LICENSE AGREEMENT
by and between
VASCO DATA SECURITY INTERNATIONAL, INC., for itself and its
subsidiaries ("LICENSEE")
and
LERNOUT & HAUSPIE SPEECH PRODUCTS, N.V. ("LICENSOR")
Effective Date: March 25, 1998 Initial Term: Five
years
LICENSEE Corporate Name: VASCO Data Security International, Inc.
Incorporated under the Laws of Delaware, USA
Address: 0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX XXX 00000
Phone: 000-000-0000 Fax: 000-000-0000
LICENSEE Notices Address: Same
Attention: T. Xxxxxxx Xxxx or Xxxx Apple
Phone: Same Fax:
LICENSOR Name: Lernout & Hauspie Speech Products N.V.
Incorporated under the Laws of Belgium
Address: Xx. Xxxxxxxxxxxxxx 0
0000 Xxxxx, Xxxxxxx
Phone: 057/22 88 88 Fax: 057/20 84 89
LICENSOR Notices Address: 00 0xx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Mr. Xxx Xxxxxxx
Phone: 000-000-0000 Fax: 781-238-
0986
THIS AGREEMENT IS GOVERNED BY THE ATTACHED TERMS AND CONDITIONS.
LICENSEE AND LICENSOR ACKNOWLEDGE THAT THEY HAVE READ AND AGREE TO BE
BOUND BY THE ATTACHED TERMS AND CONDITIONS. IN WITNESS WHEREOF, THIS
AGREEMENT HAS BEEN DULY EXECUTED BY THE PARTIES HERETO, AS OF THE
EFFECTIVE DATE.
LICENSEE: LICENSOR:
By: By:
Name: Name:
Title: Title:
ARTICLE I: DEFINITIONS
The following terms shall have the meanings ascribed to them herein
whenever they are used in this Agreement, unless otherwise clearly
indicated by the context.
1.1. "Corrections" shall mean changes made in the Development
Software and/or Documentation by LICENSOR to correct errors or
defects in the Development Software and/or Documentation.
1.2. "Designated Application" shall mean the application(s) made by
LICENSEE as identified in Addendum B.
1.3. "Development Software" shall mean the Software Development Kit
(SDK), to be adapted to work with the Designated Application;
Documentation for the SDK, which is customarily provided by
LICENSOR as a part of the SDK; and all Corrections of the SDK.
This shall not include any enhancements or upgrades of the SDK.
1.4. "Documentation" shall mean those visually-readable materials, in
English, developed by or for LICENSOR for use in connection with
the Development Software. Documentation includes operating
instructions, input information and format specifications.
1.5. "End User" shall mean the customers of LICENSEE or of Third
Parties, who will only be granted the right to use the Run-Time
Software in connection with the Designated Application.
1.6. "Run-Time Software" shall mean an object code/executable copy of
software derived from the Development Software (or any portion
thereof) which is integrated by LICENSEE within the Designated
Application and executable only in association with the
Designated Application.
1.7. "Third Party" shall include original equipment manufacturers,
system houses, value added resellers and other such entities
engaged in doing business with LICENSEE, and who acquire the
Designated Application, incorporating the Run-Time Software, for
distribution purposes only.
1.8"Subsidiary" shall mean a corporation or other legal entity at
least a majority of whose voting stock or voting power entitled
to vote for the election of directors (or other managing
authority) is owned, directly or indirectly, by the parent, now
or hereafter.
ARTICLE II: GRANT OF SOFTWARE LICENSE
2.1. Subject to all applicable terms and conditions hereof, LICENSOR
hereby grants to LICENSEE and its subsidiaries and LICENSEE and
its subsidiaries accept from LICENSOR, except as noted in
Addendum B, a world-wide non-exclusive, non-transferable license
to:
a) use the Development Software solely in connection with
LICENSEE's development, distribution and provision of
technical support for Designated Application incorporating
Run-Time Software;
b) make Run-Time Software copies based on the Development
Software with the sole purpose to incorporate into the
Designated Application;
c) distribute to End Users directly or through Third Parties,
copies of the Run-Time Software incorporated into the
Designated Application;
d) incorporate all or part of the Documentation into LICENSEE's
Designated Application documentation, provided LICENSEE
properly incorporates and references LICENSOR's trademarks and
copyrights in the documentation.
