Exhibit 10.28
ASSIGNMENT, ASSUMPTION AND AMENDMENT OF
DEVELOPMENT AND LICENSE AGREEMENT
This Assignment, Assumption and Amendment of the Development &
License Agreement (this "Agreement") is entered into as of March 31,
1999 by and between MICROSOFT CORPORATION, a Washington corporation
located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX 00000 ("Microsoft") and
SPYGLASS, INC. a Delaware corporation located at 0000 Xxxx Xxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Spyglass").
RECITALS
A. Pursuant to a Joint Development & License Agreement entered
into by Microsoft and Navitel Communications, Inc. ("Navitel") dated
July 7, 1997, as amended by that certain Amendment Number 1 to Joint
Development & License Agreement dated January 23, 1998 (as amended,
the "Original Agreement"), Navitel and Microsoft agreed to develop a
software product which combines extensions to the Windows CE
operating system and applications software for an Internet-enabled
telephone.
B. On November 23, 1998, Microsoft and Navitel entered into a
Development and License Agreement (the "Existing Agreement") that
amended and restated the Original Agreement. The Existing Agreement
restructured the relationship between Navitel and Microsoft,
clarified ownership of the technology developed under the Original
Agreement and provided a master agreement establishing the basic
terms and conditions under which Navitel would provide development,
support and testing services to Microsoft.
C. Spyglass intends to acquire Navitel and will thereby assume
all of Navitel's obligations under the Existing Agreement.
Now, therefore, in consideration of the mutual provisions set
forth in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. ASSIGNMENT AND ASSUMPTION
1.1 Condition Precedent. The effectiveness of this Agreement is
expressly contingent upon the purchase of 100% of all
outstanding stock, whether common, preferred, non-voting or
otherwise, in Navitel by Spyglass ("Acquisition") and the
execution and effectiveness of all related documents to
consummate the Acquisition. In the event that, for any reason,
the Acquisition is not completed, this Agreement shall be null
and void.
1.2 Assignment and Assumption. Upon the Acquisition, Navitel will
have assigned, transferred and conveyed to Spyglass and Spyglass
thereby will have assumed all obligations set forth in the
Existing Agreement. Provided the condition precedent in Section
1.1 of this Agreement has been satisfied, Microsoft consents to
such transfer, assignment and conveyance to Spyglass of the
Existing Agreement pursuant to Section 14.5 of the Existing
Agreement. All references in the Existing Agreement to "Navitel"
shall be deemed to refer to "Spyglass."
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
1.3 No Public Announcement. Neither party shall publicly announce
the terms or existence of this Agreement without the express
written consent of the other party. Either of the parties may
make announcements which are required by applicable law,
regulatory bodies, or stock exchange or stock association rules,
so long as the party so required to make the announcement,
promptly upon learning of such requirement, notifies the other
party of such requirement and discusses with the other party in
good faith the exact wording of any such announcement.
2. AMENDMENT.
2.1 Section 5. The following amendments shall be made to Section 5
of the Existing Agreement:
2.1.1 The following provisions shall be added to the end of
Section 5.1:
Spyglass understands that there may be additions, deletions
or other changes which may affect the Specifications at any
time during the term of any Work Plan and the Term of this
Agreement. Upon notice of any such changes by Microsoft,
Spyglass and Microsoft shall work together to make any
necessary changes to the Specifications, and Spyglass shall
alter the Work and the applicable Work Plan (if necessary)
in order to accommodate any such changes to the
Specifications. Changes within the scope of the Work, as
identified in a Work Plan, shall be made only in writing
executed by both parties. During the term of this
Agreement, Spyglass will use best efforts to accept any new
Work Plan proposed by Microsoft relating to Windows CE and
will use commercially reasonable efforts to accept any
other Work proposed by Microsoft. The parties agree that
it is reasonable for Spyglass to increase its available
personnel (including contractors) by ** per calendar
quarter if necessary to staff Microsoft Work Plans. In the
event Spyglass cannot accept a Work Plan for Windows CE for
any year during the Term (as defined in Section 6.4 below),
in which Spyglass has not invoiced Microsoft more than ***
in Work, then the dollar amount of such proposed Work Plan
shall be *** Microsoft's Minimum Payment obligation for the
applicable year described in Section 6.4, below, except
that such amount shall not be *** if the acceptance of such
Work Plan would require Spyglass to increase the available
personnel (including contractors) by more than *** in any
calendar quarter beginning July 1, 1999. The base
reference number for available personnel shall be the
number of employees and contractors working for Navitel
immediately preceding the Acquisition of Navitel by
Spyglass.
