ACN CONSUMER COMMUNICATIONS EQUIPMENT
MASTER PURCHASE AGREEMENT
This Master
Purchase Agreement (hereinafter referred to as this “
Agreement ”), dated as of April 6, 2009 (the "
Effective Date "), is made and entered into by and between
ACN Digital Phone Service, LLC, a Delaware limited liability
company, with its principal place of business at 1000 Progress
Place, Concord, NC, 28025 (hereinafter referred to as “
ACN ”), and Ojo Video Phones LLC, a Pennsylvania
limited liability company, with its principal place of business at
3190 Tremont Avenue, Trevose, PA 19053 (hereinafter referred to as
“ Seller ”). Seller and ACN are
individually referred to herein as a “ Party ”
and together as the “ Parties .”
WHEREAS, Seller
is engaged in the business of manufacturing and selling certain
Video Phone communication devices and related accessories and
providing a variety of services with respect thereto;
WHEREAS, ACN is
engaged in the business of purchasing and selling to its customers
certain communication devices; and
WHEREAS, the
Parties desire to enter into an agreement for the purchase and sale
of certain products manufactured by Seller and related services
thereto on the terms and conditions set forth below.
NOW, THEREFORE,
in consideration of the premise, the mutual promises hereinafter
contained, and other good and valuable consideration, receipt of
which are hereby acknowledged, the Parties hereto agree as
follows:
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“ ACN
Marks ” means those trademarks, service marks, trade
names and logos of ACN or its affiliates provided by ACN to Seller
for use in accordance with this Agreement.
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“ ACN
Platform ” means the current release of the VoIP
applications platform, including all modifications, updates,
upgrades, enhancements and new releases thereto as provided to
Seller by ACN in writing.
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“
Dollars ” means U.S. Dollars.
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“
Product ” means the Video Phone communication devices,
including all equipment hardware, materials, software and firmware,
as described in Exhibit A hereto.
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“
Services ” means the services as described in Exhibit
A hereto.
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“
Spare Parts ” means the spares or accessories that are
provided by Seller to ACN for replacing the damaged components or
spare parts of the Products.
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“
Technical Documentation ” means the mutually agreed
specifications, manuals, installation manuals, technical reference
manuals, drawings, release notes, descriptions, data and other
relevant technical materials of the Product provided in accordance
with this Agreement and its Exhibits relating to the operation,
maintenance, commissioning, testing and inspection of the
Product.
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Scope . Subject to the terms of this
Agreement, Seller will provide Product, Spare Parts and Services to
ACN pursuant to a written Purchase Order issued and accepted in
accordance with Section 3 below.
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Modifications and Additions
. Subject to ninety (90)
days prior written notification to ACN, Seller may modify the
Product, including software and firmware therein or add additional
products to Exhibit A; provided, however, that any modified or
additional Product must meet the compatibility requirements under
Section 2.5 below and Seller must provide ACN with new Technical
Documentation and a detailed summary that describes the
modifications of any Product, including without limitation, any new
features, upgrades, updates or bug fixes, as
applicable. Upon notification by Seller to ACN of
Product changes, Seller must update or deliver to ACN up to an
aggregate of ten units to ACN’s designated test facilities in
North America and Europe, and ACN must sign-off (which shall not be
unreasonably withheld, conditioned or delayed) as accepting Product
changes prior to Seller shipping any modified units to ACN for
resale to its customers. Any agreed changes to the
Technical Documentation requested by ACN, including without
limitation the specifications for the Product, will be made
pursuant to a mutually agreed change process as described in
Exhibit D.
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Discontinuance . Subject to the Parties' mutual
agreement (which shall not be unreasonably withheld, conditioned or
delayed), any Product may be discontinued subject to Seller's
obligations pursuant to Section 2.4 below.
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Spare
Parts . Seller
shall make Spare Parts for all Products available to ACN for a
minimum of two (2) years after the last shipment of the applicable
Product to ACN. If ACN requires Spare Parts after such
two-year period, Seller will provide available drawings or purchase
specifications to assist ACN in obtaining the Products from other
sources. The documentation to be supplied will be that
documentation as is in existence at that time.
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Compatibility . To the extent required by the
Technical Documentation, Seller shall ensure that all Product
shipped to ACN hereunder, shall be compatible and interoperate with
(a) the then-current version of the ACN Platform, (b) all similar
Products previously purchased by ACN hereunder, and (c) all other
Video Phone equipment purchased by ACN from third
parties. ACN will notify Seller as soon as practicable
of any planned or actual modification, update, upgrade, enhancement
or release to the ACN Platform. Seller agrees that it
shall add features and functionality to the Products as may be
necessary to ensure continued compatibility with the ACN
Platform.