2.2. All distributions by Third Parties in accordance with Article
2.1.c shall be pursuant to written agreements that incorporate
applicable terms and conditions hereof, including appropriate
methods of calculation, reporting and payment of applicable
royalties (see Article III hereof).
2.3. It is furthermore expressly agreed that the only right granted
to Third Parties is the right to distribute the Designated
Application incorporating the Run-Time Software.
ARTICLE III: ROYALTIES/PAYMENTS
3.1. Royalties
In consideration for the rights granted under Article II,
LICENSEE shall make royalty payments to LICENSOR, pursuant to
Addendum C, for the Run-Time Software shipped hereunder by
LICENSEE or distributed by any Third Party.
3.2. Other Fees
Any training provided by LICENSOR under this Agreement will be
invoiced at the end of each month in which said services are
provided. Unless otherwise provided in writing, all invoices are
payable within thirty (30) days after invoice date.
3.3. Late Payments
Failing payment on time as mentioned here above, LICENSEE shall
be deemed to be in default, such without any notice or injunction
being required. In such case, LICENSEE shall be liable for
interest at the rate of twelve percent (12%) per annum of the
total amount due.
ARTICLE IV: WARRANTY
4.1. LICENSOR warrants that it has the right to grant the licenses
contained in this Agreement.
4.2. LICENSOR warrants that the Development Software will perform
substantially in accordance with the specifications as mentioned
in the Documentation. LICENSEE acknowledges that the Development
Software is of such complexity that it may have inherent defects
and agrees that if any deviations from the Documentation exist,
as LICENSEE's exclusive remedy and LICENSOR's sole
responsibility, LICENSOR shall use its best efforts to eliminate
any significant deviations reported to it by LICENSEE in writing.
This warranty shall expire six (6) months after the Effective
Date of this Agreement (the "Warranty Period").
4.3. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR MAKES,
AND LICENSEE RECEIVES, NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. LICENSOR DOES NOT WARRANT THAT
ANY OR ALL FAILURES, DEFECTS OR ERRORS WILL BE CORRECTED, OR
WARRANT THAT THE FUNCTIONS CONTAINED IN THE DEVELOPMENT SOFTWARE
WILL MEET CUSTOMER'S REQUIREMENTS. LICENSEE ACKNOWLEDGES THAT
LICENSOR HAS MADE NO REPRESENTATIONS REGARDING WARRANTY OR
LIABILITY OTHER THAN AS STATED IN THIS AGREEMENT.
ARTICLE V: SUPPORT
5.1. During the term of the Warranty Period as defined above in
Article IV, LICENSOR shall, upon request of LICENSEE, provide the
following support to LICENSEE, free of charge :
a) Telephone Support
LICENSOR shall provide telephone consulting services to
LICENSEE's designated personnel to assist such personnel in
resolving problems, obtaining clarification relative to the
Development Software and Documentation and providing
assistance regarding suspected defects or errors in the
Development Software or Documentation. Said services shall be
provided during normal business hours (Belgian Time), Mondays
through Fridays (excluding Belgian legal holidays). The names,
telephone, fax numbers of LICENSOR's support personnel, as
well as a list of the current holidays, are specified in
Addendum D.
b) Written Support
LICENSOR agrees to diligently work for the resolution of
defects and errors in the Development Software and/or
Documentation.
c) Corrections
LICENSOR shall keep LICENSEE advised of the status of all
Corrections done by LICENSOR for the Development Software and
Documentation during the term of the support. At the request
of LICENSEE, LICENSOR shall provide one (1) copy of the
current release of the Development Software incorporating such
Corrections.
d) Exceptions to Technical Support Agreements
The below items are expressly excluded from the support
programs and shall, as such, be invoiced at the then current
engineering fees:
i)Maintenance of software not delivered by LICENSOR;
ii) Repairs caused by other causes than normal use or repairs
caused by force majeure (such as, but not limited to, fire,
flood, failure of electric power or air conditioning);
iii) Repairs required by the fact that maintenance has been
done by a third party, not authorized by LICENSOR.
e) Training
Training can be given to LICENSEE by LICENSOR as an additional
service which will be invoiced at the applicable training
fees.
5.2. After the term of the Warranty Period, LICENSEE may purchase
additional support and training from LICENSOR by entering into a
maintenance and support agreement.
