LICENSE AGREEMENT
This Xxxxx.xxx License Agreement ("Agreement") is dated as of March 31,
2000, between Xxxxx.xxx Sdn. Bhd. or its designee ("SEA") and Freei Networks,
Inc. ("FN") for the Xxxxx.xxx software, technology, trademarks and brand names
described below, including any updates and supplements to the original
Technology provided to SEA by FN.
RECITALS
A. Xxxxx.xxx is a free-of-charge Internet access and email service provider (the
"Service") for the general public in the United States.
B. FN desires to expand the Service into certain Asia Pacific Markets in
accordance with the terms of this Agreement and has accepted payment of
US$[*] from and signed a Draft Terms Sheet, dated 15 December, 1999, with
Xxxxxxxxx Xxxx Xxxxx Xxxx for and on behalf of SEA.
C. SEA wishes to operate the Service within those markets in accordance with the
terms of this Agreement.
AGREEMENT
In consideration of the mutual covenants contained in this agreement, the
parties agree as follows:
1. GRANT OF TECHNOLOGY LICENSE. FN hereby grants to SEA a license to use FN's
dial-up client software, ad banner viewing and delivery technology, banner ad
reporting software and system, default pages with news content, chat rooms,
Xxxxx.xxx electronic mail system and related programs for complete
implementation of Service including updates, revisions, improvements and
modifications (together, the "Technology") within the Territory (as defined
below) during the terms of this Agreement. The Technology is protected by
copyright laws and international copyright treaties, as well as other
intellectual property laws and treaties. The Technology is being licensed, not
sold, to SEA in accordance with the terms of this Agreement.
2. OTHER RIGHTS AND LIMITATIONS.
(a) Limitations on Reverse Engineering, Decompilation, and Disassembly. SEA
may not reverse engineer, decompile or disassemble the Technology.
[*] = Confidential Treatment Requested
(b) Rental. SEA may not rent, lease, sell, sublicense or lend the
Technology without the prior written consent of FN, and any such sublicenses
shall be in accordance with Section 11 hereof. FN recognizes that SEA will be
venturing to promote the Service in the Territory via its subsidiaries or
partnerships in the event of which to give business efficacy to implementation
of the Service in the Territory by SEA, the consent of FN to rent, lease, sell,
sublicense or lend the Technology shall not be unreasonably refused.
(c) Transfer. SEA may not transfer or assign SEA rights or obligations
under this Agreement to any person or entity without the prior written consent
of FN.
(d) Support Services. FN shall provide SEA with technical support
services related to the Technology ("Support Services") as described in Section
11 below. Any supplemental software code provided to SEA as part of the Support
Services shall be considered part of the Technology and shall be subject to the
terms and conditions of this Agreement. In order to facilitate communications
and development of the Service in the Territory, FN shall:
(i) provide SEA assistance in connection with the development of
the Service in the Territory and training in the standards,
procedures, techniques and methods comprising the Service;
(ii) deliver to SEA sufficient copies of the Operating Manual and
any other training materials deemed appropriate on loan to
SEA.
(e) Complimentary Technology. If the Technology is labeled
"Complimentary" or "Comp", then, notwithstanding other sections of this
Agreement, SEA's use of the Technology is limited to use for demonstration, test
or evaluation purposes. Complimentary Technology is new or different technology
that is being distributed on a test basis and not to be implemented or included
in the Service.
(f) Reservation of Rights. FN reserves all rights not expressly granted
under this Agreement.
3. TRADEMARK LICENSE. SEA is hereby granted [*] license, during the
term of this Agreement, to use Xxxxx.xxx's name, logo and product likenesses
("the Trademarks") within the Territory, as defined below, provided, however, FN
retains the right to enter into private label and other business development
relationships within the Territory, pursuant to which the "powered by Xxxxx.xxx"
logo may be licensed or otherwise used provided that such private label and that
such business is non-competitive with the Service. SEA agrees to use the
appropriate trademark, product descriptor and trademark symbol (either "tm" or
"R"), and clearly indicates FN's ownership of the trademark(s) whenever the
Trademarks or Service are first mentioned in any manner in connection with the
Trademarks or Services. SEA will not undertake an action that could interfere
with or diminish the other's right, title and/or interest in trademark(s), trade
name(s) or service name(s). SEA shall not make any false or misleading
representations to its customers or others regarding the Service. SEA shall not
make any representations, warranties, or guarantees with respect to the
specifications, features or
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[*] = Confidential Treatment Requested
capabilities of the Service. SEA agrees that it will not impugn the quality of
reputation of the Trademark or the Service, or engage in any misleading or
deceptive statements or advertising about the Service.
