifications, or with respect to all Products in a lot rejected by Cisco,
Cisco shall have the right, at its sole option, to (i) reject such Product; (ii)
require correction of such Product; (iii) accept such Product with an adjustment
in price; or (iv) return such Product for credit or refund. Any Product that has
been rejected or required to be corrected must be replaced or corrected by, and
at the expense of, the Seller within three (3) working days of request by Cisco.
If, after being requested by Cisco, Seller fails to promptly replace or correct
any defective item, then Cisco shall have the right to cancel the applicable
purchase order relative to the rejected material without penalty or terminate
this Agreement for default in accordance with the termination provisions herein
and require refund of any payments made relative to the rejected Products. At
Cisco's request, Seller shall provide to Cisco a failure analysis report
specifying the reason for failure of any rejected Product. Seller shall follow
the procedures in the Cisco Quality Plan and analyze and respond to Product
failures. Seller shall track Products returned for replacement by lot number and
date code (this obligation shall continue beyond the Warranty Period).
5.3 Packing. Unless otherwise specified in the Cisco Quality Plan, Seller
shall package and pack all goods in a manner which is (i) in accordance with
good commercial practice; (ii) acceptable to common carriers for shipment at an
economical rate for the particular goods; (iii) in accordance with I.C.C.
regulations; and (iv) adequate to insure safe arrival of the goods at the named
destination. Seller shall mark all containers with necessary lifting, handling
and shipping information and with purchase order numbers, date of shipment, and
the names of the consignee and consignor, if applicable. An itemized packing
list shall accompany each shipment which shall include (i) prominently the
purchase order number; and (ii) the description, Cisco part number, revision
level, and quantity of the Products so shipped.
5.4 Return Procedure. In the event Cisco rejects Product as set forth
above, Cisco may, at its option, return the Product to Seller F.C.A Cisco's
location, at Seller's expense, or retain such Product and withhold payment
pending Seller's instructions.
6. PRODUCT SPECIFICATIONS: CHANGES
6.1 Specifications, Cisco Quality Plan. Seller shall supply Product(s) in
conformance with Seller's published Product Specifications and the Cisco Quality
Plan. Seller shall not make any changes in the form, fit, function, design or
appearance of any Product purchased hereunder, or to any Specifications of any
Product irrespective of impact on form, fit, or function, without providing
thirty (30) days prior written notice to Cisco.
6.2 Pre-Shipment Testing. Prior to delivery, Seller shall test all
Products in accordance with its standard testing procedures as set forth in
Exhibit H, and shall not ship Products which fail to meet the Specifications.
Seller agrees not to make any changes or modifications to any test process or
procedure without prior written notice to Cisco. At its option Cisco may, from
time to time, send its quality control personnel to Seller's factory to observe
the testing. In addition, Cisco may, from time to time, request modifications to
Seller's test procedure, where repetitive failure to meet Specifications has
been noted on shipped equipment in accordance with the Cisco Quality Plan.
Seller shall not unreasonably withhold modifications of this procedure.
6.3 Engineering Change Approval. Seller shall not make any changes to any
production process, or the controlled process parameters or sources, types or
grade classifications of materials used, with respect to any Product without
first obtaining from Cisco an engineering change approval. Within one (1)
working day after learning of any bug or other problem in a Product which may
result, or has already resulted in, an impact to the installed customer base of
such Product, and in any event no later than at the time an engineering request
is made, the discovering party shall notify the other of such problem. Seller
shall submit a request to make a change containing engineering data in support
of the request. Within ten (10) working days of receiving such request, Cisco
shall respond to Sellers request and shall either (i) approve the change; (ii)
disapprove the change; or (iii) extend the deadline for the approval or
disapproval period for an additional twenty (20) working days. If Cisco fails to
reject or request an extension within the ten (10) working days, or falls to
reject within the additional twenty (20) working days if extended, then the
requested engineering change shall be considered accepted by Cisco.
6.4 Cisco's Engineering Change Request. When an engineering change is
required by Cisco, Cisco shall provide Seller all applicable documentation,
specifications and the requested effective date of such engineering change.
