[LOGO, AUDIO EYE]
June 1, 2006
Xx. Xxxxxx Xxxxxxx
Xx. Xxxxx Xxx
Managing Members
Modavox Communications LLC
0000 Xxxxxxxx
Xxxxxx, Xxxxxxx
Dear Xxxxxx and Xxxxx:
As agreed, this letter and the attached contract will serve as confirmation of a
business agreement between Modavox, Inc. and AudioEye Inc. The business
agreement has Modavox continuing to provide hosting, support, and third party
contract oversight to ensure un-interrupted technical service to AudioEye, as
well as begin a sales/marketing relationship with AudioEye under the terms and
fees outlined in Appendix A and Appendix B of the attached contract. Technical
service date began June 1, 2005 and Modavox Communications has been invoicing
AudioEye Inc. since that date. This agreement will run for three (3) years and
will be automatically optioned for three (3) additional years unless cancelled
by either party given thirty (30) days written notice.
AGREEMENT SUMMARY
AudioEye is in the process of raising funds for strategic operations and
build out of its software, therefore it is agreed to by Modavox,
Inc. and AudioEye Inc the following:
o Once operational funds are secured, all 2005 expenses incurred by
Modavox/Modavox in support of AudioEye and invoiced will be paid in
full on an agreed upon payment schedule (attached).
o AudioEye will pay Modavox for any Modavox services or expenses
incurred on AudioEye's behalf beginning January 1, 2006, and agreed
upon in writing by both parties on after client invoicing.
o Modavox, Inc. presently sells its services via a direct sales force.
AudioEye agrees to have Modavox sell, service, and represent
AudioEye products to potential clients. Modavox will have the right
to outsource, or assign the sales/services agreement to a third
party if agreed to by AudioEye Inc. Terms and fees are outlined in
Appendix B.
It is noted that Modavox Communications LLC is a shareholder in AudioEye Inc,
and members of AudioEye Inc's management team are members of Modavox
Communications LLC. In the estimation of Modavox Communications LLC, and
AudioEye Inc, the terms and conditions agreed to are in the best interests of
Modavox Inc. and AudioEye Inc. shareholders.
Thank you for your service. Please sign this memo below and return one copy for
our records. Also, please sign the contract and return as well. I look forward
to working with you in 2006.
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On Behalf of: On Behalf of:
AudioEye Inc. Modavox, Inc.
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxx
--------------------------------- ---------------------------------
Xxxxxx X. Xxxxxxx Xxxxx X. Xxx
Chief Technology Officer Chief Executive Officer
Director
AUDIOEYE - MODAVOX COMMUNICATIONS SERVICES AGREEMENT
6/1/2006
This Agreement is entered into by and between AudioEye, Inc, a corporation
organized under the laws of the State of Delaware, with its principal offices at
0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX, 00000 (hereafter referred to as "AudioEye")
and Modavox, Inc with its principal offices at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx,
XX, 00000 (hereafter referred to as "Modavox")
AudioEye and Modavox hereby agree to enter into a Services contract for Modavox
to provide management, technical, and sales services (collectively hereinafter
referred to as "Service") to AudioEye under the terms and conditions as set
forth herein.
1. SERVICES. The Service to be provided pursuant to this Agreement shall be
comprised of those items specified on the Schedule of Services ("Schedule
of Services") annexed hereto. Both parties may enhance the Services from
time to time and offer additional capabilities at an addition fees to be
mutually agreed upon.
2. PAYMENT FOR SERVICE. For the Services provided by Modavox, AudioEye shall
pay the annual or monthly charge specified on the Price List annexed
hereto. The payment terms are net cash, without discount, payable on
receipt of invoice. Monthly charges shall be invoiced each calendar month
in advance. Modavox may increase monthly charges upon sixty (60) days
prior written notice to AudioEye in the event of (i) any increase in
charges payable to parties other than Modavox, or (ii) any increase in
costs for changes to Service, Equipment or Software required by parties
other than Modavox. In addition, on each anniversary of this Agreement,
Modavox may increase the annual or monthly charges et forth herein in
proportion to the percentage increase, if any in the United States
Consumer Price Index (All Urban Consumers) ("CPI"), as published by the US
Department of Labor, during the most recent twelve (12) month period for
which such statistics are available at the time of the increase. Any
payment not received within 30 days of the date of the invoice by AudioEye
shall be subject to a service charge from the due date at a rate of one
and a half percent (1-1/2%) per month on the delinquent balance.
