EXHIBIT 10.13
TECHNOLOGY LICENSE AND DEVELOPMENT AGREEMENT
This TECHNOLOGY LICENSE AND DEVELOPMENT AGREEMENT is made and
effective as of the later of the two signature dates set forth below ("EFFECTIVE
DATE") by and between CREATIVE TECHNOLOGY LTD., a Singapore corporation
("CREATIVE"), having a principal place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
#▇▇-▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and NETSPEAK, CORPORATION, a Florida
corporation ("LICENSOR"), having a principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
This Agreement consists of the attached Basic Terms and Conditions,
including the Exhibits attached thereto (collectively, the "AGREEMENT").
For purposes of this Agreement, all reference to "Creative" shall
include a reference to Creative Affiliate, and all reference to "Licensor" shall
include a reference to Licensor Affiliate.
Each of the undersigned represents and warrants that he or she is duly
authorized to sign this Agreement on behalf of the party he or she represents.
Each party has read, understands and agrees to the terms and conditions of this
Agreement.
CREATIVE: LICENSOR:
CREATIVE TECHNOLOGY LTD. NETSPEAK CORPORATION
By:/S/ SIM ▇▇▇▇ HOO By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Sim ▇▇▇▇ Hoo ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: Sim ▇▇▇▇ Hoo Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO Title: President
Address: Address:
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇-▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Attention:___________________
Phone: 408/▇▇▇-▇▇▇▇ Phone: 407/▇▇▇-▇▇▇▇
Fax: 408/▇▇▇-▇▇▇▇ Fax: 407/▇▇▇-▇▇▇▇
Date: Date:
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CONFIDENTIAL
BASIC TERMS AND CONDITIONS
TO
TECHNOLOGY LICENSE AND DEVELOPMENT AGREEMENT
All capitalized terms contained herein shall have the meaning set forth
in Exhibit A, attached hereto, unless otherwise defined in the main text of this
Agreement.
1. GRANT OF RIGHTS.
1.1(a) EXCLUSIVE ACTIVATED PRODUCT LICENSE GRANT. For the duration of
the Activated Product Term in this Agreement, and subject to the terms and
conditions of this Agreement, Licensor hereby grants to Creative a
non-transferable, exclusive, world-wide right and license (with a right to
sublicense pursuant to Section 8.0 hereto) to:
(i) use, reproduce, have reproduced, manufacture, have
manufactured, modify or have modified solely pursuant to Section 14.0,
market, have marketed, sell, have sold, import, export, distribute
and/or have distributed the Activated Product; and
(ii) create Derivative Works (as mutually agreed), and
Localized Products from the Activated Products.
1.1(b) EXCLUSIVE RESTRICTED PRODUCT LICENSE GRANT. For the duration of
the Restricted Product Term in this Agreement, and subject to the terms and
conditions of this Agreement, Licensor hereby grants to Creative a
non-transferable, exclusive world-wide right and license (with the right to
sublicense pursuant to Section 8.0 hereto) to:
(i) use, reproduce, have reproduced, manufacture, have
manufactured, modify or have modified solely pursuant to Section 14.0,
market, have marketed, sell, have sold, import, export, distribute
and/or have distributed the Restricted Product; and
(ii) create Derivative Works (as mutually agreed), and
Localized Products from the Restricted Product.
1.2 NON-EXCLUSIVE DOCUMENTATION LICENSE GRANT. For the duration of the
Term of this Agreement, and subject to the terms and conditions of this
Agreement, Licensor hereby grants to Creative a nontransferable, non-exclusive,
world-wide right and license under Licensor's Intellectual Property Rights in
and to the Documentation, to use, reproduce, have reproduced, manufacture, have
manufactured, modify, market, have marketed, translate, have translated or
otherwise localized, sell, have sold, import, export, distribute and/or have
distributed the Documentation, including the right to include any Documentation
on any CD-ROM or diskette, in electronic form, in place of hard copy of the
same.
1.3 BUNDLE RIGHTS AND OBLIGATIONS. Licensor hereby grants to Creative
the right to combine the Licensed Products with other software programs on a
single CD-ROM or series of diskettes. Creative may sell or otherwise distribute
the Restricted Product only as a Combined
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Product (as defined in Exhibit A attached hereto). For purposes of this
Agreement, "bundled" means that the Restricted Product may be sold or otherwise
distributed only: (i) as packaged with or accompanying a Creative Bundled
Product; or (ii) directly to End Users who send to Creative a coupon,
registration card or other proof of the purchase of a Creative Bundled Product.
In no event may Creative sell or distribute the Restricted Product as a
stand-alone product or price the Restricted Product as a product apart from the
Combined Product.
1.4 EXCLUSIVITY; RESTRICTIVE COVENANT. Licensor specifically agrees
that during the Activated Product Term of this Agreement with respect to the
Activated WebPhone and the Activated Product, and during the Restricted Product
Term with respect to the Restricted Product, Licensor shall not license or sell
for retail sale, or otherwise distribute an Activated WebPhone, Activated
Product, or Restricted Product to any third party; PROVIDED, HOWEVER, that
Licensor may license, sell, or otherwise distribute an Activated WebPhone to:
(a) telephone companies; (b) Internet service providers; (c) customers via
Licensor's home page of its web site on the Internet; and (d) comply with any
contracts in effect on the Effective Date of this Agreement and as specifically
set forth in Exhibit F. In any event, Licensor may not sell or distribute its
Business WebPhone System (as defined in Exhibit B attached hereto): (x) through
any retail distribution channel, or (y) to any PC system OEM manufacturers.
Licensor agrees that any Business WebPhone Systems sold during the Term of this
Agreement shall include a WebPhone(TM) graphical user interface and shall not
permit the Business WebPhone Systems to be used, sold, or distributed by any
third party under any graphical user interface that is customized for or
modified by or otherwise designed by or for such third party; PROVIDED, HOWEVER,
that Licensor may permit one (1) third party identified during the Term of this
Agreement to use, sell, or distribute the Business WebPhone System with a
graphical user interface that is customized for or modified by or otherwise
designed by or for such third party ("Customized Graphical User Interface"),
solely if such Customized Graphical User Interface: (i) does not include the
WebPhone trademark or any confusingly similar trademark; and (ii) is
substantially different from the Creative Graphical User Interface. The license
rights reserved by Licensor in this Section 1.4 include the right to grant
sublicenses to licensees ("FIRST LEVEL SUBLICENSE"); PROVIDED, HOWEVER, that any
such First Level Sublicense that grants to a licensee a right to sublicense
("SECOND LEVEL SUBLICENSE") shall restrict such Second Level Sublicense solely
to end-users.
1.5 DEMONSTRATION PRODUCTS. Subject to the restrictions and covenants
set forth in this Agreement, Licensor may bundle for distribution Demonstration
Products with other Licensor's products or third party products; provided,
however, that Licensor in no event may bundle Demonstration Products with third
party products that are competitive with any of Creative's products; and
PROVIDED, FURTHER, that Licensor notify Creative of any and all bundling
arrangements prior to concluding such arrangements.
1.6 OPTIONAL LICENSES. The parties hereto agree that, from time to time
and at Creative's initiation, they will use commercially reasonable efforts to
negotiate in good faith licenses from Licensor to Creative for other
client-based products and other technology developed by Licensor.
2. CONTINUATION OF LICENSE RIGHTS. Creative may request that Licensor engage in
timely and good faith negotiations regarding a continuation of the licenses
granted under this Agreement on commercially reasonable terms, which request
shall be made by Creative at least sixty (60) days prior to expiration of each
of the Restrictive Product Term and the Activated Product Term. In the event
that Creative no longer desires an exclusive license or that the parties are
unable, despite good faith negotiations, to agree on terms of a continuation of
the exclusive licenses granted hereunder, Creative may request that the parties
engage in timely and good faith
*Confidential portions omitted and filed separately with the Commission.
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negotiations regarding a continuation of the licenses granted under this
Agreement on a non-exclusive, commercially reasonable basis. In the event that
the parties have engaged in good faith negotiations regarding the extension of
the licenses granted under this Agreement on either an exclusive or nonexclusive
basis, Licensor shall not license either Licensed Product to any third party on
terms more favorable than those offered to Creative during the term of the
negotiations.
3. TRADEMARK LICENSE. During the Term of this Agreement, and subject to the
terms and conditions of this Agreement, Licensor hereby grants to Creative a
personal, nontransferable, non-exclusive, worldwide right and license (with the
right to sublicense pursuant to Section 8.0) to: (a) use and reproduce the
Licensor Marks, either alone or co-branded with any trademark or trade name
owned by Creative or to which Creative has a license to use, solely in
connection with the Licensed Products or Combined Products, and used on any
labeling, packaging, demonstrations, promotions and advertising relating
thereto; and (b) use, reproduce, and display or perform the Licensor Marks
(publicly or otherwise) in connection with demonstrations, promotions and
advertising related to the Licensed Products or Combined Products. Licensor
further grants to Creative the right to file a trademark application in any
country, either alone or together with Licensor, as shall be mutually agreed to
by both parties, or to otherwise obtain exclusive ownership rights in and to the
marks "CREATIVE WEBPHONE" and "CREATIVE WEBPHONE LITE", or to other
substantially similar marks, for use by Creative solely on Licensed Products or
Combined Products. Creative acknowledges that its use of the Licensor Marks is
limited to the use licensed in this Agreement and that Creative has not
acquired, and will not acquire, any ownership rights in the Licensor Marks.
Except as otherwise provided in this Section 3.0, Creative further agrees that
it has no power or right and shall not, during the Term of this Agreement, or,
if the Agreement is terminated pursuant to Section 15.2 or 15.3, until the
expiration of the Term as though the Agreement were still in effect: (i) attack
the title or any rights of Licensor in Licensor Marks; (ii) claim any rights,
title or interest in or to the Licensor Marks adverse to Licensor, without
Licensor's express written permission; (iii) register or apply for registration
of the Licensor Marks or any name or ▇▇▇▇ that incorporates the Licensor Marks
anywhere in the world, without Licensor's express written consent; (iv)
designate any name or ▇▇▇▇ that incorporates Licensor Marks as a common law
trademark or the like anywhere in the world without Licensor's express written
consent. Furthermore, Creative agrees to use Licensor Marks only in accordance
with the guidelines for using Licensor Marks as set forth in Exhibit D.
4. MARKETING. Licensor and Creative shall use commercially reasonable efforts to
cooperatively develop a joint marketing plan to market and otherwise promote the
Licensed Products, including to End Users upgrading from Restricted Product to
Activated Product.
5. JOINT DEVELOPMENT; CUSTOM ENGINEERING.
5.1 JOINT DEVELOPMENT. Licensor agrees to provide non-recurring
engineering ("NRE") services for Joint Development Projects to be jointly
determined by the parties hereto, and ownership in any products or other
technology developed under such Joint Development Projects shall be mutually
agreed by the parties prior to beginning such Joint Development
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Projects, which determination shall include amounts paid or otherwise
contributed by each party thereto.
5.2 CUSTOM ENGINEERING SERVICES. Licensor agrees to provide NRE
services as determined by Creative and subject to Licensor's review, which
review shall result, within ten (10) business days of Licensor's receipt of a
written request from Creative for such Custom Engineering Services, in a written
indication by Licensor, that Licensor either (i) accepts the request for
services; or (ii) rejects the request due to lack of resources, which may
include time and/or manpower. Ownership in any product or technology derived
from such Custom Engineering Services shall be in and to Creative.
5.3 PAYMENT FOR NRE. Creative will pay a total of * dollars (US$ * )
for such Joint Development Projects and Custom Engineering Services (the
"PROJECTS"), solely in the event and to the extent that the parties are able to
reach agreement on the terms and conditions of such Projects, and Licensor
agrees to provide * of NRE services for such Projects under terms and conditions
to be negotiated in good faith by the parties during the Term of this Agreement.
Each party shall designate a representative to be the liaison for all such
Projects.
6. OWNERSHIP AND INTELLECTUAL PROPERTY.
6.1 OWNERSHIP BY LICENSOR. Creative acknowledges that, except with
respect to specific ownership rights set forth in Sections 5.1 and 5.2 of this
Agreement and as between Creative and Licensor, Licensor is the owner of all
right, title and interest in and to the Intellectual Property Rights in the
Licensed Products. Any Intellectual Property Rights conceived, developed or
reduced to practice by Creative during the Term of this Agreement shall be owned
solely by Creative.
6.2 OWNERSHIP BY CREATIVE. Licensor hereby acknowledges and agrees
that, except with respect to specific ownership rights set forth in this
Agreement and as between Licensor and Creative, Creative owns all right, title
and interest in and to Intellectual Property Rights in the Creative Graphical
User Interface.
6.3 CUSTOMER DATABASE. The parties hereto agree that Licensor and
Creative shall jointly own any database consisting of End User data and
information, and that each party shall have full rights and access thereto.
6.4 INTELLECTUAL PROPERTY. Licensor agrees to use its reasonable best
efforts to secure and maintain all Licensor's Intellectual Property Rights in
and to the Licensed Products and to Licensor Marks to the fullest extent
available under the applicable laws in each of the Critical Territories listed
in Exhibit G attached hereto. In the event that Licensor elects not to protect
or maintain any such Intellectual Property Rights in any of the Critical
Territories, Licensor shall so notify Creative so that Creative may pursue, at
its sole expense, such Intellectual Property
*Confidential portions omitted and filed separately with the Commission.
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Rights ("CREATIVE IP RIGHTS"). In the event that Creative elects to pursue
protecting or maintaining such Creative IP Rights pursuant to this Section 6.4,
then: (i) Licensor agrees to fully cooperate with Creative in securing such
Creative IP Rights; and (ii) Licensor shall own all right, title, and interest
in and to any such Creative IP Rights secured and maintained by Creative
pursuant to this Section 6.4; provided, however, that Creative shall have a
royalty-free, non-exclusive right and license under such Creative IP Rights to
the extent necessary to exercise its rights set forth in this Agreement during
the Term of the Agreement; provided, however, that if, upon termination of this
Agreement Licensor fails to pay to Creative a reimbursement payment for all
reasonable costs incurred by Creative in obtaining such Creative IP Rights
hereunder, then Creative's rights and licenses in and to the Creative IP Rights
as set forth in this Section 6.4 shall survive the termination of this
Agreement.
7. DELIVERABLES. Licensor will deliver the Deliverables by the date(s) specified
in EXHIBIT C. The Deliverables shall be without material errors or other defects
and shall conform to the specifications set forth in Licensor's documentation
for the Licensed Products. The physical media of the Golden Masters on which the
Licensed Products are delivered shall be free from material defects in
workmanship and materials.
8. RIGHTS OF AFFILIATES. Creative may sublicense its rights and licenses under
this Agreement only to its Affiliates; provided, however, that such Affiliates
are subject to the same terms and conditions as Creative under this Agreement.
9. QUALITY OF PRODUCTS. Creative shall make commercially reasonable efforts to
manufacture, or have manufactured, the Licensed Products to standards that are
at least as high as those for similar products of Creative.
10. PAYMENTS AND AUDIT RIGHTS.
10.1 UNLIMITED USE FEE. Creative shall pay to Licensor an unlimited use
fee of $ * (US$ * ) upon acceptance by Creative of the Deliverables for the
Restricted Product pursuant to Section 7 hereto, which acceptance shall not be
unreasonably withheld by Creative. Except as set forth in Sections 10.2 and 10.3
hereto, there shall be no further per-copy or other payments due or payable by
Creative to Licensor for Creative's exercise of its rights and licenses granted
hereunder.
10.2 PER COPY AND ADVANCE FEES. Creative shall pay to Licensor a
per-copy fee of * (US$ * ) per copy of each Activated Product sold or
distributed by Creative via non-Internet based distribution channels. In
addition, Creative shall pay an advance fee amount of * (US$ * ) upon acceptance
by Creative of the Deliverables for the Licensed Product pursuant to Section 7
hereto. Such advance fee shall be fully creditable against the per-copy fees set
forth in this Section 10.2.
*Confidential portions omitted and filed separately with the Commission.
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10.3 REVENUE SHARING. Creative shall pay to Licensor * percent ( * %)
of the Licensed Product Revenue from any Activated Product sold by Creative to
End Users directly from Creative via Creative's web site on the Internet.
