INTERCOMPANY AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 1st
day of May, 1998, by and between NETsilicon, Inc., having an address at 000
Xxxxxxxx Xxxx Xxxx, Xxxxxxx, XX ("NSI") and Osicom Technologies, Inc., having an
address at 0000 00xx Xxxxxx, Xxxxx Xxxxxx, XX ("Osicom").
W I T N E S S E T H:
WHEREAS, NSI is currently a wholly owned subsidiary of Osicom;
WHEREAS, NSI and Osicom are in the process of registering NSI's common
shares with the U.S. Securities and Exchange Commission for the purposes of
selling rights to purchase NSI's common shares to the public (the "Rights
Offering");
WHEREAS, after the Offering, Osicom will continue to be a substantial
stockholder of NSI;
WHEREAS, the parties deem it advisable at this time to provide for the
terms and conditions of the business relationship between the parties after the
Rights Offering;
NOW, THEREFORE, in consideration of the premises and mutual
undertakings herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by each of the parties hereto,
the undersigned parties hereby agree as follows:
1. NSI hereby assigns, and Osicom hereby accepts the assignment of, the
right to manufacture and market those products, commonly referred to by
the parties as commercial products, listed on Schedule A attached
hereto (the "Assigned Products").
2. NSI hereby assigns all of its right, title and interest in the
following assets to Osicom:
a. The names, addresses, phone numbers, principal contacts and sales
history for the period through the close of the month immediately
preceding the Closing Date with respect to all of NSI's
commercial customers and all of NSI's sales leads and prospect
lists together with copies of all relevant documents such as
customer contracts, sales records, agreements, and the like;
b. All accounts receivable with respect to the Assigned Products
accruing after July 31, 1998;
c. NSI's inventory of Assigned Products. Osicom shall have the
option to purchase from NSI all of NSI inventory of Assigned
Products existing on July 31, 1998 at a price equal to NSI's cost
of manufacturing, developing and shipping such Assigned Products.
NSI shall ship such Assigned Products inventory to Osicom at such
a location as Osicom shall designate in such quantities and at
such time as shall be requested by Osicom. Osicom will pay NSI on
terms available to its most favored customers within thirty (30)
days after the end of each calendar month for those Assigned
Products which have been shipped to Osicom by NSI during such
previous calendar month. No later than nine (9) months after the
effective date of this
Agreement, both parties will reconcile any remaining monies owed
to NSI by Osicom, and Osicom will pay NSI any balance due.
d. Furniture, fixtures, equipment and computer software as set forth
on the attached Schedule B.
3. Osicom hereby assigns, and NSI hereby assumes, all of Osicom's right,
title and interest in and to the trademark "NET+ARM", including, but
not limited to those rights arising from a Trademark License Agreement
dated July 14, 1998 by and between Osicom and ARM Limited. Osicom shall
use its best efforts to obtain ARM Limited's consent to assignment of
the Trademark Licensing Agreement prior to the commencement of the
Rights Offering.
4. The parties acknowledge that Osicom is owed by NSI the approximate sum
of $4,100,000 arising from the parties prior parent/subsidiary
relationship. NSI agrees to pay all indebtedness in full to Osicom upon
completion of the Rights Offering .
5. During the term of this Agreement, NSI shall provide to Osicom
manufacturing and engineering support with respect to the Assigned
Products on an "as needed" basis. Osicom will pay NSI for such support
at a rate of one hundred and ten percent (110%) of the actual labor
costs to NSI. The costs of any materials provided to Osicom by NSI with
respect to manufacturing support provided by NSI shall be reimbursed by
Osicom at a rate of one-hundred and ten (110%) of the actual cost of
material incurred by NSI. NSI will invoice Osicom quarterly for NSI
support and materials. Payment shall be due from Osicom to NSI on a net
cash basis thirty (30) days from the billing date.
