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EXHIBIT 10.22
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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LICENSING AGREEMENT
BY AND BETWEEN
DITECH COMMUNICATIONS CORPORATION
(TELINNOVATION)
AND
ACCELERATED NETWORKS, INC.
DATED
JULY 15, 1999
(AS AMENDED)
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LICENSING AGREEMENT
THIS agreement ("Agreement") is entered into as of the _____ day
of December, 1998 ("Effective Date),
BETWEEN: ACCELERATED NETWORKS CORPORATION, a corporation
existing under the
laws of California, and having a
place of business at 000 Xxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx, X.X.X.
00000
(hereinafter called "Accelerated Networks")
AND: TELINNOVATION SERVICE CORPORATION,
a corporation existing under the
laws of California, and having a
place of business at 000 Xxxxx
Xxxxxx #000, Xxxxxxxx Xxxx, Xxxxxxxxxx,
X.X.X. 00000.
hereinafter called "Telinnovation")
WHEREAS Telinnovation has certain echo cancellation digital
signal processing technology;
AND WHEREAS Accelerated Networks is a manufacturer of
telecommunications equipment;
AND WHEREAS Accelerated Networks desires to be able to
incorporate Telinnovation's echo cancellation digital signal processing
technology in certain of its products and to obtain certain rights with respect
thereto, and Telinnovation is prepared to grant such rights.
THEREFORE the parties agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 As used in this Agreement and schedules hereto:
(a) "Affiliate" means Accelerated Networks, its parent corporation
and any corporation or company which Accelerated Networks or its
parent company effectively controls, directly or indirectly
through the ownership or control of shares in such corporation
the right to sell to End Users products containing the Product.
(b) "Distributor" means any third party to whom Accelerated Networks
or any Affiliate grants.
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(c) "Documentation" means the documentation regarding the Technology
set forth on Exhibit C hereto, together with all documentation to
be developed for the Developed Technology.
(d) "End User" means any person, firm or corporation which acquires
any products referred to in subsection (b) above.
(e) "Technology" means the fundamental digital signal processing
algorithm owned by Telinnovation prior to the execution of this
Agreement which are intended to perform an echo canceling
function and/or other signal enhancement or modification.
(f) "Developed Technology" means that technology provided by
Telinnovation conforming to the Developed Technology
Specification set forth in Schedule A, all enhancements thereto,
and all applicable documentation.
(g) "Products" shall mean the Accelerated Networks' products listed
in Schedule A.
(h) "Manufacturing Licensee" shall mean any third party who acquires
or has acquired from Accelerated Networks or an Affiliate the
right to manufacture a product or products into which Accelerated
Networks or an Affiliate incorporates the Product.
(i) "Developed Technology Specification" means the specification set
forth in Schedule A.
ARTICLE 2 - LICENSING
2.1 Telinnovation grants to Accelerated Networks and Affiliates a
non-exclusive, worldwide license to (a) incorporate the Technology and
the Developed Technology and any derivative works thereof into the
Products and into Products manufactured by third parties for Accelerated
Networks and Affiliates and by Manufacturing Licensees, and (ii) to
license the Technology and the Developed Technology incorporated into or
bundled with the Products, to End Users. The parties agree that
Accelerated Networks may use Distributors to distribute products
incorporating and/or bundled with the Products.
ARTICLE 3 - TITLE
3.1 Telinnovation represents and warrants that Telinnovation owns all right,
title, and interest in and to the Technology, the Developed Technology,
and the Products and that it has full power and authority to perform all
of its obligations hereunder and that Accelerated Networks shall obtain
all rights, title and interest stated in this Agreement free and clear
of any encumbrances and restrictions; without requiring the consent of
any other person, firm or corporation.
3.2 Subject to 3.6, Telinnovation hereby indemnifies and saves harmless
Accelerated Networks, Affiliates, Distributors, and End Users from and
against any and all losses,
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costs, liabilities and expenses (including - reasonable counsel fees)
arising out of any breach or claimed breach of such representation and
warranty.
3.3 Subject to paragraph 3.6, Telinnovation shall defend at its own expense,
and, shall have control of the defense of, any and all suits, actions or
claims against Accelerated Networks, Affiliates, Distributors, and End
Users charging that any component of the Technology or the Developed
Technology infringes any patent, trademark, industrial design, trade
secret, or copyright of any third party, whether the alleged
infringement pertains to the production, Licensing or use of any part of
the Developed Technology.
3.4 In the event of any such suit, action or claim the following procedures
shall apply:
(a) the parties shall meet promptly to discuss such claim, suit or
action and, provided that the parties mutually that Telinnovation
shall do so, Telinnovation shall, settle such claim, suit or
action provided that Telinnovation can do so for an amount not
exceeding, in the aggregate, two point five percent (2.5%) of its
then total revenues from licensing the Technology or the
Developed Technology;
(b) if the parties are unable to agree on a course of action in
accordance with subparagraph (a) all fees and royalties
thereafter payable to Telinnovation by Accelerated Networks,
shall instead be paid into an escrow fund in an interest bearing
account in a United States bank until the aggregate amount paid
into such escrow fund equals two point five percent (2.5%) of
Accelerated Networks then total revenues from licensing Developed
Technology. Upon a final judicial decision awarding damages in
such claim, suit or action, or settlement thereof by
Telinnovation, Accelerated Networks shall pay the amount of such
award or settlement up to but not exceeding the amount in the
escrow fund, using all amounts contained in the escrow fund- Any
balance in the escrow fund shall be paid to Telinnovation;
(c) Accelerated Networks may set off and claim against all fees and
royalties paid or payable to Telinnovation, any and all amounts
paid by it under subparagraphs (a) and (b) hereof; and
3.5 Telinnovation will also pay the actual costs including reasonable legal
fees, and all damages finally awarded in any such suit, and will
indemnify and save harmless Accelerated Networks, Affiliates,
Distributors, and End Users from all other expenses thereby incurred,
provided Telinnovation is notified promptly in writing of the suit,
action or claim and, at Telinnovation's request and expense, is given
all assistance and authority, at Telinnovation's expense, reasonably
required for defense and settlement of same.
