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ZiLOG and World CallNet Inc.
Development and Marketing Agreement
THIS Agreement is made effective this 2nd Day of December, 1998 (hereinafter
"Effective Date", by and between ZiLOG. Inc., a Delaware Corporation having a
place of bustness at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, ("ZiLOG")
and General American Royalty Inc, a corporation having a place of business
at Xxx-xxxxxx Xxxxxx, Xxxxx 000, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxxx 00000
Recitals
a) General American Royalty, Inc. has accquired WorldWide Communications
Holdings Ltd., a privately held UK business (WWCH) as a means to establish
WWCH as a US business. WWCH and General American Royalty, Inc. are to be
renamed "World CallNet Inc." at a future date. This Agreement is made
between ZiLOG and General American Royalty Inc. at this time. Once WWCH
and General American Royalty Inc. changes its name, the parties intend to
permit the assignment of this Agreement to World CallNet Inc. ("WCI").
Approval of such assignment will not unnecessarily be withheld.
b) WCI (a subsidiary of WWCH] is a telecommuications, electronics design, and
licensing company, and innovator of internet server based applicatians for
consumer use with home entertainment electronic equipment using TV displays
and both telephone, cable and broadcast audio-video delivery.
c) ZiLOG inc. ("ZiLOG") is a semiconductor manufacturer experienced in
manufacturing low cost contollers and consumer integrated circuits used in
TV on screen dsplays ("OSD"), keyboard, mouse and wireless pointing device
awlicaffons.
d) WCI would benefit from having integrated circuit controllers and complete
solutions available to customers through each, party's distribution, sales,
advertising, press rehases and marketing litora(uro.
e) ZiLOG would benefit from having WCI applicabion software, hardware, hardware
configuration, thin client and remore server technology being available to
ZiLOG product end users and equipment manufacturing customers.
f) Each party would benefit from a cooperaSive merchandising and sales program
endorsing the other parties products.
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NOW THEREFORE, in consideration of the premises and of the mutual covenants
hereafter set forth, the parties agree as follows:
1.0. Definitions
1.1. "Product" shall mean the ZiLOG integrated circuits used to implement MailTV
and other applications.
1.2. "WCI Products" shall mean application software, services and related
hardware needed to uperate or use such software and/or seNices.
1.3. "MAILTV" shall mean the email service application as demonstrated by WCI
from an internet server accessed in the home on a television using an
on-screen display controller and modem circuit
1.4. "MailTV Application Development Board" shall mean the hardware as described
and specifed in Exhibit A using ZiLOG on-screen display and modem drcuits
and any future revisions and updates.
1.5. "MailTV Production Module Specifications" shall mean the hardware
description and drawings and ZiLOG on- screen display and modem circuit
Products that will be developed by and for customers after evaluation of
the MailTV Application Development Board during the course of this
agreement and attached as Exhibit B.
1.6. "Joint Applications" shall mean subsequent applications jointly developed
by use of WCI software and services and ZiLOG integrated circuits.
1.7. "WCI" Industrial Property Rights" or WCI Technology" shall mean all
inventions, know how, hardware, software, firmware, assembly technigques,
whether or not patentable, embodied in or utilized in connection with
MailTV, including any patents, trademarks, trade names, copyrights, trade
secrets, maskworks, or other intangible property rights.
1.8. "ZiLOG Industrial Property Rights" or "ZiLOG Technology" shall mean ZiLOG
integrated circuit Products and all inventions, know how, hardware,
software, firmwere assembly techniques, whether or not palentable, embodied
in or utilized in connection with such Products, induding any patents,
trademarks, trade names, copyrights, trade secrets, maskworks, or other
intangible property rights.
1.9. "Confidontial Information" shan mean information related to "WCI Techndogy"
or ZiLOG Products and knowhow owned or controlled by either party which is
disclosed, directly or indirectly, to the other party pursuant to the
provisions of this Agreement, except:
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o Information which, at the time of disclosure, is in the public domain;
o Information which after the time of disclosure is published or otherwise
becomes part of 1he public domain through no fault of the receiving party,
but only to the extent it is published or otherwise becomes part of the
public domain;
o Information that the receiving party can show was in its possession at the
time of disclosure and was not acquired, directly or indirectly, from, any
party under an obligation of confidence;
o Information which was received without resitriction on use or disclosure by
the receiving party after the time of disclosure hereunder from a third
parry who did not acquire it, directly or indirectly, from ZiLOG w WCI
under an oblicalion of confidence; or
o Information independently developoed by the employees of ZiLOG, WCI, or an
independent consultant for ZiLOG or WCI who has not been exposed to or had
access to the Confidential Information.
