Exhibit 10.10
LICENSE AGREEMENT
This LICENSE AGREEMENT (this "Agreement") is made and entered into as of
the 21st day of February, 1997 by and among CELERITY SYSTEMS, INC., a
corporation organized and existing under the laws of the State of Tennessee,
United States of America ("Licensor") and ENKAY TELECOM CO., LTD, a corporation
organized and existing under the laws of the Republic of Korea ("Licensee").
WHEREAS, Licensor is engaged in the development, manufacture and licensing
of hardware, software, systems and equipment used in the interactive digital
cable television business, including a CTL 9000 Fiber to the Neighborhood
("FTTN") Video Server per specifications attached as Section 4 of Exhibit 1
(Preliminary Draft Subject to Change) and a CTL 8500 MediaJet Baseband Server
per specifications attached as Exhibit 2 (Preliminary Draft Subject to Change);
and
WHEREAS, Licensor and Licensee wish to set forth in this Agreement terms
and conditions of Licensor's License to Licensee to purchase, manufacture, and
sell certain technology related to certain software and firmware as set forth on
Schedule A (Preliminary Draft Subject to Change) (the "Software Products") and
certain Proprietary Celerity Boards and Off-The-Shelf items set forth on
Schedule A (the "Hardware Products") (collectively the "Software Products" and
"Hardware Products" are referred to herein as the "Products"; it being
understood that the definition of "Products" shall specifically exclude all
technology, products, parts or services associated with the Ivision project);
and
WHEREAS, Licensee is in the business of selling various types of consumer
electronic equipment and desires to purchase, manufacture and sell the Products
in the Republic of Korea and elsewhere; and
WHEREAS, the parties executed a Memorandum of Understanding dated December
3, 1996 (the "Memorandum"), evidencing their general intention to enter into a
definitive Agreement granting license rights to Licensee as described herein.
NOW THEREFORE, in consideration of the terms, covenants and conditions
contained herein, the parties hereto mutually agree as follows:
1. Manufacturing and Distribution Rights.
a. Licensor hereby grants to Licensee, and Licensee hereby
accepts, the right and license to manufacture and sell the
Products to its customers
("end Users") in the Territory (as herein after defined) on
the terms and conditions set forth herein. Licensor hereby
grants to Licensee, and Licensee hereby accepts, a license, in
and to technology, know-how and intellectual property rights
related to the Products (the "Technology") necessary to and
solely for the purpose of manufacture and sale of the
Products.
b. When and as required by the License Agreement, Licensor will
provide to Licensee bills of materials, schematic diagrams and
drawings, board layouts, design and prototype delivery
schedules, test equipment recommendations, test procedure
recommendations and other technology and know-how (the
"Technology") sufficient, in Licensor's reasonable judgment,
to enable Licensee to Manufacture the Product. Licensor will
make available Licensor's engineers and other technical
personnel to support the transfer of the Technology, and will
provide reasonable training to Licensee's engineers and
technical personnel at Licensor's Knoxville, Tennessee, United
States of America facility. All travel, housing and other
expenses of Licensee's personnel in connection with such
training shall be borne by Licensee. In the event that
Licensor's personnel provide such training at Licensee's
facility, Licensee will pay all travel, housing and other
expenses of Licensor's personnel as well as Licensor's normal
hourly service rate for such personnel. Licensor will provide
one (1) on-site training session of up to 40 hours at no
charge to licensee, including travel and housing expenses,
provided that the date of such training is at the discretion
of Licensor. If the first 40 hours of training is at a date
selected by Licensee, the first 40 hours may be in more than
one session, and will still be free of hourly service charge,
but the travel, housing and related expenses will be paid by
Licensee.
c. The license granted hereby may not be transferred or
sublicensed by Licensee, but shall extend to any wholly-owned
subsidiaries and divisions of Licensee. Licensee shall be
responsible for the compliance by each such subsidiary and
division with the terms and provisions of this Agreement, and
agrees to report and pay royalties to Licensor in accordance
with Section 6 hereof with respect to production of the
Products by each such subsidiary or division. Any such
affiliate shall agree in advance in writing to be bound by all
the terms of this Agreement, and Licensee shall agree to
guarantee the
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obligations of such assignee hereunder.
d. The license granted hereby conveys no right to Licensee to use
or register any trademark or trade name of Licensor, or to use
the name of Licensor or any trademark or trade name in any
manner whatsoever in connection with the sale of the Products
hereunder. Nothing in this Agreement shall be construed as
conveying, expressly or by implication, any right under any of
Licensor's know-how except in connection with the manufacture
and sale of the Products hereunder nor shall Licensee have the
right to modify any of the Products without the written
consent of Licensor.
e. Licensee shall not have the Products manufactured for it by
any third party without the prior written consent of Licensor,
except where such third party has been licensed by Licensor to
manufacture the Products.
f. Upon the termination of this License for any reason, Licensee
shall return the Technology, including but not limited to the
object codes, and any and all copies thereof, to Licensor.
g. Nothing contained herein shall prohibit Licensor from using
the Technology for its own purposes, nor from licensing the
Products and the Technology to others, provided that such
usage or licensing by Licensor is not in competition with the
sale of the Products by Licensee in the Republic of Korea.
