EXHIBIT 10.12
PRODUCT SALES AGREEMENT
Between e-Net, Inc., a Delaware corporation with principal offices at 12800
Middlebrook Rd., Germantown, MD 20874-5204 ("Seller") , and PC Importers, Inc.
d/b/a Unicent Technologies and/or Unicent Communications("Reseller"), a
_______________________corporation with a principal place of business
at
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WHEREAS, Seller is the manufacturer of a product called Telecom 2000(TM), and
WHEREAS, Reseller wishes to make purchases of Telecom 2000(TM) for resale,
and
WHEREAS, the parties believe that it would be mutually beneficial for them to
cooperate in order for Reseller to resell Telecom 2000(TM),
NOW, THEREFORE, in order to establish the terms and conditions under which the
parties' respective goals may be accomplished, in exchange of the mutual
covenants and premises hereinbelow, the parties agree as follows:
1.0 DEFINITIONS
Seller Product shall mean those products listed in Attachment A hereto.
Telecom 2000(TM) shall mean the intellectual property underlying Seller Product
related to or derived from Telecom 2000(TM) and / or related to or derived from
US Patent No. 5, 526, 353 including specifically, for purposes of clarification
and not limitation, algorithms, electronic computer protocols, routines,
subroutines or programs developed by or on behalf of Seller or otherwise owned
by or in the custody of Seller.
2.0 LICENSE AND SCOPE OF AGREEMENT
2.1 License Rights and Scope. Subject to the terms and conditions set forth
herein, Seller hereby grants to Reseller, and Reseller accepts, a
non-transferable and non-exclusive license to resell or sublicense Seller
Product. A transfer of Reseller's rights hereunder may be permitted in the event
of a sale by Reseller of all or substantially all of its assets or stock, upon
the request of Reseller and with the written consent of Seller, which shall not
be unreasonably withheld.
2.2 Restrictions on Use. All purchase, use, and resale by Reseller of Seller
Product is restricted as follows :
(a) Reseller is strictly prohibited from reverse engineering, reverse
compilation, or reverse assembly of Seller Product;
(b) Reseller is strictly prohibited from making a copy or copies of Seller
Product (except for a single copy for back-up or archival purposes);
(c) Reseller shall not misuse the trademarks or trade names of Seller, but
Reseller may use the trademarks or trade names of Seller in advertising
Seller Products;
(d) Reseller shall not make any foreign sales without full compliance with
United States import/export laws and restrictions, and shall be responsible to
Seller and indemnify Seller for any failure to abide with this clause; and
(e) Reseller shall not make any government contract sales that impair the rights
of Seller hereunder, and must take all necessary steps to insure compliance with
the intellectual property ownership rights of Seller hereunder, and shall be
responsible to Seller and indemnify Seller for any failure to abide with this
clause.
2.3 Term. This Agreement shall be for a term of one year, subject to termination
by either party at any time in accordance with the terms hereof.
2.4 Termination. Subject to Section 4.6 hereof, the Agreement may be terminated
by Seller if Reseller does not pay Seller any amount due hereunder or otherwise
materially breaches this Agreement, or if Reseller violates any material term
hereof, including specifically but not as a limitation its restrictions under
2.0 and its duties under Section 3.0. Reseller shall have the right to terminate
this Agreement if Seller fails to provide support as described in Attachment B,
or if Seller otherwise materially breaches this Agreement. Either party may
terminate this Agreement if a force majeure event continues for more than ninety
(90) days or if the other party becomes insolvent or bankrupt or makes an
assignment for the benefit of creditors.
2.5 Duties Upon Termination. Upon the termination or expiration of this
Agreement for any cause, the parties agree to continue their cooperation in
order to effect an orderly termination of their relationship. Reseller shall
immediately cease representing itself as a reseller of Seller Product, and shall
accept no new orders for Seller Product except pursuant to firm, outstanding
bids or quotations.
2.6 Survival. Upon the termination or expiration of this Agreement for any
cause, the paragraphs which by their plain meaning, including specifically but
not as a limitation provisions which protect the intellectual property rights of
Seller shall survive.
2.7 Breach or Default. Neither party may terminate this Agreement for breach or
default of the other party unless and until the party seeking to terminate has
specified the breach or default in writing and such breach or default has not
been cured by the receiving party within thirty (30) days after receipt of
written notice.