3. TERM OF AGREEMENT: TERMINATION.
a. Except as herein provided, the initial term of this Agreement shall
be a period commencing on the date of this Agreement and continue
for 36 months from June 1, 2005 (the original agreement date with
Kino Communications, LLC). Except as provided in Section 3(b),
thereafter, the Service will be renewed for additional thirty-six
(36) months (or any longer term as agreed to by the parties) subject
to the terms of this Agreement unless Xxxxxxx receives written
notice of termination at least sixty (60) days prior to the
expiration of the then current term of the Agreement. After the
initial 12 months, Modavox may increase prices on the Price list at
any time upon not less then sixty (60) days prior written notice to
AudioEye. AudioEye shall have the right to terminate this Agreement
within sixty (60) days of the effective date of any price increase.
b. Modavox shall have the right to terminate this Agreement upon ten
(10) days prior written notice to AudioEye in the event of the
breach of this Agreement by the AudioEye, unless AudioEye cures such
breach within such ten (10) day period. Such breach may include
improper use that reflects negatively upon the Modavox Service.
4. LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTIES. ALTHOUGH MODAVOX
ENDEAVORS TO USE CARE IN RESPECT TO PROVIDING THE SERVICES, MODAVOX MAKES
NO REPRESENTATION OR WARRANTIES EITHER EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR USE, WITH RESPECT TO ANY ASPECT OF THE SERVICE (
INCLUDING ANY SOFTWARE, DATA OR EQUIPMENT PROVIDED AS PART THEREOF).
NEITHER MODAVOX NOR ANY THIRD PARTY DATA, SOFTWARE OR EQUIPMENT PROVIDERS
WARRANT THAT THE SERVICE WILL BE UNINTERRUPTED OR ERROR FREE, NOR DO THEY
MAKE ANY WARRANTIES AS TO THE RESULTS TO BE OBTAINED FROM USE OF THE
SERVICE. AUDIOEYE EXPRESSLY AGREES THAT USE OF THE SERVICE IS AT
AUDIOEYE'S SOLE RISK. ACCORDINGLY, NEITHER MODAVOX NOR ANY DATA, SOFTWARE,
OR EQUIPMENT PROVIDERS WILL IN ANY WAY BE LIABLE TO AUDIOEYE OR TO ANY
OTHER ENTITY FOR ANY INACCURACIES, ERRORS, OMISSIONS OR DELAYS REGARDLESS
OF CAUSE IN THE SERVICE OR IN ANY DATA, INFORMATION OR SOFTWARE CONTAINED
39
THEREIN, OR CAUSED BY ANY MODAVOX OR THIRD PARTY EQUIPMENT OR SOFTWARE
USED IN CONNECTION THEREWITH, OR FOR ANY DAMAGES (WHETHER DIRECT OR
INDIRECT, OR CONSEQUENTIAL, PUNTIVE, SPECIAL OR EXEMPLARY, INCLUDING, BUT
NOT LIMITED TO LOSS OF PROFITS) RESULTING THEREFROM, REGARDLESS OF CAUSE
AND REGARDLESS OF WHETHER OR NOT MODAVOX OR ANY SUCH THIRD PARTIES ARE
DEEMED LIABLE IN ANY MANNER, THEN SUCH LIABILITY, WHETHER ARISING FROM
CONTRACT, WARRANTY, NELIGENCE OR OTHERWISE SHALL, IN NO EVENT, EXCEED THE
AMOUNT AUDIOEYE HAS PAID FOR THE SERCIVE DURING THE PRECEDING 12 MONTH
PERIOD. MODAVOX SHALL NOT BE LIABLE TO ANY AUDIOEYE FOR ANY DELAY IN
PERFORMANCE OR FAILURE TO PERFORM ANY TERM OR CONDITION CAUSED DIRECTLY OR
INDIRECTLY BY FIRE, EXPLOSION, ACCIDENT, FLOOD, LABOR TROUBLE, WEATHER
CONDITION, ANY REGULATION, RULE OR ACT OF ANY GOVERNMENT OR GOVERNMENT
AGENCY, OR THE INABILITY TO OBTAIN OR SHORTAGE OF SUITABLE MATERIAL,
COMPONENTS, PARTS, EQUIPMENT, MACHINERY, FUEL, POWER, COMMUNICATION
FACILTIES OR TRANSPORTATION, ACT OF GOD, ARMED CONFLICTS, CIVIL COMMOTION
OR ANY OTHER CAUSE OF LIKE CHARACTER BEHOND THE REASONABLE CONTROL OF
MODAVOX.