3.6 If the use or licensing of any portion of the Technology and/or the
Developed Technology is permanently enjoined by final judicial decision,
or subject to any other continuing liability, Telinnovation shall, at no
expense to Accelerated Networks, as soon as reasonably possible:
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(a) obtain for Accelerated Networks and its Affiliates, Distributors,
and End Users from all persons in the suit who claim an interest
in the Technology and/or Developed Technology, the right to use
the Technology and/or Developed Technology; or
(b) substitute for the Technology and/or Developed Technology a
non-infringing equivalent to the Technology and/or Developed
Technology and extend the indemnity set forth in this Article 3
thereto; or
(c) modify the Technology and/or Developed Technology to make it
non-infringing but equivalent in function and performance to the
infringing Technology and/or Developed Technology and provide
such modified Technology and/or Developed Technology to
Accelerated Networks and extend the indemnity set forth in this
Article 3 thereto.
3.7 Telinnovation shall not be responsible for any expense, cost, loss or
liability of any kind arising out of any suit, action or claim against
Accelerated Networks, Affiliates, Distributors, or End Users charging
that any component of the Technology or the Developed Technology
infringes or misappropriates any Intellectual Property Rights of any
third party if any such suit, action or claim is based upon part or
parts of any of the Technology and/or Developed Technology, if, pursuant
to paragraph 3.4 herein, Telinnovation has substituted or modified the
Technology and/or Developed Technology, but Accelerated Networks
nevertheless elects to continue to use the non-modified version of the
Technology and/or Developed Technology that has been enjoined or
otherwise burdened with a liability.
3.8 Telinnovation shall not be responsible for any expense, cost, loss or
liability of any kind arising out of any suit, action or claim against
Accelerated Networks, Affiliates, Distributors, or End Users charging
that any component of the Technology and/or Developed Technology
infringes or misappropriates the intellectual property rights of any
thud party to the extent that any such suit, action or claim is based
upon part or parts of any of the Technology and/or Developed Technology
that have been materially altered or modified by Accelerated Technology
or its Affiliates without the express written consent of Telinnovation.
ARTICLE 4 - ROYALTIES
4.1 Accelerated Networks shall pay to Telinnovation fees and royalties in
accordance with Schedule B. Such fees and royalties are exclusive of all
excise, sales, use or other taxes, fees, duties or levies charged by any
governmental authority, all of which shall be paid by Accelerated
Networks; provided, however, that none of Accelerated Networks, its
Affiliates, Distributors, or End Users shall have any obligation to pay
any income taxes of Telinnovation.
4.2 Accelerated Networks' all royalties will be paid at the end of
Accelerated Networks' fiscal quarters.
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4.3 Accelerated Networks agrees to keep and maintain, for a period of two
(2) years after the end of the year to which they pertain, complete and
accurate records of the products manufactured and distributed by
Accelerated Networks which contain the Developed Technology, in order to
calculate and confirm Accelerated Networks' royalty obligations. Upon
reasonable prior notice, Licensor will have the right, exercisable not
more than once every twelve (12) months, to appoint an independent
accounting firm or other agent reasonably acceptable to Accelerated
Networks, at Licensor's expense, to examine such financial books,
records and accounts during Accelerated Networks' normal business hours
to verify the royalties due by Accelerated Networks, subject to such
independent accounting firm's or agent's execution of Accelerated
Networks' standard confidentiality agreement; provided that execution of
such agreement will not preclude such firm from reporting its results to
Licensor. In the event such audit discloses an underpayment or
overpayment of royalties due hereunder, the appropriate party will
promptly remit the amounts due to the other party shall pay to
Telinnovation fees and royalties in accordance with Schedule B. Such
fees and royalties are exclusive of all excise, sales, use or other
taxes, fees, dudes or levies charged by any governmental authority, all
of which shall be paid by Accelerated Networks
ARTICLE 5 - REPRESENTATIONS, WARRANTIES, AND COVENANTS
5.1 Telinnovation represents, warrants, and covenants to Accelerated
Networks that the Technology shall conform to the specifications
therefor, the Developed Technology shall conform to the Developed
Technology Specifications set forth on Exhibit A to this Agreement, and
that each copy of the Developed Technology shall be free from any design
defects in workmanship and material.
5.2 Telinnovation represents, warrants, and covenants that, at the time of
delivery thereof to Accelerated Networks, any Technology and the
Developed Technology shall not contain any virus, "Trojan horse," timer,
clock counter, or other limiting design, instruction, or routine that
would erase data or programming or cause any Product to become
inoperable or otherwise incapable of being used in the full manner for
which it was designed and created.
5.3 Telinnovation represents, warrants, and covenants that all Technology
and the Developed Technology shall be Year 2000 Compliant. For purposes
of this Agreement, "Year 2000 Complaint" means all Technology and the
Developed Technology shall (a) not be materially affected by any
inability to completely and accurately address, present, produce, story,
and calculate data involving dates beginning with April 9, 1999,
September 9, 1999, and January 1, 2000, and will not produce abnormally
ending or incorrect results involving such dates as used in any forward
or regression date-based function; or (b) function in such away that all
"date' related functionalities and data fields include the indication of
century and millennium and will perform calculations that involve a
four-digit year field.
5.4 Telinnovation represents, warrants, and covenants that any services that
Telinnovation performs for Accelerated Networks, or any Affiliate,
Distributor, or End User hereunder
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shall be performed in a timely, competent, professional, and workmanlike
manned, using qualified employees.
5.5 Telinnovation represents, warrants, and covenants that at all times
during which this Agreement remains in effect, Telinnovation shall
comply, and shall insure that the Technology and the Developed
Technology comply, with all applicable federal, state, and local laws,
rules, and regulations.
5.6 Telinnovation represents, warrants, and covenants that all Documentation
delivered to Accelerated Networks under this Agreement shall be complete
and describe the Technology and the Developed Technology accurately, in
accordance with industry standards, and with sufficient clarity and
detail to enable an End User to operate the Technology and Developed
Technology successfully.