3.0 OBLIGATIONS OF RESELLER
3.1 Reasonable Best Efforts Services and Minimum Commitment. In consideration of
the license granted above and discounting schedules extended in Attachment A,
Reseller agrees to exert its reasonable best efforts to resell Seller Product,
to meet agreed-upon sales goals, and to purchase the Minimum Commitment of
Seller Product outlined in Attachment A.
3.2 Sales Capability. Reseller shall maintain offices as sales locations, which
offices shall be staffed by a sufficient trained capable sales and technical
staff, adequate to provide Reseller's customers with assistance and instructions
on setup, installlation, and use of Seller Product.
3.3 Sales Reports, Sales Estimates, and Product Performance Data. Periodically,
as agreed, Reseller shall provide Seller with a report of sales and licenses
made in that month, to include numbers of units, types of units, dollar value of
units, and, where practicable, customer for and location of units. In addition,
Reseller will, periodically, as agreed, forecast expected sales to be made in
the upcoming three month period on a "rolling" basis. The Reseller is required
to forward to Seller any reports from users of the Seller Product regarding
either (i.) any outages or failures experienced by users of the Seller Product
which
become known to Reseller, or (ii) any complaints of users of the Seller
Product regarding the quality, functionality or performance of Seller Product
which become known to Reseller.
3.4 Insurance Coverages. Based upon Seller's determination, Reseller shall
acquire reasonable insurance coverages related hereto of the kinds and in the
amounts specified by Seller, at Reseller's expense, with loss payees and
subrogation as specified by Seller.
4.0 ORDERING, DELIVERY, ACCEPTANCE, FEES, PAYMENT, AND SUPPORT
4.1 Ordering and Delivery. Individual firm funded purchase orders of Reseller
issued to Seller shall be effective upon acceptance and order receipt
verification in writing by Seller at its headquarters at Germantown, Maryland,
USA. All Seller Products are listed in the initial form of Attachment A with
prices and the purchase orders of Reseller must reflect the description, prices,
and model numbers contained therein. The terms and conditions of this Agreement
override those of the purchase orders, with the exception of Reseller's rights
to return ordered product (if any) after acceptance has occurred under the
provisions of 4.2 below. All Seller Products shall be delivered on or about the
delivery date set forth in the order receipt verification in writing by Seller.
Shipment will be at the risk of Reseller. Reseller shall have 15 business days
to verify that all deliveries have been received. Delivery of the Seller
Products shall be conclusively deemed to be completed at the end of the 15
business days verification period or at such time as missing deliverables
identified by Reseller in writing during the 15 business days verification
period have been replaced by Seller.
4.2 Acceptance. The Seller Product shall be accepted by Reseller if the Seller
Products perform substantially as described in their current documentation.
Failure of Reseller to inform Seller of acceptance or non-acceptance within
thirty (30) days following completed delivery or commercial use of the
deliverables by Reseller shall constitute acceptance. Purchase prices and
license fees shown in the initial form of Attachment A are due and payable upon
acceptance.
4.3 After-Sale Support of Products. Following delivery of the Deliverables,
Reseller shall be exclusively responsible for the installation, testing,
modification, management, and control of its resales of Seller Product, except
for Seller's Warranty responsibility in clause 5.3 below and After-Sale Support
of Products responsibility defined in Attachment B hereto.
4.4 Prices and Price Changes. Reseller agrees to pay Seller the amounts shown on
Attachment A for Seller Product. Seller will have the right through its
independent auditors to inspect Reseller 's facilities and records to verify the
amounts and fees charged to Reseller's customers hereunder. Reseller shall keep
records regarding its resales and sublicenses to Reseller's customers hereunder
in detail to permit Seller to make such a verification. Seller may change the
price of any Seller Product subsequent to the date of this agreement. If prices
are increased, Seller will give Reseller a written notice thereof effective
immediately upon increase.Firm funded purchase orders accepted by Seller before
the written notice of price increase is issued shall be honored at the old
(lower) price so long as the scheduled shipment date therefore is not later than
thirty (30) days after the date of the written notice of price increase. If
prices are decreased, Seller will give Reseller a written notice thereof
effective immediately, and the decrease shall apply to all unused unopened
inventory purchased by Reseller during the previous thirty (30) days, as well as
to orders-in-process.