2.1.2 Section 5.8.4 of the Existing Agreement shall be
deleted in its entirety and replaced with the following:
2.1.1 If Spyglass fails to deliver any Deliverable within
the dates specified in a Work Plan and if any Errors
discovered before acceptance cannot be eliminated in
the correction period specified in the Work Plan or in
Exhibit B of this Agreement if no correction period is
specified in the Work Plan, then Microsoft may, at its
option: (i) retain the Deliverable (including any
applicable documentation) with rights as set forth in
Section 3, and pay Spyglass for all outstanding
payment milestones ***; (ii) extend the
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.1.2 correction period; or (iii) suspend its performance
and/or terminate this Agreement or the applicable Work
Plan for cause pursuant to Section 12.3, provided that
Microsoft may not terminate the entire Agreement
unless the failure occurs in a Work Plan valued at
more than *** (other than Work Plan A-1) or the
failure results in the termination of the *** Work
Plan valued at less than ***. Notwithstanding the
foregoing, in the event Microsoft terminates any Work
Plan for cause pursuant to Section 12.3 and the
Agreement remains in effect, the entire value of such
Work Plan shall be *** for the applicable year.
2.1.3 A new Section 5.11 shall be added to the Existing
Agreement:
5.11 Evaluation of Services. Spyglass understands and
agrees that it is obligated under this Agreement to
provide Microsoft with high quality Work at all times
during the term of this Agreement. In addition,
Spyglass shall be responsible for initiating prompt
and detailed communications with the appropriate
Microsoft project leaders regarding any Errors
discovered during the course of development of
software code Deliverables. In the event that any
such Errors are caused by a failure of Spyglass to
provide high quality Work, then Microsoft shall be
entitled (in addition to any other remedies it may
have under this Agreement, at law or in equity) to
***.
2.2 Section 6.
2.2.1 Sections 6.2 and 6.3 shall be deleted in their
entirety and replaced with the following:
2.3 Services. Microsoft agrees to pay Spyglass for work
performed in accordance with the Work Plans based upon
the Personnel Rate Schedule identified in the Work
Plan, provided that Spyglass shall not exceed the
maximum payable amount specified in any Work Plan
without obtaining Microsoft's prior written approval.
6.3 Invoices. Unless otherwise specified in a Work Plan,
Spyglass shall invoice Microsoft by the *** business
day of each month for the amounts due for work
performed under any Work Plan in the prior month.
Billing will be recorded in hourly increments by
project, and any assigned Microsoft Internal Reference
Number, sufficient for Microsoft to determine the
number of hours each engineer worked on any given
Microsoft project on each day. In the event that
Microsoft provides a form to detail Spyglass xxxxxxxx,
Spyglass agrees to utilize such forms as Microsoft may
supply. Microsoft shall pay undisputed invoices ***
of receiving each invoice. Microsoft shall be entitled
to *** Services billed each month, subject to final
approval of the Work associated with such Services
upon completion of the project set forth in the
applicable Work Plan. If Microsoft rejects any Work
pursuant to Section 5.8 above, then Microsoft shall be
entitled, in addition to any other remedies available,
to ***. Invoices shall include reasonable supporting
materials (not including any source code-type
information, which is to be delivered as part of the
Deliverables set forth in the Work Plan) documenting
the Services performed by Spyglass.
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.2 A new Section 6.4, Section 6.5, Section 6.6, Section
6.7 and Section 6.8 shall be amended to read as follows:
6.4 Minimum Payments. For a period of three (3) years
from the date of this Agreement (the "Term"),
Microsoft agrees that, provided Spyglass performs in
accordance with the terms and conditions of this
Agreement and the Agreement is not otherwise suspended
or terminated, the aggregate yearly payments to
Spyglass shall not fall below the following minimums
("Minimum Payments"):
Year 1: ***
Year 2: ***
Year 3: ***
2.4 Minimum Payment Underage. If at the end of the first
or second year of the Term, Microsoft has not met its
Minimum Payment, then ***. In the event, ***, there
remains a deficiency in the Minimum Payment, Spyglass
may invoice Microsoft for such amount and Microsoft
shall pay such amount pursuant to Section 6.3.
2.5 Minimum Payment Overage. Any amount in excess of the
Minimum Payment for the first or second year of the
Term shall be ***.
