OEM DEVELOPMENT AND LICENSE AGREEMENT
WHEREAS, Media 100 develops and markets certain software and other
computer-related products and services and desires to include Supplier's
software product as a component of Media 100's product or services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree to the following terms and conditions, which set forth the rights,
duties, and obligations of the parties.
1. DEFINITIONS. The following terms, when used with initial capital letters in
this Agreement, shall have the following definitions, unless the context in
which the term is used expressly provides otherwise.
"ACCEPTANCE CRITERIA" means a set of criteria (set forth in the Specifications)
that will be used to judge whether a Deliverable meets the Specifications.
"AFFILIATE" means with respect to any entity, any other entity controlling,
controlled by or under common control of such entity.
"APPLICATIONS PROGRAMMING INTERFACE" means the specifications of a Supplier
Product which define the external programming interface between that Supplier
Product and other Object Code. The Applications Programming Interface includes
the elements of such programming interface that are directly exposed and
recommended as mandatory to implement extension to that Supplier Product.
"APPLICATIONS PROGRAMMING INTERFACE ITEMS" means the following set of items
implementing the Applications Programming Interface: (a) System Documentation
describing the Applications Programming Interface; (b) fully functional and
tested Supplier Product (Object Code and System Documentation) designed for use
on, and implementing the Applications Programming Interface; and (c) a fully
functional and tested validation test suite and System Documentation describing
the associated test procedures.
"CONFIDENTIAL INFORMATION" means any information disclosed by one party to the
other pursuant to this Agreement which is in written, graphic, machine readable
or other tangible form and is marked "Confidential", "Proprietary", "Source
Code", or in some other manner to indicate its confidential nature. Confidential
Information may also include oral or visual information disclosed by one party
to the other pursuant to this Agreement, provided that such information is
designated as confidential at the time of disclosure and is reduced to writing
by the disclosing party within a reasonable time (not to exceed thirty (30)
calendar days) after its oral or visual disclosure, and such writing is marked
in a manner to indicate its confidential nature and delivered to the receiving
party.
"BUNDLED PRODUCT" means the combination of a Restricted Streaming Product and a
Supplier Product being distributed to third parties in accordance with this
Agreement.
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"CONTRACTOR" of a company means a person or group of persons (whether
incorporated or not) providing services to that company as independent
contractors.
"DELIVERABLES" means the Supplier Product or any portion thereof to be delivered
by the Supplier identified in Exhibits A and B.
"DERIVATIVE WORKS" means a revision, modification, translation, abridgment,
condensation or expansion of the Supplier Product or Documentation or any form
in which the Supplier Product or Documentation may be recast, transferred, or
adapted, which, if prepared without the consent of Supplier, would be a
copyright infringement.
"DISTRIBUTOR" means any third party which acquires possession of the Supplier
Product from Media 100 and is not a Reseller or End User and distributes it to a
Reseller.
"DOCUMENTATION" means End User Documentation and System Documentation. "END USER
DOCUMENTATION" means those software user manuals, reference manuals and
installation guides, or portions thereof, which are distributed in conjunction
with the Supplier Product including but not limited to those set forth in
Exhibit C. "End User Documentation" excludes System Documentation. "SYSTEM
DOCUMENTATION" means all user manuals and other written materials, including
style guides, that relate to particular Source Code or Object Code, including
without limitation materials useful for understanding, designing, developing,
building, implementing, maintaining and operating Source Code or Object Code
(for example, logic manuals, flow charts and principles of operation) and
machine-readable text or graphic files subject to display or printout.
"END USER" means an entity that acquires the Supplier Product for Internal Use
and is not an affiliate of Media 100's enterprise. "End User" does not include
an entity that distributes, resells, sells, licenses, rents or leases the
Supplier Product to other parties in the regular course of business.
"ERROR" means any mistake, problem or defect that causes either an incorrect
functioning of code or an incorrect or incomplete statement or graphic in
Documentation, if such mistake, problem or defect (a) renders the code
inoperable, (b) causes the code to fail to meet the Specifications or Acceptance
Criteria, (c) causes the Documentation to be inaccurate or inadequate in any
material respect, (d) causes incorrect results, or (e) causes incorrect
functions to occur.
"EVENT OF BANKRUPTCY" with respect to a company means (a) the commencement by
the company of a voluntary case under the United States Bankruptcy Code or under
any similar law, (b) the commencement against the company of an involuntary case
under the United States Bankruptcy Code or under any similar law if the case is
not vacated within ninety calendar days, (c) the entry of a final order by a
court of competent jurisdiction finding the company to be bankrupt or insolvent,
ordering or approving its liquidation, reorganization or any modification or
alteration of the rights of its general creditors or assuming custody of or
appointing a receiver or other custodian for all or a substantial part of its
property and such order shall not be vacated or stayed upon appeal or otherwise
stayed within ninety calendar days or (d) the company making an assignment for
the
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benefit of, or entering into a composition with, its creditors, or appointing or
consenting to the appointment of a receiver or other custodian for all or a
substantial part of its property.
"INTERNAL USE" means use for purposes that do not directly produce revenue for
the user.
"MAJOR AND MINOR UPDATES" means updates, if any, to the Supplier Product. Major
Updates involve additions of substantial functionality while Minor Updates do
not. Major Updates are customarily designated by a change in the number to the
left of the decimal point of the number appearing after the product name while
Minor Updates are customarily designated by a change in such number to the right
of the decimal point. Major Updates exclude software releases which are
reasonably designated by Supplier as new products. Where used herein "Updates"
shall mean Major Updates or Minor Updates interchangeably.
"MARKS" means Supplier's trademarks, service marks, logos, designations and
insignias.
"MILESTONE SCHEDULE" means the schedule for delivery of Deliverables and payment
therefor attached to this Agreement as Exhibit B.
"MILESTONE" means the milestones set forth in the Milestone Schedule.
"MEDIA 100 RELATED PERSONS" means Media 100 and Media 100's subsidiaries, and
their respective directors, officers, employees, agents and Contractors.
"MEDIA 100" means Media 100 Inc.
"MONTH(S)" and "MONTHLY" refers to a calendar month.