4.5 Training, Updates, Maintenance & Support Fees. Except as expressly provided
in this Agreement, including the Attachments and Exhibits, all training and
support services provided by Seller shall be at an additional fee in accordance
with Seller 's then current standard rates. Unless otherwise stated in
Attachment B, Reseller shall reimburse Seller for all reasonable travel and
other out-of-pocket expenses incurred by Seller in connection with the
assistance furnished hereunder, provided same have been approved and
preauthorized by Reseller.
4.6 Payment. All checks will be in U.S. currency unless otherwise agreed and
shall be drawn on U.S. banks. Except as otherwise stated herein, based upon
credit approval in the sole discretion of Seller, all payments including license
fees shall be due and payable within thirty (30) calendar day after the receipt
by Reseller from Seller of an invoice. If Reseller fails to pay any amount due
by the due date, Reseller shall pay late charges of 1.5% per month, but not more
than the highest rate permitted by law, together with all Seller 's expenses and
collection charges
4.7 Taxes. In addition to Seller 's fees hereunder, Reseller is obligated to pay
any federal, state, provincial, county, local or governmental taxes, (including
but not limited to sales tax and value added taxes), duties fees and amounts in
lieu thereof, now or hereafter applied on the licenses granted or products sold
herein or Reseller 's production, storage, transportation, import, export,
licensing or use of Seller Product. Any such taxes, duties, fees and amounts
payable in lieu thereof, including interest and penalties thereon ,paid or
payable at any time by Seller, exclusive of taxes based solely on Seller 's net
income, shall be reimbursed by Reseller.
5.0 OWNERSHIP AND PROPRIETARY RIGHTS
5.1 Ownership. All rights, title and interest to Telecom 2000(TM) shall at all
times remain the exclusive property of Seller. All applicable copyrights, trade
secrets, patents and other intellectual property rights in Seller Product and
Telecom 2000(TM) shall remain the exclusive property of Seller. No title to
Telecom 2000(TM) is transferred to Reseller. Reseller shall not remove the
copyright, trademark and proprietary rights notices of Seller, and shall
prohibit any such removal by its officers, agents, employees, and contractors.
5.2 Proprietary Rights. Reseller acknowledges that Telecom 2000(TM) is
proprietary and confidential and constitutes valuable trade secrets of Seller.
Reseller agrees to safeguard Telecom 2000(TM) with not less than the same degree
of care as is exercised in connection with Reseller's own most proprietary and
confidential materials.
All aspects of Telecom 2000(TM), including without limitation, programs, methods
of processing, specific design and structure of individual programs and their
interaction and unique programming techniques employed therein, if any, shall
remain the sole and exclusive property of Seller, and shall not be used, sold,
revealed, disclosed or otherwise communicated, directly or indirectly, by
Reseller to any person, company, or institution other than as set forth herein,
excepting such technical and business development communications, products
demonstrations, and detailed technical discussions as Reseller reasonably may
deem necessary to perform the reselling duties described herein.
5.3 Warranty and Disclaimer of Warranty. Seller Product Hardware is warranted as
free from defects in materials and workmanship for a period of one year after
shipment. In the event of warranty claims hereunder, Reseller shall return ship
to seller, prepaid, with a written description of the basis for warranty claim
for a final determination by Seller. Warranty-covered items shall be repaired or
replaced by Seller and shipped to Reseller, at Seller's expense. All Seller
Product Software is delivered "AS IS". SELLER MAKES NO EXPRESSED OR IMPLIED
WARRANTIES WHATSOEVER WITH RESPECT TO SELLER PRODUCT. IN PARTICULAR, AND WITHOUT
LIMITING THE FOREGOING, THE PARTIES AGREE THAT THERE IS NO EXPRESSED OR IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR OF MERCHANTABILITY. SELLER SHALL
NOT BE FOUND LIABLE FOR ANY MONETARY DAMAGES OF ANY KIND WHATESOEVER RELATED TO
THE USE OF SELLER PRODUCTS, AND ANY AND ALL RISK OF SUCH USE IS HEREBY
SPECIFICALLY ASSUMED BY RESELLER.
6.0 INDEMNIFICATION
6.1 Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE
OTHER OR TO ANY OTHER THIRD PARTY BASED ON CONTRACT, TORT OR OTHERWISE FOR LOSS
OF REVENUES, LOST PROFITS, LOST SAVINGS, OR INDIRECT, CONSEQUENTIAL, INCIDENTAL,
SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING IN ANY WAY TO THIS
AGREEMENT, EXCEPT THAT RESELLER MAY BE FOUND SO LIABLE TO SELLER FOR ANY DAMAGES
ARISING OUT OF OR RELATING TO RESELLER'S INTENTIONAL OR GROSSLY NEGLIGENT
VIOLATION OF CLAUSES 2.2.
