CONTRACT BETWEEN ITERATED SYSTEMS, INC. AND
MCI TELECOMMUNICATIONS CORPORATION
This contract ("Contract"), is made as of this __ day of _______ 1998
("Effective Date") between Iterated Systems, Inc., a Georgia corporation
("ISI"), and MCI Telecommunications Corporation, a Delaware corporation ("MCI").
For and in consideration of the mutual undertakings of the parties
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. TERMINATION OF DEVELOPMENT AND LICENSE AGREEMENT. The parties
acknowledge and agree that on September 30, 1997 the Development and License
Agreement dated September 16, 1994 between ISI and MCI ("Agreement") expired
according to its terms. The parties agree that the Agreement and the Existing
Agreements (as defined below) are hereby terminated in all respects. Without in
any way limiting the generality of the foregoing, this termination includes the
termination of (i) Section 10.12 of the Agreement so that no terms in the
Agreement survive, and (ii) each party's rights and obligations under the
Agreement and the Existing Agreements, including, but not limited to, all
license rights. Each party is entitled to retain any payments received from the
other party prior to the Effective Date under the Agreement, the Existing
Agreements and any other written or oral agreements between ISI and MCI. The
parties acknowledge that any and all rights and obligations of either party
under the terms of the Agreement, the Existing Agreements and any other written
or oral agreements between ISI and MCI (including, but not limited to, any
materials delivered or to be delivered under the Agreement) will be governed and
controlled by the terms of this Contract. Notwithstanding the above, any
confidential information exchanged between MCI and ISI prior to the Effective
Date under the Agreement shall continue to be considered the confidential
information of the disclosing party and held in confidence by the party
receiving such confidential information according to the terms of EXHIBIT C of
this Contract.
2. DEFINITIONS.
"Affiliate(s)" means any entity or entities that is directly or indirectly
controlling, controlled by, or under common control with a party to this
Contract.
"Asserting Party" has the meaning set forth in Paragraph 18(b).
"Authorized Third Parties" has the meaning set forth in Paragraph 4(a).
"Codec" means a hardware or software encoder and/or decoder that can
compress and/or uncompress digital data.
"Confidential Information" has the meaning set forth in EXHIBIT C.
"Deliverables" means collectively and individually the fractal real time
codec, and the audio and lossless codecs listed in EXHIBIT A. Deliverables
shall include Deliverables Source Code.
"Deliverables Source Code" means the following items:
(i) source code to all component modules of the Deliverables as such
component modules exist in their integrated form within the Deliverables in both
machine-readable and hard copy form (the source code may be in microcode and/or
assembly and/or C and/or C++ Projects);
(ii) any and all proprietary ISI libraries required for use with the items
listed in item (i) above; and
(iii) for the items listed in item (i) above all project and programming
documentation including but not limited to project overviews, functional
specifications, flowcharts, engineering design documents, software logic and use
documents, application programming interface descriptions, documentation of all
compile/debug options and complete documentation of all algorithms in generally
accepted mathematical terms, including complete definitions of all terms used,
but only to the extent the foregoing items are in ISI's archive of each of the
Deliverables and such items are proprietary to ISI.
"Derivative Work" has the meaning set forth in the U.S. Copyright Act, as
amended.
"Disclosing Party" has the meaning set forth in EXHIBIT C.
"Distributors" has the meaning set forth in Paragraph 5(a)(iii).
"Disclosure" has the meaning set forth in Paragraph 8(a).
"Existing Agreements" means collectively and individually the following
agreements:
(i) Letter Agreement dated December 1, 1996 among MCI, ISI, and
Oracle Corporation.
(ii) Letter Agreement dated December 1, 1996 among MCI, ISI, and
Network Computer, Inc.
(iii) Letter Agreement dated December 16, 1996 among MCI, ISI, and
Entertainment Made Convenient (Emc3) Int'l Holding B.V.
(iv) Letter Agreement dated February 6, 1998 between MCI and ISI
regarding Multi-Media Access Corporation.
(v) Letter Agreement dated September 11, 1996 between MCI and ISI
regarding Progressive Networks, Inc.
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"Export Laws" has the meaning set forth in Paragraph 22.
"Intellectual Property Rights" means any and all rights existing anywhere
in the world under copyright law, patent law, moral rights law, trade secret
law, confidential information law, trademark law, unfair competition law,
semiconductor chip protection law or other similar rights.
"Inventions" has the meaning set forth in Paragraph 8(a).
"ISI Attribution" means the ISI trademark, service ▇▇▇▇, trade name,
insignia, logo or other designation provided by ISI to MCI from time to time to
be used in accordance with Paragraph 6.
"License Agreement" has the meaning set forth in Paragraph 5(b).
"Licensed Affiliates" means any entity or entities that is directly or
indirectly controlling, controlled by, or under common control with a party to
this Contract and which has agreed in writing with a party to this Contract to
be bound by the terms of this Contract.
"Licensees" has the meaning set forth in Paragraph 5(a)(ii).
"Limitation Period" has the meaning set forth in Paragraph 25.
"MCI Modification" means the portion of the MCI Modified Codec that is in
addition to the Deliverable being modified and includes, but is not limited to,
new developments that result from the use of Deliverables Source Code.
"MCI Modified Codec" has the meaning set forth in Paragraph 4(a).
"Non-soliciting Party" has the meaning set forth in Paragraph 25.
"Patent Rights" means any and all rights, existing anywhere in the world
under patent law, in an issued patent with any claims drawn to the Inventions.
"Personnel" has the meaning set forth in Paragraph 8(a).
"Plans and Reports" means the plans and reports delivered by ISI to MCI
under the Agreement.
"Receiving Party" has the meaning set forth in EXHIBIT C.
"Territory" means the U.S. and anywhere in the world where from time to
time the Deliverables may be exported in compliance with the terms of Paragraph
22 below.
"Third Party Modification" means the portion of the Third Party Modified
Codec that is in addition to the Deliverable being modified and includes, but is
not limited to, new developments that result from the use of the Deliverables
Source Code.
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"Third Party Modified Codec" has the meaning set forth in Paragraph 4(b).
"Warrant" has the meaning set forth in Paragraph 21.
3. DELIVERY OF SOURCE CODE FOR THE DELIVERABLES. No later than thirty
(30) business days after the Effective Date, ISI will deliver to MCI the
Deliverables Source Code. MCI may request ISI to provide certain Deliverables
sooner than other Deliverables and ISI will use reasonable efforts to satisfy
MCI's delivery request. At MCI's request ISI will provide up to forty (40)
hours of assistance for each of the three codec types (lossless, audio, real-
time video) to MCI from ISI's location in Atlanta, Georgia to facilitate the
delivery and use of the Deliverables Source Code, with such assistance to be
provided within thirty (30) days of delivery of each codec type. After ISI has
provided forty (40) hours of assistance for a Codec type, then ISI has no
further obligation to provide assistance for that Codec type.