5.7 Telinnovation represents, warrants, and covenants that (a) within thirty
(30) days of the execution of this Agreement, Telinnovation shall enter
into with Accelerated Networks an escrow agreement substantially in form
set forth in Exhibit D hereto pursuant to which Telinnovation shall
place in escrow all source code for the Developed Technology, together
with source code documentation, (b) all source code documentation placed
in escrow in accordance with this Section 5.5 shall be complete and
describe the source code and all components thereof accurately so as to
enable reasonably skilled computer programmers who are knowledgeable of
the subject matter to fully utilize the source code to understand,
support, and modify the source code to which it relates.
5.8 If the Technology fails to conform to the specifications therefor, the
Developed Technology or any component thereof fails to conform to the
Developed Technology Specifications, of the Technology or the Developed
Technology is defective in material or workmanship, Accelerated Networks
shall notify Telinnovation of the evidence thereof, and Telinnovation
shall correct any such non-conformance or defect and deliver the
Developed Technology to Accelerated Networks for all affected End User
sites in accordance with the procedures set forth in Exhibit C without
charge.
ARTICLE 6 - TECHNICAL SUPPORT
6.1 Telinnovation shall develop and provide upgrades, maintenance, training
and technical advice to Accelerated Networks, its distributors and End
Users when reasonably requested by Accelerated Networks. Such support
shall be provided at Telinnovation's current market rates; provided that
Telinnovation shall not raise its rates for the technical support
described in this Section 6.1 more than once during each twelve (12)
month period during which this Agreement remains in effect and shall not
charge Accelerated Networks more for such technical support than it
charges to any other licensee of the Technology or the Developed
Technology.
ARTICLE 7 - CONFIDENTIALITY
7.1 All technical and commercial information, documentation and know-how of
every kind and description which is market as being confidential
("Confidential Information") supplied by one party (the "Supplier") to
the other (the "Recipient") whether before
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and/or after execution of this Agreement, as well as other information
related thereto acquired or developed by Telinnovation in connection
with this Agreement, shall be (except as otherwise stated herein) the
exclusive property of the Supplier, and the Recipient shall, for a
period of five (5) years from termination of this Agreement, treat and
protect such Confidential Information as the Suppliers proprietary and
confidential information, and shall not reproduce or divulge said
Information in whole or in part to third parties except as may be
required for the performance of its obligations under this Agreement,
provided such third parties agree in writing prior to such disclosure to
keep such Confidential Information confidential upon the same terms as
herein contained. This confidentiality obligation shall survive
termination or expiry of this Agreement. Notwithstanding the foregoing,
the Developed Technology and Developed Technology Documentation, with
the exception of the Technology, shall be owned by Accelerated Networks
and shall be considered as Confidential information of Accelerated
Networks. Also notwithstanding the foregoing, the Recipient shall not be
liable for disclosure of the Information if
(a) The Confidential Information enters the public domain other than
through a breach of this Agreement;
(b) the Confidential information is lawfully obtained by the
Recipient from a third party without breach of this Agreement by
the Recipient;
(c) the Supplier has provided its prior express written approval for
such disclosure;
(d) the Confidential Information was known to the Recipient prior to
commencement of the Development Project or developed
independently by Recipient, without use of Supplier's
Confidential Information, and Recipient can document the same; or
(e) disclosure of the Confidential Information is incidental to the
exercise of rights under other provisions of this Agreement
ARTICLE 8 - TERMINATION
8.1 This Agreement shall remain in full force and effect for a period of one
(1) year from the Effective Date. Thereafter, this Agreement
automatically shall renew for successive terms on one (1) year each,
unless, at least thirty (30) days prior to the end of the then-current
term, one party provides the other party with written notice of such
party's intention to terminate this Agreement. Either party may
terminate this Agreement upon thirty (30) days prior written notice to
the other party if such other party fails to comply with any of its
fundamental obligations under this Agreement unless corrective action
reasonably acceptable to the first mentioned party is commenced within
such thirty (30) day period and completed within an agreed period, if
any; provided, however, that if Accelerated Networks in good faith
disputes whether any payment is due hereunder, Telinnovation may bring
an action against Accelerated Networks with respect to whether such
payment is due, but may not terminate this Agreement
8.2 Termination of this Agreement shall, be effective upon completion of the
applicable notice period in accordance with the foregoing.
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ARTICLE 9 - SCHEDULES
9.1 The following schedules shall constitute an integral part of this
Agreement:
Schedule A - Products
Schedule B - Royalty Payments
Schedule C - Documentation
Schedule D - Escrow Agreement
Schedule E - Service Standards
ARTICLE 10 - SEVERABILITY
10.1 In the event of au enforceable derision or directive declaring invalid
an essential part of this Agreement, without which this Agreement would
not have been entered into, this Agreement may, at the option of either
party, be terminated upon the giving of written notice to the other
party. Except as aforesaid, if any term, clause, provision or condition
of this Agreement is similarly adjudged invalid for any reason
whatsoever, such invalidity shall not affect the validity or operation
of any other term, clause, provision or condition and such invalid term,
clause, provision or condition shall be deemed to have been deleted from
this agreement.
ARTICLE 11 - SURVIVAL
11.1 Notwithstanding any termination or expiry of this Agreement, the
provisions of Articles 1, 3, 5, 5, 6, 7 and 8 and all consequent rights,
obligations and liabilities shall survive the termination or expiry of
this Agreement.
ARTICLE 12 - ASSIGNMENT
12.1 Accelerated Networks shall have the right to assign all or any part of
its rights or interests under this Agreement to any Affiliate upon
notice.
12.2 Telinnovation shall not assign all or any part of its rights or
interests under this Agreement without the prior written consent of
Accelerated Networks.
ARTICLE 13 - WAIVER
13.1 The failure of either party to enforce at any time or for any period of
time any of the provisions of this Agreement shall not constitute a
waiver of such provisions or the right of either party to enforce each
and every provision.
