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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 9, 2000
OSICOM TECHNOLOGIES, INC.
(Exact name of Registrant as specified in charter)
Commission File number: 0-15810
New Jersey 22-2367234
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
2800 28th Street, Suite 100
Santa Monica, California 90405
(Address of principal executive offices) (Zip Code)
(310) 581-4030
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On March 9, 2000, Sorrento Networks, Inc., one of our subsidiaries,
entered into a Strategic Alliance Agreement with INRANGE Technologies
Corporation of Mount Laurel, New Jersey, a subsidiary of SPX Corp., giving
INRANGE exclusive worldwide distribution right to sell Sorrento's optical
networking products for use in the storage area network market for corporate or
"enterprise" accounts. The exclusivity is conditioned upon INRANGE achieving
certain purchase amounts specified on Exhibit B to the Agreement. In addition,
INRANGE acquired a minority equity position in Sorrento as part of an equity
financing completed by Sorrento during the first quarter of its 2001 fiscal
year. Copies of the agreement and a press release announcing this agreement are
included as exhibits to this current report. Sorrento develops and markets
metropolitan optical networking systems that are used in interoffice and access
telecommunications networks.
ITEM 7(c). EXHIBITS
10.9 Strategic Alliance Agreement dated March 9, 2000 between Sorrento
Networks, Inc. and INRANGE Technologies Corporation.
99. Press Release dated June 6, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OSICOM TECHNOLOGIES, INC.
DATE: June 6, 2000 By: /s/Christopher E. Sue
--------------------------
Christopher E. Sue
Vice-President Finance
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EXHIBIT 10.9
STRATEGIC ALLIANCE AGREEMENT
Strategic Alliance Agreement dated and effective as of March 9, 2000 by and
between Sorrento Networks, Inc., a California corporation ("Sorrento"), having
an address at 9990 Mesa Rim Road, San Diego, California 92121 and INRANGE
Technologies Corporation, a Delaware corporation ("INRANGE"), having an address
at 13000 Midlantic Drive, Mount Laurel, New Jersey 08054.
WHEREAS, Sorrento is engaged in the business of developing, manufacturing,
marketing and selling optical networking products; and
WHEREAS, INRANGE is engaged in the business of developing, manufacturing,
marketing and selling networking solutions for the storage networking market;
and
WHEREAS, Sorrento and INRANGE (individually, each a "Party," and
collectively, the "Parties") wish to jointly work to develop and market optical
networking solutions to the storage networking market;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and conditions contained herein, the Parties agree as follows:
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1. Appointment as Distributor. Sorrento hereby appoints INRANGE its
exclusive distributor throughout the world, and gives INRANGE the right to sell
Sorrento's optical networking products, now existing and identified on Exhibit A
attached hereto, or hereafter developed and added to Exhibit A by mutual
agreement of the Parties (the "Products"), in the Field (as defined below) only,
however the Parties agree to add to Exhibit A any optical networking product
hereafter developed by Sorrento that is a replacement, enhancement or logical
extension to a Product which has an application in the Field.
For purposes of this Agreement, the "Field" shall mean the storage networks
of enterprise customers only, such storage networks understood to be those whose
primary traffic is by and between separate Processing Systems (as defined below)
or between Processing Systems and Storage Systems (as defined below), provided
however that the Field shall not include any network or storage network sold or
supplied by, or wholly- or majority-owned by any telecommunications service
provider, or any network or storage network in which all or materially all
resources are provided by a telecommunications service provider or
telecommunications services providers on an outsourced basis. INRANGE
acknowledges that it is generally familiar with the Products and their uses, the
marketing requirements of Sorrento, and the marketing conditions for the
Products.
As referred to herein, Storage System shall be understood to mean any
collection of devices designed and built primarily for the purpose of persistent
data storage and delivery. The storage devices may operate with fixed or
removable storage media. This definition is specifically intended to encompass
disk drives, tape drives, RAID array subsystems, robotic tape libraries, filers,
file servers, and any other types of storage devices.
As referred to herein, Processing System shall be understood to mean one or
more computer elements that perform operations on data, each element typically
having a local or shared memory, central processing element and an input-output
system.
2. Undertakings of Sorrento. During the term of the Agreement, Sorrento
shall:
(a) Supply the Products to INRANGE ready for use;
(b) Make available to INRANGE information in Sorrento's possession
concerning the Products, their qualities and uses, and techniques and methods of
marketing them;
(c) Aid INRANGE in improving the sales of the Products, and to this end
shall furnish a reasonable quantity of English language data sheets, brochures,
technical bulletins and operating instructions to INRANGE at no cost;
(d) Provide to INRANGE, at Sorrento's cost, color separations for such
marketing and advertising materials in order that INRANGE may print, at its
cost, such material in languages other than English;
(e) Participate with INRANGE in quarterly product/business reviews and such
other meetings necessary to review market, pricing, technology, third-party
infringement and other matters relevant to the past and future sale of the
Products;
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(f) Immediately and fully advise INRANGE of any suit, claim or legal
complaint known to Sorrento resulting from the claimed infringement or violation
of any patent, trademark or copyright by the Products or relating to material
Product defects;
(g) Comply with, and use its reasonable commercial efforts to keep INRANGE
advised with respect to, all laws, licensing regulations and rulings of
governmental bodies having jurisdiction over Sorrento's business concerning the
sale of Products; and
(h) Provide reasonable technical support to enable INRANGE to fulfill its
obligations under Sections 3, 10 and 11 of this Agreement, including but not
limited to, its obligations to provide sales training.