Seller shall respond initially within ten (10) working days, advising Cisco as
to (i) implementation and the effective date of such change; (ii) associated
costs and effect to on-hand materials, on-order materials and work in process;
and (iii) the impact of the change upon existing Product pricing and shipment
schedules for the entire period for which purchase orders are outstanding.
Seller shall also identify any materials issue or process issue that modifies
the shipment schedule that was in effect immediately prior to the engineering
change. Where a requested change may create scrap costs, Seller agrees to stop
work in process and/or orders for materials within twenty-four (24) hours of
notification of such change by Cisco. Materials on-hand or on-order and work in
process which has become obsolete as a result of the engineering change shall be
treated in the same manner as termination of a Product as set forth herein.
Cisco shall issue requisite documentation and purchase order release changes
before Seller shall begin the change implementation.
7. DOCUMENTATION AND TRADEMARKS
7.1 Documentation. Seller shall deliver its standard commercial
documentation as set forth in Exhibit 1.
7.2 Trademarks. During the term of this Agreement, Seller hereby grants
to Cisco a nonexclusive, nontransferable license to advertise the
Product under the Seller trademarks, trade names, logos and/or
slogans listed on Exhibit J (the 'Trademarks") as updated by Seller
and agreed to in writing by Cisco from time to time. Cisco shall use
the Trademarks in accordance with Seller's Trademark usage
guidelines specified in Exhibit J, and as mutually agreed to by the
parties from time to time. If any of Seller's Trademarks are to used
in conjunction with Cisco's or another party's trademarks, on or in
relation to the Product, then Seller's Trademarks shall be presented
legibly, but nevertheless separated from the other, so that each
appears to be a trademark in its own right, distinct from the other
mark.
8. SUPPORT
Seller shall provide the support services described in Exhibit F on the
terms and conditions set forth therein.
9. REPRESENTATIONS AND WARRANTIES
9.1 Warranty of Title. Seller warrants and represents to Cisco that (i)
Cisco shall acquire good and clear title to the Products, free and clear of all
liens and encumbrances; (ii) all materials and services provided hereunder
including, without limitation, the Products, are either owned or properly
licensed by Seller or are in the public domain and the use thereof by Cisco, its
representatives, distributors, dealers, end users, and other direct and indirect
customers shall not infringe any proprietary rights of any third party; and
(iii) Seller has the full power to enter into this Agreement, to carry out its
obligations under this Agreement and to grant the rights and licenses granted to
Cisco in this Agreement.
9.2 Year 2000 Compliance. To Cisco and its customers, and as applicable,
Seller warrants that the Product and Software shall (i) handle date information
before, during, and after January 1, 2000, including, but not limited to,
accepting date input, providing date output, and performing calculations on
dates or portions of dates; (ii) function accurately and without interruption
before, during, and after January 1, 2000, without any change in operations
associated with the advent of the new century; (iii) respond to two-digit
year-date input in a way that resolves the ambiguity as to century in a
disclosed, defined, and predetermined manner; and (iv) store and provide output
of date information in ways that are unambiguous as to century, provided other
products properly exchange date data with the Seller's Product.
9.3 Product Warranty. To Cisco and its customers, Seller warrants the
Products shall be new and unused, shall perform in accordance with the
applicable published Product Specifications and related documentation provided
by Seller (and shall achieve any function described therein), and shall be free
from defects in materials, workmanship or design for a period of three (3) years
from the date of shipment by Seller (the "Warranty Period"). During the Warranty
Period, Seller shall, at its own expense and risk, repair or replace (at its
option), and return or deliver to the location designated by Cisco within five
(5) working
days from receipt, any defective Product or part, provided that the Product or
part is returned to Seller. Unless Seller reasonably demonstrates a returned
item is free from defect, Seller shall pay the costs of all shipping and
insurance of the item (including, upon repair or replacement, return of the same
or replacement item to the original location) and assume the risk of loss during
shipping. All replacement Products, which may only be shipped to Cisco's Service
Operations shall be new or remanufactured warranted as new. All replaced or
repaired Products shall be warranted for the longer of six (6) months or the
remaining Warranty Period for the Products being replaced or repaired. All
replaced parts that have been shipped from Seller to Cisco become the property
of Cisco and all defective parts returned to Seller become the property of
Seller. This limited warranty does not extend to any Products which have been
misused, abused, serviced by anyone other than an authorized representative of
Seller, Cisco or a party authorized by Cisco, or damaged due to accident, or act
of God. NO OTHER WARRANTIES ARE EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
9.4 Epidemic Product Failure. For the purposes of this Agreement epidemic
failure shall be deemed to have occurred if more than three percent (3%) of the
then current total installed base of any Product should fail in substantially
the same manner within any time period of ninety (90) days or if more than five
percent (5%) of the then current total installed base of any Product should fail
in substantially the same manner within any time period of thirty (30) days. In
the case of epidemic failure, Seller and Cisco shall cooperate to implement the
following procedure:
(a) Cisco shall promptly notify Seller in writing upon discovery of the
failure.