Nothing contained herein shall prohibit Licensor from using
the Technology for the development, sale and distribution of
Products for use with Products manufactured by others which
may be competitive with Licensee outside of the exclusive
items within this Agreement.
h. In order for Licensee to ensure the timely and accurate
completion of the product, Licensor will provide, at no
charge, two completed samples of each proprietary item, and a
list of these items to be included as an attachment to this
agreement. Any additional samples required by Licensee will be
available at the then current list price for each such item.
2. Software Products Purchases.
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a. Licensee shall purchase all of its requirements in the
Territory for the Software Products from Licensor for prices
as shown on Schedule A (Preliminary Draft Subject to Change)
(EnKay Cost) and on terms and conditions as shown on Schedule
B. It is understood and agreed that prices set forth in
Schedule A are subject to periodic revision by Licensor and
all orders for Software Products shall be billed at prices in
effect on the date of receipt of an order.
b. The Software Products to be sold to Licensee for resale under
this Agreement consist of software and firmware either in
proprietary chip sets or in object code as in existence for
the CTL 8500 and CTL 9000 on the date of execution of this
Agreement. Licensor agrees to make available to Licensee the
generic improvements made to this family of servers based on
this architecture. However, other customers of Licensor may
request development of custom features or functions for the
CTL 8500 and CTL 9000 which are paid for by those customers
and which, therefore, may not be covered by the generic
improvements covered by this license. The decision to include
these customer paid improvements in the generic improvements
to this license will be at the sole discretion of the
Licensor. Additionally, Licensor may from time to time
introduce other products including servers, based on
substantially different technology or architecture, and
Licensor agrees to discuss with Licensee any new technology or
architecture which it might develop during the term of this
Agreement. Any new technology or architecture offered to
Licensee shall be on a right of first refusal basis, and will
be subject to negotiated new payments for such new technology
or architecture by Licensee as well as new pricing
determinations and a new Schedule A will be created to reflect
such new payments and new pricing offerings.
c. Licensee agrees that it will not decompile any software of any
type incorporated in the Software Products or provided by
Licensor to Licensee (whether in the operating system of the
Software Products or otherwise) or otherwise re-engineer,
duplicate or otherwise develop an independent manufacturing
capability for the Software Products or any component thereof
nor will it permit access to any third party for any of such
purposes or for any other purpose other than the intended use
of the Software Products. Licensee agrees that it will take
all necessary steps to protect all of the Technology and
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trade secrets of License embedded in the Software Products
from disclosure to any third party, including but not limited
to all necessary supervision of its employees and the
employees of any of its subsidiaries and division for this
purpose.
d. All changes to Software Products which Licensee may wish to
make, including without limitation, any improvements to such
Software Products which Licensee might wish to implement,
shall be first disclosed to and approved in writing by
Licensor.
e. Title to all Software Products shall pass from Licensor to
Licensee with delivery in Knoxville. Risk of loss and/or
damage shall be borne by the party holding title. Licensee
shall be responsible for all insurance after the passage
title.
f. All purchases of Software Products shall be made by Purchase
Order in a form acceptable to Licensor. All purchase orders
are subject to availability and will be filled in the order
received, including orders from other customers. All prices
are FOB Licensor's delivery dock in Knoxville. Licensee shall
schedule all shipping and notify Licensor of the identity of
the carrier and expected pick up date.
g. Invoices will be submitted by Licensor in triplicate original
and two copies for each shipment and will be subject to the
terms and conditions as set forth on Schedule B.
h. Licensor warrants that all Software Products to be delivered
hereunder, shall conform to the Software Products
Specifications as set forth on Exhibit 1 and Exhibit 2 and be
free from defects at the time of delivery. If Licensee shall
give Licensor notice of any defect, deficiency or
non-conformance within 60 days after the delivery date, then
Licensor shall, at no cost to Licensee repair or furnish
replacements for all such defective, deficient or
non-conforming items or parts thereof. Licensor's sole
obligation to Licensee on account of defects shall be repair
or replacement and shall not be liable for any consequential
damages.
LICENSOR MAKES NO OTHER WARRANTY (EXPRESS OR IMPLIED) WITH
RESPECT TO THE SOPTWARE PRODUCTS, INCLUDING FITNESS FOR USE AS
INTENDED BY LICENSEE.
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3. Product Prices to End Users.
a. All Hardware Products Prices for which Licensee intends to
charge End Users are attached hereto as Schedule A.
b. All Software Products Prices for which Licensee intends to
charge End Users is attached hereto as Schedule A.
c. All End User Products pricing set forth on Schedule A shall be
subject to an increase or reduction of 15% (in the aggregate),
at Licensee's discretion.