ARTICLE VI: TERM
6.1. The Initial Term of this Agreement shall commence on the
Effective Date herein and shall be automatically renewed for one
(1) year periods, unless terminated or canceled as provided in
Article 6.2.
6.2. This Agreement may be terminated for cause, as follows:
a) by LICENSOR, if LICENSEE fails to make timely payments or
provide royalty reports as required hereunder, and any such
failure is not remedied within thirty (30) days after receipt
of written notice;
b) by LICENSOR, if LICENSEE expressly or impliedly repudiates
this license by refusing to observe the restricted use or
confidentiality requirements as mentioned in this Agreement,
LICENSOR may terminate this Agreement immediately, by
providing written notice to LICENSEE stating such breach;
c) by either party, if a party ceases its business activities as
a result of bankruptcy, dissolution, liquidation, or other
causes, the other party may immediately terminate this
Agreement by providing written notice to that party.
6.3. After the Initial Term as defined hereabove, this Agreement may
be terminated by either party without cause by giving the other
party a ninety (90) days written notice.
6.4.Any termination or cancellation of this Agreement shall promptly
terminate LICENSEE's rights as defined in Article II. Provided
however that such termination shall not terminate or affect
sublicenses previously and properly granted to End Users and
Third Parties, being it that such termination is not due to
breach of contract by LICENSEE.
6.5. No termination or cancellation of this Agreement shall affect
the obligation of LICENSEE to collect and distribute to LICENSOR
all payments, which have become or will be due from Third Parties
and End Users and any other payments which have become due
hereunder.
6.6. At the moment of termination or cancellation LICENSEE shall
promptly return all Development Software to LICENSOR.
6.7. For the purposes of this Agreement "immediately" shall mean
three (3) days after postal date of a written notice or
the date of delivery of the courier mail company, whichever comes
first.
ARTICLE VII: INDEMNITY
7.1. LICENSOR shall indemnify and defend LICENSEE and Third
Parties against any claim that the Development Software infringes
any third party patent, copyright, trade secret or other
intellectual property right when used in accordance with the
terms of this Agreement, provided however that LICENSEE shall
give LICENSOR prompt notice of any such claim and shall give
information, reasonable assistance and authority to defend or
settle the claim. LICENSOR shall have the right, at its option,
either to obtain for LICENSEE the right to continue using the
Development Software and Run-Time Software, substitute other
software with equivalent functional capabilities, modify the
Development Software and Run-Time Software so that it is no
longer infringing while retaining equivalent functions, or
terminate this Agreement and refund all royalties paid by
LICENSEE under Addendum C of this Agreement.
7.2. Except as provided above, LICENSOR shall have no liability to
LICENSEE, Third Parties and End Users in the event infringement
of any intellectual property right arises from components of a
Designated Application which are not derived directly from the
Development Software or Run-Time Software operating on the
Designated Application, but which are introduced into the
Designated Application by LICENSEE, or which result from
compliance with LICENSEE's designs, specifications or
instructions, or from modification of the Development Software by
LICENSEE.
ARTICLE VIII: LIABILITY
8.1. Limitation on Damages
In no event shall LICENSOR be liable for any loss of or damage to
revenues, profits or goodwill or other special, incidental,
indirect or consequential damages of any kind, resulting from its
performance or failure to perform pursuant to the terms of this
Agreement or any of the attachments hereto, or resulting from the
furnishing, performance, or use or loss of use of any Development
Software, Run-Time Software or other materials delivered to
LICENSEE hereunder, including, without limitation, any
interruption of business, whether resulting from breach of
contract, breach of warranty, or any other cause (including
negligence), even if LICENSOR has been advised of the possibility
of such damages.
8.2. Maximum Liability
LICENSOR's total liability to LICENSEE from any and all causes
shall be limited to the total amount of royalties actually paid
by LICENSEE to LICENSOR under this Agreeement.
LICENSOR's limitation of liability is cumulative with all
LICENSEE's payments being aggregated to determine satisfaction of
the limit. The existence of more than one claim shall not
enlarge or extend the limit.