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Printing . At ACN’s cost and expense
Seller will provide printing services with respect to the packaging
of Products for shipping. A Purchase Order (as defined
below) will include a description of the printing, including the
relevant languages, to be applied to each of the applicable
packaging items associated with a given Purchase Order, as well as
any collateral inserts or documentation to be added to the shipped
Products.
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Issuance . Purchases by ACN will be by
individual written purchase orders (“ Purchase Order
”) via fax or other electronic means made during the term of
this Agreement.
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Acceptance . Purchase Orders will be deemed
accepted upon Seller’s issuance of its initial invoice
related to such Purchase Order (hereinafter referred to as “
Initial Invoice ”). If an Initial Invoice
is not issued within ten (10) days of receipt of a Purchase Order,
the Purchase Order will be deemed rejected; provided, however, that
Seller shall not be permitted to reject any Purchase Order that
contains the information necessary for Seller to process the order
and otherwise conforms to the terms and conditions of this
Agreement, including without limitation the required lead times and
advance forecast, provided however that if Seller reasonably
demonstrates that it cannot meet the desired shipping date in the
Purchase Order for reasons not related to Seller’s
performance of its obligations under this Agreement, it can within
five (5) business days of receiving the Purchase Order, notify ACN
of a recommended commercially reasonable shipping
date. If the parties cannot agree on a shipping date
within an additional five (5) business days after the request for
an alternate shipping date, ACN may terminate the Purchase Order
without any prejudice or liability.
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Initial
Order . The
first Purchase Order for twenty-five thousand (25,000) pieces of
Product, which shall be non-cancelable (hereinafter refer to as
“ Initial Order ”), is to be issued as soon as
practicable after Seller provides a demonstration of working
Product to Buyer.
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Commitment. Subject to a mutual agreement
between Seller and ACN as to the Technical Documentation
requirements as defined in Section 1.7, and further subject to the
ability of Seller to supply a Video Phone meeting the mutually
agreed Technical Documentation and the Technical Support
requirements as set forth in Exhibit C, ACN agrees that within
twenty-four (24) months of the Effective Date, ACN will purchase
from Seller 300,000 units of Product, subject to all the terms and
conditions of this Agreement.
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Delivery
Schedule . Each Purchase Order, subject to the
conditions set forth in Article 6 below, shall set forth the
desired delivery schedule for each Product. ACN shall be
entitled to a per unit credit of $15.00, solely for those units not
shipped (unless previously shipped), to the extent the Purchase
Order amount materially differs from the amount actually shipped
within the time frames set forth in the desired delivery schedule
as set forth in the accepted Purchase Order, including any
modification thereof pursuant to Section 3.2 above.
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The Parties
intend that the price to ACN for the Products will be
Seller’s cost of producing and supplying the Product
(including by way of example and not limitation, freight, handling,
insurance and overhead) (“ Seller’s Costs
”) plus a forty ($40) dollar markup. On a
quarterly basis, Seller will provide ACN with full documentation of
these costs. Any changes to Seller’s Costs at any
time will apply upon the effective date of such cost change, and
will apply to all new Purchase Orders accepted thereafter by
Seller.
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Prices are
exclusive of any sales, use, property, and like taxes, as well as
any duties and tariffs. Any such tax, duty, tariff Seller may be
required to collect or pay upon the sale or delivery of the
Products, other than taxes based on Seller’s income, shall be
promptly reimbursed by ACN upon Seller providing appropriate
documentation. Applicable taxes, duties and tariffs
shall be billed as a separate item on the invoice.
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Invoicing . Seller shall separately invoice ACN
for Products ordered under each Purchase Order. Seller
shall invoice ACN ten percent (10%) of the total price of the
Products set forth in a Purchase Order upon acceptance of the
Purchase Order by Seller, which invoice shall be due within thirty
(30) days after receipt of such invoice by ACN. Upon
delivery of Products to ACN, Seller shall invoice ACN for the
remaining amounts due under the Purchase Order, which shall be paid
as follows: (a) forty percent (40%) shall be due within five (5)
days upon written confirmation of product shipment from
Seller’s manufacturing facility and (b) the remaining fifty
percent (50%) shall be due within the earlier of (i) thirty (30)
days after receipt of product at ACN’s fulfillment facility,
or (ii) forty-five (45) days after product shipment.
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ACN shall make
payments for Products purchased under this Agreement in Dollars by
wire transfer.