"OBJECT CODE" means any computer programming code that loads and executes
without further processing by a software compiler or linker or that results when
Source Code is processed by a software compiler.
"RESELLER" means any third party which is not a Distributor but acquires the
Supplier Product from Media 100 or an authorized Distributor and resells,
licenses, rents, or leases to End Users.
"RESTRICTED STREAMING PRODUCTS" means the Media Cleaner Product of Terran
Interactive, Inc. (a subsidiary of Media 100), and any product which is
reasonably a derivative or extension of such product; provided each such product
shall be considered a "Restricted Streaming Product" only if it can ONLY produce
streaming media output; for the purposes of this provision, products designed to
or capable of output to physical media (such as video tape or DVD disk) or in
"mini-DV" format shall not be considered to produce only streaming media output
and thus not be "Restricted Streaming Products"; however, the ability to store a
streaming media output on physical media shall not disqualify a product
otherwise compliant from being a "Restricted Streaming Product".
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"SALE," "SELL" and other similar terms, when used in connection with the
marketing and distribution of the Supplier Product shall mean the granting of a
license or sublicense and shall not be deemed for any purpose to mean a transfer
of title or other rights of ownership to the Supplier Product, other than the
rights to copy and use as specifically set out in this Agreement.
"SOURCE CODE" means the human-readable form of programming code and related
System Documentation, including all comments and any procedural language. Source
Code does not include End User Documentation.
"SPECIFICATIONS" mean specifications for the Supplier Product API necessary to
ensure effective integration with the Restricted Streaming Products and as set
forth in Exhibit B
"SUBSIDIARY" of an entity means a corporation, company or other entity (a) more
than fifty percent (50%) of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing authority)
are; or (b) which does not have outstanding shares or securities, as may be the
case in a partnership, joint venture or unincorporated association, but more
than fifty percent (50%) of whose ownership interest (representing the right to
make decisions for such corporation, company or other entity) is; in each of (a)
and (b) now or hereafter, owned or controlled, directly or indirectly, by the
entity in question, as the case may be, but such corporation, company or other
entity shall be deemed to be a Subsidiary only so long as such ownership or
control exists.
"SUPPLIER PRODUCT" means the Supplier's product identified in Exhibit A that
Media 100 is authorized to sublicense, market and sell under this Agreement,
including each of the Deliverables, if any.
"SUPPLIER RELATED PARTY" means Supplier and Supplier's subsidiaries, Affiliates,
directors, officers, employees, agents and Contractors.
"SUPPLIER" means the company identified as such on the signature page to this
Agreement.
"SUPPORT SPECIFICATIONS" means the items set forth in Exhibit C.
"TERM" means the term of this Agreement, as it may be extended or earlier
terminated in accordance with Section 10.
2. DELIVERY OF DELIVERABLES; ACCEPTANCE.
(a) DELIVERABLES. To the extent the Supplier Product or any part thereof is an
existing product, then Supplier will deliver to Media 100 such existing
materials in connection with the execution of this Agreement, and each Update
thereto immediately upon such materials being released by Supplier, and Media
100 will make any payment specified in respect thereto as indicated in Exhibit
A. These deliverables will be in object code form only. Despite the foregoing
and except as provided by separate agreement, Major
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Updates will not be supplied by Supplier after May 31, 2003 and no Updates
will be delivered after Supplier terminates its general distribution of the
Supplier Product.
To the extent the Supplier Product consists of Deliverables to be created under
this Agreement, Supplier will deliver to Media 100 the Deliverables in
accordance with due dates for each set forth on the Milestone Schedule. Upon
acceptance of each Deliverable pursuant to the provisions of this Section 2,
Media 100 will make the payment specified on the Exhibit B - Milestone Schedule.
These deliverables will be in object code form only.
Supplier agrees that it will provide the Applications Programming Interface for
the Supplier Product by delivery to Media 100 of the Applications Programming
Interface Items together with such Supplier Product, and thereafter promptly
following any changes made thereafter to such items.
(b) CREATION OF MILESTONE SCHEDULE. As of the date of execution of this
Agreement, Exhibit B - Milestone Schedule and Exhibit C -- specifications of
API, are not completed. The parties will use all reasonable efforts to complete
Exhibits B and C and attach them hereto as promptly as possible. In general, the
parties expect that an alpha release of the API will be available in February
2000 and that the commercial release version of such product will be available
no later than the anniversary of this Agreement.
(c) ENGINEERING SUPPORT FOR DEVELOPMENT. Supplier will make available sufficient
internal engineering support from its organization to ensure that the Supplier
Product is commercially viable from a technical point of view, it being
understood that the foregoing does not obligate Supplier to hire personnel not
then employed at the Supplier, and is only a statement of allocation of
resources, not a representation or promise that the Supplier Product will in
fact be commercially viable. Appropriate Media100 engineering personnel will
reasonably cooperate with Supplier's personnel.
(d) REVIEW. Media 100 may conduct periodic reviews, including reviews at
Supplier's premises to take place at a mutually convenient time, of the Supplier
Product. At Media 100's reasonable request, Supplier will provide Media 100 with
written reports regarding its work on the Supplier Product and with copies of
any work in progress and related materials.
(e) CHANGES TO THE SPECIFICATIONS.
(i) Additional Specifications for the API may be agreed upon by the
parties until Media 100's final acceptance of the Supplier Product.
Media 100 acknowledges that significant changes to the Specifications
may result in a change in the delivery time table.
(ii) If any such modification of the Specifications by Media 100 does
require Supplier's expenditure of significantly more time and effort,
additional fees must be agreed upon in writing by the parties prior to
implementation of modifications.
(f) ACCEPTANCE OF SUPPLIER PRODUCT.
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(i) Delivery will occur when Supplier delivers a testable Deliverable
to Media 100 accompanied by a written statement listing the items
delivered and stating that they are ready for Media 100's acceptance
testing. Delivery of software will be via electronic transmission only,
unless Media 100 gives Supplier written notice that such a Deliverable
is to be delivered via another medium. Media 100, with the assistance
of Supplier if requested by Media 100, will examine and test each
Deliverable upon delivery to determine whether the Deliverable conforms
to the Acceptance Criteria for the Deliverable. Within thirty (30)
calendar days or such other number of days specified in the applicable
Acceptance Criteria after such delivery, Media 100 will provide
Supplier with written acceptance of such Deliverable or a specific and
objective statement of Errors to be corrected prior to the next
Milestone.