ARTICLE IX: CONFIDENTIAL INFORMATION
9.1. "Confidential Information" shall mean (a) any information
conveyed in written, graphic, machine-readable or other tangible
form, provided that such information is conspicuously marked
and/or considered by a party as confidential or proprietary; or
(b) any information conveyed orally where such information is
designated as confidential or proprietary at the time of such
oral disclosure. Notwithstanding the above, information shall
not be deemed Confidential Information to the extent that it
(i) was generally known and available in the public domain at the
time it was disclosed or subsequently becomes generally known and
available in the public domain through no fault of the recipient;
(ii) was known to the recipient at the time of disclosure;
(iii) is disclosed with the prior written approval of the
disclosing party; (iv) was independently developed by the
recipient without any use of the Confidential Information of the
disclosing party; or (v) becomes known to the recipient from a
source other than the disclosing party without breach of this
Agreement.The obligation not to use or disclose said Confidential
Information will remain in effect until one of these exceptions
occurs.
9.2. Both parties agree not to disclose any trade secrets or
Confidential Information transferred to it by the other party
which are identified in writing and/or are considered by a party
as confidential. Each party shall protect the other's
Confidential Information form unauthorized dissemination and use
with the same degree of care that such party uses to protect its
own like information. Neither party will use the other's
Confidential Information for purposes other than necessary to
directly further the purposes of this Agreement. Neither party
will disclose to third parties the other's Confidential
Information without the prior written consent of the other party.
Except as expressly provided in this Agreement, no ownership or
license rights are granted in any Confidential information.
9.3. Since unauthorized transfer of one party's Confidential
Information will substantially diminish their value and injure
that party in ways that cannot be remedied fully by money, the
other party's breach of these Article IX obligations will entitle
first party to equitable relief (including orders for specific
performance and injunctions), as well as monetary damages.
9.4. Both parties agree that the terms and conditions, and this
Agreement itself shall be considered as Confidential Information,
except as expressly otherwise stated in this Agreement.
ARTICLE X: RESTRICTED USE
10.1. LICENSEE shall not use, distribute or have distributed the
Development Software as such, nor shall LICENSEE use, distribute
or have distributed any Run-Time Software in connection with or
on any application other than the Designated Application.
10.2. LICENSEE shall not recreate, generate or reverse-engineer
any portion or version of the Development Software or attempt any
of the foregoing, or aid, abet or permit others to do so.
LICENSEE is not allowed to make any derivative works based on or
make any modifications to the Development Software, other than
expressly agreed to in this Agreement.
10.3. LICENSEE expressly agrees not to commercialize the
Development Software and/or Run-Time Software, in a manner which
enables a third party to make, use, or distribute additional
applications other than the Designated Application.
10.4. LICENSEE acknowledges that unauthorized reproduction or use
of the Development Software and/or Run-Time Software as provided
in this Article X is a breach of a material obligation of this
Agreement and is subject to any available remedies for such
breach.
ARTICLE XI: TITLE AND RIGHTS TO SOFTWARE AND MODIFICATIONS
11.1. The grant of license and distribution rights by LICENSOR to
LICENSEE under Article II hereof is LICENSEE's only right to the
Development Software and the Run-Time Software. Title, interests
and rights to the Development Software and Run-Time Software, in
all language versions delivered or to be delivered hereunder
shall always remain in LICENSOR.
11.2. Title, interests and rights to the Development Software,
the Run-Time Software and Documentation shall always remain in
LICENSOR. Furthermore, the grant of such license shall not
restrict licensing by LICENSOR in any manner.
ARTICLE XII: TAXES
12.1.The Run-Time Software licensed hereunder is intended
principally for use by End Users and therefore should be exempt
from sales, use, excise and other similar taxes. However, if
such tax, or any import duty, or export duty, should be imposed
on LICENSOR, LICENSEE shall either bear such tax or duty by a
direct payment to the taxing authority or shall reimburse
LICENSOR for such tax or duty paid by LICENSOR.
ARTICLE XIII: USE OF LOGO
13.1. LICENSEE agrees to add the L&H Corporate Logo to its
products using the Run-Time Software or any other logo at the
request of LICENSOR. This logo must appear on the packaging and
collateral of LICENSEE's Designated Application, as well as in
the accompanying user documentation. LICENSEE agrees to issue
with LICENSOR a joint press release upon shipment of its first
product using the Run-Time Software, or sooner, as mutually
agreed upon by both parties. Any press releases concerning this
Agreement must be approved in writing by LICENSOR prior to
release.
13.2. LICENSEE shall provide LICENSOR, free of charge, with ten
(10) copies of the Designated Application for demonstration and
marketing purposes.