5. USE RESTRICTIONS; SOFTWARE AND DATA.
a. AudioEye agrees not to use the Service (including, without
limitation, any data or software that is provided as part of the
Service) in any manner except as expressly permitted hereunder and
further agrees not to reverse engineer, decompile, disassemble or
otherwise seek to duplicate the performance characteristics of the
software or any part thereof nor to sell, assign, disclose, furnish
or redistribute the Service or any data or software provided
therewith, to any other person firm corporation or entity and shall
confine knowledge of and access to the software and data only to its
employees who require such knowledge and access in the ordinary
course and scope of their employment by AudioEye.
b. AudioEye acknowledges that installation and ongoing operation of the
Services may, from time-to-time, require changes to Modavox software
resident on AudioEye's hardware; Software for such changes shall be
made available by Modavox at Modavox's expense provided that
AudioEye agrees to install such software on its hardware and renders
reasonable cooperation to Modavox (such cooperation to include
without limitation, modification or upgrade to AudioEye's equipment
and software), Should AudioEye not do so, Modavox may, in its
discretion cease supporting the Services.
6. PROPRIETARY RIGHTS. AudioEye acknowledges and agrees that all proprietary
rights in the Service are and shall remain the property of Modavox and its
third party licensors, unless the software and services are property or a
creation of AudioEye. Both Parties acknowledges that the Service was
compiled, prepared, selected, and arranged by Xxxxxxx, AudioEye, and its
licensors through the expenditure of substantial time, effort, and money
and that constitutes valuable property of Modavox, AudioEye, and its
licensors.
7. CHARGES. On written notice to Modavox, AudioEye may add to the Service as
designated in the Modavox Price List or add additional features as offered
from time to time by Modavox. Additions will be invoiced at the
then-current Modavox price.
8. TRAINING & SUPPORT AudioEye shall pay all training and support expenses as
required for AudioEye's staff unless specified as included in the Service.
9. ASSIGNMENT. This Agreement may not be assigned by either Party without the
written consent of the other Party, which consent will not be unreasonably
withheld. During the term of this contract, the contract licenses and
services provided by Hostway and Akami to Modavox in fulfillment and
servicing of AudioEye's needs and Services will not be terminated or
assigned without the written permission from AudioEye.
10. TRADEMARK AND COPYRIGHT INFRINGEMENT.
a. Modavox shall indemnify AudioEye and hold it harmless against all
claims and damages, including without limitation, reasonable
attorney's fees, which AudioEye incurs as a result of any claim
against AudioEye that the Service infringes any copyright or
proprietary right of any third party, provided that: (i) AudioEye
notifies Modavox promptly in writing of the assertion of such
claims; (ii) Modavox has sole control over the defense or settlement
of such claim; and (iii) AudioEye's use of the Service has been in
accordance with the restrictions imposed under Paragraph 5 of this
Agreement.
b. In the event of a claim for infringement, Modavox reserves the right
to terminate this Agreement with respect to the allegedly infringing
portion of the Service and either to substitute another, or
substantially similar Service therefore or to refund to AudioEye the
pro rata share of any prepaid fees relating to such terminated
Service.
11. APPLICABLE LAW. This Agreement shall be construed in accordance with the
law in the state of Delaware.
12. SEVERABILITY. Each paragraph and provision of this contract is severable
from the contract and if one provision or part is declared invalid, the
remaining provisions or parts shall nevertheless remain in full force and
effect.