(ii) Supplier will correct the Errors in any Deliverable set forth in
the statement of Errors and redeliver the Deliverable to Media 100
within thirty (30) calendar days or such other number of days specified
in the applicable Acceptance Criteria after receipt of the statement of
Errors, and Media 100 will within fourteen (14) calendar days after
such redelivery provide Supplier with written acceptance or another
statement of Errors. The procedure set forth in this clause (ii) will
be repeated until Media 100 accepts the Deliverable.
(iii) If Media 100 fails to give a statement of Errors within the
specified time, Media 100 will be deemed to have accepted the
Deliverables as of the expiration of such specified time; provided that
such acceptance shall not affect the Supplier's obligation hereunder to
correct any Errors after such acceptance.
(g) APPLICATIONS PROGRAMMING INTERFACE; SUPPLYING SOURCE CODE. Supplier agrees
that the Applications Programming Interface Items to be delivered to Media 100
are intended to be used for, among other things, extension of the user interface
functionality of Supplier Products by Media 100 without the use of Source Code
of the Supplier Products, and Supplier has and will in creating such
Applications Programming Interface's do so taking into account the need to
facilitate such use. It is the Supplier's intention that the creation of such
Applications Programming Interface will give Media 100 the same capability to
extend user interface functionality as the Supplier has.
In the event the Applications Programming Interface, as so supplied, fails to
permit a reasonably skilled programmer the ability to do so, or if the parties
otherwise agree it is appropriate for Supplier to provide Media 100 access to
modules of Source Code to perform development work, the Supplier shall
immediately give Media 100 access to those modules of Source Code necessary for
Media 100 to perform such work, but only to the extent and for the time
reasonably required for Media 100 to perform such work. Any modifications to
Source Code made by Media 100 (but not the project developed by Media 100 using
Source Code) shall belong to Supplier, and Media 100 shall convey any ownership
rights it has in the modifications to the Source Code to Supplier.
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3. GRANT OF LICENSES.
(a) LICENSE GRANT. Subject to the terms and conditions of this Agreement,
Supplier grants to Media 100 a non-exclusive, worldwide, perpetual license to
the Supplier Product: (i) to use, reproduce and distribute the Supplier Product
and System Documentation internally within Media 100; (ii) to create or have
created Derivative Works based upon or compatible with the Supplier Applications
Programming Interface (whether Supplier Applications Programming
Interface-compliant or not) with or without the use of code supplied by Supplier
and to reproduce and distribute internally the Derivative Works in Source Code
form or in Object Code form; (iii) to the extent Source Code is supplied
pursuant to Section 2(g) or 3(c), to create or have created Derivative Works by
modifying the Source Code of the Supplier Product and to reproduce and
distribute internally the Derivative Works in Source Code form or in Object Code
form; (iv) to create or have created Derivative Works by modifying the End User
Documentation of the Supplier Product and to reproduce and distribute internally
such Derivative Works in any form; (v) to distribute externally to End Users,
either directly or through distributors, but only in bundled form with
Restricted Streaming Products, copies in Object Code form only of the Supplier
Product or Derivative Works and copies in any form of the End User Documentation
or any Derivative Works of the End User Documentation, such distribution shall
be in accordance with Media 100's standard software distribution license
agreement for a particular channel of distribution; and (vi) to exercise all
rights to the Supplier Product with regard to pictorial, graphic or audio/visual
works, including icons, screens, music and characters, that are created as a
result of execution of any code or any Derivative Work thereof in accordance
with the granted license
(b) PROPRIETARY NATURE OF PRODUCTS AND OWNERSHIP. No title to or ownership of
software licensed under this Agreement or proprietary technology in hardware
acquired under this Agreement is transferred to Media 100. Notwithstanding any
provision of this Agreement to the contrary, Supplier, or the licensor through
which Supplier obtained the rights to distribute the Supplier Product, owns and
retains all title and ownership of all intellectual property rights in the
Supplier Product, including all software, firmware, software master diskettes,
copies of software, master diskettes, documentation and related materials that
are acquired, produced or shipped by Supplier under this Agreement, and all
modifications to and derivative works of software acquired under this Agreement
that are made by Supplier or any third party (other than on behalf of Media
100). Supplier does not transfer any portion of such title and ownership, or any
of the associated goodwill, to Media 100. Supplier shall own all Derivative
Works of the Supplier Product produced or created by or on behalf of Media 100
provided that Supplier shall have no rights independently to market or
sublicense any Derivative Works created by Media 100 without Media 100's prior
written approval. Media 100 shall have rights to use such Derivative Works
subject to the terms and conditions of this Agreement.
(c) ACCESS TO SOURCE CODE. Supplier agrees to execute a standard software escrow
agreement (the "Escrow Agreement") supplied by an escrow agent selected by Media
100 and reasonably acceptable to Supplier (the "Escrow Agent"), and in
connection therewith Supplier agrees that from time to time upon request of
Media 100, Supplier shall deposit
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in escrow with the Escrow Agent the latest versions of all intellectual
property, as defined in section 101 of Title 11 of the United States Code, with
respect to those portions of the software and other technology incorporated in
the Supplier Product and reasonably relevant to the implementation of this
Agreement (the "Technology") including without limitation all Source Code,
designs, patents and Documentation ("Supplier Product Materials"), to be made
available to Media 100 upon the conditions set forth in this Section. Media 100
will pay the Escrow Agent's charges.