4. Territory/Exclusivity. The territory subject to the several licenses
granted under this Agreement shall be:
a. Republic of Korea: The license to resell the Products granted
hereby shall be exclusive as to sales for delivery within the
Republic of Korea as presently constituted; provided however,
if during any calendar year Licensee shall fail to purchase
and pay for at least $2,000,000 on account of all of its
purchases of Products from Licensor for resale in the Republic
of Korea, then the exclusivity of the license granted for that
part of the Territory shall in all respects become
non-exclusive for the remaining term of the Agreement and any
renewal thereof.
b. Pacific Rim: Licensee shall also have a non-exclusive right to
resell the Products in certain other countries consisting of
Australia, New Zealand, Indonesia, Thailand, Singapore,
Vietnam, Cambodia and Japan (Referred to hereinafter as the
Pacific Rim) at prices for such Products and at "End User
Prices" used to compute royalties all as established from time
to time by Licensor in Schedule A; provided, however, that (i)
Licensor may cancel this non-exclusive right for all or any
designated country in the Pacific Rim on 60 days written
notice to Licensee and (ii) Licensee shall not be entitled to
supply any country in the Pacific Rim with any materials
purchased from Licensor for use under the license to be
granted for the Republic of Korea as outlined above.
c. Licensee shall have the option to obtain a right of first
refusal (the "Right of First Refusal Option") for the
exclusive right to resell the
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products in certain other Countries consisting of Australia,
New Zealand, Indonesia, Thailand, Singapore, Vietnam, Cambodia
and Japan (referred to hereinafter as the "Pacific Rim") at
prices for such products and at end user prices used to
compute royalties that have been delivered to Licensor
pursuant to a bona fide third-party offer. The Right of first
Refusal Option shall be exercisable within ten (10) days of
receipt of notification by Licensee of a bona fide third-party
offer to Licensor for the exclusive rights to any Country
within the Pacific Rim, at which time Licensee shall deliver
$300,000 (the "Option Exercise Price") in immediately
available funds to Licensor for the purposes of securing its
right of first refusal. The Option Exercise Price shall be
applied to the License Fee to be paid by Licensee if it
exercises its right of first refusal or, if Licensee shall
determine not to proceed with its right of first refusal, the
Option Exercise Price shall be surrendered to Licensor. Such
Right of First Refusal Option will be offered to Licensee once
for each country within the Pacific Rim.
5. Term. The term of this Agreement, and the duration of the server
license granted hereby, shall be five (5) years from the date of
this Agreement except that the term of the license granted for the
Pacific Rim under Article 4(b)(c) shall be governed by such Article
4(b)(c). This Agreement shall be subject to renewal on terms to be
agreed upon by the parties. Either party intending to seek renewal
of this Agreement shall give notice thereof to the other party at
least one hundred eighty (180) days prior to the expiration hereof.
6. License Fee, Royalty, Maintenance Fee.
a. Licensee Fee: In consideration of the licenses provided to
Licensee by Licensor under this Agreement, Licensee shall pay
to Licensor the nonrefundable sum of Six Million Dollars
($6,000,000) which shall be paid as follows:
(i) One Million Dollars ($1,000,000) payable immediately
upon signing of the Agreement in immediately available
funds;
(ii) One Million Dollars ($1,000,000) payable in immediately
available funds on May 1, 1997; and
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(iii) an aggregate of Four Million Dollars ($4,000,000)
through hardware royalty premium earn outs and software
purchase price premium earn outs as set forth in
Schedule A hereto (the "Royalty Premium").
b. Royalty Premium and Royalties: Licensee shall have paid a
Royalty Premium equal to or greater than Two Million Dollars
($2,000,000) by July 1, 1998, or the difference between the
amount paid by the Licensee and Two Million Dollars
($2,000,000) shall be paid in immediately available funds to
Licensor on that date. Licensee shall have paid an additional
Royalty Premium equal to or greater than Two Million Dollars
($2,000,000) between July 2, 1998 and January 1, 1999, or the
difference between the amount paid by the Licensee and Two
Million Dollars ($2,000,000) shall be paid in immediately
available funds to Licensor on that date. Once Licensee has
paid Royalty Premium equal to Four Million Dollars
($4,000,000) royalties for hardware as set forth in Schedule A
hereof shall immediately be reduced to 7 % from 35 % of the
End-User Price for each unit of the Hardware Products sold by
Licensee based on the End User Price set forth as part of
Schedule A and software purchases set forth in Schedule A
hereto shall be reduced to a purchase price discount of 50%
from 35%. All royalty payments shall be paid by Licensee to
Licensor within thirty (30) days following the end of each
fiscal quarter of this Agreement, beginning with the end of
the third full month following the execution of this
Agreement.
c. Prepayments: Licensee shall be entitled to prepay the balance
of the Royalty Premium at any time prior to January 1, 1999.
d. Support Services/Maintenance Fee: Licensee agrees to provide
first line support service to customers. Warranty claims for
Hardware and Software, replacement of warranted parts and
Products, local set up, installation and any locally required
integration of products or systems are the responsibility of
the Licensee. Licensor agrees to provide second line support
service. Software revisions, updates, debugging via remote
diagnostics and other functions, which can be accomplished via
long distance telecommunications will be provided by Licensor.