2.0. Apptications Cooperation
ZiLOG and WCl shall cooperate to develop customers who will use co-branded
WCI Tecnology and Products. The first applications shall be:
2.1. MailTV, an e-mail service using TV on screen display of e-mail obtained
from remote internet servers via dial-up phone connection by the user and
controlled by the user on a TV remote controller of keyboard.
2.2. Tele-mail, an e-mail service using a keyboard with remote tone dialing
access to teletext based e-mail.
2.3. Other services to be announced, that will be mutually agreed in writing by
and between W0l and ZiLOG. The parties will cooperate to evaluate Joint
Applications and Products that will prove mutually beneficial. Neither
party shall be obligated to develop any application that is not deemed to
be in its best economic interest.
3.0. Development Agreement
If the parties decide to develop Joint Application(s), they shall cooperate
in the development of Products, hardware, firmware and software necessary
to complete the Joint Applications.
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3.1. ZiLOG and WCI shall first build 50 Development application boards for Other
Equipment Manufacture ("OEM") customer use with televisions and set-top
boxes to implement MailTV prototypes as described in Exhibit A. The tasks
to be performed by each party are set forth on Exhibit A. WCI shall first
assist ZiLOG in building 10 demonstration Mail TV platforms using existing
ZiLOG OSO controller circuits Z903XX and modem controllers Z0220X in time
for January 6 CES in Las Vegas. A subsequent 40 boards shall be built for
customer demonstrations by ZiLOG. The development tasks to be performed by
each party are set forth on Exhibit A.
3.2. WCI will also develop a production quality MailTV application module
reference design and a production quality set-top box module reference
design suitable for WCI and ZiLOG's initial customer reqirements and to
mutually agreed specifications to be defined with ZiLOG's customers. WCI
will discuss the prototype design modifications with, ZiLOG cusbomers who
wi11 be introduced to WCI by ZiLOC during the initial three months of the
Agreement. ZiLOG will subequently be able to manufacture or have
manufactured and market modified versions of these module designs to
satisfy future market requirements.
3.3. ZiLOG shall pay WCI thirty-five dollars ($35,000) per month for three (3)
months for timely and acceptable development of the MailTV application
according to the deliverables, schedules and milestones contained in
Exhibits C and D attached to this agreement.
3.4. The parties shall define new Joint Applications and agree in writing to
development foes, deliverables, schedules and milestones therefore. These
shall be documented in New Exhibits to this Agreement or in new agreements
as the parties may deem appropriate.
3.5. ZiLOG at its sole option shall invest in new integrated circuits and
provide customized controllers for WCI apptiications as the customer demand
is developed and reasonable payload can be defned.
4.0. WCI Services and Marketing
4.1. WCI shall provide MailTV service through third party agreemnents with
worldwide telephone service providers and internet Service Provider ("ISP")
server and modem rack suppliers such that MailTV services can be reliably
provided to large numbers of customers, as a minimum in agreed major
European countries.
4.2. Existing third party agreements as described in 4.1 shall be provided
confidentially to ZiLOG prior to the execution of this final agreement and
future such agreements shall be so provided to ZiLOG on an ongoing basis
thereafter.
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4.3 The MailTV service shall first be established in the U. K. ZiLOG and WCI
shall merchandize and develop regions beyond the initial UK and German
markets, soon thereafter.
4.4. If WCI has not eatablished, does not wish or is no longer able to support
MailTV services in territories where ZiLOG wishes to market MailTV
solutions. WCI agrees to allow ZiLOG to sublicense WCI server based e-mail
technology to thitd party ISP's to establish such services. Sublicense
agreements shall be negotiated by ZiLOG and approved through WCI to allow
implementation of or continuation of such services
4.5. ZiLOG will be exclusively marketed and co-branded by WCI as the chip
supplier of choice for all application appliances and rernote controllers
as long as ZiLOG provides suitable components for WCI applications.
4.6. ZiLOG shall introduce WOl to its TV and set-top box customers and jointly
present the WCI applications through direct sales visits and merchandizing
programs to be defined.
4.7. ZiLOG and WCI shall establish MailTV as a brand name during merchandising
of both the Mainv application services and ZiLOG MailTV integrated circuits
used in the appliances and remote controllers.