4. LICENSE OF DELIVERABLES IN SOURCE CODE FORM.
(a) ISI grants MCI and its Licensed Affiliates the following perpetual,
non-exclusive, royalty-free right and license in the Territory to:
(i) use, make and reproduce the Deliverables Source Code solely for
MCI's and its Licensed Affiliates' internal implementation that includes a
Deliverable;
(ii) use, make and reproduce the Deliverables Source Code solely for
MCI's and its Licensed Affiliates' internal use to create a product or service
that includes a Deliverable;
(iii) modify the Deliverables Source Code to create Derivative Works of
the Deliverables that are Codecs (which Deliverable and modified Deliverables
Source Code shall collectively be referred to as a "MCI Modified Codec") solely
for MCI's and its Licensed Affiliates' internal use to create a product or
service or do an internal implementation;
(iv) compile the Deliverables Source Code together with an MCI
Modification to create an MCI Modified Codec in object code form solely for
MCI's and its Licensed Affiliates' internal use to create a product or service
or do an internal implementation; and
(v) distribute the Deliverables Source Code to third parties who are
obligated by written agreement with MCI or an MCI Licensed Affiliate to (x)
written terms of non-disclosure consistent in all material respects with the
terms set forth in EXHIBIT C, (y) use the Deliverables only as provided in
Paragraph 4(b) below, and (z) use the Deliverables, MCI Modifications and Third
Party Modifications only as provided in this Contract (such third parties
individually referred to as an "Authorized Third Party" and collectively
referred to as the "Authorized Third Parties").
(b) ISI grants MCI and its Licensed Affiliates the right to grant to an
Authorized Third Party the following perpetual, non-exclusive, royalty-free
right and license in the Territory to:
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(i) use, make and reproduce the Deliverables Source Code solely for
the Authorized Third Party's internal use to create a product or service;
(ii) modify the Deliverables Source Code to create Derivative Works
of the Deliverables that are Codecs (which Deliverable and modified Deliverables
Source Code shall collectively be referred to as a "Third Party Modified Codec")
solely for the Authorized Third Party's internal use to create a product or
service; and
(iii) compile the Deliverables Source Code together with a Third Party
Modification to create a Third Party Modified Codec in object code form solely
for the Authorized Third Party's internal use to create a product or service.
(c) Except for the limited distribution rights in Paragraph 4(a)(v), the
Deliverables, MCI Modifications, and Third Party Modifications may only be
distributed in object code form in a product or service as authorized in
Paragraph 5 and subject to the limitations in this Contract.
(d) Notwithstanding the rights granted above and except with ISI's prior
written consent, an Authorized Third Party shall not exercise the rights granted
in Paragraph 4(b) together with any rights that the Authorized Third Party may
have to (i) source code under a separate agreement with ISI, or (ii)
confidential information or trade secrets disclosed by ISI.
(e) Notwithstanding the rights granted in this Contract, for a period of
one year after the Effective Date, MCI, its Licensed Affiliates and the
Authorized Third Parties may not release a still image Codec with functionality
that competes with ISI's STiNG product in the form that STiNG is generally
available as of the Effective Date. As used herein the still image Codec shall
be deemed "released" on the date that MCI, its Licensed Affiliate or the
Authorized Third Party publicly announces its general availability for license
or purchase.
5. LICENSE OF DELIVERABLES IN OBJECT CODE FORM.
(a) ISI grants MCI and its Licensed Affiliates the following perpetual,
non-exclusive, royalty-free right and license in the Territory to:
(i) use, reproduce and distribute the object code version of the
Deliverables for MCI's and its Licensed Affiliates' internal implementation;
(ii) reproduce and distribute to third parties ("Licensees") the
object code version of the Deliverables and grant such Licensees a limited sub-
license to use the object version of the Deliverables in a product or service
subject to the limitations on use of the Deliverables, MCI Modifications and
Third Party Modifications in this Contract;
(iii) grant others ("Distributors") the right to exercise the rights
granted to MCI and its Licensed Affiliates in Paragraph 5(a)(ii), with or
without the right of such others to onward license still others with or without
such rights, and so on with respect to each successive onward license; and
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(iv) analyze and summarize Plans and Reports to explore and evaluate
the functionality, interoperability and marketability of a product or service.
(b) MCI, its Licensed Affiliates and Authorized Third Parties shall enter
into a license agreement with each Licensee and Distributor ("License
Agreement") that (i) prohibits reverse engineering, disassembling, or
decompiling the object code version of the Deliverables, MCI Modified Codec or
Third Party Modified Codec, (ii) grants a sub-license to the Deliverables that
is at least as restrictive as the rights granted to MCI and its Licensed
Affiliates in Paragraph 5(a) and includes the limitations in Paragraphs 4(d) and
9, and (iii) is consistent with the terms of this Contract (including, but not
limited to, the terms of Paragraph 7, as applicable). The License Agreement may
not impose any liabilities upon ISI and may not grant any warranty to the
Licensee or Distributor on behalf of ISI.
(c) If MCI becomes aware of any breach of any agreement granting rights
authorized under this Contract that affects ISI, then MCI shall (i) promptly
notify ISI, (ii) use commercially reasonable efforts to enforce the terms and
conditions of such agreements, (iii) allow ISI, at its expense, to join MCI as a
named plaintiff in any suit brought by MCI against an Authorized Third Party or
Licensee, and (iv) take such other actions, give such information and render
such aid, as may be necessary to allow ISI to bring and prosecute such suits
against an Authorized Third Party or Licensee.
(d) Upon ISI's request, MCI shall promptly deliver to ISI the form of
License Agreements and the form agreements for MCI's and its Licensed
Affiliates' arrangements with Authorized Third Parties as contemplated by this
Contract, to the extent MCI has such agreements.
(e) If a Licensee violates the terms of the License Agreement or an
Authorized Third Party violates the terms of an agreement contemplated by this
Contract with MCI or its Licensed Affiliates and does not cure such violation
within thirty (30) days of written notice of breach, then MCI shall promptly
terminate such Licensee's or Authorized Third Party's rights to the
Deliverables.
(f) MCI shall have the right with ISI's prior written consent, which shall
not be unreasonably withheld, to directly enforce, to the extent possible under
applicable law, ISI's Intellectual Property Rights in the Deliverables with
respect to any infringement thereof which falls within the scope of the licenses
granted to MCI and its Licensed Affiliates hereunder. MCI shall keep ISI
informed regarding the actions that MCI contemplates, including settlement of
any claims to the extent reasonably practicable. ISI shall have the option to
participate in any action described above, but only with respect to ISI's
Intellectual Property Rights, at its own expense.