6.2 Indemnification by Seller . Seller shall indemnify, defend and hold Reseller
harmless from any claims, damages or judgments, including all reasonable
attorney's fees, directly or indirectly resulting from any claimed infringement
or violation of any US copyright, US patent or other US intellectual property
right with respect to Seller Product. Seller shall have no liability for any
such claims or liabilities based on use of: (i) any version, modification or
adaptation of Seller Product, if such infringement would have been avoided by
the use of a then current unaltered release of Seller Product ; or (ii) a
combination of Seller Product with any product or data not included in Seller
Product when delivered to Reseller by Seller.
Following notice of a claim or a threat of actual suit, Seller, at its sole
option, shall as Reseller's sole remedy (except as otherwise provided for in
this section):
(a) procure for Reseller the right to continue, as provided herein, to use,
distribute and sublicense Seller Product at no additional expense to
Reseller; or
(b) provide Reseller with a non-infringing version of Seller Product.
7.0 PUBLICITY
7.1 Issuance of Publicity. Any and all publicity of any kind whatsoever with
regard to this Agreement shall be determined by Seller in its sole discretion,
except that with respect to the use of the trademarks and trade names, any
publicity is subject to the approval of the party whose trademarks and trade
names are to be used, only to the extent of the use of such trademarks and trade
names and with respect to the portions of the publicity bearing any such
trademarks and trade names.
8.0 GENERAL
8.1 Compliance With Local Laws. Reseller shall be exclusively responsible at its
own expense for compliance with all local laws relating to Seller Product and
the use thereof hereunder by Reseller. Reseller shall indemnify and save
harmless Seller from any claim by a third party arising out of or related to
non-compliance with local laws by Reseller.
8.2 Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, Cuyahoga County, Ohio being the
venue for all disputes, except for Federal jurisdiction disputes, the venue for
which shall be the Northern District of Ohio.
8.3 Dispute Resolution. If either party wishes to commence litigation, then
either before or promptly after doing so, that party shall notify the other
party in writing by Federal Express or facsimile transmission of a request for
meeting. The request shall contain a description of the problem. Within fourteen
(14) days of receipt of the letter requesting the meeting, the parties shall
meet at a mutually convenient location in Cuyahoga County, Ohio. The meeting
shall be attended by an executive of each party having the authority to resolve
the problem. Each party may bring technical staff or other representatives
having information bearing on the problem; however, neither party may bring an
attorney or be represented in the meeting by an executive who is an attorney
unless agreed in advance in writing by the other party. In the event such
meeting fails to resolve issues in dispute, all actions relating to dispute
hereunder shall have as venue, Cuyahoga County, Ohio, except for Federal
jurisdiction disputes, the venue for which shall be the Northern District of
Ohio.
8.4 Independent Contractors. It is expressly agreed that Seller and Reseller are
acting hereunder as independent contractors, and under no circumstances shall
any of the employees of one party be deemed the employees of the other for any
purpose.
8.5 Notice. Any notice required to be given by either party to the other shall
be deemed given ten (10) days after being deposited in the postal system in
registered or certified form with return receipt requested, postage paid,
addressed to the notified party at the address set forth above.
8.6 Assignment. A party may not assign this agreement or any portion thereof
without the approval of the other party, which shall not be unreasonably
withheld.
8.7 Amendment; Waiver. Any provision of this Agreement may only be amended or
waived if such amendment or waiver is in writing; and, if an amendment, executed
by all parties hereto and, if a waiver, executed by the party which is waiving
the term, condition or right.
8.8 Severability. Any provision of this Agreement that is prohibited or
unenforcable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforcability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdictio
8.9 Headings. The headings of the various sections of this Agreement have been
inserted for ease of reference only and shall be deemed not to be a part of this
Agreement.
8.10 Entire Agreement. This Agreement constitutes the entire understanding of
the parties with relation to the subject matter hereof, and may be amended only
by a writing in accordance with clause 8.7 above.