In consideration thereof, Licensee agrees to pay to Licensor
an annual Maintenance Fee equal to 4% of the aggregate sum of
the End User Sale Price for all Products sold to date,
adjusted
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quarterly to include any additional sales in the prior
quarter. The Maintenance Fee will itself be paid in quarterly
installments due 30 days after to close of every quarter. In
addition, Licensee shall pay all reasonable out of pocket
travel related expenses when and as incurred by Licensor in
the delivery of such support service. It is understood and
agreed that such support service does not include any
replacement Products or parts for Products except as provided
in Section 2(h).
e. Sample Systems: Licensee agrees to provide to Licensor,
without charge, one complete system application which is
representative of each such application as sold from time to
time by Licensee to its customers. It is understood and agreed
that trivial variations on applications shall not be deemed a
new application for the purpose of this paragraph.
f. Licensee will furnish to Licensor within thirty (30) days
following the end of each quarter a written statement
certified by the Chief Financial Officer of Licensee showing
the number of units of each of the Products sold by Licensee
during such quarter, including customer names and selling
prices, the identity of the country in the Territory where the
units were sold and delivered and the amount of periodic
royalties and maintenance fees due for the corresponding
period, together with evidence of the payment of the royalties
and maintenance fees due by wire transfer.
g. Licensee will at all times during the term of this Agreement
keep accurate books of account and other records reflecting
all sales of the Products, and will carefully prepare and
maintain such books and records for at least five (5) years
following the termination of this Agreement. Licensee hereby
grants to Licensor or its duly accredited representative the
right to inspect and make copies of such books and records for
the purpose of ascertaining or confirming the accuracy of
statements rendered hereunder, such inspection and copying to
be at the expense of Licensor, provided that if a discrepancy
of more than 5% is found, then all costs of such inspection
activity shall be paid by Licensee.
h. All payments provided for in this Agreement shall be made to
Licensor in Knoxville, Tennessee in United States currency by
wire
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transfer to Licensor's designated account. All payments shall
be net to Licensor, without deduction for taxes, assessments,
or other charges which may be imposed on Licensor or Licensee
by the Government of the Republic of Korea or any political
subdivision thereof with respect to any amounts payable to
Licensor pursuant to this Agreement, and without deduction for
banking or wire transfer fees. Such taxes, assessments or
other charges and fees, if any, shall be paid by Licensee
without diminution of any amounts otherwise provided for under
this Agreement to be paid to Licensor.
i. Licensee will provide, at no charge, whatever documentation
and certification is reasonably required to support the timely
processing of governmental requirements, including high
technology status.
7. Additional Licensee Responsibilities.
a. Licensee agrees to actively develop the market and to promote
the sale of the Products in the Republic of Korea, including
marketing, distribution, installation and service of the
Products.
b. Licensee will maintain a marketing, sales and service
organization properly trained to market the Products and to
insure proper installation and servicing thereof in every
country in the Territory for which Licensee has exclusive
rights.
c. In addition to any required royalty report, Licensee will
provide to Licensor on at least a quarterly basis information
and analysis of marketing and sales of the Products in all of
the Territories and professional support for future
development and sales of the Products in all of the
Territories.
d. Licensee will be solely responsible for providing all
installation, integration service and support for the Products
and all other customer relationship issues in the Territory.
Licensor shall have no Products service or support
responsibilities, except as set forth in Section 6 above.
8. No Patent Warranty. Licensor makes no representation or warranty
that the Products are free from any infringement of any patent or
proprietary rights of others except that Licensor is not now aware
of any claim or charge
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of any such infringement.
9. Indemnification. Licensee agrees to indemnify, to defend and to hold
harmless Licensor from claims of third persons either:
a. proximately caused by the fault or negligence of Licensee, its
officers, employees or agents; or
b. which relates to any customer disputes or claims relating to
the marketing, sale, distribution, installation, training or
service of any Products or the performance thereof, whether
arising out of express or implied warranty; or
c. which relates to any other failure by Licensee to comply with
any terms of this Agreement; or
d. which relates to any failure by Licensee to comply with
applicable laws and/or regulations in accordance with Section
13 hereof.
10. Insurance. Licensee agrees to maintain during the term hereof
liability insurance for personal injury and property damage,
including products liability and contractual coverage, as set forth
herein. Coverage for personal injury shall be not less than one
million dollars (U.S. $1,000,000) annual aggregate liability.
Coverage for property damage shall be not less than five hundred
thousand dollars (U.S. $500,000) per occurrence. Such liability
insurance obtained by Licensee shall include Licensor as a named
insured. Licensee shall supply Licensor with a Certificate of
Insurance upon written request by Licensor.
11. Force Majeure. Neither party hereto shall be liable for any delay
arising from circumstances beyond its control including (but not
limited to) acts of God, war, riot or civil commotion, industrial
dispute, fire, flood, drought, shortage of material or labor or act
of government, provided that the party seeking to be excused shall
make every reasonable effort to minimize the delay resulting
therefrom. Each party shall keep the other fully informed of any
such circumstances.