6. ATTRIBUTION RIGHTS.
(a) Any sublicenses of the Deliverables, MCI Modified Codecs and Third
Party Modified Codecs or use thereof for the provision of services to end users
in accordance with Paragraphs 5(a)(ii) and 5(a)(iii), by MCI, an MCI Licensed
Affiliate, a Distributor or an Authorized Third Party and any marketing
materials used by MCI, an MCI Licensed Affiliate, a
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Distributor or an Authorized Third Party in connection with such sublicenses or
in connection with such services shall include the ISI Attribution displayed in
a manner specified by ISI in accordance with ISI's written policies provided to
MCI, but in any case, consistent with reasonable industry practices for the use
and placement of attribution marks. ISI shall have the right to modify the ISI
Attribution or its use from time to time by issuing to MCI an amended written
policy, and MCI, its Licensed Affiliates, Distributors and Authorized Third
Parties shall have a reasonable period of time (not to exceed six (6) months
from receipt of the written notice) to "phase out" use of materials conforming
to an earlier ISI written policy.
(b) ISI grants to MCI, its Licensed Affiliates, Authorized Third Parties
and Distributors a non-exclusive, royalty-free right and license to use the ISI
Attribution solely in connection with the promotion, marketing, distribution and
sublicense of the Deliverables, MCI Modified Codecs and Third Party Modified
Codecs as part of a product or in connection with a service, in each case in
accordance with ISI's written policies described in Paragraph 6(a) hereof. To
the extent the ISI Attribution does not infringe MCI's or a third party's
intellectual property rights, MCI agrees and acknowledges that (i) the ISI
Attribution, whether or not registered, is the sole property of ISI and or its
suppliers, (ii) MCI's, its Licensed Affiliates', Distributors' and its
Authorized Third Parties' reproduction of the ISI Attribution inures to the
benefit of ISI, and (iii) MCI, its Licensed Affiliates, Distributors and
Authorized Third Parties acquire no legal rights in the ISI Attribution. MCI,
its Licensed Affiliates, Distributors and Authorized Third Parties shall use the
appropriate registered or common law trademark symbols in connection with the
ISI Attribution.
7. RESERVATION OF RIGHTS; PROPRIETARY NOTICES; OWNERSHIP.
(a) Except for the rights expressly granted in this Contract, ISI owns all
other rights, including, but not limited to, (i) all other Intellectual Property
Rights in the Deliverables, (ii) all Intellectual Property Rights in any
materials other than the Deliverables that are developed by ISI before or after
the Effective Date, and (iii) all Patent Rights that ISI elects to acquire as
provided in Paragraph 8.
(b) MCI, its Licensed Affiliates and Distributors and Authorized Third
Parties shall not remove any copyright, patent or other proprietary notices that
appear in or on the Deliverables as provided by ISI. MCI, its Licensed
Affiliates, Distributors and Authorized Third Parties shall affix ISI's
copyright, patent and any other applicable proprietary notices on all copies of
the Deliverables, MCI Modified Codecs and Third Party Modified Codecs.
(c) Notwithstanding ISI's rights in the Deliverables, except for ISI's
agreement with Multi-Media Access Corporation dated March 25, 1998, ISI shall
not license the Deliverables to third parties unless such Deliverables include a
material modification, integration or productization of the Deliverables.
(d) Notwithstanding the rights and licenses granted in this Contract, MCI,
its Licensed Affiliates, Distributors, Authorized Third Parties and Licensees
shall have no express or implied license under any patent owned by ISI which
issues on a patent application filed after the Effective Date except as provided
in Paragraph 11.
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(e) ISI is under no obligation to deliver any source code, object code or
other technical material to MCI, its Licensed Affiliates, Authorized Third
Parties, Distributors and Licensees other than as expressly provided for in this
Contract.
(f) Except as expressly stated in this Contract, neither party has any
express or implied right to use in any manner any Intellectual Property Rights
of the other party. Except for the limited license rights set forth in
Paragraphs 4(b) and 5, MCI may grant no other rights in the Deliverables to any
third party including, but not limited to, Licensed Affiliates, Authorized Third
Parties, Distributors or Licensees.
8. PATENTS.
(a) MCI agrees that if one or more employees or independent contractors of
MCI, its Licensed Affiliates or Authorized Third Parties (collectively, the
"Personnel") conceives or reduces to practice a new idea or invention (whether
or not patentable) in the course of exercising the rights granted in Paragraph 4
("Inventions"), then MCI shall promptly deliver to ISI or cause its Licensed
Affiliates or Authorized Third Parties, as applicable, to promptly deliver an
invention disclosure form for the Invention containing, at a minimum, the
information described in EXHIBIT G (the "Disclosure"). The Confidential
Information of MCI, its Licensed Affiliates and Authorized Third Parties that is
provided to ISI and/or its counsel in connection with delivery of a Disclosure
shall be treated by ISI or its counsel receiving such Confidential Information
as the Disclosing Party's Confidential Information according to the terms of
EXHIBIT C; provided, however, that ISI may disclose such information solely for
purposes of preparing, filing and prosecuting a patent application for the
Disclosure.
(b) Upon ISI's receipt of a Disclosure and upon ISI's request, ISI may
interview the inventor or co-inventors named on the Disclosure and MCI, its
Licensed Affiliates and the Authorized Third Parties shall deliver to ISI all
materials and shall take reasonable actions to ensure that the inventors
cooperate in providing all information reasonably necessary to prepare and file
patent applications resulting from such Disclosure.
(c) ISI shall have three (3) months after its receipt of the Disclosure to
evaluate the Disclosure and either (i) provide MCI written notice within the
three (3) month period of ISI's election to (x) own the Patent Rights covered by
the Disclosure and have such Patent Rights assigned to ISI according to
Paragraph 8(h), and (y) prepare and file a patent application based on the
Disclosure, or (ii) provide MCI written notice that ISI does not desire to
acquire the Patent Rights and file a patent application at that time covering
the Disclosure.
(d) During the three (3) month period described in Paragraph 8(c), MCI
shall refrain from any act and shall cause its Licensed Affiliates and
Authorized Third Parties to refrain from any act that adversely impacts ISI's
ability to obtain a patent application based on the Disclosure.
(e) Upon MCI's receipt of the notice described in Paragraph 8(c) to the
effect that ISI does not desire to file a patent application at that time
covering the Disclosure, MCI may, at its option, prepare and file a patent
application based on the Disclosure. At any time after MCI's receipt of the
notice described in Paragraph 8(c) to the effect that ISI does not desire to
file a
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patent application at that time covering the Disclosure, MCI shall provide at
ISI's request a status report of MCI's analysis and prosecution, if any, of a
patent for an Invention.
(f) If MCI elects to file and prepare a patent application based on the
Disclosure, then MCI (i) shall deliver to ISI a copy of the claims that are to
be filed relating to such Disclosure prior to filing the patent application, and
(ii) shall from time to time provide ISI copies of all correspondence related to
the prosecution of the applicable patent.