5.0. Remuneration from developed Services
5.1. WCI shall pay ZiLOG a twenty five (25) percent share of all WCI MailIV call
revenue each year to repay investment by ZiLOG in chips, hardware,
marketing and application support. ZiLOG will then incentivize customer
OEMs building the, appication hardware and agrees to aharing this call
revenue. MailTV OEMs shall typically receive from ZiLOG a low percentage no
less than 5 percent of the call revenue even when not using ZiLOG's chipset
or a higher percent if they do. This is to ensure promotion of MailTV
business with OEM customers should ZiLOG circuits be suitable or not.
5.2. Payments shall be made within thirty (30) days of the end of each calendar
quarter with a report indicating total call revenue, WCI call revenue
income and percent, and ZiLOG 25 percont amount by brand service call
account number.
5.3. Similar renuneration payments from WCI to ZiLOG and ZiLOG to OEMs Shall be
nogotiated on new apptications and services as they are implemented.
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4. Remuneration to ZiLOG after termination of this agreement shall continue
where ZiLOG products and technology are or were contributing to the
original success of WCI services.
6.0. Rights
6.1. ZiLOG shall retain ownership of all its own Industrial Property Rights
whether incorporated in the Product or not. WCI shall retain ownership of
all its own Industrial Property Rights whether incorporated in the MailTV
application development boards or production modules or not. WCI agrees
that the ZiLOG Industrial Property Rights to the Product are and shall
remain the sole propertyof ZiLOG. ZiLOG agrees that the WCI industrial
Property Rights are and shall remain the sole property of WCI.
6.2. ZiLOG is licensed under WCI Industriai Proporty Rights to markot products
relying on WCI Technology.
6.3. ZiLOG is licensed to use but not sell WCI application source code for
customer support and further development of prouction, reference design or
prototype hardware.
7.0. Warranties
7.1. ZiLOG MAKES NO WARRANTY, EITHER EXPRESS, IMPLIED OR STATUTORY, IN RESPECT
OF THE PRODUCT OR THE PERFORMANCE THEREOF, INCLUDING, WITHOUT LIMITATION,
MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE OR INTENDED USE.
7.2. WCI warrents that it is not aware of any actual or claimed infringement of
a third party's intellectual property rights by the design of the MailTV
software or use of WCI Technology.
8.0. General Terms
8.1. ZiLOG and WCI shall explore the opportunity for ZiLOG to furthur assist WCI
through investment in WCI preferred stock. This shall be discussed at
ZiLOG's option during the initial three month's of this Agreement.
2 ZiLOG and WCI shall jointly develop new business opportunities through a
co-branded marketing and merchandizing program to be defined within the
acceptable limits for each, company and that will be mutually negotiated.
Joint participation with demonstrations and press releases either before,
during or after CES (Consumer Electronics Show in Las Vegas) in January
1999 is anticipated.
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8.3. Either party without the prior written censent of the other party may make
no announcements or disclosures of any kind regarding this Agreement or the
subject matter thereof.
8.4. All notices with respect to this Agreement shall be sent to the respective
parties at the following addresses:
To ZiLOG: To WCI:
Xx. Xxxxxxx Xxxxxxx, Esq. Xx. Xxxxx Xxxxxxx
General Counsel VP Engineering
ZILOG, Inc. WCI
000 Xxxx Xxxxxxxx Xxxxxx Xxxxxx Xxxxx
Xxxxxxxx XX 00000 Xxxxxxxx Xxxx
000 Xxxxx Xxxx
Xxxxxx X00 0XX
8.5 The term of this agreement is initially set for a three year period and
will be automatically renewable in annual increments unless requested
otherwise by both parties.
8.6. This Agreement shall be governed by the laws of the State of California and
any dispute between the parties arising out of or relating to the Agreement
will be determined by binding arbitration in San Xxxx, Aalifornia and
judgment upon any arbitrtion awrd may be entered in any court of competent
jurisdiction. A single arbitrator shall hold the arbitration. If the
parties within 20 days agree upon the arbitrator, then they shall follow
CCP#1281.6 to appoint arbitrator. The parties shall agree upon rules to
govern the arbitration process. If the parties cannot agree upon rules
within 20 days after argitration has been demanded by either party, then
the substantive and procedural rules then used by the American Arbitration
Assiciation ("AAA") shall be adopted for the purposes of this arbitration.