MADE AND ENTERED INTO this _________ day of _________, 199__, by the undersigned
authorized representatives of the parties.
e-Net, Inc. Reseller
--------------------------
Company Name
- ------------------------ ------------------------
(Signature) (Signature)
- ------------------------ ------------------------
(Name) (Name)
- ------------------------ ------------------------
(Title) (Title)
- ------------------------ ------------------------
(Date) (Date)
10
ATTACHMENT A
Seller Product and Reseller Prices
Product Designation List Price Each
- ------------------- ---------------
T2000-TS $549
T2000-CO $795
T2000-CH $2995
T2000-IN (4 port BRI) $8495
T2000-DTI (single span T1/E1) $10,995
T2000-SV-100 $4995
Gateways FXS 7300 (single span T1/E1) $29,995
*Network Management System (NMS) $10,000
*Billing System- Interface module only $10,000- $25,000
(Query to CDR data only)
*Required to be paid as a license one time per network for one Network Manager
Station.
Discounts based on total units purchased per calendar quarter no minimum
committment.
Units Purchased Discount off List
- --------------- -----------------
0 - 19 -
20 - 99 -
100 - 499 -
500 - 999 -
1000 - 4999 -
5000 + -
Discounts based on total units purchased per calendar quarter with a minimum
committment of 100 units per quarter. To qualify, participants must submit a
funded purchase order for a 100 unit order by the beginning of each quarter. All
prices herein are available for certified Resellers only, and are subject to
change by Seller in accordance with the Seller's contractual agreements and
standard practices and policies.
Service Fees ( See Attachment B):
A one-year maintenance contract is available upon initial order for a
fee of fifteen per cent (15%) of the order dollar value. Maintenance service
includes Standard Support as defined in Attachment B.
Nonstandard Support in the areas of enhanced installation service, training,
customization, and relocation is available on a per order basis, when accepted
by e-net, Inc. Fees for Nonstandard Support are based upon $1500.00 per day,
minimum of two days, plus travel and living.
ATTACHMENT B
Seller's After-Sale Support of Seller Products
Product Malfunction Correction Procedures
Problem Classifications - If Reseller or its Customer encounters a problem
(classified below) with the product, then Seller is required to respond to the
Reseller or its Sublicensee in the time specified below:
P1: Critical Systems Problem - Customer is unable to use the product as
documented, and a major operational problem or reliability problem exists.
Seller shall provide acknowledgment of the problem within four (4) hours. At
this time, Reseller or its Customer may be required to provide additional
information to enable Seller to recreate the problem. Seller shall use its best
efforts to provide a work-around (if a work-around is possible) for the problem
and shall provide a plan for resolution within one (1) day from the time at
which the problem can be reproduced by Seller. Reseller or its Customer may be
required to aid in this task if the error can not be reproduced by Seller. A
patch release containing the fix shall be produced according to the plan
mentioned above. Status reports will be provided to Reseller or its Customer as
required, but no less than twice a week.
P2: Minor Operational Problem(s) - An intermittent `bug' in the product exists,
but it is not a critical systems reliability issue; however, the product does
not function as documented, and the `bug' creates a minor operational impact.
Seller shall provide acknowledgment of the problem within one (1) business day.
At this time, Reseller or its Customer may be required to provide additional
information to enable Seller to recreate the problem. Reseller or its Customer
may be required to aid in this task if the error can not be reproduced by
Seller. Seller shall use its best efforts to provide a work-around (if a
work-around is possible) for the problem and shall provide a plan for resolution
within one (1) week from the time at which the problem can be reproduced by
Seller. Any fixes to address this problem shall be incorporated into the next
Maintenance Release.
P3: Annoyance Type Problem - The use of the product produces a user annoyance
while the product is in application. Seller shall provide acknowledgment of the
problem within two (2) business days. At this time, Reseller or its Customer may
be required to provide additional information to enable Seller to recreate the
problem. Seller shall use its best efforts to provide a work-around (if a
work-around is possible) for the problem and shall provide a plan for resolution
within two (2) weeks from the time at which the problem can be reproduced.
Reseller or its Customer may be required to aid in this task if the error can
not be reproduced by Seller. Seller and Reseller or its Customer will jointly
determine if the annoyance is to be fixed. If it is agreed upon that the
annoyance is to be fixed, then Seller shall provide a schedule for the next
Scheduled Release and incorporate the fix into that release.
Definitions:
1.) Scheduled release - includes new functionality
2.) Maintenance release - takes care of `bug' fixes
3.) Work-around - customer able to make alteration to application or product as
a temporary solution.