Creative shall remit amounts due to Licensor within forty-five (45) days after
the end of each quarter. Concurrently with each payment, Creative shall submit
to Licensor a report setting forth the basis for calculation of the amount paid,
including: (i) the number of End Users who purchased a Licensed Product during
the reporting period; (ii) the total amount of Licensed Product Revenue received
by Creative from such End Users; and (iii) Licensor's portion of such Licensed
Product Revenue. Creative shall maintain accurate records of all End Users who
purchase Licensed Product from Creative.
10.4 PAYMENT TERMS. The payments set forth in Sections 10.2, 10.3, and
10.6 hereto shall be payable on a quarterly basis based on total number of units
of the Licensed Products shipped to distributors and End Users during the
preceding quarter, or total number of units upgraded from Restricted Product to
Activated Product during the preceding quarter, as applicable. Payments shall be
due and payable within forty-five (45) days after the last day of the preceding
quarter. During the last six (6) months of the Term and during the six-month
Sell-Off Period (as defined below in Section 15.4), Creative shall have the
right to hold back ten percent (10%) of any per-copy fees owed to Licensor to
cover all returns of the Licensed Products. Within forty-five (45) days after
the end of the Sell-Off Period, Creative will provide Licensor with a final
accounting and will pay all fees then owed to Licensor.
10.5 REPORTING BY CREATIVE. On a quarterly basis, Creative shall submit
to Licensor a report stating the number of copies of Restricted Product
distributed by Creative pursuant to this Agreement.
10.6 PAYMENTS BY LICENSOR TO CREATIVE. Licensor shall pay Creative *
percent ( * %) of the Revenue received by Licensor during the Term of this
Agreement and for a period of * ( * ) years beyond the termination or expiration
of this Agreement. Licensor shall remit amounts due to Creative within
forty-five (45) days after the end of each quarter. Concurrently with each
payment, Licensor shall submit to Creative a report setting forth the basis for
calculation of the amount paid, including: (i) the number of End Users who
upgraded from Restricted Product to Activated Product; (ii) the total amount of
Revenue received by Licensor from such End Users; and (iii) Creative's portion
of such Revenue. Licensor shall track through a vendor ID and maintain accurate
records of all End Users who upgrade from the Restricted Product to the fully
featured Activated Product During the last six (6) months of the Term and during
the six-month Sell-Off Period (as defined below in Section 15.4), Licensor shall
have the right to hold back ten percent (10%) of any fees owed to Creative to
cover all refunded upgrades from Restricted Product to Activated Product. Within
forty-five (45) days after the end of the Sell-Off Period, Licensor will provide
Creative with a final accounting and win pay all fees then owed to Creative.
*Confidential portions omitted and filed separately with the Commission.
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10.7 AUDIT RIGHTS. Creative and Licensor shall have the right, once in
any twelve-month (12) period, to have a mutually acceptable independent auditor
inspect the books and records of Creative and Licensor relating to the Licensed
Products to verify compliance by Creative and by Licensor with the payment
obligations of the respective parties as set forth in this Section 10. The
auditor may not be paid on a contingency or other basis related to the outcome
of the audit, and shall execute a confidentiality agreement with both parties in
a form mutually acceptable to the parties that prohibits the auditor from
divulging information obtained in connection with the audit. Any such audit
shall be conducted during regular business hours, in such a manner as not to
interfere with the normal business activities of either party, and upon
providing reasonable notice to the audited party. Such audit will be at the
expense of the auditing party; provided, however, that if such audit reveals
that the audited party has underpaid the auditing party by more than five
percent (5%), the audited party shall pay the reasonable cost of such audit.
Prompt adjustment shall be made to correct for any underpayments or overpayments
disclosed by such audit
10.8 TAXES. If income taxes are required to be withheld by a foreign
government on payments required hereunder, on such withholding taxes as will
enable Licensor to claim and receive a U.S. foreign tax credit, Creative may
deduct such taxes from the amount owed Licensor and pay such withholding taxes
to the appropriate tax authority; provided, however, Creative secures and
delivers to Licensor an official receipt for any such taxes withheld or other
documents reasonably necessary to enable Licensor to claim a U.S. foreign tax
credit.
11. DELIVERY OBLIGATIONS; ACCEPTANCE OF DELIVERABLES; DISTRIBUTION OBLIGATIONS.
11.1 ACCEPTANCE OF UPGRADES AND UPDATES. Creative and Licensor shall
jointly participate in testing and verification of each Upgrade and Update in
its beta version of the Licensed Product, and shall jointly agree on the
commercial release version of each such Upgrade and Update. Within seven (7)
days of Creative's receipt of any commercial release version Upgrade and Update
(collectively, the "DELIVERED PRODUCT(S)"), Creative shall notify Licensor, in
writing, of its acceptance or rejection of any Delivered Products. If Creative
rejects any Delivered Products, Creative shall provide reasons for its rejection
and shall, at the request of Licensor, return the rejected Delivered Product to
Licensor. Licensor shall make commercially reasonable efforts to promptly
correct and replace such rejected Delivered Product. If, however, Licensor fails
to deliver an acceptable replacement Delivered Product within sixty (60) days of
the original delivery date, Creative shall, at its option, have the right to
terminate this Agreement and Licensor shall pay to Creative a penalty payment
for each instance of failure under this Section 11.1, in the amount of
$25,000.00.
11.2 CREATIVE'S DISTRIBUTION OBLIGATIONS. Creative shall distribute a
minimum of * ( * ) units of Activated Product, via any distribution channel, per
year during the Term of the Agreement, for total of * ( * ) units over the Term
of the Agreement; provided, however, that the Agreement is not terminated
pursuant to Section 15.2 or 15.3 hereto.
*Confidential portions omitted and filed separately with the Commission.
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12. NEW RELEASES; SUPPORT.
12.1 NEW RELEASES. Licensor shall deliver to Creative, promptly upon
the availability thereof, Masters for any Updates and Upgrades of the Licensed
Products during the Term of this Agreement, and such Updates and Upgrades shall
be deemed part of the Licensed Products. In addition, Licensor agrees to upgrade
the Restricted Product to maintain the relatively same difference in
functionality between the Restricted Product and the Activated Product. Licensor
shall make commercially reasonable efforts to notify Creative at least ninety
(90) days prior to the date of introduction of any such Updates and Upgrades.
12.2 CUSTOMER SUPPORT. Licensor shall be responsible for customer
support of the Licensed Products and shall take steps reasonably identified by
Creative as necessary so that End Users will perceive customer support as being
uniquely tailored to Licensed Products. Creative shall be responsible for
customer support of the Creative Bundled Products. Each party shall provide to
customers of the Combined Products the same support that it provides to
customers of its stand-alone products. Such support shall include, at a minimum,
reasonable telephone support during the party's normal business hours. All
Updates shall to the extent possible be provided to Creative by Licensor as
patches and in downloadable form so that they may be posted by Creative and the
Licensor on their BBSs. Licensor shall maintain the availability of its server
on a continual basis as well as a back-up system.
12.3 CUSTOMER WARRANTY SUPPORT. Creative shall be responsible to End
Users for all warranty obligations relating to any defects in the manufacture of
the Licensed Products, provided that such defective Licensed Products were
manufactured by or for Creative. If a Licensed Product qualifies for warranty
service under the provisions of the applicable end user agreement due to a
defect in Creative's manufacture of such product, Creative will provide the end
user with a replacement Licensed Product. Creative shall not be liable for
payment of any per-copy running payments hereunder for such replacement copies.
12.4 LICENSOR SUPPORT. During the Term of the Agreement, Licensor shall
provide Creative with: (i) all available solutions and corrections for reported
problems which are replicated and diagnosed by Creative as a defect in the
Licensed Products; and (ii) such changes and corrections as are necessary to
keep the Licensed Products substantially in conformance with applicable
Documentation and specifications. In addition, Licensor shall provide to
Creative technical support of at least telephone support for problem resolution
from 8:00am to 5:00pm (Pacific Standard Time) weekdays, excluding published
holidays. Upon such notice to Licensor of a problem with the Licensed Products,
Licensor shall use its best efforts to correct or circumvent the problem. Any
corrections to the Licensed Products will be made to the most current generally
available release; PROVIDED, HOWEVER, that Licensor will use its best efforts to
support the previously released version of such Licensed Product for twelve (12)
months after the introduction of a new generally available release.
13. PRODUCT NOTICES. Creative shall reproduce, and shall not remove, any
copyright, trademark or other proprietary rights notices included in the
Licensed Products. Creative shall not make any representations or warranties
concerning the Licensed Products, except as set forth
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in End User Documentation and other materials provided by Licensor or as
otherwise approved in writing by Licensor.
14. LOCALIZED PRODUCT. In the event that Creative decides, in its sole
discretion, to create Localized Product (as defined in EXHIBIT A attached
hereto), then Creative shall so notify Licensor. Within ten (10) business days
of receipt by Licensor of such notice, Licensor shall provide to Creative a copy
of selected Source Code modules of the identified Licensed Products which, in
Licensor's sole discretion, are necessary for Creative to develop the Localized
Product. All other code modules of the identified Licensed Product, as well as
any other code or tools identified by Creative as being reasonably necessary to
create such Localized Product, shall be provided to Creative in object code form
only. In the event that Licensor provides to Creative a copy of the selected
Source Code modules pursuant to this Section 14.0, Creative shall treat such
Source Code modules as Proprietary Information, subject to the provisions of
Section 19.0 hereto, and shall be granted a non-exclusive, non-transferable
right and license to use, execute, display and prepare Derivative Works of,
internally within Creative, such Source Code modules solely for the purposes set
forth in this Section 14.0. All builds and future releases and versions of the
Product shall be developed and delivered by Licensor.
15. TERM AND TERMINATIONS; TERM SUSPENSION.
15.1 TERM. This Agreement shall commence as of the Effective Date and
continue until the expiration of the Term, as defined in Exhibit A attached
hereto.
15.2 TERMINATION WITH NOTICE. A party may terminate this Agreement for
a material breach of any condition, warranty or obligation of this Agreement by
the other party if the breach remains uncured thirty (30) days after receipt of
written notice by the breaching party.
15.3 AUTOMATIC TERMINATION. This Agreement shall terminate
automatically and without notice upon: (i) the institution by or against
Licensor, except by Creative (provided, however, that Creative may act in
concert with other shareholders of Licensor without affecting any of Creative's
rights hereunder), of insolvency, receivership or bankruptcy proceedings or
entering of a final judgment or decree against Licensor in any other proceedings
for the settlement of Licensor's debts, which judgment or decree has a material
adverse effect on Licensor's ability to perform its obligations under this
Agreement; (ii) Licensor's making a general assignment for the benefit of its
creditors; (iii) Licensor's dissolution; or (iv) Licensor's cessation of
business for a period of ninety (90) days or more. This Agreement also shall
terminate automatically and without notice upon: (a) the institution by or
against Creative, except by Licensor, of insolvency, receivership or bankruptcy
proceedings or entering of a final judgment or decree against Creative in any
other proceedings for the settlement of Creative's debts, which judgment or
decree has a material adverse effect on Creative's ability to perform its
obligations under this Agreement; (b) Creative's making a general assignment for
the benefit of its creditors; (c) Creative's dissolution; or (d) Creative's
cessation of business for a period of ninety (90) days or more.
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15.4 EFFECT OF TERMINATION. Upon termination of this Agreement (other
than under Section 15.3(a), (b), (c), or (d) hereto) or expiration of the
Restricted Product Term or the Activated Product Term; (i) except as otherwise
expressly stated herein, Creative's rights and license under this Agreement
shall terminate with respect to the Restricted Product or Activated Product, as
applicable (referred to as the "TERMINATED PRODUCT") and the Licensor Marks;
provided, however, that (unless this Agreement has been terminated by Licensor
pursuant to Section 15.2 hereto) Creative shall have the non-exclusive right to
distribute the copies of the Terminated Product that were reproduced and
manufactured before the expiration or termination for a period of six (6) months
after such expiration or termination (the "SELL-OFF PERIOD"); (ii) Creative
shall return to Licensor or destroy all Golden Masters of the Terminated
Product; (iii) Creative shall continue to have the right to receive payments
from Licensor in accordance with the terms and conditions of this Agreement,
including pursuant to Section 10.6 hereto; and (iv) each party shall (except as
necessary for the exercise of Creative's rights under clause (i) of this Section
15.4) return to the other party any Proprietary Information (as defined below)
of the other party that is in tangible (including machine-readable) form. Upon
termination of this Agreement (other than under Sections 15.3(i), (ii), (iii),
or (iv) hereto) or expiration of the Restricted Product Term or the Activated
Product Term, Licensor shall continue to have the right to receive payments from
Creative in accordance with the terms and conditions of this Agreement,
including pursuant to Sections 10.2 and 10.3 hereto. Upon the occurrence of any
of the events contained in Section 15.3(i), (ii), (iii), or (iv), any and all
licenses granted to Creative under this Agreement shall continue until the
expiration of the Term as though the Agreement were still in effect.
15.5 TERM SUSPENSION. In the event that any regulatory or government
agency imposes restrictions, including tariffs, that affect the ability of
either party hereto to exercise its rights or perform its obligations under this
Agreement, then the Term of this Agreement, with respect to the Licensed Product
affected by such restrictions, shall be suspended until such time as the
restriction is removed. In the event that any country imposes any tariffs,
sanctions, or other restriction on the sale or distribution of the Licensed
Products, then the parties agree to renegotiate the affected terms of this
Agreement, including any of the terms set forth in Section 10 hereto.
16. SOURCE CODE ESCROW. Upon receipt by Licensor of payment by Creative to
Licensor of the Limited Use fee (Section 10.1) and Advance fee (Section 10.2),
Licensor shall cause to be deposited with the escrow agent a complete working
copy of the Source Code for both Licensed Products, under the form of software
escrow agreement set forth in Exhibit E attached hereto. The following events
shall cause the Source Code in escrow to be released to Creative: (i) the
institution by or against Licensor, not by Creative, of insolvency, receivership
or bankruptcy proceedings or entering of a final judgment or decree against
Licensor in any other proceedings for the settlement of Licensor's debts, which
judgment or decree has a material adverse effect on Licensor's ability to
perform its obligations under this Agreement; (ii) Licensor's dissolution; (iii)
Licensor's cessation of business for a period of ninety (90) days or more; or
(iv) breach of Licensor's obligations to provide the Source Code modules
pursuant to Section 14.0 hereto. In the event that the Source Code is released
pursuant to this Section 16.0 (except pursuant to Section 16.0(iv)), Licensor
acknowledges and agrees that Creative shall have a worldwide,
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nonexclusive, perpetual license to use, reproduce, have reproduced, manufacture,
have manufactured, modify or have modified, and make derivative works from the
Source Code solely to the extent necessary, in Creative's sole discretion, to
support and provide customer maintenance for the Licensed Products. In the event
that the Source Code is released pursuant to Section 16.0(iv), Licensor
acknowledges and agrees that Creative shall, during the term of the Agreement,
have a worldwide, nonexclusive, license to use, reproduce, have reproduced,
manufacture, have manufactured, modify or have modified, and make derivative
works from the Source Code solely to the extent necessary, in Creative's sole
discretion, for Creative to exercise its rights under Section 14.0 hereto.
17. WARRANTIES.
17.1 BY CREATIVE. Creative represents and warrants that: (i) Creative
has the right to accept the rights and licenses contemplated by this Agreement,
without the need for any consents, approvals or immunities not yet obtained; and
(ii) Creative has full power to enter into this Agreement and to perform its
obligations hereunder.
17.2 BY LICENSOR. Licensor represents and warrants that: (i) the
Licensed Products operate and will operate substantially in accordance with the
specifications set forth in Licensor's documentation therefor; (ii) the Licensed
Products and Licensor Marks and the use thereof as contemplated by this
Agreement do not infringe or misappropriate any copyright, trade secret,
publicity, privacy, or other rights of any third party, and are not defamatory
or obscene; (iii) Licensor has the sole and exclusive right to grant the rights
and licenses contemplated by this Agreement, without the need for any consents,
approvals or immunities not yet obtained; (iv) Licensor has full power to enter
into this Agreement, to grant the rights and licenses granted hereunder, and to
perform its obligations hereunder, and (v) to the best of Licensor's knowledge
as of the Effective Date of the Agreement, the Licensed Products do not infringe
any patent or trademark rights of any third party.