12. Government Regulations.
a. Licensee shall comply with all laws and regulations of all
applicable
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jurisdictions relating to the manufacture, sale and
distribution of the Products.
b. This Agreement shall be subject to all United States laws and
regulations now or hereafter in effect applicable to the
subject matter hereof. The Export Administration Regulations
of the United States Department of Commerce prohibit, except
under an individual validated license, the exportation from
the United States of technical data relating to certain
commodities (listed in the Export Administration Regulations),
unless the exporter (under this Agreement, Licensor) has
received certain assurances from the foreign importer.
Licensee acknowledges that it has received a copy of the
current Export Administration Regulations of the United States
Department of Commerce and has access to Supplementary
Bulletins from the United States Department of Commerce.
Licensee agrees to comply with all applicable Export
Administration Regulations of the United States Department of
Commerce, and hereby gives to Licensor the assurances called
for in Part 779.4 of such Export Administration Regulation.
c. If the terms of this Agreement are such as to require or make
it appropriate that this Agreement or any part of it be
registered with or reported to any national or supranational
agency in any area in which Licensee will do business
hereunder, Licensee will, at its expense, promptly undertake
such registration or report. Licensee will supply prompt
notice and appropriate verification of any such registration
or report and any agency ruling resulting therefrom.
d. Licensee will, at its expense, carry out any formal
recordation of this Agreement required by the law of the
Republic of Korea and each country in the Pacific Rim in which
it makes sales as a prerequisite to enforceability of this
Agreement in any such country or for any other reason, and
promptly supply verified proof of such recordation to
Licensor.
13. Termination.
a. If either party hereto shall breach this Agreement, the other
party may give the defaulting party written notice of such
default. If the defaulting party shall fail or refuse to
remedy such default within
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thirty (30) days from the date of said notice, this Agreement
may be terminated by a second written notice and said
termination shall be effective as of the date of the second
notice of default. Such termination shall be without prejudice
to any other rights or claims the aggrieved party may have
against the defaulting party. Defaults under this Agreement
shall be deemed to include, but shall not be limited to:
(i) material failure by either party to fulfill any of its
obligations under this Agreement;
(ii) an adjudication of bankruptcy of either party under any
bankruptcy or insolvency law;
(iii) the commission by either party of a receiver for
business or property, or the making of any general
assignment for the benefit of creditors; or
(iv) without the prior consent of Licensor, sale by Licensee
of substantially all of its assets or sale or other
transfer of controlling interest in the ownership of
Licensee or any merger, consolidation or other act
whether or not in accordance with applicable law if the
result is a transfer of control of Licensee or its
assets.
b. In addition, either party may, immediately upon notice,
terminate this Agreement in its entirety or with respect to
any particular license or right granted hereunder if:
(i) Such termination is necessary to comply with an order or
official request of the government of the terminating
party, or
(ii) Normal conduct of the business of the other party as a
private enterprise ceases or is substantially altered as
a consequence of action taken by governmental or other
authority.
c. Licensor may, immediately upon notice, terminate this
Agreement in its entirety or with respect to any particular
license or right granted by it hereunder if by law or
regulation of the government of any country in the Territory,
Licensee is disabled from making the payments to
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Licensor which it is required to make under this Agreement,
and such disability continues for more than thirty (30) days.
14. Amendments. No provision of this Agreement may be amended, revoked
or waived except by a writing signed by a duly authorized
representative of each of the parties hereto.
15. Assignment. Except as otherwise provided herein, this Agreement
shall not be assignable. Licensee shall have the right to transfer
all or any part of its rights and obligations hereunder to any
wholly-owned affiliate of Licensee, provided, however, that such
affiliate shall agree in advance in writing to be bound by all the
terms of this Agreement and that Licensee agrees to guarantee the
obligations hereunder of such assignee.
16. Notices. Any notice required to be given hereunder shall be deemed
sufficient and delivery shall be deemed complete if sent by
registered Air Mail or confirmed telex to the following addresses:
To Licensor: Celerity Systems, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
To Licensee: EnKay Telecom Co., Ltd.
Xxxxx Xxxxxxxx, 000, Xxxxxxx-Xxxx
Xxxxxxx-Xx, Xxxxx, Xxxxx 135-090
Attention: President
17. Governing Law. This Agreement and the relationship of the parties
hereto shall be governed in all respects by the laws of the State of
Tennessee, United States of America, except that questions affecting
the validity, construction and effect of any patent shall be
determined by the law of the country in which the patent has been
granted. In the event of any controversy between the parties
respecting the interpretation or application of the terms of this
Agreement, the English language version of this Agreement shall be
controlling.