4. TERRITORY. The licenses granted by this Agreement shall be applicable in
the following territories: [*] (together, the "Territory"). SEA shall not have
any rights under this Agreement or otherwise in any other territories. SEA
shall have the right to pursue partnerships and other business relationship
within and outside the Territory. SEA will not pursue any deals without the
express written and signed consent of FN prior to contacting any potential
business partner. Violation of this section of Article 4 is an event which
may trigger immediate termination. Disputes about this section of Article 4,
upon request, shall be submitted to binding arbitration through American
Arbitration Association ("AAA") before immediate termination becomes
effective.
In respect of the territories of [*], FN will disclose to SEA its
activities provided that FN may not be able to involve SEA in deals where FN
had previous contacts, existing relationships or ongoing discussions.
5. ROYALTIES AND FEES.
(a) SEA will pay to FN a one-time licensing fee of US$[*]. US$[*] has been
received by FN and US$[*] is payable upon the signing of this Agreement. The
balance shall be payable as follows: US$[*] by the end of April, US$[*] each
by the end of May and June, 2000.
(b) SEA will pay to FN a [*] royalty based on the gross advertising revenue
received by SEA. This royalty will be paid quarterly, with monthly reports
provided to FN.
(c) SEA will pay to FN US$[*] per new registered Xxxxx.xxx subscriber only
within the Territory excluding Singapore. This royalty will be paid quarterly,
with monthly reports provided to FN.
(d) SEA and FN will pay to each other [*]% of revenues from advertising
sold by the other party and generated in its own territory.
(e) Business development activities will be finalized in a separate
addendum.
6. RIGHTS TO SUBSCRIBERS. Subject to the subscriber fees set forth in
Section 5(c) above, for purposes of this Agreement, FN and SEA will jointly own
rights to subscribers obtained during the term of this Agreement within the
Territory, as well as all demographic information of each subscriber. Upon the
termination of this Agreement for any reason, SEA will use its best efforts to
transition all such subscribers to FN's Service.
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[*] = Confidential Treatment Requested
7. NONCOMPETITION PROVISION. SEA agrees that during the period beginning on
the date of this Agreement and ending [*] months following termination of this
Agreement for any reason, it will not engage in the business of [*] unless
it secures the prior written permission of FN, directly or indirectly:
(a) be employed by, act as the agent for, or consult with or otherwise
perform services for a Competitor (as defined below);
(b) own any equity interest in, manage or participate in the management (as
an officer, director, partner, member or otherwise) of, or be connected in any
other manner with, a Competitor; provided, however, that nothing in this
Agreement shall restrict SEA from owning less than one percent (1%) of the
equity interests of any publicly held entity; or
(c) induce or attempt to induce any employee, officer, director, agent,
independent contractor, consultant, customer, supplier or other service provider
of FN to terminate its relationship with, or cease providing services or
products to, or purchasing products from Xxxxx.xxx.
For purpose of this Agreement, a "Competitor" is any entity or individual which,
directly or indirectly, engages in the same or similar business as FN or is
preparing to engage in the same or similar business as FN anywhere in the world,
including, without limitation, the provision of Internet access services on a
free-of-charge basis. SEA agrees that the duration of the restrictions under
this Section 7 shall be extended by the duration of any period during which SEA
is in violation of this Section 7. SEA acknowledges that the covenants in this
Section are reasonable in relation to the licenses SEA has been granted under
this Agreement. However, should any court find that any provision of such
covenants is unreasonable, whether in period of time, geographical area, or
otherwise, then in that event SEA agrees that such covenants shall be
interpreted and enforced to the maximum extent which the court deems reasonable.
Any items not covered by this Agreement shall be resolved in an addendum.