3. Undertakings of INRANGE. During the term of this Agreement, INRANGE
shall:
(a) Vigorously distribute and sell the Products throughout the world;
(b) Advise Sorrento's Vice President of Sales or other designated manager
in quarterly product/business reviews, and such other meetings, as called for in
Section 2(e), about sales progress, pricing, marketing conditions, customer
reactions and suggestions concerning Products, and activities of Sorrento's
competitors, and in particular INRANGE will provide Sorrento with a written
report within thirty (30) days of the end of each quarter of the quantity of
each Product sold and installed, and the customer name and address with respect
to all Products sold and installed;
(c) Develop and carry on a vigorous promotional program with respect to the
Products, including but not limited to the use of mailing lists, advertising,
publication of technical articles and participation in industry, trade,
professional and other meetings, exhibitions and fairs;
(d) Train the service people of INRANGE and the
integrators/resellers/distributors appointed by INRANGE (hereinafter
collectively, the "Integrators"), as applicable, in the operation and repair of
the Products;
(e) Provide help desk, first and second level support for all Products
purchased by INRANGE under this Agreement;
(f) Train the sales and service people of INRANGE and the Integrators, as
applicable, in the proper service of the Products with end-users and under
actual applications of the Products;
(g) Establish key sites using the Products for reference sales;
(h) Monitor the performance of its sales and service people, as well as
those of the Integrators;
(i) Obtain, at its cost, any governmental permits or approvals required to
market or sell the Products in any jurisdiction, provided that Sorrento makes
the modifications to the Products required by the regulatory authorities of such
jurisdictions;
(j) Attend sales meetings, technical conferences and other Sorrento
meetings as might be appropriate and mutually agreed;
(k) Immediately and fully advise Sorrento of any suit, claim or legal
complaint known to INRANGE resulting from the claimed infringement or violation
of any patent, trademark or copyright by the Products or relating to material
Product defects;
(l) Immediately and fully advise Sorrento if, to the knowledge of INRANGE,
anyone is infringing or violating any patent, trademark or copyright owned or
used by Sorrento with respect to the Products or is attempting or planning to do
so;
(m) Comply with, and use its reasonable commercial efforts to keep Sorrento
advised with respect to, all laws, licensing regulations and rulings of
governmental bodies having jurisdiction over INRANGE's business concerning its
sale of Products; and
(n) Not utilize any promotional material prepared by INRANGE with respect
to any of the Products without obtaining the prior approval thereof from
Sorrento, it being understood that any non-English material will be provided to
Sorrento in English translation.
4. Sales and Performance.
(a) During the initial term of this Agreement, INRANGE's target purchase
amounts from Sorrento, expressed in U.S. dollars, shall be an aggregate of one
hundred twenty-five million dollars (USD$ 125,000,000), with the respective
annual target purchase amounts being as set forth on Exhibit B to this
Agreement. The Parties shall mutually agree on the annual target purchase
amounts for each year of any subsequent renewal term of this Agreement at least
ninety (90) days prior to the expiration of the preceding term. Sorrento shall
have the right, subject to Sections 4(b) and 4(c) below, to terminate this
Agreement with sixty (60) days prior written notice to INRANGE in the event that
INRANGE fails to purchase at least (i) fifteen percent (15%) of the applicable
year's target purchase amount of the Products during any of the four three-month
quarters during such year beginning on the date of this Agreement or any
anniversary thereof or (ii) seventy-five percent (75%) of the applicable year's
target purchase amount as of the final date of such target year. The Parties
acknowledge that start-up training and other coordination activities will be
required during the first three-month quarter immediately following the
execution of this Agreement (the "Transition Period"), and therefore agree that
INRANGE shall not be required to meet its target purchase amount, as described
in subsection (i) above, during the Transition Period. INRANGE agrees to use its
commercially reasonable efforts to meet its target purchase amount established
for the Transition Period.
(b) In the event that INRANGE has failed to meet a three-month or annual
minimum purchase amount as set forth in Section 4(a)(i) and 4(a)(ii) above (i.e.
15% and 75% of the total target purchase amount for that year, respectively) due
to (i) product deficiency, (iii) product performance or reliability issues,
(iii) supply or delivery delays by Sorrento, or (iv) competitive market pricing,
and INRANGE's President, Vice President of Program Management or Chief Financial
Officer has provided written notice thereof to the Chief Financial Officer of
Sorrento within a reasonable time after first becoming aware that any of the
items (i) through (iii) set forth in this Section 4(b) would have a material
impact on its ability to sell the Products, and Sorrento has failed to cure such
deficiency, issue or delay, if any, in a timely manner, then Sorrento shall
waive its right to terminate this Agreement according to Section 4(a) above and
INRANGE shall have, in its sole discretion, the right to terminate this
Agreement with immediate effect.
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(c) In the event that INRANGE has failed to meet a three-month or annual
minimum purchase amount as set forth in Section 4(a)(i) and 4(a)(ii) above due
to reasons specified in Section 30 (Force Majeure), Sorrento may not terminate
this Agreement except in accordance with Section 30.