ARTICLE XIV: MISCELLANEOUS
14.1. This Agreement shall be deemed to have been entered into
and shall be construed, governed and interpreted in accordance
with the laws of Belgium, without giving effect to principles of
conflict of law.
14.2. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other
provisions, and this Agreement shall be construed in all respects
as if such invalid or unenforceable provisions were omitted.
14.3. The failure of either party to insist, in any one or more
instances, upon the performance of any of the terms of this
Agreement or to exercise any right hereunder, shall not be
construed as a waiver of the future performance of any such term
or the future exercise of such right.
14.4. Whenever any occurrence (e.g. an event of force majeure) is
delaying or threatens to delay LICENSOR's timely performance
under this Agreement, LICENSOR will promptly give notice
thereof, including all relevant information with respect thereto,
to LICENSEE.
14.5. It is hereby agreed that the rights and obligations of the
parties hereto contained in Articles III, VI, VIII, IX, X, XI,
XII and the Addenda referenced therein, shall survive and
continue after any termination or cancellation of this Agreement
and shall bind the parties, their successors, their assigns and
their legal representatives.
14.6. This Agreement sets forth and shall constitute the entire
agreement between LICENSEE and LICENSOR with respect to the
subject matter thereof, and shall supersede any and all prior
agreements, understandings, promises and representations made by
one party to the other concerning the subject matter herein and
the terms and conditions applicable thereto. This Agreement may
not be released, discharged, supplemented, interpreted, amended
or modified in any manner except by an instrument in writing
signed by a duly authorized officer or representative of each of
the parties hereto as is specially provided elsewhere in this
Agreement.
14.7. In making and performing this Agreement, the parties act
and shall act at all times as independent contractors and nothing
contained in this Agreement shall be construed or implied to
create the relationship of partner or of employer and employees
between the parties. At no time shall either party make
commitments for or in the name of the other party.
14.8. LICENSEE is not allowed to assign the license rights
granted hereunder without LICENSOR's prior written consent, which
shall not be unreasonably withheld.
14.9. All notices under this Agreement shall be sent to the address
here above mentioned. All such notices shall be deemed to be
received by the other party three (3) days after the postal date
or on the date of signature of the receipt of delivery by a
courier mail company.
14.10.The Addenda referenced in this Agreement, and the
specifications referenced therein, as well as other documentation
referenced in this Agreement which define the obligations of the
parties, are a part of this Agreement with the same force and
effect as if fully set forth herein.
ADDENDUM A
SOFTWARE FUNCTIONAL SPECIFICATION
1. Functional Specification of the Development Software
Speaker Verification
Lernout & Hauspie has developed speaker verification software for
use in access control applications. The VOICE PRINT software is
built around the L&H speaker verification engine. As such it
allows for seamless integration in already existing telephone
applications.
The actual scenario and combination of different elements in the
verification procedure is under control of the application
developer. He can combine several attempts or several passwords to
improve the overall security.
PRODUCT DESCRIPTION
Enrollment of a new speaker
Each new person is asked to select his personal password or
passwords (each at least 1 second in length) and enter 3 times
into the system. The verification software checks if the
password(s) is (are) sufficiently long, contains a sufficiently
rich subset of phonemes and if the said utterances were consistent
over the 3 enrollment utterances. Out of each utterance a feature
vector, or voice token, is extracted. The 3 voice tokens are then
combined by the verification engine into a single Voice Print,
which is the final representation of the identity of the user.
The whole enrollment procedure should not take longer than half a
minute.
Verification Procedure
This is a 2-step procedure.
Identity Claim: First the person needs to identify himself to the
system. This can be achieved by using `a token' for entering a
name or access number but could also be achieved by keyboard
input, magnetic badge, or any other suitable method.
VOICE PRINT verification: As primary verification check the person
is asked to enter his voice password. A new voice token is
extracted from the uttered sample and is matched against the
centrally stored voice print.
Features
. passwords of 1 second or longer
. consistency check during enrollment
. utterance length control
. tradeoff between false acceptance and false rejection by
simple threshold control
. possibility of integration of multiple identity claims and
multiple verification prompts
. environment: this product is designed to work over
telephone input.