8. RESPONSIBILITY FOR SERVICE. SEA will be solely responsible for the
content, quality and performance of the Service within the Territory and for any
warranty, return, support, maintenance or other obligations related to the
Service within the Territory, and Xxxxx.xxx will have no responsibility or
liability whatsoever for the foregoing. SEA will be solely responsible for the
quality and performance of its products including any warranty, return, support,
maintenance, and other obligations related to the product and that FN shall have
no responsibility or liability whatsoever for the foregoing. SEA hereby agrees
to indemnify and hold harmless FN and its officers, directors and controlling
persons from and against any and all claims, liabilities or expenses (including
court costs, attorneys' fees and costs of settlement) incurred by any of them in
connection with or arising out of the provision of the Service within the
Territory.
9. CO-BRANDING AND PRIVATE LABELING. SEA agrees that in the event of any
permissible co-branding project it undertakes, it will as part of such project
cause the FN brand
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[*] = Confidential Treatment Requested
logo to be displayed at the same size, and with at least equal prominence, as
that of the co-brand partner's logo. SEA further agrees that in the event of any
permissible private label project it undertakes, it will as part of such project
cause the "powered by Xxxxx.xxx" xxxx to appear in a prominent position at a
size no smaller than 120x60 pixels. In the case of both co-branding and private
labeling, the marks shall appear on the default pages and all pages within the
relevant internal service system. In all such case, SEA will also the FN
trademark/copyright statement to appear with equal prominence, and will provide
a hyperlink to a FN end-user license page.
10. OEM AGREEMENTS. If, in connection with the transactions contemplated by this
Agreement, SEA desires to enter into permissible relationships with third party
distribution partners, SEA may use FN's form of OEM Agreement and/or Technology
Distribution Agreement in substantially the forms attached hereto as EXHIBIT A
and EXHIBIT B respectively. In good faith, details of Exhibits A and B will be
presented to SEA post signing of this Agreement.
11. STAFF TIME AND INITIAL TRAINING. FN will furnish SEA, without further
consideration, with the services of [*] on-site and [*] in Seattle,
Washington, for the full initial software installation, localization and
customization. FN will also furnish SEA with additional staff to provide the
technical training, know-how, consulting and maintenance for the software and
other system programs necessary for the functionality of the Service; all such
training, consulting, maintenance and other staff personnel will be compensated
at a rate of US$[*] per hour beyond the five days.
12. HARDWARE AND SOFTWARE; REPRODUCTION. SEA will obtain all hardware,
equipment, software and systems necessary to implement the Service in the
Territory. For purposes of quality assurance, such purchases will be made with a
party or parties with the consent of FN, such consent not to be unreasonably
refused. In addition, SEA shall be required to use a CD producer specified by
FN, which producer shall have the right to provide reports to FN regarding CDs
produced for on behalf of SEA.
13. STAFFING AND CUSTOMER SUPPORT. SEA will be required to maintain its own
staff to build and maintain the Service within the Territory, including, but not
limited to, technical, administrative, operations and marketing; provided, that
SEA shall be required to outsource any and all technical customer support
services through the FN customer support center.
14. TAXES AND FEES. SEA will be responsible for all local and national
taxes and any fees or other expenses incurred in connection with implementing
the Service in any country within the Territory.
15. DURATION. Duration shall initially be [*]. At the end of the [*] or
during the [*], SEA may ask for and receive a rollup into a FN subsidiary to
be called [*], to be formed later. [*], as the wholly-owned subsidiary of
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[*] = Confidential Treatment Requested
FN, will have the rights to the following countries: [*]
If a rollup occurs, SEA and [*] will be appraised and valued by an
independent company that the parties mutually select or Xxxxxxx Sachs, on a Fair
Market Value basis. Then, the owners of SEA will receive the share value of SEA
in [*] stock, dollar for dollar.
At the end of the initial [*], SEA may extend for [*] more years if they
meet mutually agreed performance standards which shall not be unreasonable.
If SEA decides to extend, then a rollup can occur only if both parties agree.