17.3 LIMITATION OF WARRANTIES. THUS SECTION 17 SETS FORTH ALL OF THE
WARRANTIES OF A PARTY TO THE OTHER PARTY. EACH PARTY HEREBY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
17.4 LIMITATION OF LIABILITIES. EXCEPT FOR OBLIGATIONS UNDER SECTION
18, NEITHER PARTY SHALL HAVE ANY LIABILITY FOR LOSS OF PROFITS, LOSS OF REVENUES
OR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES, EVEN
IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
18. INDEMNIFICATION.
18.1 BY CREATIVE. Subject to the conditions set forth in Section 18.3
hereto, Creative shall indemnify, hold harmless and defend Licensor against any
claim, suit or proceeding and
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any damages or liability therefrom or settlement thereof (including reasonable
fees of attorneys and related costs) to the extent: (i) based on a claim that,
solely as a result of the processes or materials selected by Creative for
manufacturing and reproduction, a Licensed Product infringes the patent,
copyright, trademark, trade secret, publicity, privacy, defamation or other
rights of any third party; (ii) resulting from any material breach of this
Agreement by Creative; or (iii) based on a claim that Creative's manufacture,
use, sale, or distribution of a Combined Product infringes the patent,
copyright, trademark, trade secret, publicity, privacy, or other rights of any
third party, or is defamatory or obscene, to the extent that such infringement
is due solely to the combination of a Licensed Product with a Creative Bundled
Product and except to the extent that such infringement is due solely to the
Licensed Product.
18.2 BY LICENSOR. Subject to the conditions set forth in Section 18.3
hereto, Licensor shall indemnify, hold harmless and defend Creative against any
claim, suit or proceeding and any damages or liability therefrom or settlement
thereof (including reasonable fees of attorneys and related costs) to the
extent: (i) based on a claim that a Licensed Product or a Licensor ▇▇▇▇
infringes the patent, copyright, trademark, trade secret, publicity, privacy, or
other rights of any third party, or is defamatory or obscene, except as to which
Creative owes indemnity to Licensor pursuant to Section 18.1; (ii) based on a
representation or warranty concerning a Licensed Product set forth in End User
Documentation and other materials provided by Licensor or otherwise approved in
writing by Licensor, or (iii) resulting from any material breach of this
Agreement by Licensor, provided, however, that Licensor's total liability
hereunder with respect to all claims that Licensed Product infringes a third
party patent or that Licensor Marks infringe a third party trademark, shall be
limited to the total of (x) * dollars ($ * ); (y) the total amounts of revenue
received by Licensor from Creative pursuant to Section 10.3; and (z) the total
amounts of revenue received by Licensor pursuant to Section 10.6, except, * .
18.3 CONDITIONS OF INDEMNIFICATION. A party shall not be obligated to
indemnify, hold harmless and defend unless (and only to the extent) the other
party: (i) provides prompt notice of the commencement of the claim, suit or
proceeding for which indemnification is sought; (ii) provides cooperation to
such indemnifying party; and (iii) allows such indemnifying party to control the
defense and settlement, provided that neither party may settle a claim, suit or
proceeding without approval of the other party, which approval shall not be
unreasonably withheld.
18.4 INFRINGEMENT OPTIONS. If there is a material, bona fide claim of
infringement of any patent, copyright, trademark, trade secret, publicity,
privacy, or other rights of any third party, or of defamation or obscenity, the
indemnifying party shall have the right, at its option, to the extent
practicable, to mitigate its liability by: (i) replacing the infringing products
with noninfringing products that offer substantially the same functionality and
benefits as the infringing products, and paying for any manufacturing and
handling expenses associated with back inventory that is infringing and cannot
be sold or distributed or, (ii) in Licensor's case,
*Confidential portions omitted and filed separately with the Commission.
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terminating the licenses granted hereunder and Creative's payment obligations
under Sections 10.2 and 10.3 shall terminate immediately.
19. PROPRIETARY INFORMATION.
19.1 DEFINITION. As used in this Agreement, a party's means all
information that has been created, discovered, developed or otherwise became
known to that party, or any information in which property rights have been
assigned or sold to the party, that has commercial value in the business in
which the party is engaged and is treated as confidential. Proprietary
Information includes, without limitation, processes, formulas, ideas, concepts,
discoveries, developments, designs, inventions, techniques, marketing plans,
strategies, forecasts, new product projections, product pricing and costs, sales
reports, customer and supplier lists, all modifications, additions,
improvements, and adaptations of any of the foregoing, and all present and
future applications of any of the foregoing. A party's Proprietary Information
does not include any information that: (i) on the date of this Agreement, is
generally known to the public; (ii) become generally known to the public after
the date of this Agreement other than as a result of an act or omission of
either party or either party's directors, officers, employees, or agents; (iii)
was rightfully known by the other party prior to the date of this Agreement;
(iv) is or was disclosed by the party to third parties generally without
restriction on use or disclosure; or (v) was or is independently developed by
the other party without violation of the confidentiality provisions of this
Agreement or trade secret rights of the party. Each party agrees to use best
efforts to ▇▇▇▇ as confidential or proprietary any information that it delivers
to the other party (in any form) and which it considers to be Proprietary
Information and to advise the other party of the confidential nature of any
Proprietary Information that is provided verbally. Upon request by either party,
the other party shall advise whether or not it considers any particular
information or materials to be Proprietary Information.
19.2 OBLIGATION TO MAINTAIN CONFIDENTIALITY. Each party agrees to
maintain the confidentiality of the other party's Proprietary Information using
the same degree of care and security as the party uses to maintain the
confidentiality of its own Proprietary Information. Each party shall disclose
the other party's Proprietary Information only to persons who are: (i)
employees, agents, customers for the Licensed Products (including, but not
limited to OEMS); or (ii) other potential customers for the Licensed Products
(including, but not limited to OEMS) of the disclosing party who have a
reasonable need to know such Proprietary Information to further the purposes of
this Agreement; and (iii) legally bound by law or by a written agreement
protecting the Proprietary Information to the same extent as protected in this
Agreement. Each party acknowledges that the disclosure of the other party's
Proprietary Information may cause irreparable injury to the other party and,
therefore, either party may, in addition to any other available remedies, seek
injunctive relief against the breach or threatened breach of the terms of this
Section 19.2.
19.3 HANDLING PROPRIETARY INFORMATION AFTER TERMINATION OF AGREEMENT.
Each party's obligations with respect to the other party's Proprietary
Information shall survive for a period of five (5) years following the
termination of this Agreement. Upon termination of this Agreement for any man,
each party agrees that it will upon written request of the other party,
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use best efforts to return to the other party or to destroy (and certify such
destruction in writing to the other party) all Proprietary Information of the
other party.
20. MISCELLANEOUS.
20.1 PRESS RELEASES. The parties will cooperate to create appropriate
public announcements of the relationship set forth in this Agreement, including
any reference to a joint development performed hereunder, which reference shall
be at Creative's sole discretion. Neither party hereto shall, in any manner,
disclose, advertise, or publish the terms of, or any information concerning,
this Agreement without the prior written consent of the other party.
20.2 SURVIVAL. Sections 6.0, 10.6 (solely as stated therein), 10.7
(solely for a period of three (3) months beyond the Sell-Off Period), 10.8,
13.0, 15.4, 17.0, 18.0, 19.0, and 20.0 shall survive the termination or
expiration of this Agreement.
20.3 GOVERNING LAW; EQUITABLE RELIEF. This Agreement shall be governed
by and construed in accordance with the laws of State of California as they
apply to contracts entered into and wholly to be performed within the State of
California, and with the laws of the United States. The parties hereto consent
to the personal and exclusive jurisdiction and venue of the Northern District of
California federal and state courts, as applicable. Each party acknowledges that
a material breach of this Agreement by one party hereto may cause irreparable
injury to the other party and, therefore, either party may, in addition to any
other available remedies, seek injunctive relief against the breach or
threatened breach of the terms of this Agreement.
20.4 WAIVER OF JURY TRIAL. Each of Licensor and Creative do hereby
knowingly, voluntarily, intentionally and irrevocably waive any right any party
may have to a jury trial in every jurisdiction in any action, proceeding or
counterclaim brought by either of the parties hereto against the other party
hereto or their respective Affiliates, successors or assigns in respect of any
matter arising out of or in connection with this Agreement or any other document
executed and delivered by any party in connection therewith (including, without
limitation, any action to rescind or cancel this Agreement and any claims or
defenses asserting that this Agreement was fraudulently induced or otherwise
void or voidable.)
20.5 RELATIONSHIP OF PARTIES. The parties to this Agreement are
independent contractors. Neither party shall have the right to bind, represent
or act for any other party. The parties shall have no agency, partnership, joint
venture or fiduciary duties to each other. Nor shall either party have any
obligation or duty to the other party except as expressly and specifically set
forth herein, nor shall any such obligation or duty be implied by or inferred
from this Agreement or the conduct of the parties hereunder. Without limitation
of the generality of the foregoing, nothing in this Agreement will prevent
Creative from marketing and distributing any other work, whether similar or
dissimilar to the Licensed Product, and nothing herein will require Creative to
devote the same or similar efforts to distributing the Licensed Products as it
devotes to other works.
-15-
20.6 OTHER AGREEMENTS. Neither party shall agree to any contractual
provision or term in any agreement with any third party which contains a
provision or term that causes such party to be in breach of or violates this
Agreement.
20.7 MERGER. This Agreement constitutes the entire agreement between
the parties relating to the subject matter hereof and supersedes all prior or
simultaneous representations, discussions, negotiations and agreements, whether
written or oral. This Agreement may be amended only by a writing signed by both
parties.
20.8 ASSIGNMENT. This Agreement may not be assigned or delegated by
either party without the prior written approval of the other party, except that
either party may assign all its rights and delegate all its obligations as part
of a merger, reorganization or sale of all or substantially all its assets.
Subject to the foregoing, this Agreement is binding on the parties and their
successors and assigns.
20.9 WAIVER. The waiver by either party of a breach of any provision
contained herein shall be in writing and shall in no way be construed as a
waiver of any succeeding breach of such provision or a waiver of the provision
itself.
20.10 SEVERABILITY. If any provision of this Agreement is unenforceable
or invalid under any applicable law or is so held by applicable court decision,
such unenforceability or invalidity shall not render this Agreement
unenforceable or invalid as a whole, and, in such event, such provision shall be
changed and interpreted so as to best accomplish the objectives of such
provision within the limits of applicable law or applicable court decision.
20.11 FORCE MAJEURE. No party shall be liable for failure to perform,
in whole or in material part, its obligations under this Agreement if such
failure is caused by an event or condition not existing as of the date of this
Agreement and not reasonably within the control of the affected party,
including, without limitation, by fire, flood, typhoon, earthquake, explosion,
strike, labor trouble or other industrial disturbance, unavoidable accident, war
(declared or undeclared), act of terrorism, sabotage, embargo, blockade, act of
applicable governmental authorities, riot, insurrection, or any other cause
beyond the control of such party; provided, however, that such party promptly
notifies the other affected party of the occurrence of the event of force
majeure and takes all reasonable steps necessary to mitigate the effects of such
event and to resume performance of its obligations which were affected by such
event.
20.12 BANKRUPTCY. The parties hereto agree that the rights granted to
Creative hereunder, including those granted in Sections 1 and 3, are rights in
"intellectual property" within the scope of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Code.
20.13 NOTICES. All notices required hereunder shall be in writing and
shall be sent by U.S. mail (first class) or nationally-recognized courier
service (E.G., DHL, Federal Express), with all postage or delivery charges
prepaid, or may be sent via facsimile, subject to confirmation via U.S. mail or
nationally-recognized courier service, and shall be addressed to the parties at
their addresses set forth on the signature page of this Agreement or to such
other
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address(es) as may be furnished by written notice in the manner set forth
herein. Notices shall be deemed to have been served when delivered or if
delivery is not performed as a result of the addressee's fault, when tendered.
20.14 COMPLIANCE WITH U.S. EXPORT LAWS. The parties hereto acknowledge
that the laws and regulations of the United States restrict the export and
re-export of commodities and technical data of United States origin, including
the Licensed Products and related Documentation. Each of the parties hereto
agrees that it will not export or re-export the Licensed Products or related
Documentation in any form without the appropriate United States and foreign
government licenses.
20.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one and the same
instrument. Each party shall receive a duplicate original of the counterpart
copy or copies executed by it. For purposes hereof, a facsimile copy of this
Agreement, including the signature pages hereto, shall be deemed to be an
original. Notwithstanding the foregoing, the parties shall each deliver original
execution copies of this Agreement to one another as soon as practicable
following execution thereof.
[END OF TEXT - EXHIBITS FOLLOW]
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EXHIBIT A
DEFINITIONS
For purposes of this Agreement, the following words and phrases shall
have the following meanings:
"ACTIVATED PRODUCT" shall mean the client-based voice communication
software developed by Licensor and based upon or derived from the WebPhone
Technology and that has full functionality, as described in EXHIBIT B attached
hereto, and that integrates, incorporates, or otherwise includes the Creative
Graphical User Interface.
"ACTIVATED PRODUCT TERM" shall mean * from the earlier of: (i) * ; or
(ii) the date Creative first sells or distributes the Activated Product to a
third party.
"ACTIVATED WEBPHONE" shall mean a pre-paid client-based voice
communication software developed by licensor and based upon or derived from the
WebPhone Technology.
"AFFILIATE" shall mean an entity that controls, is controlled by or is
under common control with a relevant party hereto (with "control" meaning
ownership * of the voting stock of the entity or, in the case of a noncorporate
entity, an equivalent interest).
"BUSINESS WEBPHONE SYSTEM" shall mean the client-based voice
communication software developed by Licensor that includes specialized servers
and WebPhone client for receiving and transmitting multiple simultaneous
telephone calls, for providing Internet and computer network based business
communication solutions, and that incorporates the WebPhone Technology and
Licensor's proprietary WebPhone(TM) graphical user interface, and as further
described in EXHIBIT B attached hereto.
"COMBINED PRODUCT" shall mean a Creative Bundled Product distributed
with a Licensed Product.
"CREATIVE BUNDLED PRODUCT" shall mean any hardware or software product
of Creative or its Affiliates.
"CREATIVE GRAPHICAL USER INTERFACE" shall mean the Creative-specific
software developed by Licensor on behalf of and under the direction and control
of Creative that provides a graphical user interface between the End User and
the Licensed Product.
"CUSTOM ENGINEERING SERVICES" shall mean such services which are
provided by Licensor using Creative technology and which result in products or
technology that is derived from Creative technology.
*Confidential portions omitted and filed separately with the Commission.
"DEMONSTRATION PRODUCT" shall mean the client-based voice communication software
developed by Licensor and based upon or derived from the WebPhone Technology and
that has more limited, or restricted, functionality, than the Restricted
Product, as licensed to Creative under the license agreement as described in
EXHIBIT B attached hereto.
"DERIVATIVE WORKS" shall mean any and all "derivative works" and "compilations"
within the meaning of such terms as defined in the U.S. Copyright Act (17 U.S.C.
ss.101 et seq.)
"DOCUMENTATION" shall mean end-user instructions, manuals, diagrams, and other
written material, in printed or electronic form, describing the functions, use
and operation of the Licensed Products, prepared by or for Licensor and all
revisions, including localizations and translations, thereto.
"END USER" shall mean any end user of a Licensed Product
"GOLDEN MASTER" or "MASTER" shall mean the version of a Licensed Product that
meets all applicable functional and performance specifications for such Licensed
Product, that is in a form suitable for production mastering and commercial
distribution or transmission, and that includes a unique vendor identification
code.
"INTELLECTUAL PROPERTY RIGHTS" shall mean any trade secrets, patents,
copyrights, trademark, know-how, moral rights and similar rights of any type
under the laws of any governmental authority, domestic or foreign including all
applications and registrations relating to any of the foregoing.
"JOINT DEVELOPMENT PROJECTS" shall mean projects as mutually agreed to by
Creative and Licensor and which shall not include Creative technology.
"LICENSED PRODUCT(S)" shall mean, collectively, the Restricted Product and the
Activated Product.
"LICENSED PRODUCT REVENUE" shall mean all amounts received by Creative from End
Users of Licensed Products purchased directly from Creative via Creative's web
site on the Internet, less any discounts, and credits for returned copies or
copies distributed as replacements for defective copies, and fees paid to
banking establishments solely related to conducting credit card transactions.
"LICENSOR MARKS" shall mean the trademarks, whether or not registered, specified
on EXHIBIT D attached hereto.
"LOCALIZED PRODUCTS(S)" shall mean any customizations or modifications that do
not affect the architecture of the version of a Licensed Product, including
translations, as necessary or desirable, as solely determined by Creative, to
exercise the licenses granted to Creative hereunder with respect to such
Licensed Product in any foreign territory.
ii CONFIDENTIAL
"OBJECT CODE" shall mean the computer executable binary code derived from
compiled Source Code for execution on a computer hardware system.