(b) Within two (2) working days Seller shall give an initial response
indicating its preliminary plan for diagnosing the problem.
(c) Seller and Cisco shall jointly exert all commercially reasonable
efforts to diagnose the problem and plan a work-around or more permanent
solution.
(d) Seller shall apply its engineering change order procedure in
appropriate circumstances for hardware problems originating in the manufacturing
process.
(e) Seller shall prepare and consult with Cisco regarding an appropriate
recovery plan as well as an appropriate work-around, as an interim solution, if
one is needed.
(f) Seller and Cisco shall mutually agree on a recovery plan, provided
that Cisco shall be entitled to require Seller to recall or perform field
replacement of all defective Products as well as all Products which may be
susceptible to the same failure mode as required.
(g) Seller shall be responsible for all costs incurred in rectifying any
epidemic failure caused by a failure of, or defect in, the Product, including
without limitation, for any solution, work-arounds, recovery plan or engineering
changes.
10. MANUFACTURING RIGHTS
10.1 If at any time during the term of this Agreement, including but not
limited to periods during the occurrence of an event of Force Majeure but
excepting periods of raw material shortages, Seller is unable to supply in a
timely manner to Cisco its forecast requirements of Product, Seller shall have
the right to select and the obligation to utilize an alternate supplier to fill
such shortfall until such time as Seller is able to resume full performance of
its supply obligations. With regard to the portion of Products manufactured by
an alternate supplier, payment to said supplier for the costs of manufacture
shall be the responsibility of Seller. Cisco shall have the right to approve the
alternate supplier, validate the manufacturing of Products by any alternate
supplier hereunder and the right of audit of said alternate supplier upon the
same terms and conditions as shall apply to Seller pursuant to this Agreement.
10.2 In the event that, for any reason except raw material shortages,
Seller shall be unable to supply Cisco with forecast requirements of Product and
shall have failed to arrange for an alternate supplier, with Cisco's written
approval of same pursuant to Section 10. 1 above within a commercially
reasonable period of time (not to exceed thirty (30) working days), Seller shall
be deemed to have granted Cisco a non-transferable, limited, royalty-free
license to manufacture or to have manufactured the Products in the United
States until such time as Osicom is able to resume full performance of its
obligations per the terms and conditions of the Agreement, and demonstrate that
it is able resume such full performance. Upon written request of Cisco, Seller
shall, subject to the provisions of 10.2 hereof, cooperate to furnish Cisco or a
designee of Cisco approved by Seller the necessary information and technology to
permit the alternate manufacturing of sufficient quantities of Product to
fulfill Cisco's requirements provided, however, any such information and/or
technology disclosed or furnished by Seller hereunder shall be safeguarded by
Cisco; shall not be used for any purpose other than that contemplated by this
Section; shall not be disclosed to third parties, other than a designee of Cisco
approved by Seller; and shall be made available only to those employees,
officers, representatives, agents or consultants of Cisco who are directly
involved in or concerned with the manufacture contemplated hereby and who have
agreed in writing prior to such disclosure to be bound by the obligations of
confidentiality contained in this Agreement. Further, it is expressly understood
and agreed by Cisco that under no circumstances other than that contemplated by
this Section 10 will any proprietary technology be disclosed or furnished by
Seller under this Agreement. The parties agree that the items listed in Exhibit
K, Manufacturing Information and Escrow, will be placed in escrow at a time to
be mutually agreed upon by the parties.