Regardless of whether "Source Code Escrowed" is indicated on Exhibit A and
regardless of whether this license is identified in Exhibit A as including the
right to Source Code, in the event that a trustee in bankruptcy is appointed for
Supplier, then unless and until such trustee has rejected this Agreement, the
trustee shall, at the written request of Media 100, (i) continue to perform all
of the obligations of Supplier under this Agreement, or (ii) promptly deliver to
Media 100 the Technology, including all Supplier Product Materials held by the
trustee, including any embodiment of such intellectual property to the extent
protected by applicable nonbankruptcy law, and in either case not interfere with
the rights of Media 100 to use such intellectual property (including such
embodiment) as provided in this Agreement or any agreement supplementary hereto,
including any right to obtain such intellectual property or such embodiment from
any Escrow Agent under an Escrow Agreement.
Regardless of whether "Source Code Escrowed" is indicated on Exhibit A and
regardless of whether this license is identified in Exhibit A as including the
right to Source Code, if the trustee rejects this Agreement, and Media 100
elects under section 365(n)(1)(B) of Title 11 of the United States Code to
retain its rights under this Agreement, the trustee shall promptly deliver to
Media 100 all intellectual property, as defined in section 101 of Title 11 of
the United States Code, with respect to the Technology, including all Supplier
Product Materials held by the trustee, including any embodiment of such
intellectual property to the extent protected by applicable nonbankruptcy law,
and not interfere with the rights of Media 100 to use such intellectual property
(including such embodiment) under this Agreement or any agreement supplementary
hereto, including any right to obtain such intellectual property or such
embodiment from any Escrow Agent under any Escrow Agreement.
4. SUPPORT, MARKETING AND DISTRIBUTION.
(a) MAINTENANCE AND SUPPORT. Supplier shall provide Media 100 with maintenance
and support according to the terms and conditions specified in Exhibit D.
(b) NONEXCLUSIVITY; NO MARKETING OBLIGATION. Media 100 understands that Supplier
reserves the right to directly license and sell the Supplier Product and to
appoint other OEM's, distributors and resellers without restriction as to number
or location. Supplier understands that Media 100 has no obligation to
incorporate, bundle or market the Supplier Product with or into any Media 100
products, or otherwise, unless Media 100 believes in its sole discretion that
such action is desirable from the Media 100's perspective.
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(c) USE OF AUTHORIZED OEM TITLE. During the term of this Agreement, Media 100
may refer to itself and Supplier may refer to Media 100, in connection with
exercising its rights under this Agreement, as a Supplier "Authorized OEM".
(d) PUBLIC ANNOUNCEMENTS AND PROMOTIONAL MATERIALS. Supplier and Media 100 shall
cooperate with each other so that each party may issue a press release other
than as a customer reference concerning this Agreement, provided that each party
must approve such press release prior to its release.
(e) SOFTWARE. When marketing products incorporating the Supplier Product, Media
100 agrees to exercise commercially reasonable efforts (and no less effort than
expended with respect to its own products) to ensure that each End User
receiving the products or services through Media 100 or Media 100's lines of
distribution understands and agrees to be bound by a Media 100 standard Software
License Agreement consistent with the line of distribution.
(f) USE OF SUPPLIER MARKS AND TRADE NAMES. Media 100 is authorized to use the
Supplier Marks applicable to the Supplier Product in connection with its
marketing of products or services incorporating the Supplier Product. Media 100
agrees not to alter, erase or overprint any notice provided by Supplier without
the prior written consent of Supplier or affix any Supplier Marks. Media 100
recognizes Supplier's ownership and title to the Trade Names and Marks. Media
100 will abide by Supplier's generally applicable and reasonable usage
guidelines established by Supplier from time to time.
5. FEES AND PAYMENT.
(a) ROYALTY AND LICENSE FEES. As license fees for the rights herein granted,
Media 100 shall pay to Supplier royalties on Media 100 sales and related
licensing or sublicensing of Bundled Product at the rates and on the terms
specified in Exhibit A hereto.
Media 100 is free to determine its own resale prices for the Bundled Product it
is authorized to license and sell hereunder. Although Supplier may publish
suggested list prices, these are suggestions only and not binding in any way.
Royalties shall accrue for a particular transaction in the Media 100 fiscal
quarter in which Media 100 recognizes for its financial statement purposes the
revenue for the shipment by Media 100 of the relevant quantity of the Bundled
Product (to a distributor or end-user). Media 100 shall pay Supplier such
license fees accrued during each such fiscal quarter, within forty-five (45)
days following the end of such fiscal quarter, and shall be accompanied by a
report in reasonable detail showing the calculation of such fees. All payments
shall be made in United States dollars. For sales for which Supplier would
otherwise be entitled to a royalty on a non-dollar based amount, Media 100 will
make payment to Supplier in U.S. Dollars based upon the exchange rate used in
connection with preparing its internal financial statements with respect to such
transaction. In no event shall Media 100 be responsible to protect the value of
sums against currency fluctuation, effects of inflation, or other economic or
monetary adjustment. The
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applicable fees for the products and services provided under this Agreement do
not include any sales, use or similar taxes ("Taxes") payable on the part of the
acquisition of the Supplier Product from Supplier. Such Taxes, if applicable and
imposed on Supplier, shall be presented in a billing statement by Supplier to
Media 100, and shall be payable by the Media 100 as specified herein; provided
that Media 100 shall not be liable for any taxes based upon Supplier's net
income or real or personal property owned by Supplier. Any payment to Supplier
shall be net of any required withholding due to taxes under applicable law.
Media 100 is responsible for Taxes resulting from its sales of Bundled Products
to its customers.
(b) INTERNATIONAL SALES RESTRICTIONS. If any payment to Media 100 with respect
to sales in any country is blocked or subject to restrictions by governmental
authorities, royalties with respect to such sales may either be held in the
blocking or restricting country (if permitted by local regulations) or may be
removed from such country and paid to Supplier, subject to whatever
restrictions, limitations and/or taxes may be imposed by the government of such
country on receipts from the underlying sale. If the government of a country
requires a reduction in the royalty rate set forth in this Agreement as a
condition of approving the payment of royalties to Supplier, Supplier agrees to
reduce such rate for that country so as to provide for the maximum royalty
payment allowed by such government. When deemed reasonably necessary by Media
100, Supplier shall enter into separate agreements with affiliates of Media 100
for the purpose of facilitating the payment of royalties.