(g) After MCI's receipt of the notice described in Paragraph 8(c) to the
effect that ISI does not desire to file a patent application at that time
covering the Disclosure and at any time through issuance of a patent covering
such claims, ISI may elect to acquire the Patent Rights or future Patent Rights
covered by the applicable Disclosure according to the terms in Paragraph 8(h) by
providing written notice to MCI of such election and promptly reimbursing MCI
for its legal costs and expenses (including MCI's reasonable internal costs)
that have been incurred up to the time of such election by ISI in connection
with the filing, preparation, prosecution and issuance of a patent for the
Inventions set forth in the Disclosure. If, after ISI's election to acquire the
Patent Rights for a Disclosure, ISI elects to have MCI's internal legal staff
file, prepare and prosecute a patent application based on such Disclosure, then
ISI shall reimburse MCI for its reasonable internal costs and expenses
associated with such activities.
(h) If ISI elects to acquire the Patent Rights as described above, then MCI
shall assign and cause its Licensed Affiliates and Authorized Third Parties and
the Personnel of MCI, its Licensed Affiliates and Authorized Third Parties to
assign to ISI, without further consideration, all right, title and interest in
and to the Patent Rights. MCI shall execute and cause its Personnel to execute
and deliver such instruments and take such further action as may be requested by
ISI to perfect the assignment of Patent Rights. MCI shall cause its Authorized
Third Parties and its Authorized Third Parties' Personnel to execute and deliver
such instruments and take such other action as may be requested by ISI to
perfect the assignment effected by this Contract and maintain patents granted
thereon.
(i) Except as provided above, MCI shall not, and shall obligate its
Licensed Affiliates and Authorized Third Parties by written agreement not to,
file any patent application with claims drawn in whole or in part to the
Deliverables, MCI Modified Codecs, Third Party Modified Codecs, MCI
Modifications, and Third Party Modifications.
9. LIMITATION ON MCI MODIFICATIONS AND THIRD PARTY MODIFICATIONS.
(a) Notwithstanding MCI's, its Licensed Affiliates' and/or the Authorized
Third Parties' ownership rights in an MCI Modification or a Third Party
Modification, except as provided in Paragraph 4(a)(v), MCI shall not, and shall
obligate its Licensed Affiliates, Authorized Third Parties and Distributors by
written agreement not to, distribute at any time any source code version of the
MCI Modifications or Third Party Modifications.
(b) Notwithstanding MCI's, its Licensed Affiliates' and/or an Authorized
Third Party's ownership rights in an MCI Modification or a Third Party
Modification, MCI shall not, and shall obligate its Licensed Affiliates,
Authorized Third Parties and Distributors by written
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agreement not to, distribute at any time any object code version of the MCI
Modifications or Third Party Modifications unless such object code version of
the MCI Modifications or Third Party Modifications are a part of an MCI Modified
Codec or a Third Party Modified Codec, respectively.
10. REPORTS. Within thirty (30) days after the last day of each calendar
quarter, MCI shall deliver to ISI a report in the form attached as EXHIBIT F
describing all MCI Modifications and Third Party Modifications created during
such calendar quarter by MCI, its Licensed Affiliates and the Authorized Third
Parties ("Modification Report"). Notwithstanding the above, MCI, its Licensed
Affiliates and Authorized Third Parties are not obligated to report
modifications of the Deliverables Source Code that result from normal repairs
(including bug fixes).
11. USE OF PATENTS.
(a) MCI, its Licensed Affiliates, Authorized Third Parties and Distributors
shall receive an implied license to any Patent Rights that are acquired by ISI
under this Contract, the scope of which shall be defined by the rights granted
in Paragraphs 4 and 5. The term of the implied license to the Patent Rights
described above shall not exceed the term of the issued patent that is
applicable to such Patent Rights.
(b) ISI shall not be restricted in its ability to practice any Patent
Rights that are acquired by ISI under this Contract.
12. MOST FAVORED CUSTOMER. On projects agreed to by ISI and MCI after the
Effective Date and for two years thereafter, ISI shall offer to MCI service
rates at least as favorable as service rates offered to ISI's other customers
for similar projects performed by persons with similar skills. If during the
two years after the Effective Date, MCI provides ISI a written request to use
and/or distribute a product (other than the Deliverables) that is generally
offered directly by ISI to third parties, then ISI will offer the product for
license fees that are at least as favorable as ISI offers to its other customers
(excluding ISI's exclusive licensees and exclusive distributors) for the same
type of license and according to the same terms and conditions.
13. AUDIT RIGHT. Upon at least twenty-one (21) days advance written
notice to MCI and no more than once during any twelve (12) month period, ISI may
examine the MCI Modifications or Third Party Modifications at MCI's office
solely for the purpose of verifying compliance with Paragraphs 8 and 10 of this
Contract.
14. INDEMNIFICATION. The parties agree to the indemnification provisions
set forth in EXHIBIT B.
15. WARRANTIES.
(a) ISI warrants to MCI that the Deliverables Source Code delivered under
this Contract can be compiled to the Deliverables provided under the Agreement.
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(b) ISI warrants to MCI that to its actual knowledge the Deliverables
Source Code as delivered by ISI to MCI under this Contract does not contain
software traps, viruses, worms, trap doors, back doors or other similar code
that may interfere with MCI's, its Licensed Affiliates' and its Authorized Third
Parties' use of the Deliverables as authorized in this Contract.
(c) Subject to the limitations, restrictions and disclaimers set forth in
this Contract, ISI warrants to MCI that to the extent the Deliverables Source
Code as provided by ISI processes date or date dependent information, from the
Effective Date until August 7, 2002 the Deliverables Source Code, when used as
authorized in this Contract, is capable of correctly processing, providing
and/or receiving four-digit year data within and between the twentieth and the
twenty-first centuries, provided that all products (i.e., hardware, software and
firmware) used with the Deliverables Source Code properly exchange four-digit
and accurate year data with it. ISI's sole obligation and MCI's sole and
exclusive remedy with respect to a breach of this warranty is to provide MCI
with modified Deliverables Source Code which meets the requirements set forth
above.
(d) MCI acknowledges that (i) third party software as well as software
developed by MCI and its Licensed Affiliates (collectively, the "Other
Software") are used with the Deliverables Source Code provided by ISI, (ii)
ISI's Deliverables Source Code may rely on the underlying platform and operating
system software (collectively, the "Operating System Software") for time and
date services, and (iii) the Other Software and Operating System Software may
introduce Year 2000 bugs independent of ISI's Deliverables Source Code.