11. INDEMNITY
11.1 Indemnification by Seller. Seller shall defend, indemnify and hold
Cisco harmless from any and all damages, liabilities, costs and expenses
(including but not limited to reasonable attorneys fees) incurred by Cisco as a
result of (i) any breach of this Agreement; (ii) any claim of product liability
in any way relating to the Product; (iii) any claim which alleges that any
Product provided to Cisco hereunder or the use or distribution thereof infringes
upon, misappropriates or violates any patents, copyrights, trademarks, or trade
secret rights or other proprietary rights, of persons, firms or entities who are
not parties to this Agreement. As a condition to such defense and
indemnification, Cisco will provide Seller with prompt written notice of the
claim and permit Seller to control the defense, settlement, adjustment or
compromise of any such claim. Cisco may employ counsel at its own expense to
assist it with respect to any such claim. Cisco shall have no authority to
settle any claim on behalf of Seller.
11.2 Sellers Efforts. If the manufacture, service, import, support,
distribution, use or sale of the Product is enjoined or becomes the subject of a
claim of infringement, Seller shall obtain such licenses, or make such
replacements or modifications, as are necessary to the continue the manufacture,
use, service, import, support, distribution, or sale of the Product without
infringement and in compliance with the Specifications. If Seller is unable to
achieve either of the foregoing within thirty (30) days after receipt of notice
thereof, Seller shall promptly refund to Cisco the invoiced purchase price, plus
all shipping, storage, and associated costs, of any Products returned freight
collect to Seller which Cisco or its customers are legally prohibited from
selling or using. Nothing in this paragraph shall limit any other remedy of
Cisco.
11.3 Exceptions to Seller Indemnity. Seller shall have no obligation under
paragraphs 11.1 and 11.2 to the extent any claim of infringement or
misappropriation results from (i) use of a Product in combination with any other
products not intended by Seller; (ii) any alteration or modification of a
Product not provided or authorized by Seller; or (iii) use of the Product in a
way not intended by Seller or not provided for or described in the applicable
technical documentation.
12. CONFIDENTIALITY
12.1 Agreement as Confidential Information. The parties shall treat the
terms and conditions and the existence of this Agreement as Confidential
Information. Each party shall obtain the other's consent prior to any
publication, presentation, public announcement or press release concerning the
existence or terms and conditions of this Agreement.
12.2 Confidential Information. Upon execution of this Agreement, the
parties shall execute a Non-Disclosure Agreement in the form and substance
attached hereto as Exhibit L.
13. LIMITATION OF LIABILITY
EXCEPT AS PROVIDED UNDER SECTION 11 AND BREACH OF THE PARTIES' RESPECTIVE
CONFIDENTIALITY OBLIGATION UNDER SECTION 12, UNDER NO CIRCUMSTANCES WILL EITHER
PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR
OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
OR LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
14. TERM AND TERMINATION
14.1 Term. Unless terminated earlier as provided herein, this Agreement
shall have a term of two (2) years commencing from the Effective Date, unless
terminated sooner by written notice given by a party pursuant to this Section.
This Agreement shall be automatically renewed for additional successive one (1)
year periods, unless written notice of non-renewal is received by the other
party no later than sixty (60) days prior to the expiration of the then current
term. Upon any expiration or termination, the rights and obligations of the
parties shall continue except that Seller shall not be required to accept
further orders or undertake further product development.
14.2 Termination for Cause. This Agreement may be terminated by a party
for cause immediately upon the occurrence of and in accordance with the
following:
(a) Insolvency Event. Either may terminate this Agreement by delivering
written notice to the other party upon the occurrence of any of the following
events: (1) a receiver is appointed for either party or its property; (ii)
either makes a general 13 assignment for the benefit of its creditors; (iii)
either party commences, or has commenced against it, proceedings under any
bankruptcy, insolvency or debtor's relief law, which proceedings are not
dismissed within sixty (60) days; or (iv) either party is liquidated or
dissolved.