"RESTRICTED PRODUCT" shall mean the client-based voice communication software
developed by Licensor and based upon or derived from the WebPhone Technology and
that has limited, or restricted, functionality, as described in EXHIBIT B
attached hereto, and that incorporates, integrates, or otherwise includes the
Creative Graphical User Interface.
"RESTRICTED PRODUCT TERM" shall mean the period beginning on the Effective Date
of this Agreement and continuing thereafter until fourteen (14) months after the
earlier of: (i) August 3, 1996; or (ii) the date Creative first sells or
distributes the Restricted Product to a third party.
"REVENUE" shall mean all amounts actually received by Licensor from End Users of
the Restricted Product purchased from Creative, who subscribe to or otherwise
purchase or upgrade to the Activated Product, less any discounts, and credits
for returned copies or copies distributed as replacements for defective copies,
and fees paid to banking establishments solely related to conducting credit card
transactions.
"SOURCE CODE" shall mean a presentation of a computer program, regardless of the
form in which it is stored, from which it is possible to discern the logic,
algorithms, internal structure, operating features and any other design
characteristics of such computer program, together with related source
materials.
"TERM" mean the Restricted Product Term or the Activated Product Term, as
applicable.
"UPDATES" shall mean new versions, including maintenance releases, and
localizations and translations thereof, of a Licensed Product that contain bug
fixes, error corrections and minor enhancements, but not containing major
enhancements or significant new functionality, as determined in Licensor's
reasonable discretion, and any related documentation.
"UPGRADES" shall mean new versions of a licensed Product that contain major
enhancements and significant new functionality, including localizations and
translations thereof, as determined in Licensor's reasonable discretion, and any
related documentation.
"WEBPHONE TECHNOLOGY" shall mean that technology developed by Licensor prior to
the Effective Date of this Agreement, that is client-based voice communication
software developed by Licensor having the functionality, as described in EXHIBIT
B attached hereto, and that forms the core technology from which the Restricted
Product and the Activated Product are derived.
iii CONFIDENTIAL
EXHIBIT B
SPECIFICATIONS
NOTE: There may be additional features in both Restricted and Activated
Products.
I. WEBPHONE TECHNOLOGY
The WebPhone client software component of NetSpeak's WebPhone family of
products.
II. RESTRICTED PRODUCT
*
III. MINIMUM ACTIVATED PRODUCT
*
IV. BUSINESS WEBPHONE SYSTEMS
*
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT C
DELIVERABLES
------------
Licensor shall deliver four (4) copies each of the following Deliverables:
1. Golden Master of the Licensed Product (the initial deliverable shall be the
most current version as of the Effective Date, but in any event no less recent
that version 2.0 of such Licensed Product);
2. any related Documentation and other End User materials, each in both
electronic and film-negative, camera-ready form, including, without limitation:
(a) a single page, hard copy instruction card that will cost no more than
US$0.10/copy to reproduce and that will give End Users instructions for the
installation of each Licensed Product;
(b) form of End User License Agreements;
(c) samples of the product packaging,
(d) a brief product description;
(e) any trademarks, copyright and other legal proprietary notices; and
(f) artwork (including 35mm screen shots and box shots) for each Licensed
Product; and
3. Such other materials for the distribution of each Licensed Product and the
exercise of Creative's rights hereunder as may be reasonably requested from time
to time by Creative.
vi CONFIDENTIAL
EXHIBIT D
LICENSOR MARKS
--------------
WEBPHONE
Guidelines for Using the Licensor Marks
1.0 General Overview
1.1 These guidelines ("Guidelines") set forth the proper treatment and use of
the Licensor Marks on the Licensed Products and Combined Products, hereafter for
the purposes of this Exhibit referred to as "Licensed Products," and in
advertising. Compliance with these Guidelines is the sole responsibility of
Creative. In the event of a conflict between the provisions of this Exhibit D
and the Technology License and Development Agreement, the Agreement shall
control.
2.0 Use of Licensor Marks
2.1 The Licensor Marks may only be used on the Licensed Products, its
packaging, collateral documentation and in advertising for the Licensed
Products. The Licensor Marks may never be used on or in connection with any
other products or services, and, particularly not on novelty items or T-shirts,
without express written permission of the Licensor.
2.2 The Licensor Marks may not be used as part of or in any emblem or insignia
2.3 The Licensor Marks must not be used in a manner which may cause confusion
as to the source or origin of products or services being offered. As such, the
Licensor Marks may not be:
2.3.1 displayed in a striking and solitary manner by Creative;
2.3.2 made more prominent than the remainder of the text in which the
Licensor Marks are used by Creative;
2.3.3 as prominent or more prominent than the trademark or company name
of Creative;
2.3.4 used as part of the name or other identifier of a business,
product, or service not connected with the Licensed Products.
2.4 At the first or a prominent occurrence of the Licensor Marks in
advertising, it should be symbolically indicated that the Licensor Marks are
trademarks. In the United States, this usually done by using the symbol(TM) or
(R) with same footnote. Note that in some countries, a translated version of the
U.S. trademark attribution is not only used,
vii CONFIDENTIAL
but may be required. You should check with your legal department to insure that
local laws and customs are adhered to and followed.
2.5 Licensor will provide to Creative camera-ready artwork of the Licensor
Marks. Creative may not alter this artwork in any way whatsoever.
2.6 Creative may only reproduce the Licensor Marks in accordance with the
instructions included on the camera-ready artwork which will be provided by
Licensor to Creative. The Licensor Marks artwork may not be recreated in any
way. Creative may re-size the Licensor Marks using photographic proportional
processes.
2.7 Creative agrees not to use any other trademark, service ▇▇▇▇ or tradename
in combination with the Licensor Marks without prior written approval of
Licensor. A minimum border must be placed around the Licensor Marks equal to one
half of the Licensor Marks' largest dimension.
2.8 Licensor may conduct spot checks of the Licensed Products and advertising
and will periodically (but no more than twice a year) send out requests for
samples to monitor compliance with the Agreement and these Guidelines.
2.9 Creative must correct any deficiencies in their use of the Licensor Marks
on the Licensed Products or in advertising, and cease and desist from further
publication or distribution of the offending materials upon reasonable notice
from Licensor.
2.10 Advertising Claims - The accuracy and appropriateness of all claims used
in Creative's advertising or promotional materials which includes the Licensor
Marks is the sole responsibility of Creative, even if Licensor is aware of the
advertisement or promotional materials.
viii CONFIDENTIAL
EXHIBIT E
ESCROW AGREEMENT
----------------
Account Number_________________
This Escrow Agreement ("ESCROW AGREEMENT") is effective as of_________________
1996, among Data Securities International, Inc. ("DSI"), NetSpeak,
Corp.("DEPOSITOR"), and Creative Technology, Ltd. ("PREFERRED BENEFICIARY"),
which may collectively be referred to in this Escrow Agreement as "THE PARTIES".
A. Depositor and Preferred Beneficiary have entered or will enter into a
Technology License and Development Agreement (referred to in this Escrow
Agreement as the "LICENSE AGREEMENT") regarding certain proprietary technology
of Depositor, including Source Code (as defined in the License Agreement) and
related Documentation (as defined in the License Agreement) of Depositor
(collectively, the "PROPRIETARY TECHNOLOGY").
B. Depositor desires to avoid access to its Proprietary Technology except under
certain limited circumstances.
C. The availability of the Depositor's Proprietary Technology is critical to
Preferred Beneficiary in the conduct of its business and, therefore, Preferred
Beneficiary needs access to the Proprietary Technology under certain limited
circumstances.
D. Depositor and Preferred Beneficiary desire to establish an escrow with DSI to
provide for the retention, administration and controlled access of the
Proprietary Technology materials of Depositor.
E. The parties desire this Escrow Agreement to be supplementary to the License
Agreement pursuant to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ [Bankruptcy] Code, Section 365(n).
ARTICLE 1 - DEPOSITS
1.1 OBLIGATION TO MAKE DEPOSIT Upon receipt by Licensor of payment by Creative
to Licensor of the Unlimited Use fee (Section 10.1 of the License Agreement) and
Advance fee (Section 10.2 of the License Agreement), Depositor shall deliver to
DSI the Proprietary Information and other materials ("DEPOSIT MATERIALS")
required to be deposited by the License Agreement or, if the License Agreement
does not identify the materials to be deposited with DSI, then such materials
will be identified on an ATTACHMENT A. If ATTACHMENT A is applicable, it is to
be prepared and signed by Depositor and Preferred Beneficiary. DSI shall have no
obligation with respect to the preparation, signing or delivery of ATTACHMENT A.
ix CONFIDENTIAL
1.2 IDENTIFICATION OF TANGIBLE MEDIA Prior to the delivery of the Deposit
Materials to DSI, Depositor shall conspicuously label for identification each
document, magnetic tape, disk, or other tangible media upon which the Deposit
Materials are written or stored. Additionally, Depositor shall complete
ATTACHMENT B to this Escrow Agreement by listing each such tangible media by the
item label description, the type of media and the quantity. ATTACHMENT B must be
signed by Depositor and delivered to DSI with the Deposit Materials. Unless and
until Depositor makes the initial deposit with DSI, DSI shall have no obligation
with respect to this Escrow Agreement, except the obligation to notify the
parties regarding the status of the deposit account as required in Section 2.2
below.
1.3 DEPOSIT INSPECTION When DSI receives the Deposit Materials and ATTACHMENT
B, DSI will conduct a deposit inspection by visually matching the labeling of
the tangible media containing the Deposit Materials to the item descriptions and
quantity listed on ATTACHMENT B. In addition to the deposit inspection,
Preferred Beneficiary may elect to cause a verification of the Deposit Materials
in accordance with Section 1.6 below.
1.4 ACCEPTANCE OF DEPOSIT At completion of the deposit inspection, if DSI
determines that the labeling of the tangible media matches the item descriptions
and quantity on ATTACHMENT B, DSI will date and sign ATTACHMENT B and mail a
copy thereof to Depositor and Preferred Beneficiary. If DSI determines that the
labeling does not match the item descriptions or quantity on Exhibit B, DSI
will: (a) note the discrepancies in writing on ATTACHMENT B; (b) date and sign
EXHIBIT B with the exceptions noted; and (c) provide a copy of ATTACHMENT B to
Depositor and Preferred Beneficiary. DSI's acceptance of the deposit occurs
upon the signing of ATTACHMENT B by DSI. Delivery of the signed ATTACHMENT B to
Preferred Beneficiary is Preferred Beneficiary's notice that the Deposit
Materials have been received and accepted by DSI.
1.5 DEPOSITOR'S REPRESENTATIONS. Depositor represents as follows:
a. Depositor lawfully possesses all of the Deposit Materials deposited
with DSI;
b. With respect to all of the Deposit Materials, Depositor has the
right and authority to grant to DSI the rights as provided in this
Escrow Agreement;
c. The Deposit Materials are not subject to any lien or other
encumbrance; and
d. The Deposit Materials consist of the Proprietary Technology and
other materials identified either in the License Agreement or
ATTTACHMENT A, as the case may be.
1.6 VERIFICATION Preferred Beneficiary shall have the right, at Preferred
Beneficiary's expense, to cause a verification of any Deposit Materials. A
verficiation determines, in different levels of detail, the accuracy,
completeness, sufficiency and quality of the
x CONFIDENTAL
Deposit Materials. If a verification is elected after the Deposit Materials have
been delivered to DSI, then only DSI, or at DSI's election an independent person
or company selected and supervised by DSI, may perform the verification;
PROVIDED, HOWEVER, that such independent person or company shall not be the
Preferred Beneficiary.
1.7 DEPOSIT UPDATES Unless otherwise provided by the License Agreement,
Depositor shall update the Deposit Materials within sixty (60) days of each
release of a new version of the product which is subject to the License
Agreement, but no more than once a quarter. Such updates will be added to the
existing deposit. All deposit updates shall be listed on a new EXHIBIT B and the
new EXHIBIT B shall be signed by Depositor. Each Exhibit B will be held and
maintained separately within the escrow account. An independent record will be
created which will document the activity for each EXHIBIT B. The processing of
all deposit upgrades shall be in accordance with Sections 1.2 through 1.6 above.
All references in this Escrow Agreement to the Deposit Materials shall include
initial Deposit Materials and any updates.
1.8 REMOVAL OF DEPOSIT MATERIALS The Deposit Materials may be removed and/or
exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Escrow Agreement.
ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING
2.1 CONFIDENTIALITY DSI shall maintain the Deposit Materials in a secure,
environmentally safe, locked receptacle which is accessible only to authorized
employees of DSI. DSI shall have the obligation to reasonably protect the
confidentiality of the Deposit Materials. Except as provided in this Escrow
Agreement, DSI shall not disclose, transfer, make available, or use the Deposit
Materials. DSI shall not disclose the content of this Escrow Agreement to any
third party. If DSI receives a subpoena or other order of a court or other
judicial tribunal to the disclosure or release of the Deposit Materials, DSI
will immediately notify the parties to this Escrow Agreement. It shall be the
responsibility of the Depositor and/or Preferred Beneficiary to challenge any
such order; provided, however, that DSI does not wave its rights to present its
position with respect to any such order. DSI will not be required to disobey any
court or other judicial tribunal order. (See Section 7.5 below for notices of
requested orders.)
2.2 STATUS REPORTS DSI will issue to Depositor and Preferred Beneficiary a
report profiling the account history at least semi-annually. DSI shall provide
copies of the account history pertaining to this Escrow Agreement upon the
request of any party to this Escrow Agreement.
2.3 AUDIT RIGHTS During the term of this Escrow Agreement, Depositor and
Preferred Beneficiary shall each have the right to inspect the written records
of DSI pertaining to this Escrow Agreement. Any inspection shall be held during
normal business hours and following reasonable prior notice.
xi CONFIDENTIAL
ARTICLE 3 - GRANT OF RIGHTS TO DSI
3.1 TITLE TO MEDIA Depositor hereby transfers to DSI the title to the media upon
which the Proprietary Technology and materials are written or stored. However,
this transfer does not include the ownership of the Proprietary Technology and
materials contained on the media such as any copyright, trade secret, patent or
other intellectual property rights.
3.2 RIGHT TO MAKE COPIES DSI shall have the right to make copies of the Deposit
Materials as reasonably necessary to perform this Escrow Agreement. DSI shall
copy all copyright, nondisclosure, and other proprietary notices and titles
contained on the Deposit Materials onto any copies made by DSI. With all Deposit
Material submitted to DSI, Depositor shall provide any and all instructions as
may be necessary to duplicate the Deposit Materials including but not limited to
the hardware and/or software needed.
ARTICLE 4 - RELEASE OF DEPOSIT
4.1 RELEASE CONDITIONS As used in this Escrow Agreement, "RELEASE CONDITIONS"
shall mean the conditions set forth in Section 16.0 of the License Agreement.
4.2 FILING FOR RELEASE. If Preferred Beneficiary believes in good faith that a
Release Condition has occurred, Preferred Beneficiary may provide to DSI
written notice of the occurrence of the Release Condition and a request for the
release of the Deposit Materials. DSI shall immediately deliver a copy of such
notice to Depositor. No earlier than five (5) days and no later than 5:00 p.m.
Pacific Time on the date which is ten (10) days after DSI's receipt of such
notice, provided that DSI has not received a copy of a court order restraining
release of the Deposit Materials, DSI shall deliver the Deposit Materials to
Preferred Beneficiary, even if Depositor disputes the fact that Preferred
Beneficiary is entitled to the Deposit Materials. If it is subsequently
determined a Release Condition has not occurred, Preferred Beneficiary shall
immediately return all copies of Deposit Materials in its possession or control
to DSI and shall be liable for any expenses incurred by Depositor in
demonstrating that no Release Condition had occurred.
4.3 USE LICENSE FOLLOWING RELEASE Preferred Beneficiary's rights to the Deposit
Materials following release of such materials by DSI are set forth in Section
16.0 of the License Agreement.
4.4 RETURN OF DEPOSIT MATERIALS Upon Depositor's cure of any default or
cessation of any Release Condition under Section 4.1, Preferred Beneficiary
shall promptly return all copies of Deposit Materials in its possession or
control to DSL.
xii CONFIDENTIAL
ARTICLE 5 - TERM AND TERMINATION
5.1 TERM OF AGREEMENT This Escrow Agreement shall be in effect for as long as
the License Agreement is in effect, unless Depositor and Preferred Beneficiary
jointly instruct DSI in writing that the Escrow Agreement is terminated earlier.