18. Resolution of Disputes.
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a. All disputes and controversies between the parties hereto of
every kind and nature arising out of or in connection with
this Agreement as to the existence, construction, validity,
interpretation or meaning, performance, nonperformance,
enforcement, operation, breach, continuation, or termination
of this Agreement shall be resolved as set forth in this
Section 18.
b. Either party to this Agreement may within fifteen (15) days
after a dispute or controversy arises submit any dispute or
controversy hereunder in writing for resolution by a senior
executive officer of the highest executive level for each of
the parties. If such persons cannot resolve the dispute or
controversy within thirty (30) days, then the dispute or
controversy shall be submitted to binding arbitration pursuant
to the following procedure.
c. The dispute or controversy shall be submitted to a single
arbitrator with experience in international high technology
commercial matters to be chosen by the senior executive
officers at the highest executive level for each of the
parties within thirty (30) days after the conclusion of the
mediation provided for above. If senior executive
representatives of the disputing parties cannot within such
time agree on an arbitrator, the arbitrator shall be chosen
under International Chamber of Commerce procedures from its
panels of arbitrators with international high tecnnology
commercial experience.
d. The arbitration hearing shall be held in New York, New York,
United States of America, or at such other place as the
parties and the arbitrator agree, within thirty (30) days
after the dispute is submitted to an arbitrator. The
Arbitration Rules of the International Chamber of Commerce, or
such other rules and procedures as the arbitrator may
determine, shall be utilized in the arbitration proceedings.
The arbitration hearing shall be conducted in the English
language.
e. The arbitration hearing shall be concluded in not more than
three (3) days unless otherwise ordered by the arbitrator. The
award on the hearing shall be made within thirty (30) days
after the close of the submission of evidence at or in
connection with the hearing.
f. An award rendered by the arbitrator appointed pursuant to this
Agreement shall be final and binding on the parties to such
proceeding.
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The award shall be enforceable under the June 10, l958
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards. Judgment on such award may be entered by any
of the disputing parties in the highest court having
jurisdiction in any country.
g. The provisions of this Section 17 of this Agreement shall be a
complete bar and defense to any suit, action or proceeding
instituted in any court or before any administrative tribunal
with respect to any dispute or controversy arising out of or
in connection with this Agreement. The arbitration provisions
of this Agreement shall, with respect to any such dispute or
controversy, survive the termination or expiration of this
Agreement.
h. Nothing contained in this Section 17 shall give the arbitrator
selected hereunder any authority, power or right to alter,
change, amend, modify, add to, or subtract from the provisions
of this Agreement. Rather, the arbitrator shall endeavor to
interpret the provisions of this Agreement so as to carry out
its terms with reference to any dispute submitted for
arbitration.
i. The parties shall each bear all of their respective
arbitration costs and expenses, provided, however, that the
parties shall share equally the costs and expenses of the
arbitrator.
j. The failure or refusal of any party hereto to submit to
arbitration in accordance with this Agreement shall be deemed
a breach of this Agreement.
19. Entire Agreement. This Agreement, together with the schedules
attached hereto which may be amended by Licensor from time to time
in accordance with its existing business practice, represents the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersedes all other prior
agreements with respect to the subject matter hereof, understandings
and communications, whether oral or written, including the
Memorandum. Notwithstanding anything to the contrary contained
herein, the parties hereby acknowledge and agree that this Agreement
does not supersede a License Agreement between the parties for the
manufacture and distribution of Set Top Boxes executed as of
September 26, 1996.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by
16
their duly authorized officers as of the day and year first herein written.
CELERITY SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
X.X. Xxxxxxxx
President
ATTEST:
/s/ Xxxxxxx X. Van Meter
-----------------------------------
Secretary
ENKAY TELECOM CO., LTD.
By: /s/ Authorized Officer
--------------------------------
Title:
-----------------------------
ATTEST:
/s/ X. X. Xxxx
-----------------------------------
Secretary
17
AMENDMENT
1. 4-c is removed
2. 6-b in the agreement,
Every "thirty(30)days" changes to "forty-five days(45)days" and "quarter"
changes to "half"
3. 6-d Add,
If EnK sells equipment without Celerity providing Maintenance Service,
that equipment is not subject to the 4% Maintenance Fee until the first of
either of the following events occurs;
- the customer signs up for Maintenance
- the customer calls Celerity for Maintenance
4. 13a - iv Add after "consent",
Such consent not to be unreasonably withheld
5. change the title of the agreement to "License and Technology Transfer"
CELERITY SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
X.X. Xxxxxxxx
President
ATTEST:
/s/ Xxxxxxx X. Van Meter
-----------------------------------
Secretary
ENKAY TELECOM CO., LTD.