(b) Change of Control. If there is a change in ownership representing
fifty percent (50%) or more of the equity ownership of either party, the other
party may, at its option, terminate this Agreement upon written notice to the
first party.
(c) Default. Either party may terminate this Agreement effective upon
written notice to the other if the other party violates any covenant, agreement,
representation or warranty contained herein in any material respect or defaults
or fails to perform any of its obligations or agreements hereunder in any
material respect, which violation, default or failure is not cured within thirty
(30) days after receipt of written notice thereof from the non-defaulting party
stating its intention to terminate this Agreement by reason thereof.
14.3 Survival of Rights and Obligations Upon Termination. Sections 2, 9,
10, 11, 12, 13, 14, 16 and Cisco's right to distribute Products in inventory or
subject to any pending purchase order or pursuant to any escrow license shall
survive termination or expiration of this Agreement. Furthermore, in the event
of any termination or expiration of this Agreement (i) all end-user licenses
shall remain in effect; and (ii) Seller shall continue to provide maintenance
support to Cisco at Seller's prevailing rates for a minimum of three (3) years
after termination or expiration.
14.4 Notwithstanding anything in the foregoing to the contrary, in the
case of termination by Cisco for cause pursuant to Section 14.2, Cisco shall not
be required to pay any royalty or license fee to Seller after termination, and,
in the case of termination by Seller for cause pursuant to Section 14.2, all end
user licenses, if any, shall remain in effect and Cisco's license rights under
Section 2.2 shall survive only for a period of nine (9) months following such
termination and only with respect to Products then in inventory or subject to
any pending purchase order.
14.5 Return of Materials Upon Termination. On or before ten (10) days
after the termination of this Agreement, each party shall deliver to the other
party all of that party's Confidential Information and Property in its
possession. Cisco shall be entitled to retain any Seller Confidential
Information required to support the Product
15. DESIGNATED THIRD PARTIES
15.1 Designation. Cisco may assign all or a portion of its rights to
purchase the Products to Designated Third Parties. "Designated Third Party" for
a Product shall mean each company (including without limitation Cisco's
manufacturing subcontractors ("Cisco Subcontractors") and Cisco's trading
partners ("Trading Partners")) which Cisco notifies Seller in writing is
authorized to purchase that Product from Seller pursuant to the terms and
conditions of this Agreement. Cisco shall be entitled to withdraw each such
authorization by written notice to Seller, and upon such notice the applicable
company shall no longer be a "Designated Third Party" for that Product. If so
requested, Seller agrees to negotiate, in good faith, with
any Trading Partner modifications to the terms and conditions of this Agreement
as applied to Product purchases by that Trading Partner.
15.2 Application of Agreement to Designated Third Parties (Contract
Manufacturer). As provided above, a Designated Third Party may issue to Seller
purchase orders of its own against a purchase order issued by Cisco to such
Designated Third Party. Cisco shall be liable to pay only for Products ordered
by and invoiced directly to Cisco and shall not be liable to pay for any
Products ordered by the Designated Third Parties, except as otherwise agreed to
in writing by Cisco with respect to Cisco Subcontractors. All references in this
Agreement to purchases of, purchase orders for, or shipments of Products by or
to Cisco shall mean by or to Cisco or the Designated Third Parties. For purposes
of volume pricing or other terms or conditions dependent on volume, all
purchases of Products by Cisco and Cisco Subcontractors shall be aggregated for
the benefit of Cisco.
16. MISCELLANEOUS
16.1 Force Majeure. Neither party shall be liable to the other for delays
or failures in performance resulting from causes beyond the reasonable control
of that party, including, but not limited to, acts of God, labor disputes or
disturbances, material shortages or rationing, riots, acts of war, governmental
regulations, communication or utility failures, or casualties. In the event
Seller fails to deliver Product due to such causes, Cisco may either:
(a) Terminate this Agreement or any part hereof as to Product(s) not
shipped; or
(b) Suspend this Agreement in whole or in part for the duration of the
delaying cause, and at Cisco's option, buy the Product(s) elsewhere and deduct
from any commitment to Seller the quantity so purchased. Seller shall resume
performance under this Agreement immediately after the delaying cause ceases
and, at Cisco's option, extend the then current term period for a period
equivalent to the length of time the excused delay endured; or
(c) Exercise its Manufacturing Rights pursuant to this Agreement.