Should the License Agreement expire or be terminated by Depositor based on
Preferred Beneficiary's uncured material breach, this Escrow Agreement shall
also be terminated and DSI shall destroy, return, or otherwise deliver the
Deposit Materials in accordance with Depositor's instructions. Should the
License Agreement be terminated by Preferred Beneficiary due to Depositor's
uncured material breach, this Escrow Agreement shall continue for the sole
purpose of assuring Preferred Beneficiary's right of access to the Deposit
Materials as set forth in Section 16 of the License Agreement.
5.2 NOTICE FROM DEPOSITOR In the event that the License Agreement expires or is
terminated by Depositor due to Preferred Beneficiary's material breach,
Depositor shall notify DSI in writing and shall provide a copy of such notice to
Preferred Beneficiary. Before returning the Deposit Materials to Depositor, DSI
shall verify with Preferred Beneficiary that the License Agreement has expired
or been terminated and that the Deposit Materials may be returned to Depositor.
5.3 TERMINATION FOR NONPAYMENT In the event of the nonpayment of fees owed to
DSI, DSI shall provide written notice of delinquency to all parties to this
Escrow Agreement. Any party to this Escrow Agreement shall have the right to
make the payment to DSI to cure the default. If the past due payment is not
received in full by DSI within one month of the date of such notice, then DSI
shall have the right to terminate this Escrow Agreement at any time thereafter
by sending written notice of termination to all parties. Upon termination for
nonpayment, DSI may, at its sole discretion, destroy the Deposit Materials or
return them to Depositor. DSI shall have no obligation to take any action under
this Escrow Agreement so long as any payment due to DSI remains unpaid.
5.4 SURVIVAL OF TERMS FOLLOWING TERMINATION Upon termination of this Escrow
Agreement, the following provision of this Escrow Agreement shall survive:
a. Depositor's representations (Section 1.5);
b. the obligations of confidentiality with respect to the Deposit Materials;
c. Preferred Beneficiaries' obligation to pay DSI any fees and expenses due;
d. the provisions of Article 7; and
e. any provisions in this Escrow Agreement which specifically state they
survive the termination or expiration of this Escrow Agreement.
xiii CONFIDENTIAL
ARTICLE 6--DSI'S FEES
6.1 FEE SCHEDULE DSI is entitled to be paid its standard fees and expenses
applicable to the services provided. DSI shall notify Preferred Beneficiary, as
the party responsible for paying DSI's fees hereunder, at least ninety (90) days
prior to any increase in fees. For any service not listed on DSI's standard fee
schedule, DSI will provide a quote prior to rendering the service, if requested.
6.2 PAYMENT TERMS DSI shall not be required to perform any service unless the
payment for such service and any outstanding balance owed to DSI are paid in
full. All other fees are due upon receipt of invoice. If invoiced fees are not
paid, DSI may terminate this Escrow Agreement in accordance with Section 5.3.
Late fees on past due amounts shall accrue at the rate of one and one-half
percent per month (18% per annum) from the date of the invoice.
ARTICLE 7--LIABILITY AND DISPUTES
7.1 RIGHT TO RELY ON INSTRUCTIONS DSI may act in reliance upon any request for
release of the Deposit Materials which: a) is presented on Preferred
Beneficiary's letterhead; b) specifically refers to the Release Condition under
which the Preferred Beneficiary believes it is entitled to the Deposit
Materials; c) identifies the date on which Preferred Beneficiary believes the
Release Condition has occurred; and d) is signed by a corporate officer of the
Preferred Beneficiary.
7.2 INDEMNIFICATION DSI shall be responsible to perform its obligations under
this Escrow Agreement and to act in a reasonable and prudent manner with regard
to this escrow arrangement. Provided DSI has acted in the manner stated in the
preceding sentence, Depositor and Preferred Beneficiary each agree to indemnify,
defend and hold harmless DSI from any and all claims, actions, damages,
arbitration fees and expenses, costs, attorney's fees and other liabilities
incurred by DSI relating in any way to this escrow arrangement.
7.3 DISPUTE RESOLUTION Any dispute relating to or arising from this Escrow
Agreement shall be resolved by arbitration under the Commercial Rules of the
American Arbitration Association. Unless otherwise agreed by Depositor and
Preferred Beneficiary, arbitration will take place in San Francisco, California,
U.S.A. Any court having jurisdiction over the matter may enter judgment on the
award of the arbitrator(s). Service of a petition to confirm the arbitration
award may be made by First Class mail or by commercial express mail, to the
attorney for the party or, if unrepresented, to the party at the last known
business address.
7. CONTROLLING LAW This Escrow Agreement is to be governed and construed in
accordance with the laws of the State of California, without regard to its
conflict of law provisions.
xiv CONFIDENTIAL
7.5 NOTICE OF REQUESTED ORDER If any party intends to obtain an order from the
arbitrator or any court of competent jurisdiction which may direct DSI to take,
or refrain from taking any action, that party shall:
a. Give DSI at least two business days prior notice of the hearing;
b. Include in any such order that, as a precondition to DSI's obligation,
DSI be paid in full for any past due fees and be paid for the reasonable
value of the services to be rendered pursuant to such order; and
c. Ensure that DSI not be required to deliver the original (as opposed to a
copy) of the Deposit Materials if DSI may need to retain the original in
its possession to fulfill any of its other duties.
ARTICLE 8--GENERAL PROVISIONS
8.1 ENTIRE AGREEMENT This Escrow Agreement, which includes the Exhibits
described herein, embodies the entire understanding among the parties with
respect to its subject matter and supersedes all previous communications,
representations or understandings, either oral or written. No amendment or
modification of this Escrow Agreement shall be valid or binding unless signed by
all the parties hereto, except that ATTACHMENT A need not be signed by DSI,
Exhibit B need not be signed by Preferred Beneficiary and Exhibit C need not be
signed.
8.2 NOTICES All notices, invoices, payments, deposits and other documents and
communications shall be given to the parties at the addresses specified in the
attached Exhibit C. It shall be the responsibility of the parties to notify each
other as provided in this Section in the event of a change of address. The
parties shall have the right to rely on the last known address of the other
parties. Unless otherwise provided in this Escrow Agreement, all documents and
communications may be delivered by First Class mail.
8.3 ATTORNEYS FEES In the event any suit, action, arbitration or other legal
proceeding arising from or based on this Escrow Agreement is instituted between
Depositor and Preferred Beneficiary, the prevailing party shall be entitled to
recover its reasonable attorneys' fees, costs and disbursements, including,
without limitation, any fees, costs and disbursements incurred on appeal or
incurred in enforcing or collecting any resulting judgment.
8.4 SEVERABILITY In the event any provision of this Escrow Agreement is found to
be invalid, voidable or unenforceable, the parties agree that unless it
materially affects the entire intent and purpose of this Escrow Agreement, such
invalidity, voidability or unenforceability shall affect neither the validity of
this Escrow Agreement nor the provisions herein, and the provisions in question
shall be deemed to be replaced with a valid and enforceable provision most
closely reflecting the intent and purpose of the original provision.
xv CONFIDENTIAL
8.5 SUCCESSORS This Escrow Agreement shall be binding upon and shall inure to
the benefit of the successors and assigns of the parties. However, DSI shall
have no obligation in performing this Escrow Agreement to recognize any
successor or assign of Depositor or Preferred Beneficiary unless DSI receives
clear, authoritative and conclusive written evidence of the change of parties.
____________________________ ___________________________
Depositor Preferred Beneficiary
By:_________________________ By:________________________
Name:_______________________ Name:______________________
Title:______________________ Title:_____________________
Date:_______________________ Date:______________________
Data Securities Inc.
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
xvi CONFIDENTIAL
ATTACHMENT A
Account Number_____________________
Depositor represents to Preferred Beneficiary that Deposit Materials delivered
to DSI shall consist of the following:
[OPEN ISSUE FOR BOTH PARTIES]
______________________________ ______________________________
Depositor Preferred Beneficiary
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
Date:_________________________ Date:_________________________
xvii CONFIDENTIAL
EXHIBIT F
COPIES OF EXISTING LICENSOR AGREEMENTS
*
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT G
CRITICAL TERRITORIES
*Confidential portions omitted and filed separately with the Commission.
FIRST AMENDMENT TO THE
JUNE 7, 1996 TECHNOLOGY LICENSE AND DEVELOPMENT AGREEMENT
BETWEEN
CREATIVE TECHNOLOGY LTD.
and NETSPEAK CORPORATION
This FIRST AMENDMENT (the "FIRST AMENDMENT") is made as of this 6th day
of December, 1996 (the "AMENDMENT EFFECTIVE DATE"), by and between: CREATIVE
TECHNOLOGY LTD. ("CREATIVE"), a Singapore corporation having a principal office
at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇-▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; and NETSPEAK
CORPORATION ("LICENSOR"), a Florida corporation having a principal office at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, CREATIVE desires Licensor to extend the license terms and
perform Custom Engineering Services, as set forth in Section 5.2 of the
TECHNOLOGY LICENSE AND DEVELOPMENT AGREEMENT (the "MASTER AGREEMENT"), effective
as of June 7, 1996, by and between CREATIVE and Licensor;
WHEREAS, the parties desire that this First Amendment amend that Master
Agreement, as stated below; and
WHEREAS, the parties intend to further their relationship;
NOW THEREFORE, for additional consideration recited herein and
acknowledge by the parties hereto, the parties agree to the following amendments
to the Master Agreement:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Master Agreement.
"ADJUSTED GROSS REVENUE" shall mean gross revenue received by CREATIVE
from sales of the applicable product or services, less discounts, returns, and
fees paid to banking establishments solely related to conducting credit card or
debit card transactions.
"AFFILIATES" shall be amended in the Master Agreement such that the
term "control" means, collectively: (i) ownership of more than * of the voting
stock of the entity, or in the case of a non-corporate or non-public entity, an
equivalent ownership interest; and (ii) the Future Subsidiary.
"CLIENT/SERVER DERIVATIVE WORKS" shall mean technology, including any
Intellectual Property Rights contained therein, that is derived from or based on
Licensor Specifications, Licensor Technology, whether such technology is
developed by CREATIVE or Licensor, either solely or jointly including those
products listed in EXHIBIT G attached hereto.
*Confidential portions omitted and filed separately with the Commission.
-1-
"CLIENT/SERVICE DERIVATIVE WORKS SPECIFICATIONS" shall mean jointly
owned written design documents jointly created by the parties and based on
Licensor Specifications for Client/Server Derivative Works.
"CREATIVE APPLICATIONS" shall mean those software applications
developed by CREATIVE, either alone or jointly with Licensor, based upon
CREATIVE Video Technology, other CREATIVE technology, technology licensed by
CREATIVE from third parties, Client/Server Derivative Works, or Licensor
Technology, and as described in EXHIBIT D attached hereto, as such may be
amended by mutual agreement of the parties, which agreement shall not
unreasonably be withheld.
"CREATIVE *" shall mean the CREATIVE client server
TCP/IP-based communications content and services network system, developed by or
for CREATIVE or its Affiliates, and including, without limitations, * .
"CREATIVE IMPROVEMENT" shall mean any improvement, enhancement, or
other modification that either: (a) adds new functionality to the Client/Server
Derivative Works made by or for CREATIVE after Version 1.0 of the Client/Server
Derivative Works is finally tested pursuant to this Agreement or (b) is reduced
to practice by or for CREATIVE after version 1.0 or the Client/Server Derivative
Works is finally tested pursuant to this Agreement.
"CREATIVE SERVER MODULES" shall mean the object code version of the
server components of the Client/Server Derivative Works, used on the CREATIVE
*, as defined in the Client/Server Derivative Works Specifications.
"CREATIVE TECHNOLOGY" shall mean the technology developed solely by
CREATIVE, or its licensee or agents, including, without limitation, the products
described in EXHIBIT F attached hereto, which exhibit may be modified by
CREATIVE from time to time.
"CREATIVE VIDEO TECHNOLOGY" shall mean that video compression
technology developed and owned by CREATIVE prior to the Amendment Effective
Date, including any Intellectual Property Rights contained herein, and any
subsequent Upgrades (as defined in the Master Agreement) thereto, providing the
functionality described in EXHIBIT A attached hereto, and that forms the core
video technology from which the Restricted Video WebPhone and Full Video
WebPhone products are derived.
"FIRST AMENDMENT TERM" shall mean the term set forth in Section 6.1 of
this First Amendment.
"FULL VIDEO WEBPHONE" shall mean the client-based audio/video
communication software derived or based upon CREATIVE Video Technology and the
WebPhone Technology and developed by CREATIVE and Licensor under this First
Amendment and that has full functionality, as described in EXHIBIT B attached
hereto, and that integrates, incorporates, or includes the CREATIVE Graphical
User Interface (as that term is defined in the Master Agreement).
*Confidential portions omitted and filed separately with the Commission.
-2-
"FUTURE SUBSIDIARY" shall mean one (1) entity; (i) that CREATIVE
controls at least * of the voting stock or, or in the case of a non-corporate
entity, an equivalent interest: (ii) that has the responsibility for maintaining
and operating the CREATIVE * ; and (iii) in which none of Licensor's Excepted
Companies, as listed in EXHIBIT H attached hereto, which list may be modified
from time upon mutual agreement of the parities, shall have any interest, unless
specifically agreed upon by Licensor.
"GOLDEN MASTER" shall be amended to include reference to Notebook and
Server Products.
"INTERNET TELEPHONY SERVICE" shall mean any computer network based
telephone service for use with public or private communication networks, the
primary purpose of which computer network is to provide telephone directory,
telephone connection, or telephone information services over communication
networks.
"LICENSOR APPLICATIONS" shall mean those software applications
developed by Licensor, either alone or jointly with CREATIVE, based upon
Licensor Technology, other Licensor technology, technology licensed by Licensor
from third parties, Client/erver Derivative Works, or WebPhone Technology, and
as described in EXHIBIT D attached herto,a s such may be amended by mutual
agreement of the parties, which agreement shall not unreasonably be held.
"LICENSOR CLIENT MODULES" shall mean the source code version of the
WebPhone Technology, including without limitation, those components set forth in
EXHIBIT C attached hereto, as such exhibit may be mutually agreed by the parties
from time to time.
"LICENSOR IMPROVEMENT" shall mean any improvement, enhancement, or
other modification that either: (a) adds new functionality to the Client Server
Derivative Works made by or for Licensor after version 1.0of the Client/Server
Derivative Works is finally tested pursuant to this Agreement; or (b) is reduced
to practice by or for Licensor after version 1.0 of the Client/Server Derivative
Works is finally tested pursuant to this Agreement.
"LICENSOR SERVER MODULES" shall mean the source code versions of
Licensor's * when available, and bug fixes, as described in EXHIBIT C attached
hereto.
"LICENSOR SPECIFICATIONS" shall mean the written design documents
initially created by Licensor for Client/Server Derivative Works, which are
reviewed and approved by CREATIVE.
"LICENSOR TECHNOLOGY" shall include Licensor Modules, Licensor Server
Modules, and any bug fixes, patches, and minor corrections thereof.
"LICENSOR * shall mean the object code version of the client function
of the Client/Server Derivative Works distributed alone or incorporated into
CREATIVE Applications, as set forth in EXHIBIT G attached hereto.
*Confidential portions omitted and filed separately with the Commission.
-3-
"LICENSOR * shall mean the object code version of the client
function of the Client/Server Derivative Works for incorporation into a
*, as set forth in EXHIBIT G attached hereto.
"Licensor Video WebPhone" shall mean, collectively, the Restricted
Video WebPhone and Full Video WebPhone that does not integrate, incorporate, or
include the CREATIVE Graphical User Interface (as that term is defined in the
Master Agreement).
"NOTEBOOK" shall mean the object code version of the client
collaborative application software owned by Licensor, and described in further
detail in EXHIBIT E attached hereto, together with all Upgrades and Updates
thereto.
"RESTRICTED PRODUCTS" shall mean Restricted WebPhone and Restricted
Video WebPhone, which definition shall replace the definition of such term in
the Master Agreement.
"RESTRICTED VIDEO WEBPHONE" shall mean the client-based audio/video
communication software derived or based upon CREATIVE Video Technology and
WebPhone Technology and developed by CREATIVE and Licensor under this First
Amendment and that has limited or restricted functionality, as described in
EXHIBIT B attached herteo, and that integrates, incorporates, or includes the
"CREATIVE Graphical User Interface (as that term is defined in the Master
Agreement).