If SEA violates any term of this Agreement, except Section 4, FN may issue
a notice to SEA at the address hereinbefore stated or at its last business
address requiring it to remedy or rectify the breach within one (1) month of the
date of receipt of the said notice. In the event that SEA fails at the end of
the expiry of the notice to remedy or rectify the breach complained of, FN may
terminate this Agreement without waiving any other rights.
In addition, if SEA has not made reasonable efforts to begin providing the
Service within the Territory within [*] months of the date of this Agreement,
FN may terminate this Agreement immediately provided that FN shall first
issue a minimum of one (1) month's notice to SEA requiring it to immediately
take reasonable effort to provide the Service failing which FN shall then be
entitled to terminate the Agreement.
It is hereby expressly declared that save and except for the terms
contained herein nothing in this Agreement shall give the right to FN to
terminate this Agreement or to disconnect, discontinue or disrupt in anyway
whatsoever the Service otherwise other than by due process of law before the
expiry of the term.
16. SAFEGUARDS / AUDIT RIGHTS. SEA agrees to (i) implement internal
safeguards to prevent any unauthorized copying, distribution or use of the
technology; (ii) provide FN with written certification of the number of
copies or concurrent usage of the Technology on request; and (iii) to allow
FN to audit SEA's premises and systems for compliance with this Agreement
during regular business hours. FN will pay for the cost of the audit unless
the audit shows a discrepancy which is [*] or more of the revenue amount
reported by SEA, in which event SEA shall pay for the cost of the audit and
give two (2) days notice.
17. UPGRADES. As and when there are any upgrades, changes, modifications, FN
will make efforts to furnish SEA without delay such upgrades, changes,
modifications of the FN software. Technology acquired as an upgrade replaces
and/or supplements all prior versions. SEA may use the resulting upgrade only in
accordance with the terms and conditions of this Agreement.
18. OWNERSHIP. All right, title and interest in and to the Technology, the
Trademarks and the Service (collectively, the "IP"), including, without
limitation, all applicable copyrights,
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[*] = Confidential Treatment Requested
trade secrets and other intellectual property ownership or distribution rights
in and to the IP, and any and all modifications, improvements or derivative
works of or to the IP (the "Derivatives") shall remain exclusively with FN
regardless of which party developed the Derivative. SEA shall do nothing to
divest or disturb FN's title to the IP. SEA shall take all steps reasonably
requested by FN to protect any of FN proprietary rights in connection with the
IP and any Derivatives. Except as set forth in this Agreement, SEA will have no
proprietary rights in or to the IP at any time; and SEA's rights are limited to
those set forth in this Agreement. SEA shall be granted a royalty fee,
non-exclusive license in the Derivatives where SEA developed or assisted in the
development of such Derivative.
19. EXPORT. SEA agrees that SEA will not export or re-export the Technology,
any part thereof, or any process or service that is the direct product of the
Technology (the foregoing collectively referred to as the "Restricted
Components"), to any country, person or entity subject to U.S. export
restrictions. SEA specifically agrees not to export or re-export any of the
Restricted Components (i) to any country to which the U.S. has embargoed or
restricted the export of goods or services, which currently include, but are not
necessarily limited to, Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria,
or to any national of any such country, wherever located, who intends to
transmit or transport the Restricted Components back to such country; (ii) to
any person or entity who SEA knows or has reason to know will utilize the
Restricted Components in the design, development or production of nuclear,
chemical or biological weapons; or (iii) to any person or entity who has been
prohibited from participating in U.S. export transactions by any federal agency
of the U.S. Government. SEA warrants and represents that neither the Bureau of
Export Administration of the U.S. Commerce Department nor any other U.S. federal
agency has suspended, revoked or denied SEA's export privileges.
20. GOVERNING LAW AND ATTORNEYS' FEES. This Agreement is governed by the
laws of the State of Washington, USA, excluding its conflict of laws, rules, and
specifically excludes the United National Convention on Contracts for the
International Sale of Goods. The parties agree that any dispute arising under
this Agreement shall be brought in federal district court in Seattle,
Washington, USA, and hereby submit to such jurisdiction and venue. In any action
or suit to enforce any right or remedy under this Agreement or to interpret any
provision of this Agreement, the prevailing party will be entitled to recover
its costs, including reasonable attorneys' fees.