. response time: less than 0.5 seconds
PERFORMANCE
Using a double voice print of each 1 to 2 seconds long (3-4
syllable word) following average equal error rates have been
obtained:
. better than 4% EER in case the intruder KNOWS the password
Using a triple voice print of each 1 to 2 seconds long (3-4
syllable word) following average equal error rates have been
obtained:
. better than 3% EER in case the intruder KNOWS the password
SYSTEM REQUIREMENTS
Minimum 486 PC, equipped with the necessary telephony hardware and
software, Windows '95, Minimum 8 MB RAM
Background storage (on disk) of a voice print requires as little
as 1.4kByte pre second of speech. An active keyword (in RAM)
requires 25kByte/second.
Client-Server architecture is supported
2. Deliverables
Licensee agrees having received he SDK for Speaker verification
and the software supporting logic to combine scores from
individual trials and multiple passwords. And furthermore he
hereby accepts the development software.
ADDENDUM B
DESIGNATED APPLICATION/ LIMITED EXCLUSIVITY
1. Designated Application
The Run-Time Software will be incorporated into the following
LICENSEE' s proprietary application(s):
Products into which the Run-Time Software represents an inherent
part of its security function, or add-on modules to certain
products into which the Run-Time Software represents an inherent
part of its security function, which are being deployed in the
field of:
Telecom Applications.
Data Security Applications
Physical Access Applications.
Future applications to be defined in mutual agreement.
2. LIMITED EXCLUSIVITY
The license granted under article 2.1. shall be exclusive with
respect to Data Security Applications under which LICENSOR's Run-
Time Software is used as an alternate method to authenticate
users under LICENSEE' s patents 4,599,489 Claim 1 (attached
hereto as Exhibit 1) and 0172239 Claim 1 (attached hereto as
Exhibit 2), under the assumption of LICENSEE' s representations
and warranties that it fully and solely owns the above patents
and that these patents have not been invalidated by any third
party.
Both patents describe the use of a device that is analogous to a
key to generate passwords for authenticating users. The
exclusivity pertains to Data Security Applications under which
the users are required to generate a voice sample that can then
be transmitted to the computer for verification using the Run-
Time Software, all in accordance with and limited to the above
claims under the above mentioned patents.
LICENSEE acknowledges that LICENSOR retains the right to enter
into agreements, without any restriction or consideration, under
which its customers, either existing or new, shall have the right
to commercially use and exploit the Run-Time Software in
connection with Data Security Applications in so far said
applications do not infringe the above patents of LICENSEE.
Furthermore, nothing in this Agreement shall prevent LICENSOR to
license the Run-Time Software to its existing customer base,
under which LICENSOR has sold or licensed an L&H product, as well
as to customers who received a license from LICENSEE under which
such customer is or will be allowed to practice the claims under
the above patents.
This exclusivity shall commence on the Effective Date of this
Agreement and shall remain for a period of five(5) years,
(i) so long as LICENSEE:
a) does not enter into agreements with other speech software
companies;
b) makes timely payments to LICENSOR under this Agreement and
other agreements;
c) remains the sole owner of the above patents;
(ii) unless the patents are abandoned by LICENSEE or such patents
becomes the subject of a patent invalidation;
(iii) provided both parties evaluate from time to time, but not
less than once a year, the revenue forecasts to be generated
under the exclusivity.
The failure to achieve any of the above cumulative conditions
shall immediately revert the exclusivity into a non- exclusivity.
In addition, both parties agree to consider the other as a
Strategic Partner. As such, both parties agree to negotiate in
good faith to issue a license(s) to companies in Data Security
industry which wish to incorporate either the LICENSOR's Run-Time
Software or Licensee's derivative products developed using
LICENSOR's Run-Time Software.
ADDENDUM C
ROYALTY PRICING
1. Royalties
a) The royalty to be paid by LICENSEE for the use of LICENSOR's
Run-Time Software consists of ten percent (10 %) of the
revenue of LICENSEE related to the Designated Applications.
b) LICENSEE hereby commits to a non-refundable pre-payment on
royalties in the amount of US $ 800.000 (eight hundred
thousand US $).
c) LICENSEE will provide LICENSOR with calendar quarterly reports
showing the quantity of royalty-bearing copies of the
Designated Application shipped and/or distributed hereunder,
commencing three (3) months after the Effective Date. These
quarterly reports shall be provided to LICENSOR within ten
(10) days after each quarter. LICENSEE shall at the same time
transfer the amount of royalties due to LICENSOR's bank
account for all such royalties due.
d) LICENSEE shall keep a separate register in which it shall
record the exact number of royalty- bearing copies, as well as
the type of the Designated Application incorporating the Run-
Time Software and any other information relevant for
determining the amounts of royalties payable.