Accordingly, MCI acknowledges and agrees that (i) ISI makes no representations,
warranties, or covenants of any kind with respect to the Other Software or the
Operating System Software, and (ii) ISI shall have no liability of any kind
whatsoever for any damages incurred by MCI or any third party arising from the
Other Software or Operating System Software.
(e) Except for Clear Video Live licenses, ISI represents and warrants to
MCI that it has not licensed the Deliverables to anyone other than MCI and its
Affiliates between September 16, 1994 until the Effective Date.
(f) MCI represents and warrants to ISI that prior to the Effective Date it
has not granted anyone any license to ISI technology that did not contain
confidentiality restrictions and reverse engineering restrictions.
(g) ISI represents and warrants to MCI that the Deliverables Source Code
has not been materially modified since September 30, 1997 until the Effective
Date. MCI's sole and exclusive remedy for any breach of this warranty shall be
for ISI to promptly deliver such material modifications to MCI. Any material
modifications to the Deliverables Source Code delivered to MCI under this
Paragraph 15(g) shall be treated as part of a Deliverable.
16. DISCLAIMER OF WARRANTIES. MCI ACKNOWLEDGES AND AGREES THAT THE
DELIVERABLES AND ANY OTHER MATERIALS OF ANY KIND PROVIDED UNDER THE AGREEMENT
AND THIS CONTRACT ARE PROVIDED "AS-IS" EXCEPT FOR THE WARRANTIES IN PARAGRAPH 15
OF THIS CONTRACT. ISI AND THE ISI AFFILIATES DISCLAIM ANY AND ALL OTHER
REPRESENTATIONS, CONDITIONS,
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AND WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT.
17. LIMITATION OF LIABILITY. NEITHER PARTY NOR ITS AFFILIATES WILL BE
LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR ANY LOSS OF REVENUE OR INDIRECT,
PUNITIVE, EXEMPLARY, SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING FROM THE
AGREEMENT, EXISTING AGREEMENTS, THIS CONTRACT OR ANY OTHER WRITTEN OR ORAL
AGREEMENTS BETWEEN ISI (INCLUDING ITS AFFILIATES) AND MCI (INCLUDING ITS
AFFILIATES), EVEN IF SUCH PARTY HAS BEEN ADVISED AS TO THE POSSIBILITY OF SUCH
DAMAGES. EXCEPT FOR CLAIMS THAT MAY ARISE UNDER THE TERMS OF PARAGRAPHS 4, 5,
7, 14 AND 19 AND EXHIBITS B AND C, EACH PARTY AGREES THAT THE AGGREGATE
LIABILITY OF THE OTHER PARTY AND ITS AFFILIATES, AGENTS, AND LICENSORS, IF ANY,
ARISING OUT OF ANY KIND OF CLAIM (WHETHER IN CONTRACT, TORT, OR OTHERWISE), IN
ANY WAY ARISING OUT OF OR RELATED TO THE AGREEMENT, EXISTING AGREEMENTS, THIS
CONTRACT OR ANY OTHER WRITTEN OR ORAL AGREEMENTS BETWEEN ISI (INCLUDING ITS
AFFILIATES) AND MCI (INCLUDING ITS AFFILIATES) SHALL NOT EXCEED $1,000,000 IN
THE AGGREGATE.
18. RELEASE.
(a) In consideration of the agreements contained in this Contract and
except as expressly set forth in Paragraphs 18(b) and 18(c) below, each party
hereby releases, acquits and forever discharges the other party and its
predecessors, successors, assigns, parents, subsidiaries, Affiliates, officers,
directors, partners, agents, attorneys and employees from any and all
liabilities, claims, complaints, demands, actions, causes of action and damages
of any kind or nature arising out of or related to (i) the Agreement, (ii) the
Existing Agreements, and (iii) any other written or oral agreements between ISI
(including its Affiliates) and MCI (including its Affiliates) on or before the
Effective Date.
(b) The release set forth in Paragraph 18(a) above shall not apply to a
dispute between ISI and MCI regarding an obligation, prior to the Effective
Date, under the Agreement, the Existing Agreements or any other written or oral
agreement between the parties, to pay royalties with respect to revenues from
license fees which revenues were not disclosed or reported to MCI (including any
public disclosure of such revenues), but only where the party asserting
liability on the part of the other ("Asserting Party") establishes that (1) the
amount of unpaid royalties exceeds $100,000, (2) the party allegedly owing the
royalties (x) had actual knowledge, prior to the Effective Date, of the events
giving rise to the obligation to pay royalties, and (y) had actual knowledge,
prior to the Effective Date, that its failure to pay such royalties was contrary
to its obligations under the Agreement or the Existing Agreements, and (3) the
Asserting Party had no actual knowledge prior to the Effective Date of such
failure to pay royalties. The parties acknowledge and agree that MCI has no
right to claim a royalty from ISI's STiNG product under the Agreement, the
Existing Agreements or any other written or oral agreement between the parties.
-12-
(c) The release set forth in Paragraph 18(a) above shall not apply to
claims of infringement arising between September 30, 1994 through the Effective
Date based on MCI's authorized use of the Deliverables and such claims shall be
subject to EXHIBIT B.
19. CONFIDENTIALITY. The parties agree to the confidentiality provisions
set forth in EXHIBIT C.
20. DISPUTE RESOLUTION. The parties agree to the dispute resolution
provisions set forth in EXHIBIT D.
21. WARRANTS. ISI agrees to issue and deliver to MCI the warrant attached
hereto as EXHIBIT E ("Warrant") to purchase from ISI up to 1,452,570 shares of
ISI common stock at any time, or from time to time, in whole or in part, after
the Effective Date and before 5:00 p.m. Eastern Time, August __, 2002.
22. EXPORT. MCI shall comply fully with all laws and regulations of the
U.S. and other countries relating to the export or import of information
("Export Laws") to assure that neither the Deliverables and the other materials
provided under this Contract, nor any direct products thereof are (i) exported,
directly or indirectly, in violation of the Export Laws, or (ii) are used for
any purpose prohibited by the Export Laws.
23. TERM AND TERMINATION. The terms of this Contract shall commence on
the Effective Date and, except as provided in Paragraphs 3, 12, 15(c), 21 and
25, shall continue in perpetuity.
24. NOTICE.
(a) All communications required or permitted under this Contract shall be
in writing and either mailed first class, postage pre-paid, sent by reputable
overnight delivery services (with request for written confirmation of receipt),
hand-delivered or sent by facsimile transmission (with facsimile generated
confirmation of transmission) to the parties at the addresses shown below, or at
such other addresses as one party may notify the other of from time to time:
If to ISI: ▇▇▇▇ ▇. ▇▇▇▇▇
President and CEO
Iterated Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
-13-
If to MCI: MCI Telecommunications Corporation
Tysons II
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Senior Manager Network Media Initiatives
FAX: ▇▇▇-▇▇▇-▇▇▇▇
with copies to: MCI Communications Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Technology Counsel
FAX: ▇▇▇-▇▇▇-▇▇▇▇
(b) All communications shall be deemed effective upon personal delivery or
on the date of actual receipt if sent by facsimile transmission or registered or
certified mail.