ARTICLE 14 - GOVERNING LAW
14.1 The rights and obligations -arising under the Agreement shall be
governed by and construed in accordance with the laws of the State of
California and the United States of America, excluding, without regard
to conflicts of laws provisions thereof and without regard to the United
Nations Convention on Contracts for the International Sale of Goods. The
sole jurisdiction and venue for actions related to the subject matter
hereof
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shall be the state and federal courts having within their jurisdiction
the location of Accelerated Networks' principal place of business. Both
parties hereby consent and waive any venue objections to the
jurisdiction of such courts. The parties agree that process may be
served in the manner provided herein for giving of notices or otherwise
as allowed by California or federal law.
ARTICLE 15 - NOTICES
15.1 Any and all notices or other information required to be given by one of
the parties to the other shall be deemed sufficiently given when
received following forwarding by prepaid registered mail, or by cable,
telegram, telex or hand-delivery to the other party at the following
address:
If to Accelerated Networks:
Accelerated Networks
000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
X.X.X.
Attention: President
If to Telinnovation:
Telinnovation Service Corporation
000 Xxxxx Xxxxxx #000
Xxxxxxxx Xxxx, XX 00000
X.X.X.
Attention: President
and such notices shall be deemed to have been received five (5) business
days after mailing if forwarded by mail, and the following business day
if forwarded by e-mail, cable, telegram, telex or hand-delivery.
15.2 The aforementioned address of either Party may be changed at any time by
giving fifteen (15) business days prior notice to the other Party in
accordance with the foregoing.
15.3 In the event of a generally prevailing labor dispute or other situation
which will delay or impede the giving of notice by any such means, the
notice shall be given by such specified mode as will be most reliable
and expeditious and least affected by such dispute or situation.
ARTICLE 16 - CURRENCY
16.1 All dollar amounts expressed in this Agreement are in U.S. dollars. All
remittances shall be in U.S. dollars.
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ARTICLE 17 - ENTIRE AGREEMENT
17.1 This Agreement and schedules hereto set forth the entire agreement and
understanding between the parties and supersede and cancel all previous
negotiations, agreements, commitments and writings in respect of the
subject matter hereof and there are no -understandings, representations,
conditions, warranties, express or implied, statutory or otherwise made
or assumed by the parties, other than those expressly contained in this
Agreement Neither party shall be bound by any term, clause, provision or
conditions save as expressly provided herein or as duly set forth on or
subsequent to the date of this Agreement in writing signed by duly
authorized officers of the parties.
IN WITNESS WHEREOF, the parties have signed this Agreement on the
day, mouth and year first above mentioned.
TELINNOVATION ACCELERATED NETWORKS
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxxx Xxxxxxxx
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Title: President Title: President
--------------------------- --------------------------
Date: 12-24-98 Date: 12-30-98
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SCHEDULE A - LICENSED TECHNOLOGY AND DEVELOPED TECHNOLOGY
Developed Technology Specification: echo cancellation software intended to run
on the Texas instruments C54X family of Digital Signal Processors and available
in:
a. Stand alone 16-channel canceller (current product)
b. C' callable multi channel functions (current product)
c. CPE short tail canceller (future product)
Since the CPE short tail canceller (item c) is unavailable at the
time of this contract, and until the time that this product is available and
offered to Accelerated Networks, Telinnovation agrees to offer the `C' callable
multi channel canceller function (item b) for all Accelerated Networks' CPE
applications.
Minimum performance of the echo cancellation object code when
running on 80Mhz TMS320C548 DSP must be compliant with the ITU G.165 and G.168
Recommendations and consistent with the performance as described in the
Telinnovation document titled "ECHO CANCELLATION "C"-CALLABLE FUNCTION USER'S
GUIDE FOR THE TMS320C54x FAMILY" REVISION B, dated May 13, 1998.
When the short tail canceller is available and it meets the CPE
product requirement of Accelerated Networks, it will henceforth be used instead
of the "C' callable multi channel canceller for short tail applications.
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SCHEDULE B - ROYALTY PAYMENTS
Accelerated Networks shall pay Telinnovation royalties with
respect to sales by Accelerated Networks during the life of the Product.
The price for the short tail canceller, or for the `C' callable
multi channel canceller when used in a CPE application, shall be [***] of the
regular rate. Volumes will be combined for quantity pricing, but the short tail
canceller volume will be counted at [***].
The royalty payable by Accelerated Networks shall be on a per
channel end basis. Telinnovation shall submit to Accelerated Networks an invoice
in the amount of [***], covering the first [***] channels. Payment of this
invoice to be paid to Telinnovation immediately after the delivery of the first,
generally available (non-demo, non-beta) product containing Telinnovation code
to an Accelerated Networks customer.
After the first [***] echo cancellers, additional payments are
specified as per the schedule below:
Quantity [***] [***] [***]
Price ea. [***] [***] [***]
Beta tests, field trials and evaluation units are not counted as
shipments and no royalties are due.
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*** Confidential Treatment has been requested for certain redacted
provisions of this agreement. The redacted provisions are identified by three
asterisks, enclosed by brackets and underlined. The confidential portion has
been filed separately with the Securities and Exchange Commission.
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SCHEDULE C - DOCUMENTATION
11 U G. 168 "Digital Network Echo Canceller" March 1999
ITU G. 165 "Digital Network Echo Cancellers" 19913
Telinnovation "Tms320c54x Echo Canceller DSP Module User's Guide" (Rev F)
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SCHEDULE D - ESCROW AGREEMENT
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SOFTWARE ESCROW AGREEMENT
This Software Escrow Agreement is entered into as of the 24
day of December 1998, by and among Accelerated Networks Corporation, a
California corporation ("Accelerated Networks"), Telinnovation Service
Corporation, a California corporation ("Telinnovation"), and
_______________________ as Escrow Agent ("Escrow Agent").
RECITALS
A. Telinnovation is the owner of certain software set forth on
Exhibit A to this Agreement (including all modifications, changes, enhancements,
conversions, upgrades and/or additions, collectively, the "Telinnovation
Software") which Telinnovation has licensed to Accelerated Networks under the
terms of a technology licensing agreement dated as of Dec 24, 1998 (the
"Licensing Agreement").