By: /s/ Authorized Officer
--------------------------------
Title:
-----------------------------
ATTEST:
/s/ X.X. Xxxx
-----------------------------------
Secretary
18
Schedule A
After Royalty Premium
Description Part EnKay Celerity End Est. EnKay Margin %
Number Cost Royalty Users Margin
equals 7% Price
Hardware Products:
Proprietary Celerity Boards
CHASSIS & MOTHERBOARD M821 $ 1,377 $ 145 $ 2,065 $ 544 26%
MediaJet SUPERVISOR w I/O S801 $ 2,914 $ 306 $ 4,370 $ 1,151 26%
CTL 9000 SUPERVISOR w I/O S902 $ 3,010 $ 316 $ 4,515 $ 1,189 26%
MPEG 2-CHANNEL MODULE I/O C802 $ 1,980 $ 208 $ 2,971 $ 782 26%
ATM OC3 MODULE w I/O C950 $ 5,894 $ 619 $ 8,841 $ 2,328 26%
MediaJet SCSI-II MODULE w I/O D801 $ 1,628 $ 171 $ 2,442 $ 643 26%
CTL 9000 SCSI-II MODULE w I/O D902 $ 1,750 $ 184 $ 2,625 $ 691 26%
Off the Shelf Items
STORAGE CABINET M800 $ 2,023 $ 184 $ 2,630 $ 423 16%
816W -48 VOLT POWER SUPPLY 48PWR-81 $ 1,517 $ 138 $ 1,972 $ 317 16%
650W -48 VOLT POWER SUPPLY 48PWR-65 $ 724 $ 66 $ 941 $ 151 16%
10-BASE-T CABLES - 15ft 10BTCBL $ 3 $ 0 $ 4 $ 1 16%
CSB CABLE CSBCBL $ 28 $ 3 $ 36 $ 6 16%
POWER CABLE PWRCBL $ 2 $ 0 $ 3 $ 1 16%
CATV MODULATOR MOD $ 350 $ 32 $ 455 $ 73 16%
POWER STRIP (CABINET MOUNT) PWRSTR $ 32 $ 3 $ 42 $ 7 16%
9GN HARD DRIVE SYSTEM 9GBSUB $ 1,900 $ 173 2,470 397 16%
R60 3/4 RAID SYSTEM R60-3/4 $ 27,000 $ 2,457 $ 35,100 $ 5,643 16%
R92 3/6 RAID SYSTEM R92/3-6 $ 41,000 $ 3,731 53,300 $ 8,569 16%
SCSI CABLE SCSICBL $ 42 $ 4 $ 54 $ 0 00%
XXXXXXX XXXX XXXXX $ 10,000 $ 910 $ 13,000 $ 2,090 16%
FORE SYSTEM ASX1000 SWITCH $103,990 $ 9,463 $135,187 $21,734 16%
00-XXXX 00XXXX-X-X-XXX XXX 00XXX $ 2,500 $ 228 $ 3,250 $ 523 16%
SUPERVISORY REMOTE TERM XTERM $ 3,450 $ 314 $ 4,485 $ 721 16%
Confidential Subject To Change
Description Part EnKay Celerity End Est. EnKay Margin %
Number Cost Royalty Users Margin
equals 7% Price
KEYBOARD + TERMINAL $ 300 $ 27 $ 390 $ 63 16%
SYSTEM CONTROLLER w/4P ALR4160 $ 70,000 $ 6,370 $ 91,000 $14,630 16%
REVOLUTION Q-SMP CNTRL ALRREV $ 3,916 $ 356 $ 5,091 $ 818 16%
OS-9000 SERVER LICENSE $ 1,500 $ 137 $ 1,950 $ 314 16%
Software Products
Discount equals 50%
Celerity Firmware
CHASSIS & MOTHERBOARD M821 $ 1,722 $ -- $ 3,444 $ 1,722 50%
MediaJet SUPERVISOR w/I/O S801 $ 3,788 $ -- $ 7,576 $ 3,788 50%
CTL 9000 SUPERVISOR w/I/O S902 $ 3,909 $ -- $ 7,817 $ 3,909 50%
MPEG 2-CHANNEL MODULE w/I/O C02 $ 2,547 $ -- $ 5,094 $ 2,547 50%
ATM OC3 MODULE w/I/O C950 $ 7,561 $ -- $ 15,122 $ 7,561 50%
MediaJet SCSI-II MODULE w/I/O D801 $ 2,077 $ -- $ 4,154 $ 2,077 50%
CTL 9000 SCSI-II MODULE w/I D902 $ 2,230 $ -- $ 4,459 $ 2,230 50%
Software
MIX LICENSE, First 25 STREAMS $ 12,500 $ -- $ 25,000 $12,500 50%
MIX LICENSE, (Per Stream)
26-100 STREAMS $ 250 $ -- $ 500 $ 250 50%
MIX LICENSE, (Per Stream)
101-1000 STREAMS $ 125 $ -- $ 250 $ 125 50%
ETHERNET API INTERFACE $ 750 $ -- $ 1,500 $ 750 50%
NAV/APP, NAV/VOD $ 17,500 $ -- $ 35,000 $17,500 50%
NAV RT $ 32,500 $ -- $ 65,000 $32,500 50%
TAR Servr Software License $ 2,000 $ -- $ 4,000 $ 2,000 50%