13. ENTIRE AGREEMENT. This Agreement embodies the entire Agreement and
understanding between the AudioEye and Modavox and supersedes any and all
prior agreements and understandings, express or implied, relating to the
subject matter hereof. No other agreement or understanding verbal or
otherwise, exists between the parties except as herein set forth.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE
DATE WRITTEN BELOW.
-------------------------------- -----------------------------------
AUDIOEYE MODAVOX
BY: /s/ Xxxxxx X. Xxxxxxx BY: /s/ Xxxxx Xxx
-------------------------------- -----------------------------------
XXXXXX X. XXXXXXX XXXXX XXX
CHIEF EXECUTIVE OFFICER
06.08.06 06.08.06
-------------------------------- -----------------------------------
DATE DATE
SCHEDULE OF SERVICES
APPENDIX A
HOSTING, SUPPORT, AND THIRD PARTY CONTRACT OVERSIGHT
SERVICE DESCRIPTION
Modavox has provided hosting and other services in respect to technical, data
delivery, and support services for AudioEye Inc since June, 2005. AudioEye will
continue to leverage contracts Modavox has with AKAMAI AND HOSTWAY.
AudioEye's patent pending software consists of a content management and
navigation proprietary code. As the picture below portrays, the AudioEye content
management system can index and catalog voice, html, xml, audio, and text
streams and encode such streams into tagged audio streams that are stored at
AKAMAI, Modavox's contracted CDN. AudioEye's intelligent navigation index and
database is stored in AudioEye servers at Hostway, a contracted hosting
facility.
AGREEMENT SUMMARY
Modavox will continue to provide hosting, support, and third party contract
oversight to ensure un-interrupted technical service to AudioEye under the terms
outlined in the contract and the terms and fees detailed below. Technical
service date began June 1, 2005 and Modavox has been invoicing AudioEye Inc.
since that date. This agreement will run for three years unless extended by both
parties.
AudioEye is in the process of raising funds for strategic operations and build
out of its software, therefore it is agreed to by Modavox and AudioEye Inc the
following:
o Once operational funds are secured, all 2005 expenses incurred by
Modavox in support of AudioEye and invoiced will be paid in full on
an agreed upon payment schedule
o AudioEye will pay Modavox for any Modavox services or expenses
incurred on AudioEye's behalf beginning January 1, 2006, and agreed
upon in writing by both parties on a net forty-five days after
client invoicing.
[GRAPHIC]
TERMS AND FEES
Modavox Communications will calculate each month what percent of their Akamai
and Hostway invoices are associated with AudioEye based business. Presently
those fees are approximately $2000 per month for Hostway. Akamai invoices will
be produced separately each month with the fees to AudioEye as follows: $250.00
base per month with up to 100 GB of transfer. Storage fees will be at $15.00 per
month per GB and overage on transfer will be invoiced at $.0025 per MB. AudioEye
agrees to pay cost plus of its share of the Akamai and Hostway invoices
associated with the AudioEye based business. Modavox will provide a detailed
invoice to AudioEye each month detailing services provided. Modavox may add a
service charge of up to 25% on top of its cost to cover billing and personnel
charges it may incur.
AudioEye must pay the invoices on a timely basis not to exceed 30 days. If
invoices have not been paid within the schedule then Modavox may charge AudioEye
1 1/2 % each month interest on any outstanding amount.
AudioEye will compensate Modavox $75.00 per hour for Technical Support,
Development Support, Design Elements, and Voice Over Talent. Those Fees will be
invoices separate from any standing monthly invoices produced by Modavox and all
hours will be calculated and presented for review within five (5) days following
each calendar month.
SCHEDULE OF SERVICES
APPENDIX B
SALES AND MARKETING.