(d) In the event that INRANGE has identified a geographic market outside of
the United States for the Products (the "New International Market"), and the
Products must be modified in order for INRANGE to obtain governmental permits or
approvals in order to sell or market the Products in such New International
Market, and INRANGE notifies Sorrento of this requirement in a timely manner,
and Sorrento fails to respond to such notice in a timely manner or notifies
INRANGE in a timely manner that it declines to so modify the Products, then
INRANGE shall have the right, in its sole discretion, to obtain an alternative
source of products to be sold in the New International Market only.
5. Prices and Terms. The Products will be sold to INRANGE at a price or
prices (the "Sorrento Sales Price(s)") reflecting, among other factors,
INRANGE's selling cost, Sorrento's engineering research and development cost,
and Sorrento's cost of goods sold for the Products. The Parties shall review the
Sorrento Sales Price(s) on a quarterly basis and will make adjustment, if any,
to such Sorrento Sales Price(s) for all future sales by Sorrento to INRANGE as
the Parties may agree. Nothing in this Agreement shall be construed to give
Sorrento the right to establish the price at which INRANGE sells Products to its
Integrators or end-user customers. Sales to INRANGE will be made F.O.B.
Sorrento's San Diego, California, facility unless otherwise designated by
Sorrento, and will be invoiced upon shipment and due thirty (30) days, net. All
payments shall be in U.S. dollars.
6. Forecasts and Purchase Orders. INRANGE will provide to Sorrento each
month during the term of this Agreement a forecast for the next 180-day period.
Products will be sold and delivered in accordance with firm purchase orders
delivered at least 60 days in advance of the requested delivery date. Sorrento
will make all commercially reasonable efforts to fill purchase orders on a
timely basis, to the extent that such purchase orders, in aggregate, do not
exceed by more than fifteen percent (15%) the most recent forecast for the
applicable period. Sorrento acknowledges that time is of the essence with
respect to delivery of forecasted, accepted purchase orders and agrees that, in
the event Sorrento fails to deliver a forecasted, accepted order on a timely
basis, INRANGE may cancel the order without cost or liability (provided,
however, such order shall still be credited in favor of INRANGE in calculating
INRANGE's minimum purchase amounts under Section 4 above). Sorrento further
agrees that, in the event there is a shortage of Products, Sorrento shall
allocate Products to INRANGE in at least the same proportion as INRANGE's
forecasted orders for Products bear to Sorrento's forecasted orders for Products
in all markets; provided, however, that upon either Party's request, the other
Party shall consider in good faith, and not unreasonably withhold its consent
to, reasonable modifications to the foregoing allocation in the event of a
shortage.
7. Trademarks; Packaging. Products delivered to INRANGE shall bear a name
and/or trademark owned by or licensed to Sorrento and a name and/or trademark
owned by or licensed to INRANGE (hereinafter, "co-brand") or, if agreed upon
from time to time by the Parties in each Party's sole discretion, a name or
trademark owned by or licensed to Sorrento only, in which event INRANGE shall
resell the Products bearing such name and/or trademark owned by or licensed to
Sorrento only. Sorrento will not co-brand any internal components or software
contained within the Products. Except with the prior written consent of
Sorrento, INRANGE shall resell the Products in their original packages and shall
make no changes, additions or alterations whatsoever to the Products, or to
Sorrento's packaging, trademarks or labels, nor be deemed to acquire any right
in any patent, trademark, or copyright owned or used by Sorrento. Similarly,
Sorrento shall not be deemed to acquire any right in any patent, trademark, or
copyright owned or used by INRANGE.
8. Rights and Obligations Regarding Software Source Code. All software
source code incorporated in the Products ("Software Source Code") shall remain
the sole property of Sorrento. INRANGE acknowledges that Software Source Code is
valuable to Sorrento and agrees to use reasonable care to prevent disclosure to
others of Software Source Code in INRANGE's possession or on INRANGE's premises.
Because of the highly technical nature of Software Source Code and the high
probability that any modification of it, however minor, could significantly
affect the performance of the Products to which it applies, INRANGE agrees that
it shall not modify, or allow the modification of Software Source Code, by
end-users in any manner whatsoever other than by, or with the express written
consent of Sorrento. INRANGE agrees to indemnify and hold Sorrento, its
employees, agents, subsidiaries and affiliates harmless from any claim or loss,
including costs thereof, attributable to any such modification of Software
Source Code in violation of this Section herein.
9. Limitation of Liability for Damages. NEITHER PARTY SHALL, IN ANY CASE,
BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING FROM BREACH
OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, OR ANY OTHER LEGAL THEORY. SUCH
DAMAGES INCLUDE, BUT ARE NOT LIMITED TO, LOSS OF PROFITS OR REVENUES, LOSS OF
USE OF EQUIPMENT OR ANY ASSOCIATED EQUIPMENT, COST OF CAPITAL, COST OF ANY
SUBSTITUTE EQUIPMENT, FACILITIES OR SERVICES, DOWNTIME COSTS OR CLAIMS OF
CUSTOMERS FOR SUCH DAMAGES. IN NO EVENT WILL EITHER PARTY'S LIABILITY FOR
DAMAGES UNDER THIS AGREEMENT, FOR ANY CAUSE AND NATURE WHATSOEVER, OTHER THAN
(I) ITS BREACH OF SECTION 14 OF THIS AGREEMENT, (II) ITS LIABILITY WITH RESPECT
TO THIRD PARTY CLAIMS RELATING TO ITS DEFECTIVE PRODUCTS OR SERVICES OR (III)
ITS OBLIGATIONS UNDER SECTION 10(b) OF THIS AGREEMENT, REGARDLESS OF THE FORM OF
ANY CLAIM OR ACTION UNDER THIS AGREEMENT, EXCEED THE HIGHER OF (1) TEN MILLION
DOLLARS ($10,000,000) OR (2) THE AGGREGATE PRICE PAID BY INRANGE FOR PRODUCTS
UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEEDING
THE OCCURRENCE OF SUCH DAMAGES.