LICENSOR shall have the right to conduct an audit of LICENSEE,
and (through LICENSEE), Third Parties records relative to the
performance of this Agreement no more than once yearly. Such
audit shall be conducted by a mutually acceptable auditing
firm, independent from the parties.
LICENSEE's approval of the time and place for the audit
requested by LICENSOR shall not be unreasonably withheld.
Any audit shall be performed during normal business hours. In
the event such audit reveals an underpayment to LICENSOR,
LICENSEE shall pay LICENSOR such underpayment within thirty
(30) days, as well as the audit costs. Those audit costs shall
only be paid by LICENSEE if the underpayment is greater than
five percent (5%).
2. Engineering Fees
No engineering specification is currently anticipated. In the
event engineering needs to be performed, a separate engineering
agreement will be executed.
3. Payment Terms
a) LICENSEE will pay a first non-refundable pre-payment on royalties
to the amount of six hundred thousand US Dollars ($ 600,000 USD)
within three (3) months after the Effective Date of this
Agreement. This non-refundable prepayment will be credited
against royalty payments as described in this Agreement. LICENSEE
shall pay the non-refundable prepayment according to the payment
schedule as mentioned hereunder:
LICENSEE will pay a second non-refundable pre-payment on
royalties to the amount of two hundred thousand US Dollars ($
200,000 USD) within twelve (12) months after the Effective Date
of this Agreement. This non-refundable prepayment will be
credited against royalty payments as described in this Agreement.
LICENSEE shall pay the non-refundable prepayment according to the
payment schedule as mentioned hereunder:
After the minimum committed royalties, the amounts of royalties
shall be paid by LICENSEE to LICENSOR in quarterly basis and
shall be calculated according to section 1 of this Addendum,
being it understood that during the commitment period, or any
extension thereof, royalties shall be at least equal to or be
higher than the minimum amounts as specified in section 3.a).
This means that if during the commitment period/or any extension
thereof, the royalty fee in a specific quarter would be less
than the corresponding minimum amount to be paid in such
quarters, LICENSEE shall pay the minimum amount, but shall be
entitled to offset the difference in and against any future
quarterly royalty payments, which would exceed the corresponding
minimum amounts, provided however that such offset shall be
limited each quarter to the amount paid in excess of the
corresponding minimum amount.
Any royalties due for a specific quarter under this agreement,
upon consummation of the committed quantity, shall be paid by
LICENSEE no later than ten (10) days after the end of such
specific quarter.
b) Payment of Non-Refundable Engineering Fee will be defined when
applicable.
ADDENDUM D
SUPPORT DURING WARRANTY PERIOD
1. LICENSOR's contact information for technical support during the
warranty period will be:
Name: Technical Support Engineer
tel: x00-00-000-000 fax:x00-00-000-000
e-mail address: xxxx.xxxxxxx@xxx.xx
2. LICENSOR's normal business hours are as follows:
Monday: 8.30 - 12.30 and 13.30 - 17.30
Tuesday: 8.30 - 12.30 and 13.30 - 17.30
Wednesday: 8.30 - 12.30 and 13.30 - 17.30
Thursday: 8.30 - 12.30 and 13.30 - 17.30
Friday: 8.30 - 12.30 and 13.30 - 16.30
3. The current legal holidays are as follows:
Belgium: January 1, 1998
January 2, 1998
April 13, 1998
May 1, 1998
May 21, 1998
June 1, 1998
July 21, 1998
November 11, 1998
December 25, 1998
December 28-31, 1998
4. LICENSEE shall contact the above mentioned persons of LICENSOR's
personnel via the telephone and fax numbers mentioned here above to
request for the technical support services as described in Article
VI of this Agreement. LICENSOR's technical support personnel will
provide LICENSEE with a resolution within a reasonable period of
time according to the request and the difficulty of the problem.
5.If LICENSEE is willing to receive more and/or other technical
support during the warranty period, or wishes to expand the
technical support after the warranty period, LICENSEE has to enter
into a separate maintenance and support agreement with LICENSOR.