Confidential Subject To Change
Schedule A
Royalty Premium
Description Part EnKay Celerity End Est. EnKay Margin %
Number Cost Royalty Users Margin
equals 7% Price
Hardware Products:
Proprietary Celerity Boards
CHASSIS & MOTHERBOARD M821 $ 1,377 $ 723 $ 2,065 $ (34) -2%
MediaJet SUPERVISOR w I/O S801 $ 2,914 $ 1,530 $ 4,370 $ (73) -2%
CTL 9000 SUPERVISOR w I/O S902 $ 3,010 $ 1,580 $ 4,515 0%
MPEG 2-CHANNEL MODULE I/O C802 $ 1,980 $ 1,040 $ 2,971 $ (50) -2%
ATM OC3 MODULE w I/O C950 $ 5,894 $ 3,094 $ 8,841 $ (147) -2%
MediaJet SCSI-II MODULE w I/O D801 $ 1,628 $ 855 $ 2,442 $ (41) -2%
CTL 9000 SCSI-II MODULE w I/O D902 $ 1,750 $ 919 $ 2,625 $ (44) -2%
Off the Shelf Items
STORAGE CABINET M800 $ 2,023 $ 920 $ 2,630 $ (314) -12%
816W -48 VOLT POWER SUPPLY 48PWR-81 $ 1,517 $ 690 $ 1,972 $ (235) -12%
650W -48 VOLT POWER SUPPLY 48PWR-65 $ 724 $ 329 $ 941 $ (112) -12%
10-BASE-T CABLES - 15ft 10BTCBL $ 3 $ 2 $ 4 $ (1) -12%
CSB CABLE CSBCBL $ 28 $ 13 $ 36 $ (4) -12%
POWER CABLE PWRCBL $ 2 $ 1 $ 3 $ (0) -12%
CATV MODULATOR MOD $ 350 $ 159 $ 455 $ (54) -12%
POWER STRIP (CABINET MOUNT) PWRSTR $ 32 $ 15 $ 42 $ (5) -12%
9GN HARD DRIVE SYSTEM 9GBSUB $ 1,900 $ 865 2,470 $ 295 -12%
R60 3/4 RAID SYSTEM R60-3/4 $ 27,000 $ 12,285 $ 35,100 $ (4,185) -12%
R92 3/6 RAID SYSTEM R92/3-6 $ 41,000 $ 18,655 53,300 $ (6,355) -12%
SCSI CABLE SCSICBL $ 42 $ 19 $ 54 $ (6) -12%
MAMMOTH TAPE DRIVE $ 10,000 $ 4,550 $ 13,000 $ (1,550) -12%
FORE SYSTEM ASX1000 SWITCH $103,990 $ 47,315 $135,187 $(16,118) -12%
00-XXXX 00XXXX-X-X-XXX XXX 00XXX $ 2,500 $ 1,138 $ 3,250 $ (388) -12%
SUPERVISORY REMOTE TERM XTERM $ 3,450 $ 1,570 $ 4,485 $ (535) -12%
KEYBOARD + TERMINAL $ 300 $ 137 $ 390 $ (47) -12%
Confidential Subject To Change
Description Part EnKay Celerity End Est. EnKay Margin %
Number Cost Royalty Users Margin
equals 7% Price
SYSTEM CONTROLLER w/4P ALR4160 $ 70,000 $ 31,850 $ 91,000 $(10,850) -12%
REVOLUTION Q-SMP CNTRL ALRREV $ 3,916 $ 1,782 $ 5,091 $ (607) -12%
OS-9000 SERVER LICENSE $ 1,500 $ 683 $ 1,950 $ 233 -12%
Software Products
Discount equals 35%
Celerity Firmware
CHASSIS & MOTHERBOARD M821 $ 1,722 $ -- $ 3,444 $ 1,206 35%
MediaJet SUPERVISOR w/I/O S801 $ 3,788 $ -- $ 7,576 $ 2,652 35%
CTL 9000 SUPERVISOR w/I/O S902 $ 3,909 $ -- $ 7,817 $ 2,736 35%
MPEG 2-CHANNEL MODULE w/I/O C02 $ 2,547 $ -- $ 5,094 $ 1,783 35%
ATM OC3 MODULE w/I/O C950 $ 7,561 $ -- $ 15,122 $ 5,293 35%
MediaJet SCSI-II MODULE w/I/O D801 $ 2,077 $ -- $ 4,154 $ 1,454 35%
CTL 9000 SCSI-II MODULE w/I/O D902 $ 2,230 $ -- $ 4,459 $ 1,561 35%
Software
MIX LICENSE, First 25 STREAMS $ 12,500 $ -- $ 25,000 $ 8,750 35%
MIX LICENSE, (Per Stream)
26-100 STREAMS $ 250 $ -- $ 500 $ 175 35%
MIX LICENSE, (Per Stream)
101-1000 STREAMS $ 125 $ -- $ 250 $ 88 35%
ETHERNET API INTERFACE $ 750 $ -- $ 1,500 $ 525 35%
NAV/APP, NAV/VOD $ 17,500 $ -- $ 35,000 $ 12,250 35%
NAV RT $ 32,500 $ -- $ 65,000 $ 22,750 35%
TAR Servr Software License $ 2,000 $ -- $ 4,000 $ 1,400 35%
Confidential Subject To Change