B. Under the terms of the License Agreement, Telinnovation has
agreed to deposit and maintain a copy of the underlying source code of the most
current released version of the Telinnovation Software with the Escrow Agent for
the benefit of Accelerated Networks, and Escrow Agent agrees to accept such
source code under the terms of this Agreement.
AGREEMENTS
In consideration of the recitals and the mutual agreements set
forth herein, the parties agree as follows:
1. Escrow of Source Code.
(a) Initial Deposit. Telinnovation shall deliver
electronic and paper copies of all high order language and/or assembly language,
as applicable, source code and any link files, compiler and linker instructions,
make files, job control language, library routines and any other similar source
material, as well as complete written instructions for compiling, linking,
loading and executing the software or performing any similar functions and a
complete list, including version number, of all compilers, linkers or other
software development tools (collectively, "Source Code") necessary to generate,
using a standard set of software development tools, a fully executable version
of the Telinnovation Software to the Escrow Agent within fifteen (15) days of
the date of this Agreement.
(b) Subsequent Deposits. Within fifteen (15) days of
the delivery to Accelerated Networks of any modifications, changes,
enhancements, conversions, upgrades and/or additions to the Telinnovation
Software, Telinnovation shall deposit the most current version of the Source
Code necessary to generate, using a standard set of software development tools,
a fully executable version of such modified, changed, enhanced, converted,
upgraded, and/or supplemented Telinnovation Software with the Escrow Agent. Upon
deposit of such Source Code, Exhibit A to this Agreement shall be updated to
include such to reflect the applicable modifications, changes, enhancements,
conversions, upgrades, and/or additions. Within fifteen (15) days of the
delivery of any new release of Telinnovation Software, Telinnovation shall
deposit the Source Code for such new release with the Escrow Agent.
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(c) Mechanics of Deposit. Telinnovation shall deliver
any Source Code deposited under this section 1 to Escrow Agent via national
courier service or registered U.S. mail to the address set forth in section 11
of this Agreement. Any such deposit shall include a written description of the
Source Code identifying the software, version number, modifications from the
previous version and any other information required to uniquely identify the
Source Code (the "Deposit Description"). The Deposit Description shall contain a
representation and warranty by Telinnovation that the Source Code is an accurate
and complete representation of the version of the Telinnovation Software,
Telinnovation Application or Other Software described in the Deposit
Description. In the event the Source Code is damaged or destroyed in transit,
Escrow Agent shall notify Telinnovation within three days of the receipt of such
Source Code, and Telinnovation shall deliver a duplicate copy of the Source Code
to the Escrow Agent within seven days of the receipt of such notice.
(d) Duties of Escrow Agent. Escrow Agent shall hold
the deposited Source Code, in accordance with the terms and conditions of this
Agreement, in a secure media vault which provides appropriate fire protection
systems and a storage environment which minimizes degradation of the physical
media containing the Source Code. Escrow Agent shall have no obligation to
verify the completeness or accuracy of the Source Code. Escrow Agent shall have
the right to duplicate the Source Code solely as required to comply with the
terms of this Agreement.
(e) Notice of Deposit. Upon deposit of the Source
Code into the secure media vault, the Escrow Agent shall notify Telinnovation
and Accelerated Networks via certified mail or national courier service (the
"Deposit Notification"). The Deposit Notification shall include the date the
Source Code was received by the Escrow Agent, the date of its deposit into the
media vault and a copy of the Deposit Description.
2. Verification Rights. Accelerated Networks shall have the
right upon ten (10) days' written notice to Telinnovation and Escrow Agent, to
review or to have any or all of the Source Code deposited with Escrow Agent
reviewed to verify that such Source Code conforms to the Telinnovation Software
identified in the appropriate Deposit Description. Such verification shall be
performed by representatives of Accelerated Networks and the Escrow Agent.
Telinnovation may designate a representative to be present at any verification
activities. The Accelerated Networks and/or the Escrow Agent shall issue a
report of its findings (the "Verification Report") within 30 days of the
completion of such activities.
3. Release of Source Code to Accelerated Networks. Escrow
Agent is hereby authorized and directed to release the Source Code to
Accelerated Networks under the conditions set forth in this section 3.
(a) Notification of Release Condition. Accelerated
Networks may provide written notice to Escrow Agent and Telinnovation of the
occurrence of any of the following conditions ("Release Notification"):
(i) Telinnovation is adjudicated insolvent,
or consents to or acquiesces to the appointment of a receiver or liquidator,
Telinnovation's board of directors or a majority of its shareholders take any
action towards the dissolution or liquidation of
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Telinnovation, Telinnovation voluntarily or involuntarily becomes a debtor
subject to proceedings under the United States Bankruptcy Code, or makes an
assignment for the benefit of creditors, or a receiver is appointed for
Telinnovation;
(ii) Telinnovation has discontinued
maintenance and support of the Telinnovation Software; or
(iii) for a period of forty-five (45) days
or more from the date on which Telinnovation first received from Accelerated
Networks notice thereof, Telinnovation has been unable to rectify (y) a material
failure of the Telinnovation Software to function in accordance with the
specifications therefor, applicable user documentation, or both; or (z) a
material breach of Telinnovation's warranties set forth in Article 5 of the
Licensing Agreement.
(b) Dispute Provisions. Telinnovation shall have
seven days from the receipt of the Release Notification to provide written
notice if it disputes the condition or conditions specified in the Release
Notification (the "Telinnovation Dispute"). Accelerated Networks, upon receipt
of the Telinnovation Dispute, shall contact Telinnovation and the parties shall
make a good faith attempt to resolve the dispute. If the matter is not resolved
by the parties within seven days of Accelerated Networks' receipt of the
Telinnovation Dispute, the matter shall be referred to binding arbitration in
accordance with section 10 of this Agreement, subject to the limitations set
forth in section 3(c) below.
(c) Limitations on Arbitration. In the event of
arbitration of a dispute under section 3(b), the entire arbitration process
shall be limited to five (5) working days. The sole issue for arbitration shall
be whether Accelerated Networks is entitled to release of the requested Source
Code for the Telinnovation Software. If the arbitrator determines that
Accelerated Networks is entitled to release of any Source Code, the arbitrator
shall further determine whether Accelerated Networks is entitled to the release
of all, or a portion of, the escrowed Source Code and shall order the release of
such Source Code. The prevailing party in the arbitration proceedings may, in
the arbitrator's discretion, be awarded reasonable costs, expenses, and
attorney's fees.