(c) ISI shall promptly advise MCI of any legal notice served on it relating
to this Contract. MCI shall promptly advise ISI of any legal notice served on
it relating to this Contract.
(d) Upon appointing any Authorized Third Party or Distributor, MCI shall
promptly notify ISI of the name of such Authorized Third Party or Distributor.
25. EMPLOYEE NON-SOLICITATION. For a period of three years after the
Effective Date ("Limitation Period"), each party and its Licensed Affiliates
agree not to call upon, solicit, recruit, or assist others in calling upon,
recruiting or soliciting any person who is or was an employee of the other party
or its Affiliates ("Non-soliciting Party") during the Limitation Period, for the
purpose of having such person perform services that are the same or similar to
the services that the person performed for the Non-soliciting Party during the
Limitation Period. MCI and its Licensed Affiliates shall include in their
agreements with Authorized Third Parties a provision similar to this Paragraph
25 that restricts the Authorized Third Party from soliciting ISI's employees for
the same purpose for a period of one (1) year after MCI or its Licensed
Affiliate enters into an agreement with the Authorized Third Party. ISI shall
not solicit an Authorized Third Party's employees for the same purpose for a
period of one (1) year after MCI or its Licensed Affiliates enters into an
agreement with the Authorized Third Party; provided that MCI has given ISI
written notice of such Authorized Third Party prior to the date such agreement
is entered into.
-14-
26. MISCELLANEOUS. This Contract shall be governed by and construed and
interpreted in accordance with the laws of the State of New York without giving
effect to its rules regarding conflicts of law and any applicable federal laws
of the United States of America, as from time to time amended and in effect.
This Contract, which includes the attached Exhibits, constitutes the entire
understanding of ISI and MCI and supersedes all prior written and oral
agreements of any kind between ISI and MCI, including but not limited to the
Agreement and the Existing Agreements. Except as provided in this Contract, any
representation, promise or condition of any kind between ISI and MCI shall not
be binding on either party. In any proceeding to enforce any of the terms of
this Contract, the prevailing party shall be entitled to recover its reasonable
expenses, including reasonable attorneys' fees. This Contract may not be
assigned, in whole or in part, by either party without the other party's written
consent, which consents shall not be unreasonably withheld. Notwithstanding the
foregoing, either party may assign this Contract to an Affiliate of, or
successor to, the assigning party without the consent of the other party;
provided, however, that the Affiliate or successor agrees to the terms of the
Contract. Any other attempt to assign the Contract shall be null, void, and of
no force or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their respective duly authorized representatives.
MCI TELECOMMUNICATIONS ITERATED SYSTEMS, INC.
CORPORATION
--------------------------------- ----------------------------------
By (Sign) By (Sign)
--------------------------------- ----------------------------------
Name (Print) Name (Print)
--------------------------------- ----------------------------------
Title Title
--------------------------------- ----------------------------------
Date Date
-15-
EXHIBIT A
DELIVERABLES
Date of Shipment
Description Under the Agreement
----------- -------------------
PC Audio Codec May 30, 1996
Host Lab Audio Codec September 30, 1996
Prototype Lossless Data Codec September 30, 1996
C30 Audio Codec December 31, 1996
Enhanced Fractal Real-time Video Codec December 31, 1996
C50 Audio Codec March 31, 1997
FRTC Reference Design Kit Version 3.0 June 6, 1997
Host Lab Audio Codec (P.C. version) June 30, 1997
C30 Audio Codec Reference Design Kit September 12, 1997
FRTC (I-Cam Version 1.0) September 30, 1997
MVM Audio Codec TMSC320C3x Version 2.0 September 30, 1997
Next Generation Real-time Video Codec September 30, 1997
Reference Design Kit Version 1.2
Lossless Video Codec (CCIR-601) September 30, 1997
-16-
EXHIBIT B
INDEMNIFICATION
1. ISI INDEMNIFICATION OF MCI
(a) ISI shall (i) defend at its expense and indemnify MCI and MCI's
directors, officers, employees, agents and advisers (collectively, the "MCI
Indemnified Parties," and individually, the "MCI Indemnified Party") and (ii)
hold the MCI Indemnified Parties harmless from and against any claim, in any
action, suit, or proceeding, or settlement thereof, that use of the Deliverables
infringes any Intellectual Property Rights of any third party. ISI shall pay
those damages and costs awarded against any MCI Indemnified Party, in such
action, suit, proceeding or settlement that are attributable to such claim. MCI
shall (i) notify ISI in writing of any such claim within five (5) days after an
MCI Indemnified Party receives notice of such claim, (ii) permit ISI sole
control of the defense, settlement or other compromise of such claim, and (iii)
ensure that the MCI Indemnified Party cooperates with ISI in the defense and
settlement of such claim, including providing to ISI, at the expense of ISI,
such information and assistance as ISI may reasonably request. If MCI fails to
perform any of the obligations described in the preceding sentence and such
failure has an adverse impact on ISI's or MCI's liability to the applicable
third party or ISI's ability to defend such claim, then ISI shall no longer be
obligated to indemnify the MCI Indemnified Parties for such claim or pay for
such damage or cost. The MCI Indemnified Party may, at its own expense, be
represented by counsel of its own choice in defense of such claim; provided,
however, that ISI shall continue to have sole control of the defense,
settlement, or other compromise of such claim.
(b) Notwithstanding Paragraph (a) above, the indemnification obligations of
ISI shall not extend to claims for infringement resulting from any additions or
modifications to the Deliverables other than by a person engaged or employed by
ISI by or under the direct control of ISI.
(c) If use of the Deliverables is enjoined due to a claim of infringement
that ISI is obligated to indemnify under Paragraph (a) above, then ISI shall, at
its own expense and to MCI's reasonable satisfaction, either (i) procure for MCI
the right to continue using the allegedly infringing Deliverables, as
applicable; (ii) replace the same with functionally substantially equivalent
non-infringing components, matter or materials; or (iii) modify the same to
become non-infringing.