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The bank
information for Seller is listed as following:
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Disputed
Charges . If
Seller submits an invoice which ACN reasonably and in good faith
believes is incorrect or it can be shown that the charges do not
correspond to a Purchase Order, then ACN will pay any undisputed
amounts in accordance with the Agreement and notify Seller in
writing of the dispute. While the Parties are working
together to determine the correct amount to be invoiced, ACN will
not be deemed to be in breach of this Agreement for
nonpayment. Seller shall provide ACN reasonable
supporting documentation regarding any disputed invoice or claim
amount.
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ACN’s
Representations . ACN
hereby represents to Seller that it has financial ability to pay
for Products ordered from Seller, is able to pay its debts in the
ordinary course of business as they become due, and is not
insolvent within the meaning of applicable bankruptcy
law. ACN shall provide any creditability information and
documentation as reasonably requested by Seller. ACN
agrees and undertakes to notify Seller within thirty (30) days in
the event that the foregoing representations become untrue or
inaccurate. ACN agrees that Seller may reasonably rely
on the representations contained in this Section in selling
Products to ACN, that these representations are a material
inducement to Seller for selling Products and any extension of
credit, and that it is ACN’s intent that Seller shall so
rely.
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LEAD TIMES;
CHANGES, RESCHEDULING AND CANCELLATIONS; RETURNS
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Seller shall use its commercially reasonable
efforts to manufacture and timely ship the full quantity of
Products under the Purchaser Order accepted by Seller, as necessary
to meet the delivery schedule. Seller may make partial
shipments of less than the full quantity of Products under the
Purchase Order upon ACN's prior written consent. If Seller cannot
ship purchase order quantities as requested by ACN in two
subsequent months, ACN retains the right to cancel the particular
Purchase Order (excluding the Initial Order) and/or this
Agreement.
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Lead
Time . The
initial product and parts lead time is one hundred fifty (150) days
for the current Product. Within the first ninety (90)
days following the first delivery of Product to ACN, and within
each thirty (30) days thereafter, ACN and Seller will meet to
discuss the shortening of lead time changes, and Seller will make
all reasonable efforts to shorten such lead time, until lead time
becomes ninety (90) days.
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Reduced Lead
Time . Notwithstanding the above, Seller
will, on request, make reasonable efforts to shorten the lead time
for demand exceeding the forecast quantities.
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Rescheduling, Changes, Cancellations
. ACN may reschedule (no
more than once per line item) or cancel the applicable part of an
accepted order only in accordance with the following: (i) if, for
reason other than an event of force majeure or the actions or
omissions of ACN or its agents, a delay in the scheduled shipping
date for the products ordered exceeds or will exceed thirty (30)
days, or (ii) upon ACN’s written notice to Seller, received
by Seller prior to the originally scheduled shipment date by a
period greater than the current lead time for the product plus
thirty days. Any rescheduling which results in a delay
in shipment by more than ninety days from the originally requested
shipment date may, at Seller’s option, be deemed a
cancellation by ACN. Any cancellation or rescheduling of
an accepted Purchase Order by ACN other than as expressly
authorized above (other than for Seller’s default) shall be
subject to the payment of an equitable cancellation charge
including, without limitation, any unearned pricing adjustment and
uniquely incurred costs for such order. Such
cancellation charge shall be determined based upon the work
completed and commitments incurred in good faith prior to such
cancellation and Seller’s current price to ACN for the
applicable products. At ACN’s request and at least
fifteen (15) business days prior to payment of any cancellation
charge, Seller will document all amounts it reasonably believes
should be incorporated into any cancellation charge. If
ACN reasonably disputes the cancellation charge amounts, the
parties will utilize the remedy available in Section 23.8.1
hereof. Upon receipt of notice of such termination,
Seller will use commercially reasonable efforts to terminate work
in progress and/or to divert such products to other
customers. In no event shall such cancellation or
rescheduling charge exceed the full contract price for the products
so canceled or rescheduled by ACN. ACN shall be entitled
to receive any Products to the extent payment in full has been made
to Seller for the same.
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On or before
the fifteenth day of each calendar month ACN shall provide Seller
with a monthly, detailed rolling forecast of its delivery
requirements for each model of the Product for the following six
(6) calendar months. Except as set forth below, such
forecast shall be non-binding and provided solely for planning
purposes. To the extent such forecasted Products have a
requested delivery date within a period equal to the lead time plus
fifteen days from the date of the forecast, ACN shall be deemed to
have issued Purchase Orders hereunder consistent with the units so
forecasted for this delivery period. To the extent such
forecasted Products have a requested delivery date within a period
equal to the lead time period plus sixteen days, but less than the
lead time period plus forty-five days, both from the date of the
forecast, the delivery requirements for each version of the Product
may be adjusted only up to 25% (plus or minus) of the quantities
forecast for this period in the immediately preceding monthly
forecast.