(c) RECORDS EXAMINATIONS. Media 100 agrees to allow Supplier to examine its
records to determine compliance or noncompliance with this Agreement. Any
examination will be conducted only by an authorized representative of Supplier,
and will occur during regular business hours at Media 100's offices and will not
interfere unreasonably with Media 100's business activities. Examinations will
be made no more frequently than annually, and Supplier will give Media 100
fifteen (15) business days or more prior written notice of the date of the
examination and the name of Supplier's authorized representative who will be
conducting the examination. The audit will be conducted at Supplier's expense,
unless the audit reveals an underpayment for the reviewed period of more than
five percent, in which case the reasonable audit cost will be borne by Media
100. . All information obtained by Supplier's authorized representative
conducting the audit will be maintained confidential by the representative. The
examiner will give Media 100 and Supplier an examination report containing only
the information necessary to indicate compliance or non-compliance with this
Agreement. Underpayments will be promptly paid. All late payments will bear
interest at the rate of one percent per month until paid.
6. WARRANTIES.
(a) GENERAL. Supplier represents and warrants (i) that the Supplier Product
being delivered to Media 100 is identical to that generally marketed by
Supplier, except to the extent specifically agreed to between the parties; and
(ii) it has and will have full and sufficient authority to assign or grant the
rights and/or licenses granted in the Supplier Product pursuant to this
Agreement.
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(b) NO VIRUS. Supplier has taken reasonable steps to test the Supplier Product
for programming devices (e.g., viruses, key locks (including, without
limitation, that control the number of users), backdoors, etc.) that would (i)
disrupt the use of the Supplier Product or any system, device or software to
which the Supplier Product is interfaced or other computer equipment with which
such equipment communicates; (ii) destroy or damage data or make data
inaccessible or delayed, except for file and purge routines necessary to the
routine functioning of the Supplier Product; or (iii) permit Supplier personnel,
agents or subcontractors access to any portion of the Supplier Product other
than as necessary to carry out the terms of this Agreement. Supplier agrees to
use programming practices and security procedures to avoid insertion of such
devices and to scan for viruses before sending any media containing programming
code to Customer.
(c) NO EXPORT RESTRICTION. Supplier further represents and warrants that to its
knowledge, except as disclosed to Media 100 the Supplier Product does not
contain cryptographic code or any other code that would subject it any United
States export license restrictions.
THE WARRANTIES DESCRIBED IN THIS SECTION 6 ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.
7. INDEMNIFICATION.
(a) INDEMNIFICATION. Supplier will indemnify, defend and hold Media 100, its
affiliates and, subsidiaries, and its and their respective directors, officers,
employees and agents (collectively, "Media 100 Persons") harmless from any and
all damages, liabilities, costs and expenses incurred by any Media 100 Person as
a result of any claim, judgment or adjudication against Media 100 Person that
alleges that the Supplier Product, Trade Names or the Marks infringe any
trademark, copyright, patent or trade secret rights of any third party. Media
100 shall promptly notify Supplier in writing of any claim for which it seeks
indemnification, provided the failure or delay in doing so shall not relieve
Supplier from any obligation to indemnify any Media 100 Person except to the
extent such delay or failure materially prejudices the defense of any such
claim. Supplier will have control of the defense of any action and all
negotiations for settlement and compromise, but shall not make any settlement
binding on any Media 100 Person without Media 100's consent except if such
settlement provides a complete and absolute release of such person. Media 100
shall provide Supplier with reasonable assistance and information necessary to
perform the above, with Supplier to be responsible for any out-of-pocket
expenses of any Media 100 Person in providing such assistance. If any Media 100
Person desires to have separate legal representation in any such action, such
Media 100 Person shall be responsible for the costs and fees of its separate
counsel.
(b) LIMITATION ON INDEMNIFICATION. Supplier shall have no liability for
infringement to the extent based on (i) modification of the Products by Media
100 or to Media 100's specifications, or (ii) the combination or use of the
Supplier Product with any other computer program, equipment, product, device,
item or process to the extent (A) such
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program, equipment, product, device or process is not furnished by Supplier and
(B) such infringement would have been avoided by the use of the Supplier Product
alone and in its unmodified form. Moreover, Supplier shall have no liability for
infringement, unless it knew or should have known of the infringement on the
date of this Agreement or any significant amendment thereto and had not
previously disclosed the possibility of such infringement to Media100 in writing
specifying either the specific technology, algorithm, standard or similar item
which is anticipated to be the source of infringement, or the party from which
infringement is reasonably expected.
8. CONFIDENTIAL INFORMATION.
(a) RESTRICTION ON USE. Each party and its Related Persons shall treat as
confidential all Confidential Information of the other party, shall not use such
Confidential Information except as contemplated under this Agreement, and each
party and its Related Persons shall not disclose such Confidential Information
to any third party except as may be reasonably required in connection with the
manufacture, use, sale or distribution of products pursuant to this Agreement,
and subject to confidentiality obligations at least as protective as those set
forth in this Agreement. Without limiting the foregoing, each of the parties
shall use at least the same degree of care which it uses to prevent the
disclosure of confidential information of like importance to the disclosing
party to prevent the disclosure of Confidential Information disclosed to it by
the other party under this Agreement.
(b) EXCEPTIONS. Notwithstanding the above, neither party shall have liability to
the other with regard to any Confidential Information of the other which
(i) was in the public domain at the time it was disclosed or enters the
public domain without violation of this Agreement by the receiver;
(ii) was known to the receiver, without restriction, at the time of the
disclosure as shown by the files of the receiver in existence at the
time of disclosure;
(iii)is disclosed with the prior written approval of the discloser;
(iv) was independently developed by the receiver without any use of the
Confidential Information and by employees or other agents of (or
Contractors hired by) the receiver who have not been exposed to the
Confidential Information;
(v) becomes known to the receiver, without restriction, from a third party
without breach of this Agreement by the receiver and otherwise not in
violation of the discloser's rights;
(vi) is disclosed to third parties by the discloser, intentionally without
restrictions similar to those contained in this Agreement;
(vii)to the extent disclosed in accordance with the order or requirement
of a court, administrative agency, or other governmental body,
provided, however, that the receiver shall provide prompt notice
thereof to enable the discloser to seek a protective order or
otherwise prevent such disclosure; or
12
(viii)is inherently disclosed in the use, lease, sale or other
distribution of, or publicly available supporting documentation for,
any present or future product or service by or for the receiving party
or any of its Subsidiaries as otherwise permitted in this Agreement.