21. MAIN AGREEMENT. This Agreement constitutes the Main Agreement between
SEA and FN with respect to the Technology, the Trademarks and the Service, and
replaces all other agreements or representations, whether written or oral. The
terms of this Agreement can only be modified by express written consent of both
parties. If any part of this Agreement is held to be unenforceable as written,
it will be enforced to the maximum extent allowed by applicable law, and will
not affect the enforceability of any other part.
22. NOTICES.
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23. LIMITED WARRANTY. For a period of ninety (90) days from the date SEA
receives the Technology or from the date of performance of Support Services by
FN, FN warrants that (a) the unmodified Technology will perform substantially in
accordance with the accompanying written materials when used as directed, (b) FN
media will be free of defects, and (c) such Support Services will be performed
in a manner consistent with generally accepted industry standards. Any implied
warranties are limited to the 90-day period. This Limited Warranty is void if
failure of the Technology has resulted from modification, accident, abuse or
misapplication. Some jurisdictions do not allow limitations on duration of an
implied warranty, so the above limitation may not apply to SEA.
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24. XXXXX.XXX SDN.BHD. REMEDY. Xxxxx.xxx Sdn.Bhd.'s remedies will be set forth
in the Service Level Agreement.
25. FN warrants that it is entitled to license the Technology and trademark and
that the same will not constitute an infringement of the rights of any third
party and will fully and effectively indemnify SEA for and against all
proceedings, loss, damages, costs, claims and expenses arising out of any such
infringement.
26. NO OTHER WARRANTIES. TO THE FULL EXTENT PERMITTED BY LAW, FN AND ITS
SUPPLIERS DISCLAIM ALL OTHER WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT, WITH REGARD TO
THE SOFTWARE AND THE PROVISION OF OR FAILURE TO PROVIDE SUPPORT SERVICES. THIS
WARRANTY GIVES SEA SPECIFIC LEGAL RIGHTS. SEA MAY HAVE OTHERS, WHICH VARY FROM
JURISDICTION TO JURISDICTION.
27. LIMITATION OF LIABILITY. FN AND ITS SUPPLIERS WILL NOT BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR PERSONAL INJURY, LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION, LOSS OF BUSINESS OR CONFIDENTIAL INFORMATION, LOSS OF PRIVACY, OR
ANY OTHER PECUNIARY LOSS) ARISING OUT OF THE USE OF OR INABILITY TO USE THE
SOFTWARE OR THE PROVISION OF OR FAILURE TO PROVIDE SUPPORT SERVICES, EVEN IF FN
OR ITS SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY
CASE, THE ENTIRE LIABILITY OF FN AND ITS SUPPLIERS UNDER THIS AGREEMENT AND
LIMITED WARRANTY SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY SEA FOR THE
SOFTWARE OR SUPPORT SERVICES THAT CAUSE THE DAMAGE. BECAUSE SOME JURISDICTIONS
DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY, THE ABOVE LIMITATION MAY
NOT APPLY TO SEA.
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Any items not covered in this Agreement shall be resolved in addendums. The
parties agree to negotiate in good faith any issues raised by their respective
counsel after further review of this Agreement by such counsel. The parties
further agree that any such issues will initially be handled directly by Xxx
XxXxxxxxxx and Xxx Xxxxxx on behalf of FN, and by Xxxx Xxxx Xxxxx Xxxx on behalf
of Xxxxx.xxx Sdn.Bhd.
FREEI NETWORKS, INC. XXXXX.XXX XXX.XXX.
/s/ Xxx Xxxxxx /s/ Xxxxxxxxx Xxxx Xxxxx Xxxx
-------------------- --------------------------------
By XXX XXXXXX By XXXXXXXXX XXXX XXXXX XXXX
Its VICE PRESIDENT OF Its PRESIDENT & CEO for and on behalf
BUSINESS DEVELOPMENT
Witnessed by: Witnessed by:
/s/ Xxx XxXxxxxxxx /s/ Xxxxxxx Xxxx
-------------------- --------------------------------
Xxx XxXxxxxxxx Xxxxxxx Xxxx
President & CEO
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