16.2 Compliance with Laws. Seller warrants that in performance of work
under this Agreement it has complied with or shall comply with all applicable
federal, state, local laws and ordinances now or hereafter enacted including,
but not limited to OSHA, the Fair Labor Standards Act of 1938 (29 USC 201-219),
the 8Hour Law (40 USC 327-332), the Foreign Corrupt Practices Act (15 USC 78),
the Equal Opportunity and Affirmative Action Regulations, and laws restraining
the use of convict labor. Seller warrants that in performance of work under this
Agreement it has complied, in all material respects, with all laws, regulations,
statutes and ordinances of all governmental entities including local, state,
federal or international, now or hereafter enacted, which regulate any material
because it is radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment, including but not limited to the Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Resource
Conservation Recovery Act, the Federal Water Pollution Control Act, the Clean
Air Act, the Montreal Protocol, the Toxic Substances Control Act and similar
laws, rules, statutes, treaties or orders and international understandings. In
addition, Seller shall secure and maintain adequate workmen's compensation
insurance in accordance with the laws of the state or states from which Seller
shall furnish the Product and/or services for Cisco. Upon Cisco's request,
Seller shall issue certificates certifying compliance with any of the
aforementioned laws or regulations as may be applicable to the Product and/or
services being furnished hereunder.
16.3 Import and Export. Seller shall provide all information under its
control which is necessary or useful for Cisco to obtain any export or import
licenses required for Cisco to ship or receive Software, including, but not
limited to, certificates of origin, (NAFTA, etc.), manufacturer's affidavits,
Buy America qualification, and U.S. Federal Communications Commissions
identifier, if applicable. This information is to be provided within ten (10)
business days of Cisco's request. The parties agree to comply with all
applicable export laws and regulations of the United States.
16.4 Relationship of Parties. The parties are independent contractors
under this Agreement and no other relationship is intended, including a
partnership, franchise, joint venture, agency, employer/employee, fiduciary,
master/servant relationship, or other special relationship. Neither party shall
act in a manner which expresses or implies a relationship other than that of
independent contractor, nor bind the other party.
16.5 No Third Party Beneficiaries. Unless otherwise expressly provided, no
provisions of this Agreement are intended or shall be construed to confer upon
or give to any person or entity other than Cisco and Seller any rights, remedies
or other benefits under or by reason of this Agreement.
16.6 Equitable Relief. Each party acknowledges that a breach by the other
party of any confidentiality or proprietary rights provision of this Agreement
may cause the non-breaching party irreparable damage, for which the award of
damages would not be adequate compensation. Consequently, the non-breaching
party may institute an action to enjoin the breaching party from any and all
acts in violation of those provisions, which remedy shall be cumulative and not
exclusive, and a party may seek entry of an injunction enjoining any breach or
threatened breach of those provisions, in addition to any other relief to which
the non-breaching party may be entitled at law or in equity.
16.7 Attorneys Fees. In addition to any other relief awarded, the
prevailing party in any action arising out of this Agreement shall be entitled
to its reasonable attorneys' fees and costs.
16.8 Notices. Any notice required or permitted to be given by either party
under this Agreement shall be in writing and shall be personally delivered or
sent by a reputable overnight mail service (e.g., Federal Express), or by first
class mail (certified or registered), or by facsimile confirmed by first class
mail (registered or certified), to the Project Manager of the other party.
Notices will be deemed effective (i) three 3) working days after deposit,
postage prepaid, if mailed; (ii) the next day if sent by overnight mail; or
(iii) the same day if sent by facsimile and confirmed as set forth above. A copy
of any notice shall be sent to the following:
Cisco Systems, Inc. Osicom Technologies, Inc.
170 West Tasman Drive 8245 Boone Blvd., Ste 704
San Jose, CA 95134 Vienna, VA 22182
Attn: VP Legal and Government Attn: Joe Scott,
Affairs Manager Federal Business Group
Fax: (408) 526-7019 Fax: (703) 287-3475
16.9 Assignment. Neither party may assign its rights or delegate its
obligations hereunder, either in whole or in part, whether by operation of law
or otherwise, without the prior written consent of the other. Any attempted
assignment or delegation without the other party's written consent will be void.