(c) TERMINATION OF OBLIGATIONS.
The parties' obligations under this Section with respect to nontechnical sales,
marketing and financial Confidential Information terminate three (3) years from
the end of the Term, if not terminated earlier pursuant to Section 8(b). The
parties' obligations with respect to all technical Confidential Information
shall be terminated only pursuant to Section 8(b).
9. LIMITATION OF REMEDIES.
(a) LIMITATIONS. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT,
NEITHER SUPPLIER NOR MEDIA 100 WILL BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS)
SUSTAINED OR INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE SUPPLIER PRODUCT
THAT IS SUBJECT TO THIS AGREEMENT REGARDLESS OF THE FORM OF ACTION AND WHETHER
OR NOT SUCH DAMAGES ARE FORESEEABLE. Supplier's liability to Media 100 under
this Agreement shall not exceed the greater of amounts paid by Media 100 to
Supplier under this Agreement. Media 100's liability to Supplier under this
Agreement shall not exceed the amounts payable by Media 100 to Supplier under
Section 5.
(b) EXCEPTIONS. The limitation set forth in subsection (a) above do not apply to
any payment under Section 7; to breach of Section 8; to claims by either party
for personal injury or damage to real property or tangible personal property
caused by other's negligence; or in the case of fraud.
10. TERM; TERMINATION.
(a) TERM. This Agreement shall commence on the date it is executed by an
authorized Supplier signatory and continue until terminated in accordance with
its terms.
(b) TERMINATION FOR CAUSE. Either party may terminate this Agreement for the
substantial breach by the other party of a material term. The terminating party
will first give the other party written notice of the breach and a reasonable
period of at least sixty (60) days in which to cure the alleged breach. If a
cure is not achieved during the cure period, then the non-breaching party may
terminate this Agreement upon written notice.
(c) INSOLVENCY, ASSIGNMENT, OR BANKRUPTCY. Either party may terminate this
Agreement upon written notice to the other party if the other party (i) is not
paying its debts as such debts generally become due, (ii) becomes insolvent,
(iii) files or has filed against it a petition (or other document) under any
Bankruptcy Law or similar law that is unresolved within sixty (60) days of the
filing of such petition (or document), (iv) proposes any dissolution,
liquidation, composition, financial reorganization or
13
recapitalization with creditors, (v) makes a general assignment or trust
mortgage for the benefit of creditors, or (vi) if a receiver, trustee, custodian
or similar agent is appointed or takes possession of any of its property or
business.
(d) TERMINATION BY MEDIA 100 FOR CONVENIENCE. Media 100 may terminate this
Agreement for its convenience at any time, for any reason or for no reason, by
giving Supplier written notice of termination prior to the beginning of the next
Media 100 fiscal quarter. Termination will become effective upon receipt of such
notice by Supplier.
(e) EFFECT OF TERMINATION ON OBLIGATIONS. Termination of this Agreement will not
affect any pre-termination obligations of either party under this Agreement, and
any termination is without prejudice to the enforcement of any undischarged
obligations existing at the time of termination. Within thirty (30) calendar
days after termination of this Agreement, Media 100 shall either deliver to
Supplier or destroy all copies of the Supplier Product and Documentation and any
other materials provided by Supplier to Media 100 hereunder in its possession or
under its control, and shall furnish to Supplier an affidavit signed by an
officer of Media 100 certifying that, to the best of its knowledge, such
delivery or destruction has been fully effected. Notwithstanding the foregoing,
(i) all licenses to the Bundled Product granted prior to termination to End
Users by or on behalf of Media 100 and in connection with products incorporating
the Supplier Product shall survive any termination of the Agreement, and in
particular, it is agreed that upon the termination of the Agreement for any
reason, such termination shall not abridge or diminish in any way the rights of
existing End Users to the licensed use and enjoyment of any product utilizing or
incorporating the Supplier Product or any Derivative Work already distributed in
accordance with the Agreement prior to its termination; and (ii) for a period of
up to one year after the date of the termination of this Agreement Media 100 may
continue, subject to payment of amounts which may be due as of the date of such
termination and at any time thereafter, to sell the Bundled Product and grant
End User licenses to in connection therewith, under the provisions of this
Agreement solely to (A) work off existing inventory, (B) fulfill contract
commitments existing at the date of termination, or (C) satisfy binding
quotations in effect at the date of termination, and may thereafter retain such
rights as are necessary to support users at the release level existing at the
time of termination.
Upon termination, Media 100's sole monetary obligation arising out of
termination will be to pay Supplier the fees set forth in Exhibit A of this
Agreement.
11. GENERAL PROVISIONS.
(a) FORCE MAJEURE. If either party is prevented from performing any portion of
this Agreement (except the payment of money) by causes beyond its control,
including labor disputes, civil commotion, war, governmental regulations or
controls, casualty, inability to obtain materials or services or acts of God,
such defaulting party will be excused from performance for the period of the
delay and for a reasonable time thereafter.
(b) CHOICE OF LAW; JURISDICTION. The validity, construction and performance of
this Agreement will be governed by and construed in accordance with the laws of
the State of
14
California applicable to contracts executed in and performed entirely within
such State, without reference to any choice of law principles of such State.
With respect to any suit, action or other proceeding arising out of this
Agreement, or any other transaction contemplated thereby, the parties hereto
expressly waive any right they may have to a jury trial and agree that any
proceeding hereunder shall be tried by a judge without a jury. Each party
acknowledges that injunctive relief is an appropriate remedy for a breach of
Sections 3, 8 or 11. The parties agree to non-exclusive personal jurisdiction
and venue of the United States District Court for Massachusetts (and any
Massachusetts State Court) and the United States District Court for the Northern
District of California (and any California State Court in Santa Xxxxx County)
for that purpose.