10. Warranties; Responsibility for Claims. In order to distribute between
themselves the responsibility for claims arising out of this Agreement, and
except as otherwise specifically provided for and limited herein, the Parties
agree as follows:
(a) Sorrento warrants that Products furnished under this Agreement will, at
the time of initial shipment, be in conformity with Sorrento's published
specifications and free from defects in material and workmanship for a period of
thirteen (13) months, with such warranty period beginning on the date of
shipment of the Product by INRANGE to INRANGE's end-user customer. Sorrento
will, at its own expense and option, repair or replace the defective hardware or
software and/or refund the monies paid by INRANGE provided that Sorrento is
notified (electronically or in writing) within the warranty period. INRANGE or
its end-user customer shall notify Sorrento (electronically or in writing) of
any defect and obtain Sorrento's approval prior to the return of any Products
for repair and/or replacement on an exchange basis, and any replacement may, at
Sorrento's option, be either new or reconditioned. At INRANGE's request,
Sorrento shall make available, for its then current fee, to be specified as part
of the Sorrento Sales Price(s), a warranty service which provides for all
replacements to be made with new Products or new replacement parts.
Transportation charges on any Products returned from INRANGE or INRANGE's
end-user customer to Sorrento shall be at INRANGE's or INRANGE's end-user
customer's expense, and any Product returned to INRANGE or INRANGE's end-user
customer from Sorrento shall be at Sorrento's expense. The warranty provided
herein shall be void in the event that: (i) the Product fails, malfunctions or
is damaged as a result of improper handling, installation, maintenance, removal,
modification or repair or, (ii) the Product is accidentally damaged, subjected
to abuse or improper use. Sorrento agrees to defend and hold INRANGE harmless
against any and all claims, suits, proceedings, expenses, recoveries and
damages, including court costs and reasonable attorneys fees and expenses
arising out of alleged defects in materials, workmanship or design of the
Products, or the packaging of them by Sorrento or its suppliers, except to the
extent that such arise from a wrongful act or omission by INRANGE. EXCEPT AS
STATED IN SECTION 10 OF THIS AGREEMENT, SORRENTO MAKES NO OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WARRANTIES AS TO MERCHANTABILITY OR AS TO THE
FITNESS OF THE PRODUCTS FOR ANY PARTICULAR USE OR PURPOSE, AND, EXCEPT AS
PROVIDED IN SECTION 10, SHALL NOT BE LIABLE FOR ANY LOSS OR DAMAGE, DIRECTLY OR
INDIRECTLY, ARISING FROM THE USE OF SUCH PRODUCTS. Sorrento shall maintain
comprehensive general and product liability insurance in such amount as ordinary
good practice for its type of business would require. INRANGE will promptly
notify Sorrento of any such claim or demand that comes to its attention.
(b) Sorrento shall indemnify and hold INRANGE, its Integrators and end-user
customers harmless against any and all claims, suits, proceedings, expenses,
recoveries, and damages, including court costs and reasonable attorneys fees and
expenses, arising out of the infringement of any United States patent or other
intellectual property right by the Products furnished to INRANGE under this
Agreement, and Sorrento shall, at its own expense, defend all claims, suits or
actions of infringement against INRANGE, its Integrators and end-user customers
provided that Sorrento is notified of such claims, suits and actions, and is
given all necessary documentary evidence in INRANGE's possession, and is given
sole control for the defense, negotiation, settlement and/or compromise thereof.
INRANGE shall render reasonable assistance to Sorrento. In the event of such an
infringement charge, Sorrento shall: (i) obtain a license for INRANGE, its
Integrators and end-user customers to continue the use of or sell, as
applicable, the infringing Product purchased from Sorrento; or (ii) replace or
modify the infringing Product so as to be equal but non-infringing; or (iii)
refund the purchase price paid to Sorrento by INRANGE for such infringing
Product, less depreciation of the Product based on a Product life of five (5)
years, and remove said Product. INRANGE agrees that the foregoing
indemnification shall not apply to any claim of infringement which may be
brought against Sorrento because of compliance with INRANGE's particular design
requirements, specifications, or instructions. Sorrento shall have no liability
for any costs, loss or damages resulting from: (i) the use of any Product
furnished hereunder in combination with any other product not supplied by
Sorrento; (ii) willful wrongful acts of INRANGE; or (iii) any settlement or
compromise incurred or made by INRANGE without Sorrento's prior written consent.
Sorrento shall not have any liability to INRANGE under any provision of this
clause if the infringement is based upon the use of any software or equipment
not furnished by Sorrento, or if the Product is used in a manner for which the
Product was not designed. The above states the entire liability of Sorrento with
respect to infringement by the Product, or by its operation, and is in lieu of
all other infringement warranties, express, implied or statutory, in regard
thereto.