(d) Release of Source Code. If Escrow Agent does not
receive notification of any Telinnovation Dispute within seven days of receipt
of the Release Notification, Escrow Agent shall release the Source Code
specified in the Release Notification to Accelerated Networks. If Escrow Agent
does receive timely notification of a Telinnovation Dispute, Escrow Agent shall
release Source Code at such time as it receives (i) joint written direction from
Accelerated Networks and Telinnovation or (ii) an arbitration decision rendered
pursuant to section 3(c) and 10 of this Agreement and which directs the Escrow
Agent as to the disposition of the Source Code.
(e) Accelerated Networks Source Code License. In the
event that any Source Code is released to Accelerated Networks under the terms
of this section 3, Telinnovation shall retain all right title and interest to
such Source Code, and Accelerated Networks shall receive a nonexclusive,
perpetual and irrevocable, royalty-free, right and license (the "Source Code
License") to modify the Source Code for purposes of error correction,
maintenance,
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support of and compatibility with updated operating systems, network protocols,
security procedures and the like.
4. Release of Source Code to Telinnovation. Upon termination
of this Agreement with respect to any Source Code in the Escrow Agent's
possession, the Escrow Agent is hereby directed to release such Source Code to
Telinnovation. Escrow Agent shall also release any Source Code to Telinnovation
upon (i) receipt of joint written direction from Telinnovation and Accelerated
Networks with respect to such Source Code or (ii) receipt of an arbitration
decision rendered pursuant to section 10 of this Agreement and which directs the
Escrow Agent as to the disposition of such Source Code.
5. Liability. The Escrow Agent shall be obligated to perform
only such duties as are expressly set forth in this Agreement. No implied
covenants or obligations shall be inferred from this Agreement against the
Escrow Agent. Escrow Agent does not have any interest in the Source Code
deposited hereunder but is serving as escrow holder only and has only possession
thereof.
The Escrow Agent shall not be liable hereunder except for its
own gross negligence or willful misconduct and Accelerated Networks and
Telinnovation agree to indemnify, hold harmless and defend Escrow Agent against
any claim or liability as to any loss, liability or expense, including attorney
fees, incurred without gross negligence or willful misconduct on the part of the
Escrow Agent and arising out of or in connection with this Agreement or Escrow
Agent's duties under this Agreement.
The Escrow agent shall be entitled to rely upon any order,
judgment, certification, instruction, notice or other writing delivered to it in
compliance with the provisions of this Agreement without being required to
determine the authenticity or the correctness of any fact stated therein or the
propriety or validity or service thereof. Escrow Agent may act in reliance upon
any instrument comporting with the provisions of this Agreement or signature
believed by it to be genuine and may assume that any person purporting to give
notice or receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so.
The Escrow Agent may act pursuant to the advice of counsel
chosen by it with respect to any matter relating to this Agreement and shall not
be liable for any action taken or omitted in accordance with such advice.
6. Discharge of Escrow Agent. Escrow Agent agrees that
Accelerated Networks and Telinnovation may, by mutual agreement at any time,
remove Escrow Agent hereunder, and substitute another escrow agent therefore, in
which event, upon receipt of written notice thereof, Escrow Agent shall account
for and deliver to such substituted escrow agent the Source Code held by it, and
Escrow Agent shall thereafter be discharged from all liability under this
Agreement.
7. Term and Termination. Upon payment of the fees initially
due hereunder, this Agreement shall be in full force and shall have an initial
term of [one (1) year] unless earlier terminated (i) upon Escrow Agent's receipt
of written notice from Accelerated Networks and
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Telinnovation or an arbitration decision stating that the Licensing Agreement
has been terminated; or (ii) on the date Escrow Agent receives written notice
from Accelerated Networks and Telinnovation terminating this Agreement. This
Agreement may be renewed for additional periods of [one (1) year] upon receipt
by Escrow Agent of the specified renewal fees prior to the last day of the term
(the "Expiration Date"). If Escrow Agent has not received the renewal fees
within thirty (30) days prior to the Expiration Date, Escrow Agent shall so
notify Accelerated Networks of the thirty (30) day expiration period. If the
renewal fees are not received within thirty (30) days after Accelerated
Networks' receipt of such written notice from Escrow Agent, Escrow Agent may
terminate this Agreement without further notice. Accelerated Networks shall have
the right to pay renewal fees and other related fees. Accelerated Networks may
extend the period of this Agreement to cover the processing of an outstanding
release instruction made during any period of this Agreement.
8. Escrow Fees. Telinnovation shall pay Escrow Agent all
applicable escrow fees as set forth in Exhibit B to this Agreement. Payment is
due upon receipt of invoice from Escrow Agent. All fees and charges are
exclusive of, and Telinnovation is responsible for the payment of, all sales,
use and like taxes. Escrow Agent shall have no obligations under this Agreement
until the initial invoice is paid in full by Telinnovation.
9. Proprietary Information; Nondisclosure. Escrow Agent
acknowledges and agrees that the Source Code contains information and data
proprietary to Telinnovation. Escrow Agent agrees to maintain all information
and data contained in the Source Code in strictest confidence for the benefit of
Telinnovation and Accelerated Networks. Escrow Agent agrees that it shall not
disclose, proliferate or duplicate any Source Code except as expressly allowed
in this Agreement. Escrow Agent shall ensure that any employee or agent
receiving a copy of the Source Code is fully apprised of the terms under which
Escrow Agent, its employees and agents may use the Source Code under this
Agreement.