(c) SURVIVAL OF TERMS. The provisions of this Agreement that by their nature
extend beyond the termination of this Agreement will survive and remain in
effect until all obligations are satisfied. Confidentiality provisions of
Section 8 shall remain in effect until the Confidential Information is no longer
Confidential.
(d) ENTIRE AGREEMENT. This Agreement, including the following Exhibits,
constitutes the entire Agreement between the parties pertaining to the subject
matter and supersedes all prior agreements and understandings between the
parties, written or oral, with respect to such subject matter. No
representations or statements of any kind made by any representative of either
party which are not stated in this Agreement or other substantially
contemporaneous written agreements between the parties shall be binding on such
party. No course of dealing or course of performance shall be relevant to
explain or supplement any term expressed in this contract. In the event of any
conflict between this Agreement and any purchase order or acknowledgment, this
Agreement shall take precedence over any written or typed instructions in a
written or electronic purchase order or acknowledgment. References to Sections
without decimals (such as "Section 2") shall include all sections numbered with
decimals in such Section (i.e. Section 2.1, 2.2, etc.). The pre-printed
provisions of any written or electronic purchase order or acknowledgment shall
be void and of no effect. This Agreement shall be valid when signed by
authorized officers of both parties. The parties agree that this Agreement,
together with any appendices, addenda or exhibits attached hereto, may be
amended from time to time in writing by mutual agreement of the parties. No
party shall be bound by any change, alteration, amendment, modification or
attempted waiver of any of the provisions of this Agreement unless in writing
and signed by an authorized officer of the party against whom it is sought to be
enforced.
(e) ASSIGNMENT.
(i) The rights and liabilities of the parties hereto will bind and inure to
the benefit of their respective successors, executors and administrators,
as the case may be; provided that neither party may assign or delegate its
obligations under this Agreement either in whole or in part, expressly or
by operation of law, without the prior written consent of the other, except
that each party may assign this Agreement (A) to any Subsidiary or company
of which it is a Subsidiary so long as it remains responsible for such
Subsidiary's performance or (B) to a person or entity into which it has
merged or which has otherwise succeeded to all or substantially all of its
15
business and assets to which this Agreement pertains, by purchase of stock,
assets, merger, reorganization or otherwise, and which has assumed in
writing or by operation of law its obligations under this Agreement. Any
attempted assignment in violation of the provisions of this Section will be
void.
(ii)All rights and licenses granted to a party under this Agreement shall
apply to that party's Subsidiaries so long as such Subsidiaries agree to
comply fully with the obligations imposed on that party by this Agreement
and so long as such Subsidiary continues to be a Subsidiary of a party.
Each party shall remain fully liable for the actions and omissions of its
Subsidiaries relative to rights granted under this Section 11(f).
(f) NOTICE. All notices, demands, requests or other communications that may be
or are required to be given, served or sent by any party pursuant to this
Agreement will be in writing (and shall be deemed to have been duly given upon
receipt), will reference this Agreement and shall be mailed by first class,
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by express courier or hand delivery or facsimile transmission,
addressed to the address below the party's name on the signature page of this
Agreement. Each party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be so given, served
or sent. Each notice that is mailed, delivered or transmitted in the manner
described above shall be deemed sufficiently given, served, sent and received
for all purposes at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt or the affidavit of messenger or courier
being deemed conclusive evidence of such delivery) or at such time as delivery
is refused by the addressee upon presentation.
(g) SEVERABILITY. If any term, provision, covenant or condition of this
Agreement is held invalid or unenforceable for any reason, the remainder of the
provisions will continue in full force and effect as if this Agreement had been
executed with the invalid portion eliminated. The parties further agree to
substitute for the invalid provision a valid provision that most closely
approximates the intent and economic effect of the invalid provision.
(h) INDEPENDENT CONTRACTORS. Each party acknowledges that the parties to this
Agreement are independent contractors and that it will not, except in accordance
with this Agreement, represent itself as an agent or legal representative of the
other.
(i) EXPORT CONTROL. Each party agrees that it will comply with the provisions of
United States laws restricting export of any software, technical data or other
information or materials, including without limitation the United States Export
Administration Act and regulations thereunder, and will not export any software,
technical data or other information or materials to any country in violation
thereof. This clause shall survive termination or cancellation of this
Agreement.
(j) HEADINGS. The headings provided in this Agreement are for convenience only
and will not be used in interpreting or construing this Agreement.
16
(j) NONSOLICITATION. During the term of this Agreement and for one year
thereafter, (i) neither party shall solicit the employees or contractors of the
other for employment or consulting and shall promptly advise the other if
approached by same for such purposes; and (ii) Media100 agrees not to distribute
the Bundled Products through any distributor of Supplier's as of the date of
this Agreement without Supplier's prior written approval, which approval will
not be unreasonably withheld..
(k) ATTORNEYS' FEES. In the event of any dispute in connection with this
Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' and experts' charges, in addition to such other relief as the court
may award.
Executed as of the date first above written.
SUPPLIER: Media 100:
DIGITAL ORIGIN, INC. MEDIA 100 INC.
By By
---------------------- ---------------------------
Name: Name:
Title: Title:
Address: 000 Xxxx Xxxxxxxxxxx Xxxx Address: 000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxx XX 00000 Xxxxxxxx, XX 00000-0000
17
EXHIBIT A
SUPPLIER PRODUCT, ROYALTIES
1. SUPPLIER PRODUCT: The Agreement to which this is appended applies to the
following Supplier Product:
a. IntroDV 1.0 For Windows, Software Only Version. The Digital
Origin Software content of retail SKU 0752 (see company website for complete
description). Specifically excludes all other bundled products from DO or third
parties, specifically excluded hardware, cables, and other miscellaneous
contained in that SKU.
2. ROYALTY/LICENSE FEES:
a. DEVELOPMENT PAYMENTS
Payment of $500,000 upon the earlier to occur of February 1,
2000 and Acceptance of all Deliverables of the Supplier Product (in accordance
with Exhibit B).
b. ONGOING ROYALTIES
1. Payment of $250,000 advance pre-paid royalty upon
execution of this Agreement, considered to be the minimum royalty payment for
the quarter ending February 29, 2000.