6. The parties acknowledge that in connection with the assignment of the
Assigned Products, certain mutually agreeable employees will cease
performing services for NSI and shall thereafter perform services for
Osicom (the "Transferred Employees"). Transferred Employees shall be
transferred to Osicom's payroll as of July 31, 1998. However,
Transferred Employees shall remain on NSI's health insurance plan. NSI
will forward an invoice each month to Osicom which shall indicate the
amount of premium payment made by NSI with respect to such Transferred
Employees as well as documentation of their continued coverage under
NSI's health plan. Payment shall be due from Osicom to NSI on a net
cash basis thirty (30) days from the billing date. Notwithstanding
anything to the contrary in this Agreement, the terms of this Section 5
shall survive the termination of this Agreement.
7. Osicom shall provide to NSI certain MIS computer services at NSI place
of business at Waltham, Massachusetts, including, without limitation,
the maintenance of data lines. In consideration for such services, NSI
shall pay to Osicom the sum of one thousand dollars ($1,000) per month,
payable on the first day of each calendar month as long as NSI requires
such services.
8. Osicom and NSI agree that Osicom shall have co-ownership of the
intellectual property listed on Schedule C attached hereto (the
"Intellectual Property"), completed as of the commencement of the
Rights Offering, for Osicom's product development needs, provided,
however, that the Intellectual Property shall become a part of a
value-added Osicom product provided, further that Osicom shall not
resell, license, transfer or assign to any third party all or any part
of the Intellectual Property or any derivative thereof.
9. The term of this Agreement shall be for a period of twelve (12) months
from the date set forth above. This Agreement may be sooner terminated
only upon the written agreement of both parties hereto.
10. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions
of this Agreement, which shall remain in full force and effect.
11. Notices given under this Agreement shall be in writing, and shall be
deemed given when delivered by a recognized overnight service, or three
(3) days after deposit by certified mail, return receipt requested,
addressed to a party at the address given above, or to another address
specified by a party.
12. This Agreement shall be governed by Massachusetts law. The parties
consent to exclusive jurisdiction of courts sitting in Massachusetts
for all disputes arising under this Agreement. Service of process is
effective if served in the manner a notice may be given under this
Agreement.
13. Neither NSI nor Osicom shall assign this Agreement to any other person
or entity, without the prior written consent of the other party,
provided, however, that Osicom may assign all or part of this Agreement
to any of its subsidiaries without the prior consent of NSI.
14. This Agreement contains the entire understanding of the parties and may
be changed or waived only in writing. Waiver of a breach of this
Agreement shall not operate as a waiver of any other breach. This
Agreement is binding upon and inures to the benefit of the parties
hereto and their successors and assigns. Invalidity of any provision of
this Agreement shall not affect other provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above
Attest: NET SILICON, INC.
By: /s/ Xxxxxxxxx Xxxxxxxx
__________________________ _________________________________
Xxxxxxxxx Xxxxxxxx, President
OSICOM TECHNOLOGIES, INC.
By: /s/ Xxxxxxxxxxx X. Xxx
__________________________ _____________________________
Xxxxxxxxxxx X. Xxx,
Vice-President of Finance
Schedule A
Commercial Products assigned to Osicom
ALL MODELS OF THE FOLLOWING
NETPrint
JETXPrint
Netcommuter
Schedule B
Furniture, fixtures and equipment assigned to Osicom-leased or owned.
All such equipment whether owned by NSI or leased located in Suite 241 now
occupied by Osicom commercial sales at 000 Xxxxxxxx Xxxx Xxxx.
All software currently in use in Suite 241 as NSI has title therein.
Schedule C
NSI Intellectual Property available for Osicom use
All designs of products of NSI as of the date of commencement of the Rights
Offering.
The deliverables for hardware products of NSI are verilog design
models, CAD drawings for artwork, schematics for logic design, and
bills of materials.
The deliverables for software products are source code relating to
software and firmware.
All other hardware, software, firmware, documentation, bills of
material, test plans necessary for Osicom to either design, modify or
manufacture the components produced or to be produced by NSI.