SERVICE DESCRIPTION
Modavox presently sells its services via a direct sales force. AudioEye agrees
to have Modavox sell, service, and represent AudioEye products to a designated
client base. Modavox will have the right to outsource, or assign the
sales/services agreement to a third party if agreed to by AudioEye Inc
TERMS AND CONDITIONS
PRODUCTS AUDIOEYE NAVIGATION AND CONTENT SOFTWARE
PRICING [GRAPHIC]
CLIENT TARGETS MODAVOX may sell to any client though it is
assumed Modavox will be selling to its client
base. Once a month, MODAVOX will submit in writing
clients in their pipeline. See Sales Process
Method and procedures for reporting. The
coordination of pipeline is necessary to avoid
sales channel conflict
SCOPE: Identify and close new business opportunities
within the North American sector. Modavox shall
report this sales progress to Xxxxxxx X'Xxxxx, CEO
AudioEye.
TERM: JANUARY 1, 2006 TO January 1, 2008. May be renewed
thirty days from end-date depending upon
performance.
FEES AND TERMS OF PAYMENT: Commissions will be paid to Modavox LLC and not
directly to Sales People. It is up to Modavox LLC
to distribute.
COMPENSATION FOR RESELLER MODAVOX, INC.
- 30 % commission on invoice amount
- 50% payable on invoice; 50% payable on payment.
- Payment will be Net of cancels received.
- Modavox will invoice all clients direct for AudioEye sales
- AudioEye will invoice Modavox using NET30 Terms for all sales
- Modavox & AudioEye will reconcile all charges by the 5th of each
calendar month
* Commission for any other Customer Agreement terms to be agreed with AEYE prior
to contract execution
* Terms of payment is net 30 days from invoice date.
SALES METHOD/APPROACH TO BE FOLLOWED:
1. Modavox will submit to AudioEye via email, notice of all client calls
or meetings that were completed. Email should be sent to
xxxxxxx@xxxxxxxx.xxx.
2. Only those clients where an email was received will be considered for
commission payments.
3. If a conflict between the Modavox and AudioEye direct sales people
occurs due to overlap of pipeline, the email notice date mentioned in #1
above will be a deciding factor. Xxxxxxx X'Xxxxx will be the ultimate
authority on whether commission was earned by Modavox.
4. Modavox will utilize standard AudioEye pricing, proposals,
documentation, and contracts. This information will be provided upon
signature of this contract. Any deviation from the standard must be
approved in writing in advance.
5. Modavox will go through quarterly training of the software use and
positioning of the product and company. An initial sales training will be
accomplished within 30 days of signing this contract.
6. Modavox will not sign any contract or bind AudioEye in anyway. All
contracts must be approved and signed by Xxxxxxx X'Xxxxx, CEO AudioEye for
commissions to be paid.
7. Modavox will not represent that that they are full-time employees of
AudioEye.
8. AudioEye personnel will support the efforts of the Modavox, but it is
up to the Modavox to understand the product, the technology, the
positioning and approach for the company. This is not a lead generation
contact. It is up to the Modavox to sell the service.
APPENDIX B-1
AEYE QUALITY POLICY
Since its inception, AudioEye has committed itself to develop and maintain a
reputation for outstanding quality. Our result will be AudioEye becoming an
end-to-end, world-class social technology company, and our goal is to continue
building on this achievement and practices.
In so doing, we will continue to be guided by the principles on which the
company was founded. We will continue to guarantee our clients the highest level
of expertise, along with rigorous planning, careful monitoring of results, and
tight control over costs and schedules. We will strive constantly to find the
best solutions for our clients through innovative approaches and systematic
assessment of client satisfaction.
We recognize that client needs, information technologies, and the business
environment are constantly changing. AudioEye's success in meeting changing
client's expectations, and hence our success as a business, depends on our
quality system. This system is based on constantly assessing our stakeholders'
satisfaction and improving our practices, methods and procedures. At AudioEye,
our quality system is a set of principles and methods for continuously improving
the service that we give our clients. All our managers and members play a key
role in delivering quality, because the distinctive way we work with our clients
emphasizes partnership and teamwork. That is why our quality system that will be
implemented and managed includes procedures for managing and training members to
fulfill our clients' expectations.
Senior management's commitment to quality is reflected in many concrete ways
throughout the organization. Our quality system will be an agenda items at every
meeting of the AudioEye Management group.
Xxxxxxx X. X'Xxxxx
CEO