(c) INRANGE agrees to defend and indemnify and hold Sorrento harmless
against any and all claims, suits, proceedings, expenses, recoveries, and
damages, including court costs and reasonable attorneys fees and expenses, in
connection with any of the Products sold by INRANGE arising out of, based on, or
caused by statements, whether written or oral, made by INRANGE in its
advertising, publicity, promotion or sale of any of the Products which expresses
a warranty beyond that set forth in Section 10 hereof (but only to the extent of
such excess), or in the delivery, installation and service of the Products,
except to the extent that such arise from a wrongful act or omission by
Sorrento. INRANGE shall maintain comprehensive general and product liability
insurance in such amount as ordinary good business practice for its type of
business would require. Sorrento will promptly notify INRANGE of any such claim
or demand that comes to its attention.
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(d) Any on-site labor in connection with Products purchased by INRANGE
shall be performed by INRANGE or its Integrators. Sorrento will exchange
Products or parts thereof covered by warranty with replacement Products or
parts, as the case may be. Sorrento agrees to undertake any necessary
non-warranty repairs at prices established by Sorrento. Sorrento agrees to
provide on an annual basis one training session for INRANGE service technicians
and applications technicians at Sorrento's manufacturing location in San Diego,
California, at no charge to INRANGE; however, INRANGE shall pay the costs of
travel and lodging for such trainees. This training will include instruction
necessary to enable INRANGE personnel to perform diagnosis and repair of
equipment and performance problems as required to maintain the Products in
proper and intended working/operating condition and capable of providing the
specified Product functionality and capabilities.
11. Installation and Maintenance. All Products sold by INRANGE that require
installation shall be installed by INRANGE, or its Integrators, as requested by
the end-user customer at no charge to Sorrento. INRANGE or its Integrators shall
instruct the end-user customer in proper maintenance of the Products at the time
of sale and installation, in keeping with Sorrento's standards and instructions.
12. Remove or Recall. During the term of this Agreement, and any renewal
period thereafter, upon notice from Sorrento, INRANGE, on a reasonable efforts
basis, shall comply with Sorrento's reasonable and practicable instructions
regarding removal or recall of any of the Products from INRANGE's warehouse,
Integrators or end-user customers. INRANGE shall keep records sufficient to
permit it to effect such a removal or recall and upon Sorrento's reasonable
request, shall provide such records to Sorrento. All of INRANGE's reasonable
costs and expenses relating to the removal or recall of Products pursuant to
this Section 12 shall be borne by Sorrento, except to the extent such costs and
expenses result from INRANGE's failure to comply with this Agreement or
Sorrento's reasonable and practicable instructions.
13. Other Returns. No Products will be accepted for return and no credit
given for returned Products without the prior written approval of Sorrento, from
its San Diego, California headquarters office, in each instance. No obsolete or
discontinued Products shall be accepted for credit or return. All Products
accepted for return shall be subject to a handling and service charge by
Sorrento to INRANGE. Notwithstanding the foregoing, Sorrento agrees that new
Products shipped to INRANGE, while covered by the warranty set forth in Section
10(a), which are defective and which cannot reasonably be repaired may be
returned to Sorrento for full credit of the purchase price or replacement by
Sorrento, at Sorrento's sole option and in its sole discretion.
14. Proprietary Information. Each Party acknowledges that in connection
with the performance of this Agreement such Party may learn information of the
other party that is the property of such other Party and confidential to it
("Proprietary Information"). Such Proprietary Information includes, but is not
limited to engineering and technical data, production data, test data and test
results, customer information, and development plans. Accordingly, each Party
covenants to the other Party that:
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(a) Such Party will maintain all Proprietary Information of the other Party
in confidence with the same level of protection and care that Party normally
affords its own proprietary information, but in no event less than reasonable
care;
(b) Such Party will not use or disclose, and will not permit its employees,
agents, representatives or independent contractors to use or disclose, any of
the Proprietary Information of the other Party without the express written
consent of the other Party;
(c) Such Party will ensure that all persons, including its employees,
agents, representatives or independent contractors, who have had access to
Proprietary Information are bound by an agreement to keep confidential and not
to use any such Proprietary Information; and
(d) Such Party will not use any Proprietary Information of the other Party
in any way except as allowed herein.
Notwithstanding the provisions of this Section 14, neither Party's use or
disclosure of the Proprietary Information of the other Party will be deemed to
breach Section 14 if and to the extent the Proprietary Information in question:
(i) is now or hereafter becomes available to the public without a breach of
Section 14 hereof;
(ii) is received by the receiving Party from a third party without
restrictions on its use or further disclosure; or
(iii) is required to be disclosed pursuant to applicable law, regulation or
court order, but only to the extent and for the purpose of such required
disclosure after providing the other Party with advance written notice of such
disclosure and an opportunity to seek to limit or restrict such disclosure or to
obtain appropriate protective/secrecy orders.
The recipient of Proprietary Information will promptly return to the
disclosing Party, or certify to the disclosing Party that the recipient has
destroyed all documents, electronic media and other items received from the
disclosing Party which contain Proprietary Information, including any copies
thereof made by the recipient, its agents or employees, at such times as the
recipient no longer needs the Proprietary Information for purposes of exercising
its rights or performing its duties under this Agreement.
The terms of this Section 14 shall supersede all prior letters of intent,
agreements, covenants, arrangements, communications, representations, or
warranties, whether oral or written, by any officer, employee, or representative
of either Party relating to the confidentiality of information exchanged by the
Parties in connection with the performance of this Agreement.