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ACCEPTANCE
AND DELIVERY OF PRODUCT AND SPARE PARTS
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Any Product and
Spare Parts shall be deemed to have been delivered in conformity
with the applicable Purchase Order unless ACN gives written notice
to the Seller within ten business days after the date of
ACN’s receipt of such Products and/or Spare Parts at
ACN’s fulfillment facility. ACN shall notify
Seller in writing with respect to any non-conformity of the
Products and/or Spare Parts with the Purchase Order and these terms
and conditions, setting forth in detail the nature and scope of any
such non-conformity. Such inspection or acceptance shall
not, however, be deemed a waiver of any non-conformity which could
not reasonably be ascertained by an inspection conducted in
accordance with good commercial practices. Absent timely
receipt of such notification by Seller, such Products shall be
deemed accepted by ACN. Any determination of
non-conformity hereunder shall be subject to verification by
Seller. Non-conforming Products which have been duly
rejected in accordance herewith may be returned by ACN for repair,
replacement or credit as set forth below.
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Seller shall be
responsible for any and all government mandated export and import
requirements needed to deliver products to ACN’s fulfillment
facilities, with the cost of such compliance being included within
the Seller’s Costs.
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SHIPPING AND
RISK OF LOSS
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All Products
and Spare Parts shall be shipped FOB Origin at Seller's site in
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Seller shall be
responsible for arranging all freight, handling and insurance prior
to delivery to ACN’s fulfillment facility. Actual
costs of shipping (including by way of example and not limitation,
the freight, handling and insurance) will be borne by ACN with
payment terms for shipping and related costs due upon receipt of
invoice and supporting documentation from Seller. Seller will
package the Products in accordance with ACN’s standard
fulfillment guidelines as provided to Seller. All shipments shall
be made on wooden pallets treated for entry into the USA, Canada
and all EU countries.
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If ACN desires
to replace Seller as the shipping party or designate the method of
shipment on each individual Purchase Order issued under this
Agreement and/or arrange for shipment by other than the designated
method, ACN shall pay any additional reasonable documented expense
arising from such designation.
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Subject to the
terms and conditions of this Agreement, Seller grants to ACN, with
respect to the Products purchased by ACN from Seller and paid for
hereunder, including without limitation, the hardware,
firmware and software that constitute the Product, a non-exclusive,
irrevocable, perpetual, worldwide, royalty-free license to
distribute and use (and solely and then only to the extent
reasonably required for such lawful use of the Products purchased
hereunder, reproduce and create derivative works of such firmware
and software, and publicly perform and publicly display such works
contained therein, by all means now known or later developed), with
the right to sublicense such rights through multiple levels of
sublicenses through its standard distribution
channels. Seller agrees to render all reasonably
required assistance to ACN to protect ACN’s rights herein
above described. Nothing contained herein shall give ACN
or any other person or entity any other license, right or interest
in Products except as herein expressly provided, and any such other
license, right and interest is hereby expressly reserved by Seller
and its affiliated companies, and disclaimed by ACN and anyone else
gaining access to the Products hereunder. By way of
example and not limitation, the following rights are expressly
disclaimed; any right for itself, or to sublicense or otherwise
grant to any party any right to reproduce or modify the product, to
manufacture or provide other video phone products or services, to
facilitate or control the access by and/or operation of the
Products with other products and services, or to facilitate the
operation of video phones other than the Products or video phones
that are not part of an Seller authorized service
offering. All use of Seller’s intellectual
property contained in or related to the Products shall inure to the
benefit of Seller and its affiliated companies. Seller
reserves all rights and remedies, whether provided by contract, at
law, self-help, in equity and/or otherwise, to enforce it rights
under this license. Any breach or threatened breach of
this license shall cause Seller irreparable injury for which there
may be no adequate remedy at law, and in addition to any other
remedies available, Seller shall be entitled to obtain injunctive
relief as well as actual damages.
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Branding . ACN shall provide to Seller the
content, language, logos (including size and location thereof), and
design of all packaging, end user documentation, welcome kits and
any other materials included with the Products for distribution by
ACN hereunder. The Seller agrees that the ACN Marks
shall be used on all Products. In addition, ACN provided
"wallpaper" shall be loaded and used on all Products, where
applicable and reasonably possible.
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Welcome
Kit . If
applicable, ACN may modify welcome kits and other materials
included with the Products for distribution at ACN’s cost and
expenses, and upon sixty (60) days p
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