10. Arbitration of Disputes. All disputes, or claims arising
out of, resulting from or related to this Agreement shall be finally settled
under the Rules of the American Arbitration Association (the "Rules") by an
arbitrator appointed in accordance with the Rules. If the parties fail to so
nominate a sole arbitrator within 30 days from the date when the claimant's
request for arbitration has been communicated to the other party, the sole
arbitrator shall be appointed in accordance with the Rules. Any decision made by
such an arbitrator within the scope of his or her authority shall be binding
upon the parties. The cost for such arbitrator shall be borne equally between
the parties, but all other costs involved in the arbitration shall be borne
separately by the parties. Each party shall enter into an arbitration agreement
providing reasonable protection to the arbitrator. The place of arbitration
shall be in Moorpark, California. Judgment on any award rendered by the
arbitrator may be entered by any court of competent jurisdiction.
Notwithstanding the forgoing, in the event of arbitration resulting from a
dispute concerning the release of Source Code, the provisions of this section 10
shall be modified by the terms of section 3(c) above.
11. Miscellaneous.
(a) Notices. All notices required or permitted to be
given hereunder shall be in writing and shall be deemed given when delivered in
person, by reputable overnight
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courier service with tracking capabilities, or on the fifth business day after
being deposited in the mail, postage prepaid, registered or certified mail,
addressed as follows:
Telinnovation: Accelerated Networks:
------------- --------------------
Telinnovation Service Corporation Accelerated Networks Corporation
000 Xxxxx Xxxxxx 000 Xxxxxxx Xxxxx
Xxxxx 000 Xxxxxxxx, Xxxxxxxxxx 00000
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Escrow Agent:
(b) Bankruptcy. Telinnovation and Accelerated Networks
acknowledge that this Agreement is an "agreement supplementary to" the License
Agreement and Development Agreement as provided in Section 365(n) of Xxxxx 00,
Xxxxxx Xxxxxx Code (the "Bankruptcy Code"). Telinnovation acknowledges that if
Telinnovation as a debtor in possession or a trustee in Bankruptcy in a case
under the Bankruptcy Code rejects the Licensing Agreement, Accelerated Networks
may elect to retain its rights under the Licensing Agreement and this Agreement
as provided in Section 365(n) of the Bankruptcy Code. Upon written request of
Accelerated Networks to Telinnovation or the Bankruptcy Trustee, Telinnovation
or such Bankruptcy Trustee shall not interfere with the rights of Accelerated
Networks as provided in the Licensing Agreement and this Agreement, including
the right to obtain the Source Code from the Escrow Agent.
(c) Expenses. Except as otherwise provided herein, Accelerated
Networks and Telinnovation shall be responsible for their own costs and expenses
with respect to matters involving this Agreement.
(d) Severability. If any provision of this Agreement is
determined by a court to be invalid or unenforceable, such determination shall
not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if such invalid or unenforceable portion were
not contained herein. Such invalidity or unenforceability shall not affect any
valid and enforceable application thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective, to the full extent
permitted by law.
(e) Entire Agreement. This Agreement, including all exhibits
hereto, supersedes all prior discussions, understandings and agreements between
the parties with respect to the matters contained herein, and constitutes the
entire agreement between the parties with respect to the matters contemplated
herein.
(f) Multiple Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. This Agreement may
be signed and shall be deemed
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delivered upon facsimile transmission of a signature in the space marked below,
but the parties shall endeavor to provide each other with originally signed
copies as soon as possible thereafter.
(g) Amendments and Waivers. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No amendment or modification of this Agreement shall be
binding unless executed in writing by all parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed to waive any other provision or
constitute a continuing waiver.
(h) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the state of
California without giving effect to California's conflict of law rules.
(i) Independent Contractor. The parties acknowledge and agree
that the Escrow Agent is performing its functions under this Agreement as an
independent contractor and is not an employee or agent of Accelerated Networks
or Telinnovation.
(j) Survival. Sections 3(e), 5, 8, 9 and 11(b), and such
additional provisions of Section 11 as are necessary to give meaning and effect
to the foregoing shall survive any termination of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the date first above-written.
Telinnovation Service Corporation
By /s/
---------------------------------
Its Pres.
----------------------------
Accelerated Networks Corporation
By /s/
---------------------------------
Its President
----------------------------
ESCROW AGENT:
By
---------------------------------
Its
----------------------------
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EXHIBIT A
TELINNOVATION SOFTWARE
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EXHIBIT B
ESCROW FEES
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ADDENDUM
Account Number 0000000-00002-0103062
This is an Addendum to the attached Escrow Agreement dated December 24, 1998,
and among Accelerated Networks Corporation ("Accelerated Networks"),
Telinnovation Service Corporation ("Telinnovation"), and DSI Technology Escrow
Services ("Escrow Agent").
The parties acknowledge and agree to all the modifications set forth in the
following sections of this Addendum to the Escrow Agreement.
Section 1c., sentence 2 is hereby amended and restated to read as follows:
Any such deposit shall include Exhibit B a written description of the Source
Code identifying the software, version number, modifications from the previous
version and any other information required to uniquely identify the Source Code
(the "Deposit Description").
Section 1c., sentence 4 is hereby amended and restated to read as follows:
In the event the Source Code is damaged or destroyed in transit, Escrow Agent
shall notify Telinnovation within ten days of the receipt of such Source Code,
and Telinnovation shall deliver a duplicate copy of the Source Code to the
Escrow Agent within seven days of the receipt of such notice.
Section 1e., sentence 1 is hereby amended and restated to read as follows:
Upon deposit of the Source Code into the secure media vault, the Escrow Agent
shall notify Telinnovation and Accelerated Networks via First Class mail (the
"Deposit Notification").
Section 1e., sentence 2 is hereby amended and restated to read as follows:
The Deposit Notification shall include the date the Source Code was processed by
the Escrow Agent, and a copy of the Deposit Description.
Section 3a. is hereby amended and restated to read as follows:
(a) Notification of Release Condition. Accelerated Networks will provide
written notice to Escrow Agent and Telinnovation of the occurrence of
any of the following conditions ("Release Notification");
Section 3d. is hereby amended and restated to read as follows
(d) If Escrow Agent does not receive notification of any Telinnovation
Dispute within seven days of Escrow Agent's receipt of the Release
Notification, Escrow Agent shall release the Source Code specified in
the Release Notification to Accelerated Networks. If Escrow Agent does
receive notification of a Telinnovation Dispute within seven days of
Escrow Agent's receipt of the Release Notification, Escrow Agent shall
release Source Code at such time at it receives (i) joint written
direction from Accelerated Networks and
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Addendum
Accelerated Networks/Telinnovation
Page 2
Telinnovation or (ii) an arbitration decision rendered pursuant to
section 3(c) and 10 of this Agreement and which directs the Escrow
Agent as to the disposition of the Source Code.