"REVISED TERM" shall mean the period * .
"SERVER PRODUCTS" shall mean * and * owned by Licensor, and as
described in further detail in EXHIBIT E attached hereto, together with all
Upgrades and Updates thereto.
"UPGRADE REVENUE" shall mean all amounts received by Licensor from End
Users of the Restricted Video WebPhone purchased from CREATIVE, who subscribed
to or otherwise purchase or upgrade to the Full Video WebPhone, less any
discounts, and credits for returned copies or copies distributed as replacements
for defectives copies, and fees paid to banking establishments solely related to
conducting credit card transactions.
"VIDEO WEBPHONE" shall mean, collectively, the Restricted Video
WebPhone and Full Video WebPhone.
"VIDEO WEBPHONE REVNUE" shall mean all amount received by CREATIVE from
End Users of the Full Video WebPhone purchased directly from CREATIVE via
CREATIVE's web site on the Internet or via retail and OEM distribution channels,
less any discounts, and credits for returned copies or copies distributed as
replacements for defective copies, and less any fees paid to banking
establishments solely related to conducting credit card transactions.
"WAPI" shall mean the application program interface that allows parties
or co-developers to develop software that interacts with the Client/Server
Derivative Works.
*Confidential portions omitted and filed separately with the Commission.
-4-
"WebPhone" shall mean any process which implements a material part of
the WAPI in a manner that provides Internet telephony that set forth in the
Client/Server Derivative Works Specifications.
2. GRANT.
2.1 CREATIVE GRANT TO LICENSOR. Subject to the terms and conditions of
the First Amendment, and for the Revised Term, CREATIVE hereby grants to
Licensor a non-transferable, non-exclusive, world-wide, * right and license
(with a right to sub-license pursuant to Section 2.2 hereto) to:
(i) use, reproduce, have reproduced, modify and create Derivative
Works of the source code version of the CREATIVE Video
Technology solely for porting to different operating system
environments ("PORTED CREATIVE VIDEO TECHNOLOGY"). Including
but not limited to Macintosh-, UNIX-, and Window NT-based
operating systems:
(ii) use, reproduce, modify, and create Derivative Works from the
object code version of the CREATIVE Video Technology and
Ported CREATIVE Video Technology solely for purposes of
incorporating into the Licensor Video WebPhone and Licensor
Applications pursuant to the terms and conditions of this
First Amendment; and
(iii) use, have used, execute, display, reproduce, have reproduced,
manufacture, have manufactured, market, sell, import, export,
licensed, sublicense, lease, transfer and otherwise distribute
and have distributed the object code version of the CREATIVE
Video Technology and Ported CREATIVE Video Technology solely
as incorporated into the Licensor Video WebPhone and Licensor
Applications.
Licensor grants to CREATIVE a non-transferable, non-exclusive, world-wide,
perpetual, * right and license (with a right to sublicense pursuant to Section
2.2 hereto) to use, reproduce, have reproduced, manufacture, have manufactured,
modify, and create Derivative Works from, market, sell, import, export, and
distribute the object code and source code versions of the Ported CREATIVE Video
Technology.
2.2 SUBLICENSE RIGHT. Licensor may sublicense its rights and license
under this First Amendment only its Affiliates; PROVIDED, HOWEVER, that such
Affiliates are subject to the same terms and conditions as Licensor under this
First Amendment.
2.3 LICENSOR GRANT TO CREATIVE. Subject to the terms and conditions of
this First Amendment, including without limitation Section 3.9 and 6.4 hereto
and for the First Amendment Term, in addition to the rights and licenses granted
in the Master Agreement, Licensor hereby grants to CREATIVE, subject to the
restriction set forth in Section 5.5 hereto, a non-transferable, non-exclusive,
world-wide right and license to:
*Confidential portions omitted and filed separately with the Commission.
-5-
(i) use, reproduce, and modify the source code version of the
Licensor Technology solely for the purposes of developing
Client/Server Derivative Works for incorporation into CREATIVE
Applications, CREATIVE Improvements, and the CREATIVE * ,
including without limitation, incorporating or otherwise
combining CREATIVE Technology with Client/Server Derivative
Works to develop and maintain products, including without
limitation, CREATIVE Applications and the CREATIVE * ;
(ii) manufacture, have manufactured, sublicense, reproduce, have
reproduced, market, have marketed, import, expert, use, sell,
have sold, and otherwise distribute and have distributed the
object code version of the Licensor Client modules, Licensor
* , and Licensor * , solely for the purpose of manufacturing,
having manufactured, sublicensing, reproduction, having
reproduced, marketing, having marketed, importing, exporting,
using, selling, having sold, and otherwise distributing and
having distributed Client/Server Derivative Works, CREATIVE
Improvements, CREATIVE Applications; PROVIDED, HOWEVER, that
nothing herein shall be construed as granting any rights to
CREATIVE to include the WebPhone in the Client/Server
Derivative Works, CREATIVE Improvements, or CREATIVE
Applications; PROVIDED FURTHER, that nothing herein grants to
CREATIVE any right to sell, have sold, distribute, or have
distributed the Licensor Client Modules as stand-alone
products; and
(iii) manufacture, have manufactured, reproduce, have reproduced,
market, have marketed, import, export, and use the object code
version of the Licensor Server Modules, only as integrated
into the CREATIVE Server Modules, solely for the purposes of
maintaining the CREATIVE Broadcast Network.
PROVIDED, HOWEVER, that any and all use of the source code version of the
Licensor Client Modules and Licensor Server Modules under Subsection 2.3 (i)
occurs pursuant to the provisions of Section 4.4 hereto.
As a matter of clarification, CREATIVE acknowledges that it has no
right to sell, have sold, license, sublicense, or otherwise distribute Licensor
Server modules and CREATIVE Server Modules, partially or in their entity, to any
third party; provided, however, that nothing herein shall prevent CREATIVE from
distributing the object code version of CREATIVE Server Modules to CREATIVE's
subcontractors or other agents for the sole purpose of maintaining and/or
operating the CREATIVE Broadcast Network.
2.4 NOTEBOOK. Subject to the terms and condition of his First
Amendment, Licensor hereby grants to CREATIVE a non-transferable, non-exclusive,
world-wide right and license (with a right to sublicense pursuant to Section 2.2
hereto) to use, reproduce, have reproduced,
*Confidential portions omitted and filed separately with the Commission.
-6-
manufacture have manufactured, modify or have modified, market, have marketed,
sell, have sold, import, export, distribute and have distributed from the Golden
Master, copies of Notebook.
2.5 SERVER PRODUCTS. Subject to the terms and conditions of this First
Amendment, Licensor hereby grants to CREATIVE a non-transferable, non-exclusive,
world-wide right and license (with a right to sublicense pursuant to Section 2.2
hereto) to (i) use the Server Products internally in conjunction with the
CREATIVE * ; and (ii) to make such copies from the Golden Master of the server
Products as reasonably necessary to operate and maintain the CREATIVE * , which
the parties currently contemplate will be no more than five (5) copies.
2.6 PODIUM. Subject to the terms and conditions of this First
Amendment, Licensor ] hereby grant to CREATIVE, a non-transferable,
non-exclusive, world-wide right and license (with a right to sublicense pursuant
to Section 2.2 hereto) to: use, reproduce, and distribute internally only within
CREATIVE, with no rights or license to externally distribute the Podium, in any
form.
2.7 IMPROVEMENTS. Each of CREATIVE and Licensor may independently
develop CREATIVE Improvements and Licensor Improvements, respectively. The
parties agree that base compatibility shall be maintained pursuant to the
provisions of Section 5.6 hereto, and subject to the ownership provisions of
Section 4.3 hereto, so that at least the baseline functions mutually agreed upon
in writing by the parties (as such may be changed from time to time if the
parties mutually agree) can run on each parties' products. Both parties agree to
enter into good faith negotiations regarding licensing of such CREATIVE
Improvements and Licensor Improvements.
3. LICENSE FEES.
3.1 AMENDMENT TO UNLIMITED USE FEE. In partial consideration for the
rights granted by CREATIVE to Licensor under this First Amendment, the parties
hereto agree that the * set forth in Section 10.1 of the Master Agreement
extends to all Restricted Products, including those developed pursuant to this
First Amendment and as that Term is defined in this First Amendment. However,
any future cedes or new functionality integrated into the Restricted Products
which incurs a royalty to Licensor will be offered to CREATIVE as an option to
be included into the Restricted Products at an additional cost to CREATIVE, with
no gain or loss to Licensor.
3.2 AMENDMENT TO PER COPY FEES. In partial consideration for the rights
granted by CREATIVE under this First Amendment, the parties hereto agree to
amend Section 10.2 of the Master Agreement to reflect that CREATIVE shall pay to
Licensor, during the Activated Product Term a per copy fee of * (*) per copy of
each Activated Product sold or distributed by CREATIVE via non-Internet based
distribution channels. The per-copy fee defined in this Section 3.2 includes all
existing codes in the Activated Product, and also includes future compatibility
with the * standard. Any future codes or new functionality integrated into the
Licensed Products or Video WebPhone which incurs a royalty to Licensor will be
offered to CREATIVE as an option to be included into the Licensed Products and
the Video WebPhone at a cost, with no gain or loss to Licensor, in addition to
the per-copy fee defined in this Section 3.2.
*Confidential portions omitted and filed separately with the Commission.
-7-
3.3 VIDEO WEBPHONE FEES. In consideration for the Licenses granted
hereunder. CREATIVE shall pay to Licensor, during the First Amendment Term, a
per-copy fee of * (*) per copy of each Full Video WebPhone sold or distributed
by CREATIVE via non-Internet based distribution channels. The per-copy fee
defined in this Section 3.3 includes all existing codes in the Activated
Product, and also includes future compatibility with the H.323 standard. Any
future codes or new functionality integrated into the Licensed Products or Video
WebPhone which incurs a royalty to Licensor will be offered to CREATIVE as an
option to be included into the Licensed Products and the Video WebPhone at a
cost, with no gain or loss to Licensor, in addition to the per-copy fee defined
in this Section 3.3.
3.4 VIDEO WEBPHONE REVENUE SHARING. CREATIVE shall pay to Licensor
* (*) of the Video WebPhone Revenue received by CREATIVE from sales by
CREATIVE via the Internet. In addition, Licensor shall pay to CREATIVE * (*) of
the Upgrade Revenue received by Licensor during the Revised Term and for a
period of * thereafter.
3.5 LICENSOR SERVER MODULES AND LICENSOR CLIENT MODULES. In partial
consideration for the licenses granted pursuant to Section 2.3 hereto, CREATIVE
shall:
(i) pay to Licensor within five (5) days after the Amendment Effective
Date, a license fee of * (*) for the license granted pursuant to Section
2.3(iii) hereto , and a license fee of * (*) for the licenses granted in
Sections l2.3(i)-(ii); and
(ii) during the First Amendment Term and any applicable post-expiration
period pursuant to Section 6.4 hereto, pay to Licensor a quarterly royalty
payment equal to * (*) of Adjusted Gross Revenue received by CREATIVE based on
the sale of network services, including but not limited to content sales,
advertising, subscriptions and network use fees which utilize Licensor
Technology, Client/Server Derivative Works, Server Products, the Podium, or
Derivative Works thereof, in the CREATIVE * .
Payment under this Section 3.5 shall be made by CREATIVE within forty-five (45)
days after the end of each calendar quarter, together with a statement of
accounting for each such payment. The audit rights granted pursuant to Section
10.7 of the Master Agreement shall apply to the payments made under this Section
3.5
3.6 CREATIVE APPLICATIONS. Licensor acknowledges and agrees that the
license granted to CREATIVE to Licensor * pursuant to Section 2.3 is * , and is
granted in consideration for the rights and obligations of Licensor hereunder.
Regarding the license granted to CREATIVE to Licensor * pursuant to Section 2.3,
CREATIVE shall pay to Licensor a per unit fee of * per Licensor * sold by
CREATIVE, including without limitation, Licensor * sold as a stand-alone product
or as incorporated into CREATIVE Client Product, such Licensor * having a
maximum retail price below * (*); for Licensor * having maximum retail price
above * (*), the parties shall negotiate a separate higher per-unit fee. In
addition, CREATIVE shall pay to Licensor * (*) of the Adjusted Gross Revenue,
less the $* per unit fee recited in this
* Confidential portions omitted and filed separately with the Commission.
-8-
Section 3.6, as applicable, from: (i) sales of the Licensor * purchased directly
from CREATIVE via CREATIVE's web site on the Internet; (ii) any and all upgrades
to the Licensor * distributed via Internet and non-Internet channels; and (iii)
any and all upgrades from Licensor * to Licensor * . In the event that CREATIVE
does not charge its customers for a Licensor * , then CREATIVE shall pay to
Licensor the per-unit fee.
3.7 * AND * . In partial consideration for the licenses granted
pursuant to Section 2.4 and 2.5 hereto, CREATIVE shall pay to Licensor; (i) a
license fee of * (*) for * (*) copies of the * , payable upon acceptance by
CREATIVE of the * , thereafter CREATIVE shall pay a per-copy price of * (*) for
each additional * distributed, sold or licensed by CREATIVE; and (ii) a license
fee for the * of * (*), payable upon acceptance by CREATIVE of the * accordance
with Section 4.7 hereto. In the event of non-acceptance by CREATIVE, CREATIVE
may, at is sole option, cancel any further obligations, including without
limitation payment obligations, with respect to the non-accepted * or * as
applicable.
3.8 NRE FEES. The parties hereto agree that, within ten (10) days after
the Amendment Effective Date, CREATIVE shall pay to Licensor the amount of
* (*) as payment in full for NRE performed by Licensor in connection with
developing server technology prior to the Amendment Effective Date and relating
to the rights granted hereunder. In addition, CREATIVE shall pay to Licensor
within ten (10) days the Amendment Effective Date, a second amount of * (*) as
payment in full for NRE performed by Licensor in connection with developing
client technology prior to the Amendment Effective Date and relating to the
rights granted hereunder.
3.9 LICENSE MAINTENANCE FEES: In partial consideration for the licenses
granted pursuant to Section 2.3 hereto. CREATIVE shall pay to Licensor an annual
license maintenance fee, in the amount of: (i) * *, payable in advance of each
of years 1 through 5 of this First Amendment; and (ii) * (*), payable in advance
of each of years 6 tough 10 of this First Amendment. Each license maintenance
fee paid this Section 3.9 shall be treated as a non-refundable pre-payment
against any and all fees paid or to be paid pursuant to section 3.5 (ii) hereto.
Licensor may terminate the licenses granted to CREATIVE pursuant to Section 2.3,
in the event that, within thirty (30) days after receipt by CREATIVE of a
written notice of failure to pay pursuant to this Section 3.9, CREATIVE fails to
make such maintain fee payment.
3.10 ROYALTY TO CREATIVE In partial consideration for CREATIVE's
efforts in developing the Client/Server Derivative Works hereunder, and so long
as CREATIVE pays the license maintenance fee set forth in Section 3.9., or
Section 6.4 if beyond the First Amendment Term, Licensor shall pay to CREATIVE a
quarterly royalty payment of * (*) of gross revenue (less discounts and returns)
receive by Licensor based on the sale of licensing of any Client/Server
Derivative Works.
* Confidential portions omitted and filed separately with the Commission.
-9-
3.11 NON-DILUTION Any license fees and royalties payable to either part
to the other party pursuant to Sections 3.4, 3.5, 3.6, and 3.10 thereto shall
not be diluted by any revenue sharing activities or agreements in which the
other party participates or enters into with any Affiliates, agents,
contractors, subcontractors or other third parties.
4. PRODUCT DEVELOPMENT.
4.1 Video WebPhone Development and Ownership. The parties hereto agree
to use their commercially reasonable efforts to jointly develop a Video
Webphone, in compliance with the specifications set forth in EXHIBIT B attached
hereto. Except as set forth in Section 3.8, each party hereto shall solely be
responsible for any and all of its own costs incurred in such joint development
under this Section 4.1. The parties further agree to use commercially reasonable
efforts to jointly develop the scheduled Restricted Video WebPhone features.