2. MCI INDEMNIFICATION OF ISI
MCI shall (i) defend at its expense and indemnify ISI and ISI's directors,
officers, employees, agents and advisers (collectively, the "ISI Indemnified
Parties", and individually, an "ISI Indemnified Party") and (ii) hold the ISI
Indemnified Parties harmless from and against any claim, in any action, suit, or
proceeding, or settlement thereof, that the Intellectual Property Rights of the
claimant are infringed by additions or modifications to the Deliverables made by
-17-
anyone receiving rights under this Contract other than ISI. MCI shall pay those
damages and costs awarded against any ISI Indemnified Party in such action,
suit, proceeding or settlement that are attributable to such claim. ISI shall
(i) notify MCI in writing of any such claim within five (5) days after an ISI
Indemnified Party receives notice of such claim; (ii) permit MCI sole control of
the defense, settlement, or other compromise of such claim; and (iii) ensure
that the ISI Indemnified Party cooperates with MCI in the defense, settlement or
other compromise of such claim, including providing to MCI, at the expense of
MCI, such information and assistance as MCI may reasonably request. If ISI
fails to perform any of the obligations described in the proceeding sentence and
such failure has an adverse impact on MCI's or ISI's liability to the applicable
third party or MCI's ability to defend such claim, then MCI shall no longer be
obligated to indemnify the MCI Indemnified parties for such claim or pay for
such damage or cost. The ISI Indemnified Party may, at its own expense, be
represented by counsel of its own choice in defense of such claim; provided,
however, that MCI shall continue to have sole control of the defense,
settlement, or other compromise of such claim.
3. LIMITATIONS ON INDEMNITY OBLIGATIONS
Each party's indemnification obligation set forth in this EXHIBIT B shall
be limited according to the terms in Paragraph 17 of this Contract.
-18-
EXHIBIT C
CONFIDENTIALITY COVENANTS
1. Each of MCI and ISI shall (i) use reasonable efforts to maintain the
confidentiality of the information and materials of the other that may be
reasonably understood, from legends, the nature of such information itself
and/or the circumstances of such information's disclosure, to be confidential
and/or proprietary thereto or of third parties to which either of them owe a
duty of non-disclosure (collectively, "Confidential Information"); (ii) take
reasonable steps in connection therewith, including at least the steps that each
takes to protect the confidentiality of its comparable proprietary assets; (iii)
with respect to any source code in the possession of either of them, use
reasonable care in the selection and assignment of personnel to work with such
source code and instruct all personnel so assigned to take reasonable
precautions to prevent unauthorized disclosures; and (iv) with respect to any
person to which disclosure is contemplated, require such person to execute an
agreement providing for the treatment of Confidential Information set forth in
clauses (i) through (iii) above. The foregoing shall not require separate
written agreements with employees and agents already subject to written
agreements substantially conforming to the requirements of this EXHIBIT C nor
with professionals or others that are bound under applicable law, canons, or
codes of ethics to respect the confidentiality of client communications and
materials.
2. The obligations set forth in this EXHIBIT C shall not apply to any
information and materials which: (i) become public knowledge through no act or
failure to act of the party receiving the Confidential Information ("Receiving
Party"); (ii) are publicly disclosed by the owner of the Confidential
Information ("Disclosing Party"); (iii) are lawfully obtained by the Receiving
Party without obligations of confidentiality from a third party or third parties
after reasonable inquiry regarding the authority of such third party or third
parties to possess and divulge the same; (iv) are independently developed by the
Receiving Party from sources or through persons that such person can demonstrate
had no access to Confidential Information; or (v) are lawfully known by the
Receiving Party at the time of disclosure other than by reason of discussions
with or disclosures by the parties. The obligations set forth in this EXHIBIT C
with respect to the Confidential Information shall remain in effect for a period
of two years after the disclosure thereof and thereafter unless and until the
Confidential Information is no longer deemed to be trade secret under applicable
law through no act or omission of MCI, its Affiliates and each of their
respective licensees.
-19-
EXHIBIT D
DISPUTE RESOLUTION
1. SCOPE OF ARBITRATION. All disputes between ISI and MCI arising out of
or relating to this Contract and all royalty disputes and infringement disputes
described in Paragraphs 18(b) and 18(c) of the Contract, shall be resolved by
final and binding arbitration conducted in accordance with and subject to the
provisions of the United States Arbitration Act, 9 U.S.C. Sections 1 et seq.,
provided, however, that prior to filing a demand for arbitration, the parties
shall attempt to resolve their disputes through negotiation, and, if the dispute
remains unresolved, by non-binding mediation, as provided in this EXHIBIT D.
2. MEETING BEFORE ARBITRATION. In the event there is a dispute arising
out of or relating to this Contract or a royalty dispute or infringement dispute
as described in Paragraphs 18(b) and 18(c) of the Contract, the parties first
shall attempt to resolve the dispute by negotiations between senior executives
of the parties who have authority to settle the controversy. The disputing
party shall give the other party written notice of the dispute. Within twenty
days after receipt of said notice, the receiving party shall submit a written
response to the disputing party. The notice and response shall include (a) a
statement of each party's position and a summary of the evidence and arguments
supporting its position, and (b) the name and title of the executive who will
represent that party. The executives shall meet at a mutually acceptable time
and place within thirty days after the date of receipt of the disputing party's
notice and, after that, as often as they reasonably deem necessary to exchange
relevant information and to attempt to resolve the dispute. If the matter is
not resolved within sixty days after the receipt of the disputing party's
notice, or if the party receiving said notice will not meet within thirty days,
then either party may initiate mediation of the dispute according to the terms
provided below.
3. MEDIATION BEFORE ARBITRATION. In the event the dispute is not resolved
by negotiation as provided in the preceding paragraph, then, prior to filing a
demand for arbitration, either party shall, if it still wishes to resolve the
dispute, refer the dispute to mediation, i.e., an informal, non-binding
conference or conferences between the parties in which a mediator will seek to
guide the parties to a resolution of the dispute. The mediation shall take
place in Washington, D.C. if requested by ISI, and shall take place in Atlanta,
Georgia if requested by MCI. The mediation shall be conducted under the
auspices of the J.A.M.S./ENDISPUTE ("JAMS") office in the city where the
mediation is to be conducted, or, if JAMS has no office in that city, under the
auspices of the JAMS office closest to the city where the mediation is to be
conducted. The parties are free to select any mutually acceptable mediator from
the list provided by such JAMS office. If the parties cannot agree or have no
particular choice of mediator, then a list and resumes of available mediators
will be sent to the parties, each of whom shall inform JAMS of those mediators
who are acceptable, provided that at least one such mediator shall be designated
acceptable. JAMS shall then select a mediator who is acceptable to both
parties. The mediation shall occur within sixty days after the request for
mediation. The fees and costs of the mediation shall conform to the then
current fee schedule at JAMS and, in the absence of an agreement to the
contrary, shall be borne equally by each party.