15. Modifications/Improvements. INRANGE shall make no modifications or
improvements to the Products.
16. Competitive Products. Neither INRANGE, nor any of its affiliates under
direct INRANGE management control shall, except with the prior written consent
of Sorrento, directly or indirectly (as distributor, representative, agent,
dealer, manufacturer or otherwise) sell any product which competes with any of
the Products in the Field during the term of this Agreement. The aforementioned
obligation of INRANGE shall not apply to sales in any New International
Market(s) permitted pursuant to Section 4(d) above. The restrictions described
in this Section 16 notwithstanding, INRANGE shall have the right to fulfill
contractual obligations, quotations or bids to its customers which specifically
require INRANGE to supply products which compete with the Products, provided
however that such contractual obligations, quotations or bids are outstanding at
the effective date of this Agreement (the "Pre-Existing Product Obligations").
In order that the Parties may better resolve any future dispute between them
arising in connection with the Pre-Existing Product Obligations, INRANGE agrees
to make reasonable commercial efforts to identify each and every one of its
Pre-Existing Product Obligations by project and customer name only (the
"Pre-Existing Product Obligations List") and to direct its legal counsel to hold
such Pre-Existing Product Obligations List in trust and to furnish applicable
information from the Pre-Existing Product Obligations List to Sorrento upon the
Parties' joint request.
17. Joint Product Initiatives. During the term of this Agreement, the
Parties may, by written agreement, jointly initiate specific projects to improve
and upgrade the Products or to develop new Products (the "Joint Product
Initiatives"). The respective financial and other contributions by each Party to
such Joint Product Initiatives will be negotiated on a project-by-project basis,
it being understood that Sorrento will own the rights to any Products or Product
improvements, upgrades or developments resulting therefrom, subject to INRANGE's
rights to distribute such Products, Product improvements, upgrades or
developments pursuant to this Agreement.
18. Term of Agreement. This Agreement shall remain in effect for an initial
term of five (5) years from its effective date and shall be renewed
automatically for succeeding terms of two (2) years each, subject to either
Party's right not to renew this Agreement by giving notice to the other Party at
least six (6) months prior to the expiration of the then-current term, including
the initial term.
19. Termination by Either Party. Either Party may terminate this Agreement
immediately on notice to the other in case such other Party:
(a) Becomes insolvent or unable to meet its debts as they mature; or
(b) Makes an assignment for the benefit of creditors or goes into
liquidation, bankruptcy or receivership; or
(c) Becomes party to any procedure for the settlement of its debts or to
dissolution proceedings; or (d) Breaches any provision of this Agreement and
fails to remedy such default within 30 days of receipt of notice thereof; or
(e) Fails to agree in good faith upon target purchase amount(s) for any
renewal term or the Sorrento Sales Price(s) for any renewal term.
20. Effects of Termination. Immediately upon termination of this Agreement,
INRANGE and its Integrators shall undertake the following obligations, which
shall survive and be binding after the Agreement terminates:
(a) Cease and refrain from any future sale or promotion of the Products;
(b) Refrain from selling or offering for sale articles or products which
create a reasonable likelihood of confusion with the Products on account of
similarity as to any registered or unregistered trademark owned by, licensed to
or used by Sorrento, other than any registered or unregistered trademark of
INRANGE or its affiliates;
(c) Cease from the use of the trademarks of Sorrento and the use of the
Proprietary Information of Sorrento;
(d) Return to Sorrento or its nominee any and all of its Proprietary
Information, in written or other tangible form, and any promotional, labeling
and sales training material then in its possession;
(e) Render information regarding the identity of Products sold, the
identity of purchasers, dates of sales, ship-to addresses, serial numbers of
Products, and warranty and repair history, as well as customer information as
described in Section 12 above, to Sorrento;
(f) Refrain from making reference to any of the terms and provisions of
this Agreement or expressing in any way that its Strategic Alliance relationship
with Sorrento continues;
(g) Reasonably assist Sorrento in the smooth and orderly transfer of
operations to Sorrento; Sorrento will likewise reasonably assist INRANGE; and
(h) Following termination or expiration of this Agreement, Sorrento,
INRANGE, and INRANGE's Integrators shall be entitled to work directly with
end-user customers secured by each of them during the term of this Agreement.
Upon termination or expiration of this Agreement, Sorrento shall maintain
spare parts supply and engineering support for the Products, and make such spare
parts and support available to INRANGE and its Integrators to ensure ongoing
support for end-user customers, for a period of one (1) year from the date of
the last sale of the Products under this Agreement; provided, however, that such
period may be extended by INRANGE up to an additional four (4) years (the
"Extended Support Period"). The price(s) to be charged for such spare parts and
engineering support in excess of one (1) year will either be incorporated into
the Sorrento Sales Price(s), as applicable, or charged separately at Sorrento's
relevant prices then in effect.
21. Repurchase of Inventory. In the event this Agreement is terminated for
any reason, Sorrento shall have the right to purchase from INRANGE, and, if
Sorrento so elects, INRANGE shall sell to Sorrento, at the purchase price paid
by INRANGE (including freight, insurance and taxes, if any, paid by INRANGE, net
of any tax benefit which has accrued or may accrue to INRANGE by virtue of such
payments) all or any part of INRANGE's inventory of unsold Products. Obsolete
and/or damaged Products, as determined in the reasonable business judgment of
Sorrento within thirty (30) days of termination will not be accepted or
reimbursed. All such Products resold to Sorrento shall be returned to Sorrento
at INRANGE's expense as close to the termination date as practicable. If
Sorrento shall not elect to purchase all of INRANGE's inventory of unsold
Products, INRANGE shall be entitled to sell out any or all such inventory, at
INRANGE's sole discretion.