The rights and liabilities of the parties under this Agreement will bind and
inure to the benefit of the parties' respective successors and permitted
assigns. For purposes of this Section, a fifty percent (50%) change in control
shall constitute an assignment.
16.10 Waiver and Modification. Failure by either party to enforce any
provision of this Agreement will not be deemed a waiver of future enforcement of
that or any other provision. Any waiver, amendment or other modification of any
provision of this Agreement will be effective only if in writing and signed by
the parties.
16.11 Severability. If for any reason a court of competent jurisdiction
finds any provision of this Agreement to be unenforceable, that provision of the
Agreement will be enforced to the maximum extent permissible so as to effect the
intent of the parties, and the remainder of this Agreement will continue in full
force and effect.
16.12 Controlling Law and Jurisdiction. This Agreement and any action
related thereto shall be governed, controlled, interpreted and defined by and
under the laws of the State of California and the United States, without regard
to the conflicts of laws provisions thereof. The parties specifically disclaim
the UN Convention on Contracts for the International *Sale of Goods.
16.13 Headings. Headings used in this Agreement are for ease of reference
only and shall not be used to interpret any aspect of this Agreement.
16.14 Entire Agreement. This Agreement, including all exhibits which are
incorporated herein by reference, constitutes the entire agreement between the
parties with respect to the subject matter hereof,
and supersedes and replaces all prior and contemporaneous understandings or
agreements, written or oral, regarding such subject matter.
16.15 Counterparts. This Agreement may be executed in two counterparts,
each of which shall - be an original and together which shall constitute one and
the same instrument.
16.16 Basis of Bargain. EACH PARTY RECOGNIZES AND AGREES THAT THE WARRANTY
DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT ARE MATERIAL
BARGAINED FOR BASES OF THIS AGREEMENT AND THAT THEY HAVE BEEN TAKEN INTO ACCOUNT
AND REFLECTED IN DETERMINING THE CONSIDERATION TO BE GIVEN BY EACH PARTY UNDER
THIS AGREEMENT AND IN THE DECISION BY EACH PARTY TO ENTER INTO THIS AGREEMENT.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT BY PERSONS
DULY AUTHORIZED AS OF THE DATE AND YEAR FIRST ABOVE WRITTEN.
CISCO SYSTEMS INC. OSICOM TECHNOLOGIES, INC.
By: /s/ Dennis Davidson By: /s/ Arthur Trakas
Name: Dennis Davidson Name: Arthur Trakas
Title: Director Title: V President, Sales
Cisco/Osicom Agreement CISCO CONFIDENTIAL INFORMATION
Rev. 12/11/97
9
EXHIBIT A
PRODUCTS; PRICES
1. When reference is made in the Agreement or any exhibit to Seller's published
U.S. List Price of a Product specially modified for Cisco, such reference shall
mean Seller's published U.S. List Price for the Seller standard product upon
which the Product has been based. In the event that the parties amend this
Agreement to include specifically modified Products for Cisco, Seller will sell
such Products specially modified for Cisco only to Cisco.
2. The purchase price, to Cisco, for the Products(s) shall be per the prices set
forth herein, in accordance with the following schedule, throughout the life of
the Agreement. Each category refers to the aggregate volume of Products
purchased.
3. The unit purchase price to be paid by Cisco for quantity 1 - 3000 shall be
$450. After the 3000th unit is ordered with firm delivery, Cisco shall then be
entitled to a unit purchase price of $435 for all units ordered with firm
delivery, starting with the 3001st up to and including the 5000th unit. After
the 5000th unit is ordered with firm delivery, Cisco shall then be entitled to a
unit purchase price of $425 for the 5001st and all subsequent units.
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Product Aggregate Quantity Unit Price
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2340 Quad 10/100, Cisco P/N 74-0796-01 1-3000 $450
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2340 Quad 10/100, Cisco P/N 74-0796-01 3001-5000 $435
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2340 Quad 10/100, Cisco P/N 74-0796-01 5001+ $425
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