Section 11a. is hereby amended and restated to read as follows:
Notices. All notices regarding the "Release of Deposit" will be sent out
certified mail, return receipt requested, or by commercial express mail. All
other notices, invoices, payments, deposits and other documents and
communications shall be given to the parties at the addresses specified in the
attached Exhibit C. It shall be the responsibility of the parties to notify each
other as provided in this Section in the event of a change of address. The
parties shall have the right to rely on the last known address of the other
parties. Unless otherwise provided in this Agreement, all documents and
communications may be delivered by First Class mail.
Agreed:
Accelerated Networks Telinnovation
By: /s/Xxxxxx Xxxxxxxx By: /s/Xxxxxxx X. Xxxxx
--------------------------------- ------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxx
--------------------------------- ------------------------
Title: President & CEO Title: Pres
--------------------------------- ------------------------
Date: 1-29-99 Date: 2-11-99
--------------------------------- ------------------------
DSI Technology Escrow Services
By: /s/[illegible]
---------------------------------
Name:
---------------------------------
Title: Sr. Contract Administrator
---------------------------------
Date: 2-3-99
---------------------------------
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SCHEDULE E - SERVICE STANDARDS
If the Technology fails to conform to the specifications therefor, the Developed
Technology or any component thereof fails to conform to the Developed Technology
Specifications, of the Technology or the Developed Technology is defective in
material or workmanship, Telinnovation shall correct any such non-conformance or
defect and deliver the Developed Technology to Accelerated Networks for all
affected End User sites. The initial determination of priority, as described
below, shall be made solely by Accelerated Networks, in its reasonable
discretion. Telinnovation shall respond to failures of Technology or Developed
Technology to operate as warranted as follows:
PRIORITY 1. A "Priority 1" failure of the Technology or Developed Technology to
operate as warranted is any condition that precludes operation of the Technology
or Developed Technology as bundled with or incorporated into a Product, or that
materially impairs such operation. Priority 1 conditions are the highest in
severity, for which Accelerated Networks shall receive a response within one (1)
business day from the time (the "Notification Time") Telinnovation's service
representative ("SR") or other person receives the call from Accelerated
Networks notifying the SR of the Priority 1 failure. Telinnovation shall use its
best efforts to resolve and correct a Priority 1 failure in a manner reasonably
acceptable to Telinnovation within two (2) business days from the Notification
Time.
PRIORITY 2. Any condition that impairs one or more functions of the Technology
or Developed Technology is warranted to perform, but that does not involve a
Priority 1 condition and is not a Priority 3 condition, is a "Priority 2"
condition. Priority 2 conditions are less severe than Priority 1 conditions. For
Priority 2 conditions, Accelerated Networks shall receive a response within one
(1) business day from the Notification Tune. Telinnovation shall use its best
efforts to resolve and correct a Priority 2 failure in a manner reasonably
acceptable to Accelerated Networks within three (3) business days from the
Notification Time.
PRIORITY 3. Any condition that constitutes an immaterial, defect or error in one
or more functions that the Technology or Developed Technology is warranted to
perform is a "Priority 3" condition. Priority 3 conditions are the least severe.
For Priority 3 conditions, the Accelerated Networks shall receive a response
within two (2) business days from the Notification Time. Telinnovation shall use
reasonable efforts to resolve and correct a Priority 3 failure in a manner
reasonably acceptable to Accelerated Networks within three (3) weeks from the
Notification Time.
If Telinnovation is unable to correct a Priority 1 or Priority 2 condition
within ten (10) business days, or a Priority 3 condition within one (1) month,
of the date on which the SR or other person receives the call informing
Telinnovation of the Priority 1, Priority 2, or Priority 3 condition, as the
case may be, Accelerated Networks may, in its sole discretion, withhold payment
of any amount due under Agreement until the condition is corrected. If
Telinnovation is unable to correct a Priority 1 or Priority 2 condition within
such ten (10) business-day period, or in the event of a Priority 3 condition
such one (1) month period, despite Telinnovation's diligent efforts to do so,
then Telinnovation shall continue to use its diligent efforts to correct the
condition as soon as practicable. In the event Telinnovation fails to exercise
such diligent efforts as reasonably determined by Accelerated Networks,
Accelerated Networks shall be entitled to (a)
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immediately terminate the Agreement without any further obligation to
Telinnovation, (b) exercise Accelerated Networks' right to obtain source code
under Section and/or (iii) exercise any other remedy available at law, in
equity, by statute, or otherwise.
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Amendment I to License Agreement dated December 1998.
The first two sentences of ARTICLE 8.1 of The License Agreement between
Accelerated Networks Corporation and Telinnovation Service Corporation dated
December 1998 are as follows:
8.1 This Agreement shall remain in full force and effect for a period of one
(1) year from the Effective Date. Thereafter, this Agreement shall
automatically renew for successive terms of one (1) year each, unless, at
least (30) days prior to the end of the then-current term, one party
provides the other party with written notice of such party's intention to
terminate this Agreement.
These sentences are amended as follows
8.1 This Agreement shall remain in full force and effect for a period of three
(3) years from the Effective Date. Thereafter, this Agreement shall
automatically renew for successive terms of three (3) years each, unless,
at least (90) days prior to the end of the then-current term, one party
provides the other party with written notice of such party's intention to
terminate this Agreement.
In witness whereof, the parties have signed this Amendment on the dates given:
TELINNOVATION SERVICE CORP. ACCELERATED NETWORKS CORP.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxx
------------------------------ -------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxxxxx X. Xxxxx
-------------------------- ----------------------------
Title: President Title: Chief Financial Officer
-------------------------- ----------------------------
Date: 1/29/00 Date: 1/29/00
-------------------------- ----------------------------
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