22. Termination with Respect to Particular Products. In the event INRANGE
breaches any provision of this Agreement with respect to a particular Product or
Products and fails to remedy such default within thirty (30) days after receipt
of written notice from Sorrento thereof, Sorrento may, at its sole option, and
in addition to any other rights it may have hereunder, terminate immediately
upon notice to INRANGE either this Agreement in its entirety or only with
respect to such Product or Products. In the event that Sorrento gives notice to
INRANGE that it is terminating the supply of a Product or Products to INRANGE
for reasons other than a breach of this Agreement, including the "end of life"
of such Product or Products, and INRANGE gives notice to Sorrento that it
desires to continue purchasing that Product or Products, and Sorrento declines
to continue supplying such Product or Products to INRANGE, then INRANGE may, in
its sole discretion, terminate this Agreement in its entirety or continue this
Agreement in force with respect to the remaining Products and procure and offer
for sale in the Field third-party replacement products for the discontinued
Product(s) only. Sorrento shall give INRANGE six (6) months notice of any
Product discontinuation and afford INRANGE an opportunity to complete an "end of
life" purchase of such Product.
23. Indemnity. Each Party represents, covenants and warrants that it will
do nothing which will create any liability on the part of the other Party by
reason of the sale of the Products, other than as set forth in this Agreement,
and each Party shall indemnify and hold harmless the other Party from any
liability by reason of its breach of this Agreement.
24. Independent Contractor. INRANGE is an independent contractor and shall
have no authority to obligate Sorrento in any respect or hold itself out as
having any such authority. All personnel of INRANGE shall be solely employees of
INRANGE and neither they nor any Integrators shall represent themselves as
employees of Sorrento.
25. Expenses and Credit. All expenses incurred by INRANGE for promotion,
sales and distribution, as well as INRANGE's administrative and other overhead
expenses, shall be borne solely by INRANGE, except to the extent explicitly made
a part of the Sorrento Sales Price payable to Sorrento. INRANGE assumes all
credit and other payment risks involved in its sales of Products under this
Agreement.
26. Waiver. The failure of either Party to insist upon or enforce strict
conformance by the other Party of any provision of this Agreement or to exercise
any right under this Agreement shall not be construed as a waiver or
relinquishment of such Party's right unless such waiver is made in writing.
27. OMITTED
28. Invalid Provisions. If any provision of this Agreement is finally held
by a court of competent jurisdiction to be illegal or unenforceable, the
legality, validity and enforceability of the remaining provisions of this
Agreement shall not be affected or impaired.
29. Survival. The provisions of Sections 8, 9, 10, 13, 14, 20, 21, 23, 26,
28, 29, 34, 35, 36, 37 and 39 of this Agreement shall survive the termination or
expiration of this Agreement. Outstanding purchase orders shall survive the
termination of this Agreement.
30. Force Majeure. Neither Party shall be responsible or deemed to be in
default for nonperformance or delays in performance of this Agreement due to
causes beyond its control and not occasioned by the fault or negligence of such
Party to be excused, including, but not limited to, civil war, insurrections,
unforeseeable strikes, riots, fires, floods, explosions, earthquakes, acts of
God or the public enemy, and any statute, order, regulation, proclamation,
ordinance, demand or requirement of any governmental agency imposed after the
effective date. Upon the occurrence of such event, the Party so affected, upon
giving prompt written notice to the other Party, shall be excused from such
performance to the extent of such prevention, restriction or interference
provided that the Party so affected shall take all reasonable steps to avoid or
remove such causes of nonperformance and shall continue performance hereunder
with dispatch whenever such causes are removed. In the event that a Party's
performance of its obligations is excused in accordance with this Section for a
period in excess of sixty (60) days in the aggregate, the other Party may
terminate its obligations under this Agreement upon written notice to the Party
whose performance of its obligations was excused.
31. Successors and Assigns. Neither Party may assign any rights hereunder
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld or delayed. Any assignment of rights shall not work as a
novation of obligations hereunder without written agreement. Any attempt to
assign any rights, duties or obligations hereunder without the other Party's
written consent will be void. Notwithstanding the above, either Party may assign
this Agreement to a surviving entity in connection with any merger, sale of
assets, acquisition or consolidation of not less than a majority ownership in
the merged, acquired or consolidated company by the surviving entity.
32. Attorneys' Fees. If either Party commences a proceeding to enforce any
provision of this Agreement, the prevailing Party shall be entitled to recover
reasonable attorneys' fees and expenses of litigation, incurred in connection
therewith.
33. Headings; Construction. The section and paragraph headings of this
Agreement are intended as a convenience only, and shall not affect the
interpretation of its provisions. The Parties hereto acknowledge that this
Agreement is a negotiated document. In the event that this Agreement requires
interpretation, such interpretation shall not use any rule of construction that
a document is to be construed more strictly against the Party who prepared the
document.