2. Royalty of 5% of Net Sales of Bundled Product each
quarter. Net Sales means gross receipts from the license or sale of the Bundled
Products less applicable sales and use taxes, shipping, insurance and reasonable
returns.
3. Cumulative minimum payment of $250,000 per quarter
for the first 14 quarters of the Agreement, such last payment being for the
quarter ended May 31, 2003. "Cumulative" means that if in a particular quarter,
(a) the cumulative payments under this Agreement under clause (1) and (2) in
previous quarters, plus the amount to be paid based on the foregoing 5% royalty,
is less than (b) $250,000 multiplied by the total number of elapsed quarters,
then the payment due in such quarter is such difference, up to $250,000.) The
$500,000 payment made pursuant to clause (a) shall not be considered in making
the calculation of "cumulative", but shall be treated as an advance against
royalties for the payments for the quarters ended August 31, 2003, and November
30, 2003 payments under clause (b), such that only to the extent the 5% royalty
set for in clause (b) above exceeds such amount would Media 100 be obligated to
make payments under clause (b) above for such quarters.
(Note: because of the $250,000 payment on execution, no further minimum royalty
payment is due for the quarter ended February 29, 2000; payment with respect to
such
18
quarter shall only be made if the amount payable under the 5% royalty exceeds
that amount.).
c. TREATMENT OF TERMINATION
1. In the event of termination of the Agreement prior to
February 28, 2001 by Media 100 for cause or convenience pursuant to Section 10,
the $500,000 payment made pursuant to clause (a) above shall be promptly
refunded by Supplier to Media 100. However, payments made under clause (b) above
shall not be refundable.
2. In the event of termination of the Agreement by Media
100 pursuant to Section 10 prior to the end of a quarter which quarter is after
the quarter ended February 28, 2001, Media 100 shall pay to Supplier in
accordance with the Agreement the payment for such quarter in accordance with
the provisions of (b) above. If Media 100 terminates the Agreement in or prior
to the quarter ended February 28, 2001, or if, pursuant to Section 10(e) above,
Media 100 shall provide residual post-termination copies of materials in a
quarter following any quarter in which the Agreement is terminated, it shall pay
to Supplier solely the 5% royalty specified in clause (b)(2) above with respect
to such sales, without any obligation of a minimum royalty. For avoidance of
doubt, in no case will Media 100 have liability for any minimum royalties
following termination of the Agreement other than as specifically stated in the
first sentence of this clause (c)(2).
19
EXHIBIT B
MILESTONES SCHEDULE
[to be completed after execution, in accordance with Section 2(b)]
DESCRIPTION OF MILESTONE DUE DATE
20
EXHIBIT C
PRODUCT SPECIFICATIONS
[to be completed after execution, in accordance with Section 2(b)]
21
EXHIBIT D
MAINTENANCE AND SUPPORT
Supplier shall not be responsible for first-level support (i.e., direct support
of customer questions) of products incorporating the Supplier Product. However,
during the term of this Agreement, and for a period of one (1) year thereafter
but not longer than Supplier provides general support for the Supplier Product
or if Supplier terminates the Agreement pursuant to Section 10(b), Supplier
shall provide to Media 100 second level support services, consistent with the
support obligations described below with respect to the Supplier Product
including, without limitation, identification of defective Source Code and
Object Code and providing corrections, Workarounds and/or patches to correct
defects or errors in such Code. During the term of this Agreement and for one
year thereafter, Media 100 shall provide first-level customer support of
products incorporating the Supplier Product on the same basis as the Restricted
Streaming Products or other comparable products that do not incorporate the
Supplier Product.
TECHNICAL SUPPORT. While obligated to provide second level support as provided
above, in addition to the second level support services described above, (i)
Supplier shall appoint a technical contact to whom Media 100 may address all
technical questions relating to Supplier technologies; (ii) the parties shall
determine a mutually acceptable procedure by which Media 100 shall direct its
technical questions to the appropriate Supplier technical contact; and (iii)
Supplier shall promptly answer all technical questions asked by Media 100
relative to the Supplier Product.
TRAINING OF MEDIA 100. Supplier shall provide training of up to two members of
Media 100's technical and marketing staff on the following topics: IntroDV.
Training of Media 100 personnel will be provided by Supplier at Mountain View CA
or other mutually agreeable location. The training duration is estimated at 2
days. Media 100 is responsible for Media 100 personnel's out of pocket expenses
including travel, room and board. Supplier is responsible for the facilities,
training materials and equipment. There are no tuition charges. The course will
be scheduled at a mutually agreed upon time.
UPGRADES, UPDATES, ERROR CORRECTIONS AND ENHANCEMENTS. Supplier will include
Media 100 in its alpha programs for any Updates to the technology underlying the
Supplier Product (the "Technology") released during the term of this Agreement,
and will provide Media 100 with the production version of such upgrades, subject
to Section 2(a) of the Agreement. Beta testing will be managed by Media 100,
with support from Supplier. Media 100 may, but is not required to, incorporate
any such Updates in a product.
To enable Media 100 to provide standard support, while Supplier provides second
level support as provided above, Supplier shall provide to Media 100, at no
cost, all pertinent System Documentation for the Supplier Product and any new
releases thereof which is reasonably necessary for the purpose of providing
standard software support for the Supplier Product. Supplier shall also provide
to Media 100, at no cost and on an as needed basis, timely qualified technical
support by phone during Supplier's Business
22
Hours to answer questions from a designated Media 100 representative consistent
with the following support obligations. Errors may be reported, on a 24 hours
per day, 365 day per year basis, by electronic mail, voice mail, fax or
telephonic recording capability.
While Supplier is obligated to provide second level support as provided above,
Supplier will use reasonable commercial efforts to resolve each significant
Error by providing either a reasonable work around, an object code patch, or a
specific action plan for how Supplier will address the problem and an estimate
of how long it will take to rectify the defect. Notwithstanding the foregoing,
Supplier has no obligation to perform services in connection with (i) Errors
resolution from hardware or software not supplied by Supplier or (ii) which
occur in the Supplier Product release which is not the then-current release.