Ownership shall generally be determined in accordance with the provisions set
forth in Section 6.0 of the Master Agreement; PROVIDED, HOWEVER, that any
Intellectual Property Rights conceived, developed or reduced to practice solely
by one party hereto relating to the Video WebPhone during the First Amendment
Term shall be owned solely by that party; PROVIDED, FURTHER, that ownership in
any Derivative Works of any CREATIVE Technology (except for any Licensor
Products/Technology, as that term is defined in Section 8.i6 hereto, that are
compiled, incorporated, or included with such Derivative Works) shall be owned
by CREATIVE; and PROVIDED, FURTHER, that ownership in any Client/Server
Derivative Works shall be determined in accordance with the provisions of
Section 4.3 hereto; and provided, further, that Licensor shall own all rights in
and to Licensor Technology and Licensor Improvements.
4.2 CREATIVE * DEVELOPMENT. The parties hereto agree to use their
commercially reasonable efforts to develop the * set forth in EXHIBIT F attached
hereto. The development required will be mutually agreed upon by both parties,
and if any engineering resources are required, then such resources shall be made
available at an hourly rate that is at least as favorable as rates charges by
Licensor to third parties, but in any event no more than * .
4.3 OWNERSHIP. All Client/Server Derivative Works and Client/Server
Derivative Works Specifications shall be owned * by * , subject to *
Intellectual Property Rights in and to * . The parties hereto agree that
CREATIVE shall own all rights, title, and interest in and to any CREATIVE
Improvements developed pursuant to this First Amendment. The parties hereto
agree that Licensor shall own all rights, title, and interest in and to any
Licensor Improvements developed pursuant to this First Amendment, Nothing herein
shall in any grant or be deemed to grant any license or right to Licensor in
CREATIVE's Sound Blaster, AWE or EMU audio technology including, but not limited
to, any rights in any PCB layout, design, silicon, firmware, API's, documented
or undocumented commands, or interfaces, whether to achieve compatibility or for
any other purpose.
*Confidential portions omitted and filed separately with the Commission.
-10-
4.4 CLIENT/SERVER DERIVATIVE WORKS In furtherance of CREATIVE's rights
granted pursuant to Section 2.3 hereto, CREATIVE shall use the source code
version of the * and * at * facilities in * . * agrees to provide office space
for up to * designated by CREATIVE to * such * . * . CREATIVE shall not
incorporate any CREATIVE Technology into Client/Server Derivative Works without
the prior agreement of Licensor. In the event that CREATIVE desires to include
or incorporate any CREATIVE Technology into any Client/Server Derivative Works,
then the parties shall enter into good faith negotiations regarding the terms of
such incorporation, including without limitation, any royalty terms as
applicable.
4.5 DELIVERABLES. In support of CREATIVE's rights under Sections 2.3 of
this First Amendment no later than December 30, 1996, Licensor shall provide to
CREATIVE: (i) well-defined * , together with specifications and related
documentation for such * , as mutually agreed to by the parties; (ii) the
Licensor Server Modules and Licensor Client Modules, in the form necessary for
CREATIVE to fully exercise its rights herein, which Licensor will install on a
stand-alone server, not connected to any network outside of Licensor's
facilities, at Licensor's facilities in Boca Raton and (iii) the Licensor
Specifications and all other materials and information in Licensor's possession
or control as reasonably necessary for CREATIVE to fully exercise its rights
herein. In addition, executable copies of the * Upgrades and Updates thereto
will be delivered to CREATIVE promptly after they are developed by Licensor.
4.6 NRE COMMITMENT In the event that CREATIVE wants Licensor to assist
CREATIVE in the subsequent modification to Client/Sever Derivative Works,
Licensor agrees at Licensor's discretion to provide NRE services to CREATIVE in
support of CREATIVE's rights under Section 2.3 at a rate that is at least as
favorable as rates charged by Licensor to third parties, but in any event no
more than * (*) per hour, annually adjusted for inflation in accordance with the
Consumer Price Index. In addition, CREATIVE shall pay to Licensor an additional
* (*) for NRE services to be performed by Licensor in connection with developing
the Video WebPhone pursuant to this First Amendment, in accordance with the
following payment schedule; (i) * (*) due and payable on * ; and (ii) * ($*) due
and payable on * .
4.7 ACCEPTANCE OF * AND *. Within one (1) month of CREATIVE's receipt
of each of * and * ("DELIVERABLE PRODUCTS"), CREATIVE shall notify Licensor, in
writing, of its acceptance or reject of any Deliverable Products. If CREATIVE
rejects any Deliverable Products, CREATIVE shall provide reasons for its
rejection and shall, at the request of Licensor, return the rejected Deliverable
Product to Licensor. Licensor shall make commercially reasonable efforts to
promptly correct and replace such rejected Deliverable Products within sixty
(60) days after first delivery thereof, then CREATIVE, at its sole option, may
terminate its obligations, including without limitation any payment obligations,
with respect to such non-accepted Deliverable Products.
* Confidential portions omitted and filed separately with the Commission.
-11-
4.8 ACCEPTANCE OF SERVER PRODUCTS. Within one (1) month of CREATIVE's
receipt of each of Server Products, CREATIVE shall notify Licensor, in writing,
of its acceptance or rejection of any Server Products. If CREATIVE rejects any
Server Products, CREATIVE shall provide reasons for its rejection, which
rejection shall be based on the lack of conformance with the performance,
functional and technical specifications for such Server Products and shall, at
the request of Licensor, return the rejected Server Product to Licensor.
Licensor shall make commercially reasonable efforts to promptly correct and
replace such rejected server product.
4.9 DEVELOPMENT OF CLIENT/SERVER DERIVATIVE WORKS SPECIFICATIONS.
Licensor will deliver to CREATIVE the Licensor Specifications by no later than
* , for CREATIVE to use in exercising its rights thereto pursuant to this First
Amendment. Within thirty (30) business days of receipt by CREATIVE of such
Licensor specifications, CREATIVE will delivery to Licensor written comments on
such Licensor Specifications, CREATIVE will delivery to Licensor written
comments on such Licensor Specifications, in the form of Client/Server
Derivative Works Specifications. Licensor shall use its commercially reasonably
efforts to correct or amend the Licensor Specifications in accordance with the
Client/Server Derivative Works Specifications to form a mutually agreed upon
final specifications for developing the Client/Server Derivative Works, and the
CREATIVE * pursuant to the terms of this First Amendment.
4.10 DEVELOPMENT OF SERVER PRODUCTS. Licensor will delivery to CREATIVE
a set of written specifications for Server Products upon availability but in no
event later than * for CREATIVE to review. CREATIVE will submit to Licensor
written request for modifications to such specifications, and Licensor shall use
its commercially reasonable efforts to make such specifications as NRE, subject
to the provisions of Section 4.6 hereto.
4.11 ADDITIONAL INFORMATION. Following development of the Client/Server
Derivative Works, both parties agree to make available to the other party all
information, Source Code and related materials necessary to perform all phases
of testing of the Client/Server Derivative Works, subject to the confidentially
provisions set forth in the section 19.0 of the Master Agreement, and to fully
cooperate with the testing and acceptance of such Client/Server Derivative
Works.
5. OBLIGATIONS OF THE PARTIES.
5.1 EXCLUSIVITY. In partial consideration for the rights and licenses
granted hereunder, the parties hereto agree that the period for exclusivity with
respect to the Activated Product and the Restricted Product, as set forth in
Section 1.4 of the Master Agreement, is hereby amended to extend for a period of
* years, beginning on * and ending on * . In addition, Licensor acknowledges and
agrees that Licensor will not, and will not allow any third party to market,
promote, advertise, sell, offer for sale, or otherwise distribute, through any
distribution channel, any Client/Server Derivative Works developed hereunder,
either alone or jointly with Creative, for a period that is the earlier of: (i)*
from the date that such Client/Server Derivative Work is tested and accepted as
version 1.0 final by both parties; or (ii) six (6) months from the date the
Creative Client/Server Derivative Work is first commercially available by
Creative; PROVIDED, HOWEVER, that Licensor may: (x) provide a limited number of
copies of the object code version of the Client/Server Derivative Works, solely
for evaluation purposes, to any third party no sooner than sixty (60) days after
such Client/Server Derivative Works is tested and accepted as final by both
parties; and (y) enter into any agreement with a third party for such
Client/Server Derivative Works no sooner than ninety (90) days after such
Client/Server Derivative Works is tested and accepted as final by both parties,
which acceptance shall not unreasonably be delayed.
*Confidential portions omitted and filed separately with the Commission.
-12-
*
5.2 CUSTOMER SUPPORT OF VIDEO WEBPHONE. Customer support for the Video
WebPhone shall be provided, at the election of CREATIVE, either by: (i)
CREATIVE, at any time, upon providing to Licensor ninety (90) days prior notice,
at CREATIVE's cost; or (ii) Licensor, for so long as CREATIVE pays to Licensor
an annual support fee of * payable in full in advance. The first annual support
fee payment shall be due and payable upon * , renewable on each subsequent
annual anniversary thereof, unless CREATIVE provides such ninety (90) day
notice; PROVIDED, HOWEVER, that CREATIVE may elect not to make the first annual
payment, thereby assuming the customer support obligation, by providing Licensor
with forty-five (45) days prior notice.
5.3 OBLIGATIONS OF CREATIVE. During the First Amendment Term, each
party shall be responsible for providing, all development and commercialization
resources, at its own expense, required to develop through first commercial
release the Video WebPhone developed pursuant to this First Amendment.
5.4 MINIMUM SALES OBLIGATIONS. CREATIVE agrees to purchase the
following cumulative minimum copies: (i) Licensor agrees to deliver to CREATIVE
* copies of a combination of WebPhone and Video WebPhone, in a proportionate
amount of each product to be determined solely be CREATIVE, within five (5)
business days after the Amendment Effective Date; and (ii) CREATIVE agrees to
place all future orders for WebPhone and Video WebPhone in combined quantities
of * copies. The parties hereto acknowledge and agree that as of the Amendment
Effective Date, CREATIVE has purchased a fully paid for a total of * copies
pursuant to the terms of the Master Agreement and a total of * as of the
Amendment Effective Date.
5.5 RESTRICTIVE COVENANTS.
(a) During the period of * years from the earlier of: (1) deployment
of the Creative *; or (ii) thirty (30) days from final acceptance of the
Client/Server Derivative Works by Creative, Creative shall not: operate, offer,
control, market, license, sell, or otherwise distribute an Internet Telephony
Service, unless otherwise agreed to by Licensor. In the event that Creative
desires to add rights to Internet telephony for Creative * customers, Licensor
agrees to enter into good faith negotiations with Creative for such rights;
provided, however, that nothing herein shall prohibit or limit in any manner
Creative's right and ability to distribute NetMeeting and/or OnLive to and use
the NetMeeting and/or OnLive service or to distribute another telephony client.
During the First Amendment Term, Creative agrees not to use Client/Server
Derivative Works or Licensor Technology to establish or operate an Internet
Telephony Service, unless otherwise permitted herein or anticipated in Exhibit
G.
*Confidential portions omitted and filed separately with the Commission.
-13-
(b) During the period of * years from the earlier of: (i) deployment
of the Creative * or (ii) thirty (30) days from final acceptance of the
Client/Server Derivative Works by Creative, Licensor shall not: (x) own any
interest in, operate, control, offer, market, license, sell, or otherwise
distribute or maintain (other than for a third party) any content
aggregation or content delivery or distribution service utilizing the Client/
Server Derivative Works, EXCEPT for educational and corporate services; (y)
provide any daily, weekly, monthly, or other periodic programming to third
party networks utilizing the Client/Server Derivative Works; or (z) produce
or co-produce any third party content utilizing the Client/Server Derivative
Works for or to any Internet-based broadcast to any third party receiver
device or system.
5.6 COMPATIBILITY. The parties hereto agree that, during the First
Amendment Term: (i) Licensor Transceivers, Licensor Transmitters Client/Server
Derivative Works developed by Licensor and Creative pursuant to this Agreement;
and (ii) Creative Broadcast Network developed by Creative pursuant to this
Agreement shall retain a basic level of compatibility so that at least the
baseline functions mutually agreed upon in writing by the parties (as such may
be changed from time to time if the parties mutually agree) can run on each
parties' Client/Server Derivative Works developed hereunder, including, without
limitation, Client/Server Derivative Works relating to the product in Exhibit G
and as specified by the parties by January 30, 1997. The parties further agree
that, during the First Amendment Term, each party shall require each of its
license to such Client/Server Derivative Works to retain such basic level of
compatibility.
5.7 ANNUAL MEETINGS. The parties agree to hold annual meetings, at a
location and time to be mutually agreed, to review and exclusively establish the
basic compatibility provisions of section 5.6.
5.8 COMPATIBILITY ▇▇▇▇. The parties agree to jointly establish a set of
standard, criteria and testing procedures, and to jointly develop a trademark
and/or logo that both parties may use to indicate the compatibility of each
parties' products, in accordance with Section 5.6 hereto.
5.9 ATTRIBUTION. Licensor agrees to prominently display the Share
Vision Registered trademark and logo on the display screen for the Video
WebPhone while the Video WebPhone is in use.
6. TERM
6.1 FIRST AMENDMENT TERM. The term of this First Amendment shall be ten
(10) years from the Amendment Effective Date, unless terminated in accordance
with Section 6.3 hereto.
6.2 TERM OF MASTER AGREEMENT. The parties hereto agree to amend the
Term set forth in Exhibit A of the Master Agreement to mean two (2) years from
August 31, 1996. The parties hereto further agree to amend the Activated Product
Term and the Restricted Product Term set forth in Exhibit A of the Master
Agreement to mean four (4) years from August 31, 1996.
6.3 TERMINATION. The provisions of Sections 15.2 and 15.3 of the Master
Agreement shall apply to and effect termination of the First Amendment Term
hereto. Breach of a provision of this First Amendment shall not provide a cause
for termination of the Master Agreement.
*Confidential portions omitted and filed separately with the Commission.
-14-
6.4 POST EXPIRATION OF FIRST AMENDMENT TERM. In partial consideration
for the fees set forth in Section 3 hereto, CREATIVE agrees that the rights
granted to Licensor hereunder shall be renewed annually, at the current royalty
structure set forth in this First Amendment, subject to mutually agreed
adjustments based on and no greater than the Consumer Price Index, solely for so
long as CREATIVE continues to pay the greater of: (i) the license maintenance
fee amount of * (*), which amount shall be treated as a non-refundable
pre-payment against any and fees paid or to be paid pursuant to Section 3.5 and
3.6 hereto; or (ii) in the event that the royalty payments from Licensor to
CREATIVE pursuant to Section 3.10 hereto exceed the royalty payments from
CREATIVE to Licensor pursuant to Section 3.5 hereto average over the prior
calendar year (such differential amount referred to as the "DELTA AMOUNT"),
* (*) of such Delta Amount.
6.5 SURVIVAL. In addition to the termination provisions set forth in
Sections 15.4 and 20.2 of the Master Agreement, Section 1,4.3, 6.5, 8 and 9 of
this First Amendment shall survive termination of this First Amendment.
7. SOURCE CODE ESCROW
7.1 Licensor Technology. Within twenty (20) days after the Amendment
Effective Date and promptly thereafter for subsequent deposits, Licensor shall
cause to be deposited with an escrow agent, a complete working copy of the
Source Code for the Licensor Technology licensed hereunder, under the form of
software escrow agreement set forth in EXHIBIT E of the Master Agreement, and
shall be released to CREATIVE pursuant to EXHIBIT E of the Master Agreement in
the event that Licensor fails to materially perform its obligations under
Section 4.5 of this First Amendment, in addition to the release conditions set
forth in sections 16.0(i) -(iii) of the Master Agreement.
7.2 Client/Server Derivative Works. Within twenty (20) days after the
date on which Client/Server Derivative Works are tested and accepted as final by
both parties, the parties shall cause to be deposited with an escrow agent a
complete working copy of the Source Code for the Client/Server Derivative Works
developed hereunder, under a form of software escrow agreement similar to that
set forth in EXHIBIT E of the Master Agreement, as modified by mutual agreement
of the parties hereto to be consistent with the terms of this First Amendment.
Thereafter, both parties shall have free and unlimited access to the Source
Code, subject to any and all restrictions on use set forth in this First
Amendment, for the First Amendment Term and any post-expirations term defined in
Section 6.4 hereto.
8. WARRANTY AND INDEMNITY
8.1 CREATIVE WARRANTY. CREATIVE represents and warrants that: (i) the
CREATIVE Video Technology operates and will operate substantially in accordance
with the specifications set forth in CREATIVE's documentation therefore; (ii)
the CREATIVE Video Technology and the use thereof as contemplated by this First
Amendment do not infringe or misappropriate any copyright, trade secret,
publicity, privacy, or, to CREATIVE's knowledge, other rights of any third
party; (iii) CREATIVE has the sole and exclusive right to grant the rights and
licenses contemplated by this First
*Confidential portions omitted and filed separately with the Commission.