2.6 Personnel Rate Schedule Adjustments. The Personnel
Rate Schedule shall increase at a rate of *** per
year, effective April 1st of 2000 and 2001. Beginning
on April 1, 2002, the parties agree to meet annually
to establish the Personnel Rate Schedule for the
upcoming year. Subsequent Personnel Rate Schedule
adjustments shall be effective as of April 1st of the
relevant year (e.g., by May 1, 2002 for the one year
period commencing April 1, 2002 and ending March 31,
2003). In the event that the parties are unable to
agree on a Personnel Rate Schedule adjustment by April
1st of the relevant year, then either party may ***,
with the existing Personnel Rate Schedule remaining in
effect through the date of termination. Any mutually
agreed upon Personnel Rate Schedule, if agreed upon
after April 1st of the relevant year, shall be
retroactive to April 1st of such year.
2.7 Support Work. For a period of *** from the date of
the commercial release of a product containing any
Work, Spyglass agrees to correct Errors identified by
Microsoft in the Work pursuant to the Error correction
schedule in Exhibit B. Microsoft shall pay Spyglass
for such additional Work. This Section 6.8 shall
apply to Work Plan A-1 and any subsequent Work Plans
which explicitly incorporate this Section.
2.8 Section 10. Section 10.1.5 shall be deleted in its entirety and
replaced with the following:
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
10.1.5 All Work (including without limitation all
Deliverables) is original to Spyglass and does not
infringe any copyright, patent, trade secret, or other
proprietary right held by any third party, provided,
however, that this warranty does not apply with regard
to any patent infringement necessitated by compliance
with any Work Plan hereunder unless Spyglass had
knowledge of such infringement;
2.9 Section 12.
2.4.1 Section 12.2 shall be deleted in its entirety.
2.9.1 A new sentence shall be added to the end of Section 12.3 to
read as follows:
A failure to deliver pursuant to Section 5.8.4 above shall
be considered material for purposes of termination of the
applicable Work Plan, but a failure to deliver pursuant to
Section 5.8.4 shall not be considered material for purposes
of termination of this Agreement unless and until such
failure occurs in a Work Plan valued at more than ***
(other than Work Plan A-1) or the failure results in the
termination of the third (or greater) Work Plan valued at
less than ***.
2.10 Exhibit D. The parties agree that the attached Exhibit D shall
replace the Exhibit D attached to the Existing Agreement for
successive Work Plans. The parties believe that all required
personnel for current Microsoft Work Plans are covered by the
current classifications contained in Exhibit D. The parties
agree that in the event any subsequent Work Plan requires
personnel not currently provided for in Exhibit D, the parties
shall negotiate the rates of such personnel in good faith. The
current Exhibit D shall continue to govern Work Plan A-1.
2.5 Work Plan A-1. The parties agree that the "Schedule" Section of
the Work Plan A-1 shall be revised as follows:
The current estimate of the Due Dates and target Deliverables
are as follows:
Date Due Deliverable
*** ***
*** ***
*** ***
*** ***
The Delivery Schedule is subject to change by agreement of both
parties.
3. GENERAL.
3.1 All capitalized terms not otherwise defined in this Agreement
shall have the meanings given in the Existing Agreement.
3.2 This Agreement amends, modifies and supersedes to the extent of
any inconsistencies, the provisions of the Existing Agreement.
Except as expressly amended by this Agreement, the Existing
Agreement is in full force and effect.
IN WITNESS WHEREOF, the parties have entered into this Agreement as
of the date first written above.
MICROSOFT CORPORATION SPYGLASS, INC.
/s/ Xxxx Xxxxxx /s/ Xxxx Xxxxxxxx
By (Sign) By (Sign)
Xxxx Xxxxxx Xxxx Xxxxxxxx
Name (Print) Name (Print)
Chief Financial Officer Executive Vice President & Chief
Financial Officer
Title Title
March 31, 1999 March 31, 1999
Date Date
Reviewed by Microsoft Legal /s/______ 3-31-99
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT D
PERSONNEL RATE SCHEDULE
As agreed in any applicable Work Plan, Spyglass will charge Microsoft
at the applicable rate specified below for each hour of services
rendered under a Work Plan by the associated Job Title using assigned
Microsoft Internal Reference Numbers, if any.
Job Title (Duties) Hourly Rate
General Manager ***
Consulting Manager ***
Architect ***
Project Manager ***
Lead Engineer ***
Engineer ***
QA Manager ***
QA Engineer ***
Technical Document Spec. ***
Systems Adminstration ***