-20-
4. ARBITRATION. If the dispute is not finally resolved within thirty days
after the first day of the mediation, then either party may demand arbitration
by filing a demand for arbitration. The arbitration shall be conducted under
the auspices of JAMS. An arbitration demanded by ISI shall take place in
Washington, D.C. and an arbitration demanded by MCI shall take place in Atlanta,
Georgia. The arbitration shall be conducted by one arbitrator mutually agreed
upon by ISI and MCI, under the JAMS Arbitration Rules and Procedures in effect
on the Effective Date of the Contract, except that the parties shall have any
right to discovery as would be permitted under the Federal Rules of Civil
Procedure for a period of ninety days following the selection of the arbitrator,
and the arbitrator shall resolve any dispute which arises in connection with
such discovery. The fees and costs of JAMS and the arbitrator shall, in the
absence of an agreement to the contrary, be borne equally by each party. The
prevailing party shall be entitled to an award of costs, expenses and reasonable
attorneys' fees. Judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction. The award shall not include,
and the arbitrator shall not have the power to award, any damages or relief
which are excluded by the Contract.
5. LIMITATION OF ACTIONS. Any request for a meeting to resolve a dispute,
as provided in Paragraph 2 of this EXHIBIT D, must be served upon the other
party no later than one year from the date that the facts giving rise to such
dispute occurred.
6. EXCLUSION OF REQUEST FOR INTERIM INJUNCTIVE RELIEF. Notwithstanding
this EXHIBIT D, either party may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction or other interim
injunctive relief, as may be necessary to protect such party's Intellectual
Property Rights and Confidential Information.
-21-
EXHIBIT E
WARRANT AGREEMENT
WARRANT AGREEMENT ATTACHED
-22-
EXHIBIT F
MODIFICATION REPORT
CALENDAR QUARTER ______
This report is submitted according to the terms of Paragraph 10 of the
Contract dated August __, 1998 between Iterated Systems, Inc. ("ISI") and MCI
Telecommunications Corporation ("MCI") (the "Contract").
List and describe below all MCI Modifications and Third Party Modifications
created during the above indicated calendar quarter by MCI, its Licensed
Affiliates and the Authorized Third Parties ("Modification Report").
Notwithstanding the above, MCI, its Licensed Affiliates and Authorized Third
Parties are not obligated to report modifications of the Deliverables Source
Code that result from normal repairs (including bug fixes).
You may attach additional pages, if necessary, to further describe the
modifications made to the Deliverables.
DATE
DELIVERABLES
SOURCE CODE
DELIVERED TO
AUTHORIZED
DESCRIPTION DATE PROJECT THIRD PARTY
STARTED (IF
APPLICABLE)
ITEM #
------ ------------ -----------
DELIVERABLE MODIFIED:
---------------------------------
NAME AND ADDRESS OF MCI ENTITY OR AUTHORIZED THIRD PARTY:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
DESCRIPTION OF MODIFICATION:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
ITEM #
------ ------------ -----------
DELIVERABLE MODIFIED:
---------------------------------
NAME AND ADDRESS OF MCI ENTITY OR AUTHORIZED THIRD PARTY:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
DESCRIPTION OF MODIFICATION:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
-23-
EXHIBIT G
MCI
INVENTION DISCLOSURE FORM
Item 1. Provide a short, descriptive title of the invention:
Item 2a. When and under what circumstances was the invention first conceived
(if you have any written evidence of this date, include copies):
Item 2b. What is the date of the first sketch or drawing of the invention:
Item 2c. What is the date of the first written description of the invention:
Item 2d. What is the date of the first test or operation of the invention:
Item 3a. List all contributors (use other pages if necessary) to this
conception of the invention and indicate the contributor's company if
not an MCI employee (also identify one person as the primary contact
with an "X" next to the name):
Printed Name:__________________________________________________________________
Last Name First Middle Initial
Phone#: (w)___________ (h) ____________ Dept/Loc:__________ E-MailD:__________
Current Address:_______________________________________________________________
Street City State Zip Code
Country:_____________ Citizenship:_________________ Job Title:_________________
Job assignment at Invention conception:________________________________________
Printed Name:__________________________________________________________________
Last Name First Middle Initial
Phone#: (w)___________ (h) ____________ Dept/Loc:__________ E-MailD:__________
Current Address:_______________________________________________________________
Street City State Zip Code
Country:_____________ Citizenship:______________ Job Title:___________________
Job assignment at Invention conception:________________________________________
Item 3b. Provide the management chain (though VP) of the originating
organization for the invention:
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-24-
MCI
INVENTION DISCLOSURE FORM
Item 4a. Has the invention been disclosed, or is it likely to be disclosed in
the near future, to persons outside of MCI, such as to a vendor, at a
technical conference or a trade show:
Yes__________ No___________ Don't Know/Other______________
If the answer above is yes, list the name, company/agency, date and
place of the disclosure:
Item 4b. Has the invention been disclosed, or is it likely to be disclosed in
the near future, in technical papers, oral presentations, etc. (please
indicate date):
Item 4c. If the answer to Items a or b is Yes or Don't Know/Other, was a non-
disclosure agreement used, or have you contacted one of the attorneys
listed in the instruction section to obtain a non-disclosure
agreement.
Item 4d. Have there been any attempts to demonstrate, publicly use, market or
sell the service or product:
Yes__________ No___________ Don't Know/Other______________
Item 4e. If the answer to Item 4d is Yes or Don't Know/Other, provide a
description of each such attempt:
Item 5a. Identify each MCI service, network or product which utilizes or may
utilize the invention:
Item 5b. Describe any potential or existing market for sale or license of this
item or the technology:
a. Government:
b. Commercial:
c. Identify any known firms or vendors who may be interested
in this item:
Item 6. If this item was first conceived or constructed with:
a. A governmental contract, provide the government contract
number:
b. An Internal Research and Development (RAD) or company
project, provide the project identification number:
c. Neither a or b, explain:
Item 7. Identify and attach copies of any prior references which you are aware
of and which may be relevant to the invention (products, brochures,
patents, publications, etc.), but do not perform a search for
references in order to complete this form:
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Inventor Signature(s) Date | Read, understood, and witnessed Date
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-25-
MCI
INVENTION DISCLOSURE FORM
Item 8. Describe the invention using the following format. Use as many pages
as necessary. ▇▇▇▇ each additional page "MCI Confidential."
1. Discuss the problems which the item is designed to solve. Refer to
any prior devices of a similar nature with which you may be
familiar.
2. Describe how the invention qualifies as a solution to the problem,
and state the advantage of the item over presently known devices,
systems or processes.
3. Specifically describe the item and its operation. Attach copies of
drawings, sketches, prints, photographs and illustrations, which
should be signed, witnessed and dated. Use numbers and descriptive
names in descriptions and drawings.
4. List all known and other possible uses for the item.
5. List the features of the item that are believed to be novel.
6. State why the invention is important to MCI.
7. List some related key words to facilitate searching for this
disclosure at a later time.
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Inventor Signature(s) Date | Read, understood, and witnessed Date
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-26-
MCI
INVENTION DISCLOSURE FORM
Attach Text or Drawings:
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Inventor Signature(s) Date | Read, understood, and witnessed Date
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-27-