34. Conflicting Terms. Both Parties agree that the terms and conditions of
this Agreement, together with any amendments pursuant to Section 37, shall
prevail, notwithstanding the contrary or additional terms in any purchase order,
sales acknowledgment, confirmation or any other order-related document issued by
either Party effecting the purchase and/or sale of Products. No pre-printed
terms set forth in any purchase order used by either Party shall modify or
supplement the terms of this Agreement. Any order-specific terms will be in
writing and agreed to by the Parties.
35. Binding Effect; Assignment. This Agreement shall be binding on and
inure to the benefit of the successors and permitted assigns of the Parties.
36. Notices. Notices hereunder shall be in writing an given by certified
mail, postage prepaid, return receipt requested, or by reputable overnight
delivery service to the address first above set forth (or to such different
address as either Party may hereafter give to the other in accordance with this
section for such purpose). The date of mailing, dispatch or sending shall be
deemed the date of the notice.
37. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the Parties relating to the subject matter hereof. There are
no terms or representations other than those set forth herein. No amendments or
waiver of this Agreement shall be valid unless in writing and signed by the
Party against whom such amendment or waiver is asserted.
38. OMITTED
39. Governing Law. The substantive law of the United States and the State
of California shall govern this Agreement and its interpretation. Paragraph or
Section headings shall not be considered in the interpretation hereof.
40. Counterpart Signatures. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original and all of which shall
constitute a single instrument.
IN WITNESS WHEREOF, the duly authorized representatives of the Parties
hereto have executed and delivered this Agreement as of the date first above
written.
INRANGE TECHNOLOGIES SORRENTO NETWORKS, INC.
CORPORATON
By:/s/ Gregory Grodhauf By: /s/ Xin Cheng
Name: Gregory Grodhauf Name: Xin Cheng
Title: President Title: Chief Executive Officer
<PAGE>
EXHIBIT A - PRODUCTS
<PAGE>
EXHIBIT B - TARGET PURCHASE AMOUNTS
Contract Year Target Purchase Amounts
1 $15,000,000
2 $20,000,000
3 $25,000,000
4 $30,000,000
5 $35,000,000
<PAGE>
EXHIBIT 99
Sorrento Networks Announces Strategic Alliance with INRANGE Technologies
for SAN Market
San Diego, CA, June 6, 2000: Sorrento Networks, Inc., a leading provider of
optical networking solutions, today announced a strategic alliance with INRANGE
Technologies, Inc., a subsidiary of SPX Corp. (NYSE: SPX), a leading provider of
enterprise infrastructure solutions, to deliver optical networking solutions to
the rapidly growing worldwide market for storage area network (SAN)
applications.
Under this agreement Sorrento has appointed INRANGE as its exclusive
worldwide distributor of Sorrento's optical networking products for the storage
networks of enterprise customers. INRANGE will offer Sorrento's wave division
multiplexing, or WEM, and dense wave division multiplexing, or DWDM products,
including GigaMuxTM, as part of its IN-VSN family of storage networking
products. INRANGE will provide Sorrento revenue guarantees in return for
exclusive worldwide rights to offer these products in the enterprise storage
networking market. These products facilitate the creation of virtual storage
networks by reducing the costs of sending information over long distances.
Additional terms of the agreement between Sorrento and INRANGE Technologies
have been reported on Form 8-K of Osicom Technologies, Inc., filed today with
the U.S. Securities and Exchange Commission and available at
About Sorrento Networks
Sorrento Networks has been a provider of all optical networking solutions
that are used in both interoffice and access networks since 1997. Sorrento
Networks, Inc. products are successfully deployed at numerous customer sites in
North America, Europe and Asia.
Sorrento Networks' products are specifically designed to meet the
requirements of the Metropolitan market, supporting a wide variety of protocols,
network traffic speeds and changing traffic patterns. Sorrento Network's
products' small footprint allows service providers to offer a wide variety of
services from the same platform including aggregation, transport, switching and
management.
The Company's ultra scalable carrier class products are manufactured to
meet all key industry certifications. These products offer customers an optical
end-to-end solution that improves bandwidth utilization and reduces network
costs and complexity. The products provide a migration path from ring, point to
point topologies to the mesh architecture of next generation networks.
Sorrento Networks is headquartered in San Diego, California and is a
subsidiary of Osicom Technologies, Inc. (Nasdaq NM: FIBR). Recent news releases
and additional information about Sorrento Networks can be found at
Sorrento Networks Press Contact
John Unverferth
Market Communications
(800) 854-2831
Except for historical information contained herein, the matters discussed
in this release are forward-looking statements that involve risks and
uncertainties. The forward-looking statements in this release are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The occurrence of actual events may differ materially due to a variety of
factors, including without limitation the following: (1) failure of INRANGE
and/or the Company to successfully integrate the Company's products into
INRANGE's overall SAN market solution; (2) failure of INRANGE and/or the Company
to achieve acceptance of the Company's products among INRANGE's installed
customer base, or to achieve such acceptance in amounts equal to or greater than
the amounts which INRANGE and the Company have set as non-binding targets under
the agreement between them; (3) unanticipated technical problems relating to the
Company's products; (4) the Company's ability, or lack thereof, to make, market
and sell optical networking products that meet with market approval and
acceptance; (5) the greater financial, technical and other resources of the
Company's many, larger competitors in the marketplace for optical networking
products; (6) changed market conditions, new business opportunities or other
factors that might affect the Company's decisions as to the best interests of
its shareholders; and (7) other risks detailed from time to time in the
Company's parent corporation's reports filed with the U.S. Securities and
Exchange Commission.