-15-
Amendment, without the need for any consents, approvals or immunities not yet
obtained; (iv) CREATIVE has full power to enter into the First Amendment, to
grant the rights and licenses granted hereunder, and to perform its obligations
hereunder; (v) to the best of CREATIVE's knowledge as of the Amendment Effective
Date, the CREATIVE Video Technology does not infringe any patent rights of any
third party; and (vi) CREATIVE does not know of any actual, alleged, pending, or
threatened third party claim of infringement or misappropriation of any
intellectual property rights of a third party.
8.2 LICENSOR WARRANTY. Licensor represents and warrants that: (i) the
Licensor Technology, *, and Server Products (the "WARRANTY PRODUCTS")
operate and will operate substantially in accordance with the specifications set
forth in Licensor's documentation therefor; (ii) the Warranty Products and the
▇▇▇ thereof as contemplated by this First Amendment do not infringe or
misappropriate any copyright, trade secret, publicity, privacy, or, to
Licensor's knowledge, other rights of any third party; (iii) Licensor has the
sole and exclusive right to grant the rights and licenses contemplated by this
First Amendment, without the need for any consents, approvals or immunities not
yet obtained; (iv) Licensor has full power to enter into this First Amendment,
to grant the rights and licenses granted hereunder, and to perform its
obligations hereunder; (v) to the best of Licensor's knowledge as of the
Amendment Effective Date, the Warranty Products do not infringe any patent
rights of any third party; and (vi) Licensor does not know of any actual,
alleged, pending, or threatened third party claim of infringement of
misappropriation of any intellectual property rights of a third party.
8.3 LIMITATIONS OF WARRANTIES. THIS SECTION 8 SETS FORTH ALL OF THE
WARRANTIES OF A PARTY TO THE OTHER PARTY WITH RESPECT TO THE SUBJECT MATTER OF
THIS FIRST AMENDMENT. EACH PARTY HEREBY DILSCLAIMS ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
8.4. LIMITATION OF LIABILITIES. EXCEPT FOR OBLIGATION UNDER THIS
SECTION 8, NEITHER PARTY SHALL HAVE ANY LIABILITY FOR LOSS OF PROFITS, LOSS OF
REVENUES OR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY
DAMAGES, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8.5 INDEMNIFICATION BY CREATIVE. Subject to the conditions set forth in
Section 18.3 of the Master Agreement, CREATIVE shall indemnify, hold harmless
and defend Licensor against any claim, suite or proceeding and any damages or
liability there from or settlement thereof (including reasonable fees of
attorneys and related costs) to the extent; (i) based on a claim that, solely as
a result of the processes or materials selected by CREATIVE for manufacturing
and reproduction, a CREATIVE Application, CREATIVE Improvement, or the CREATIVE
* infringes the patent, copyright, trademark, trade secret, publicity,
defamation or other rights of any third party; (ii) resulting from any material
breach of this Agreement by CREATIVE; or (iii) based on a claim that Licensor's
manufacture, use, sale, or distribution or CREATIVE Video Technology, CREATIVE
Technology, A CREATIVE Applications, (collectively, "CREATIVE
PRODUCTS/TECHNOLOGY")
*Confidential portions omitted and filed separately with the Commission.
-16-
infringes the patent, copyright, trademark, trade secret, publicity, privacy, or
other rights of any third party, except to the extent that such infringement is
due solely to the combination of CREATIVE Products/Technology with Licensor
Products/Technology (as defined in Section 8.6 below), and except to the extent
that such infringement is due solely to the development contributions of
Licensor, if any, to CREATIVE Technology, CREATIVE Video Technology, which
infringement would not have occurred but for such development contributions, and
except to the extent that such infringements due solely to Licensor
Products/Technology.
8.6 INDEMNIFICATION BY LICENSOR. Subject to the conditions set forth in
Section 18.3 of the Master Agreement, Licensor shall indemnify, hold harmless
and defend CREATIVE against any claim, suit or proceeding and any damages or
liability therefrom or settlement thereof (including reasonable fees of
attorneys and related costs) to the extent: (i) based on a claim that any
Licensor Technology, Licensor applications, * , Licensor Video WebPhone, * , or
* (collectively, "LICENSOR PRODUCTS/TECHNOLOGY") infringes the patent,
copyright, trademark, trade secret, publicity, privacy, or other rights of any
third party, EXCEPT to the extent that such infringement is due solely to the
combination of CREATIVE Products/Technology or the CREATIVE * with the Licensor
Products/Technology, which infringement would not have occurred but for such
combination, and except to the extent that such infringement is due solely to
the development contributions of CREATIVE, if any, to Licensor technology, which
infringement would not have occurred but for such development contributuions and
EXCEPT to the extent that such infringement is due solely to CREATIVE
Products/Technology, and EXCEPT as to which CREATIVE otherwise owes indemnity to
Licensor pursuant to Section 8.5 hereto; or (ii) resulting from any material
breach of this Agreement by Licensor.
9. OTHER TERMS
9.1 AMENDED EXCLUSIVITY. In partial consideration for the rights and
licenses granted by Licensor to CREATIVE hereunder, CREATIVE agrees to amend
Section 1.4 of the Master Agreement to: (i) permit Licensor * its * through any
* ; and (ii) to permit * identified by Licensor during the original * Term of
the Master Agreement to use, sell, or distribute the * with a graphical user
interface that is customized for or modified by or otherwise designed by or for
such * , subject to the conditions set forth in section 1.4 of the Master
Agreement. For purposes of this First Amendment, the term * shall be amended to
include a reference to Video WebPhone Technology, in addition to WebPhone
Technology. In addition, Licensor specifically agrees that during the * Term of
the Master Agreement, Licensor shall not license or sell for retail sale, or
otherwise distribute a * ; provided, however, that Licensor may license, sell or
otherwise distribute a * * to (a) * ; (b) * ; (c) customers via * . In any
event, there will be no restrictive covenants on Licensor's ability to
distribute * , EXCEPT to the extent that Licensor's rights to distribute the *
are limited to the licenses granted in Section 2.1 hereto.
*Confidential portions omitted and filed separately with the Commission.
-17-
9.2 INCORPORATED TERMS. All other terms and conditions of the Master
Agreement shall remain in full force and effect during the Term of the Master
Agreement, as amended by Section 6.2 hereto. The following terms and conditions
shall apply to Video WebPhone, and are herein amended to refer to and include
Video WebPhone provided hereunder; Sections 1 (as amended by this First
Amendment); 1.3,1.4,1.5,2.0,3.0,4.0,6.4,8.0,10.4,10.5,10.6 (as amended by this
First Amendment), 10.7,10.8,11.1,12.0,13.0,15.2,15.3,15.4,15.5,18.3,18.4,19.0
and 20.0 (with amended Section 20.5). The following terms and conditions shall
apply to the Client/Server Derivative Works, and are herein amended to refer to
and include Client/Server Derivative Works provided hereunder. Sections 1.3 and
1.6I; 2.0,8.0,10.4, 10.7,10.8, 15.2, 15.3,15.5,18.3,18.4,19.0, and 20.0 (with
amended Section 20.5). A breach of any term or condition of this First Amended
solely relating to Video WebPhone, CREATIVE Video Technology, License
Technology, or CREATIVE Applications shall not provide a basis for termination
of the Master Agreement or of any other amendments thereto. Similarly, a breach
of any term or condition of the Master Agreement solely relating to WebPhone
shall not provide basis for termination of the First Amendment or of any other
amendments thereto.
9.3 RELATIONSHIP OF THE PARTIES. The parties further agree that nothing
in the Master Agreement or in this First Amendment (except for the restrictive
covenants set forth in Section 5.5 and the license provisions of Section 2
hereto) will prevent either party hereto from marketing and distributing any
other work, whether similar or dissimilar to the Licensed Product (as that term
is defined in the Master Agreement), or any Client/Server Derivative Works
developed hereunder. In furtherance of the relationship established by the
parties under both this First Amendment and the Master Agreement, the parties
hereto agree to use their commercially reasonable efforts to support and promote
the Video WebPhone products developed pursuant to this First Amendment and the
WebPhone products developed pursuant to the Master Agreement.
9.4 CONFLICT. In the event of any conflict between the terms of this
First Amendment and the terms of the Master Agreement, the terms of this First
Amendment shall control with respect to the subject matter of this First
Amendment.
9.5 CONFIDENTIALITY. The parties hereto agree to amend Section 19.2
of the Master Agreement to include the following sentence: "Each party shall
only use the other party's Proprietary Information in furtherance of its rights
and obligations under this Agreement."
10. REPRESENTATIONS.
Each party hereby represents to the other that the undersigned has full
and binding authority to execute this Amendment.
-18-
ACCEPTED AND AGREED:
CREATIVE TECHNOLOGY LTD. NETSPEAK CORPORATION
Signature: /s/ LUNG YEH Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- -------------------------
Printed Name: Lung Yeh Printed Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- -------------------------
Title: Vice President Title: President
------------------------------- ----------------------------
12-6-96 12-6-96
EXHIBIT A
Creative Video Technology
-------------------------
Summary
*
1. Brief Specification
*
1.1 Video input and output
*
1.2 Digital output and input
*
1.3 Sampling frequency
*
1.4 Source coding algorithm
*
2. Source Coder
2.1 Source Format
*
2.2 Video source coding algorithm
*
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT B
Features and Specifications (WebPhone/Video WebPhone)
[ILLEGIBLE]
WEBPHONE BAUD AND AUDIO
Talk time Restricted unlimited unlimited
- restrictions 3 minutes n/a n/a
Lines 1 1 4 or more
OGM 1 3 unlimited
Voicemail 2 10 unlimited
Offline voicemail Receive Send/Rec Send/Rec
Personal Dir Entree 3 unlimited unlimited
Directory Assistance yes yes yes
Direct calling yes yes yes
File transfer?
Conferencing Participant Participant Full 4 line Conf
Pary Specific Boardrs no yes yes
Auto answer yes yes yes
Multimedia help system yes yes yes
Call transfer no no yes
Call hold yes yes yes
OND yes yes yes
Recall Restricted yes yes
Mute yes yes yes
Webboard yes yes yes
User config. sound effects no yes yes
Caller ID yes yes yes
Text chat Noteboard Noteboard Noteboard
On-hold MIDI music yes yes yes
Speed dialing yes yes yes
Conversation exception yes yes yes
Codecs: GSM, Truspeech, SVP yes yes yes
WebPhone 2.02 CS Support Win95,3.1,NT Win95,3.1 Win95,3.1
WebPhone 3.0 CS Support Win95 ▇▇▇▇▇ ▇▇▇▇▇
Modem support ▇▇.▇,▇▇▇▇,▇▇▇ ▇▇.▇,▇▇▇▇,▇▇▇ ▇▇.▇,▇▇▇▇,▇▇▇
APIs WAPI WAPI WAPI
VIDEO SPECIFICATIONS FOR 3.0 (SEE EXH A)
2-way video (32b831) Send/Rec Rec Send/Rec
- restrictions 3 minutes 30 day promotion unlimited
148 by 178 yes yes yes
Direct x support?
Snapshot capabilities yes yes yes
- save formats: bmp, jpeg, ? yes yes yes
SYSTEM REQUIREMENTS
▇▇▇▇▇▇▇-▇▇ ▇▇▇ ▇▇ or faster
Pentium 75 for Tru speech
4 MB RAM
Sound card with MIC and Speaker
Winsock 1.1 compliant stack
VGA card capable of displaying 256 colors
Full duplex audio card for full duplex mode
5 MB of free disk space
-i- CONFIDENTIAL
EXHIBIT C
LICENSOR CLIENT MODULES/LICENSOR SERVER MODULES
I. LICENSOR CLIENT MODULES
*
II. LICENSOR SERVER MODULES
*
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT D
CREATIVE APPLICATIONS/LICENSOR APPLICATIONS
I. CREATIVE APPLICATIONS
*
II. LICENSOR APPLICATIONS
1. WebPhone
*
6. Video WebPhone
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT E
SERVER PRODUCTS; NOTEBOOK
I. SERVER PRODUCTS
*
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT F
CREATIVE TECHNOLOGY; CREATIVE *
I. CREATIVE TECHNOLOGY
1. Sound Blaster/Registered TradeMark/
2. Soundfront/TradeMark/
3. 3-D positional audio
4. algorithmic composer
5. Wave table
6. stereo enhancement
7. Creative software and utilities
8. video conference (VATP)
9. video compression (H.263)
10. audio codec (Share Vision)
11. White Board (Share Vision)
II. CREATIVE *
[TO BE PROVIDED WITHIN SIXTY (60) DAYS OF THE AMENDMENT EFFECTIVE DATE.]
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT G
BASIC COMPATIBILITY PRODUCTS AND SPECIFICATION
*
*Confidential portions omitted and filed separately with the Commission.
EXHIBIT H
EXCEPTED COMPANIES
*
*Confidential portions omitted and filed separately with the Commission.
February 19, 1997
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
NetSpeak Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇:
This letter is a Second Amendment to the June 7, 1996 Technology
License and Development Agreement (the "Agreement") between Creative Technology,
Ltd. and Netspeak Corporation as amended on December 6, 1996 (the "First
Amendment"). The Agreement and First Amendment are hereby further amended to
provide as follows:
1. There shall be a new definition of "Video WebPhone Special Edition"
hereby defined as a limited featured Video WebPhone differing from the full
featured Video WebPhone by having only a single line, with a limited number of
outgoing messages permitted from time to time, limited voicemail, personal
directory entries, no party specific blocking, no initiation of audio
conferencing, or file transfer permitted. Video WebPhone Special Edition only is
intended to be sold by Creative Labs, Inc. via the Internet and retail channels
for $ * . For Internet sales, end-users can download the software for a $ *
charge and, once that charge clears through Creative's merchant system, be sent
an activation code unlocking the features of the Video WebPhone Special Edition.
End-users wishing to upgrade via the Internet to the full featured Video
WebPhone will, upon payment of a different fee (currently anticipated to be $ *
) be sent by Internet e-mail a different activation code and/or additional
software, and revenue for such an upgrade to the full featured Video WebPhone
shall be shared pursuant to Section 3.4 of the First Amendment.
2. With respect to the Video WebPhone Special Edition only, Sections 3.3
and 3.4 of the First Amendment are hereby amended such that the * or other * to
NetSpeak shall be * per copy. There will be * for the Video WebPhone Special
Edition or for activation codes relating thereto. The * shall be * for each *
or, for * , for each * code for the Video WebPhone Special Edition and * .
3. With respect to the Video WebPhone Special Edition only, the First
Amendment Term as specified in Section 6.1 for the First Amendment is hereby
amended to a * period from the date of first contained shipment from Creative
Labs, Inc. but ending in no event later than September 1, 1997.
*Confidential portions omitted and filed separately with the Commission.
All other terms and conditions of the First Amendment and the Agreement shall
remain in full force and effect. Attached hereto is Attachment A which shall
serve as a clarification.
Thank you for your courtesy in this matter. Please sign and return a copy of
this letter signifying our agreement.
Sincerely yours,
/s/ LUNG YEH
-------------------------------
Lung Yeh
Vice President - Communications
AGREED TO AND ACCEPTED:
NETSPEAK CORPORATION
Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Printed Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Date: February 24, 1997
ATTACHMENT A
This attachment is being added to serve as a clarification of the Second
Amendment letter agreement dated February 19th, 1997, to the June 7 1996
agreement between Creative Technology Ltd. and NetSpeak Corporation.
*
It's a * promotion which will not extend beyond *.
*
*
Creative will *, and * in * for the * which are to be used for the *.
NetSpeak has agreed that it will not require any * for the *.
Creative may sell the * on the * in conjunction with its * effort but not in *
of its *. It's understood and agreed that the * sales may precede the sale of a
* effort by a *. HOWEVER, Creative will not maintain an * sales effort if it
does not continue to maintain the * . The whole idea was to produce a
significant * and not just an * for *. If Creative decides not to continue the *
in * in *, then it will not continue to receive the * and the * from NetSpeak
unless mutually agreed to by the parties.
Clarification of Paragraph 2 of the Second Amendment:
*
Agreed to:
/S/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /S/LUNG YEH
------------------------- -------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President Lung Yeh, Vice Pres. - Communications
NetSpeak Corporation Creative Technology Ltd.
*Confidential portions omitted and filed separately with the Commission.