The application of these rules shall not cause AAA in any way to become
involved in the arbitration. The party prevailing in the arbitration shall
be entitled to a reasonable sum for attorney's fees and costs in addition
to other relief that may be granted. The arbitrator shall determine the
amount of attorney's fees and costs that shall be awarded. All agreements
or controversies arising out of or in any matter related to this Agreement
shall be brought within one (1) year after said claim, controversy or
disagreement arises or be forever barred.
8.7. This Agreement may be terminated forthwith by either party upon written
notice to the other in the event that an uncured breach of the agreement
after notification of breach, by more than 90 days occurs or the other is
adjudicated bankrupt or insolvent by any court of competent jurisdiction or
trustee in any proceeding in a court of competent jurisdiclion.
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8.8 The remdles provided herein are the parties' sole and exclusive remedies
for any action arising out of or in connection with this Agreement. Neither
party will be liable for any direct, indirect, special, incidental or
Consequential damages, whether based in contract, tort, or any other legal
theory. In addition, neither party will be iiabie far lost profits or
injury to goodwill for any delay or nonperformance, even if they shell have
been advised of the possbility of it.
8.9. This Agreement includes the entire agreement of the parties hereto with
respect to the subject matter hereof, supersedes all prior communications,
representations, promises or statements either written or oral, including,
but net limited to, quotations, purchase orders, acknowledgements and
agreements, whether written, or oral relating thereto, and may not be
modifed or ammended except by a writing signed by the parties hereto.
8.10.This Agreementmay be terminated fortwith by either party upon written
notice tothe other in the event that the other is adjudicated bankrupt or
insolvent by any court of Competent jurisdiction or trustee In any
proceeding in any ccour of competent jurisdiction. After expiration or
termination of this Agreement, the following sections induding all
subsections contained therein sha11 survive: 1, 3.5, 4.2, 4.4, 5.4, 6, 7,
8.1, 8.3. 8.4, 8.6, 8.7, 8.8, 8.9, Exibits A and B.
IN WITNESS THEREOF, each of the parties has signed this Agreement as of the
date first set forth above:
ZiLOG, Inc. World CallNet Inc.
By /s/ Ayden Koc By /s/ Xxxx Xxxxxxx-Xxxxxxx
----------------------- ------------------------
Ayden Koc Xxxx Xxxxxxx-Xxxxxxx
----------------------- ------------------------
Printed Name Printed Name
Sr. VP & GM, Home President & CEO
---------------------- ------------------------
Title Title
Entertainment
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Exhibit A
MailTV Application Development Board
And Specifications
A single board comprising of three separable distinct sections
a) MailTV application board with population options for Z903XX
EEPROM based on-screen display cantroller and the Z02205 modem
controller snd extemal SRAM.
b) Data Access Arrangement (DAA) suitable for CBT21 FCC Part 68
European Type Approval including the ZiLOG 702201 modem datapump.
c) Utility board that includes a PAL/NTSC encoder and IR receiver
with a power supply unit.
Each circuit can be used in isolation or in combinatian with the other circuits
in order to provide:
a) Demonstration of MailTV within a TV set.
b) Demonstration of MailTV on a TV from, an extemal set-top tox.
c) A physical platform to allow for initial and ongoing software
development and user interface custamization by clients.
Actions to complete prototypes: Due Date
1. ZiLOG to provide WCI with 100 units of each integrated 12/15/98
circuit used In the Application Development Board.
2. ZILOG to provide 60 remote controllers as used with 12/15/98
ZiLOG's set-top boxes.
3. WCI to complete 1O Applicatin Development Boards for 12/23/98
ZiLOG use al CES in January 1999.
4. WCI to complete 40 Applicatien Development Boards for 1/30/99
ZiLOG and ZiLOG custom~ use
5. WCI to provide ZiLOG with Application Development Board 12/15/98
specifications that shall be periodically updated as required.
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Exhibit B
MailTV Production module specifications
ZiLOG and WCI will discuss the design parameters for customer prototypes and
production modules. Specifications for production versions of both a MailTV
application module and and set-top reference application board module will be
finalized based on input from ZiLOG and its customers and shall be attached to
this agreement as Exhibit B before completion of the anticipated three month
development program. These designs shall represent the acceptable and reliable
implementntion of WCI technology and ZiLOG integrated circuits for MailTV
application. These designs shall be updated from time to time by WCI and ZiLOG
as necessary to implement MailTV or ZiLOG circuit updates or bug fixes necessary
in the original MailTV application.
Actions to produce production modules: Due Date
1. ZiLOG to Introduce customers to WCI TBS
2. WCI to work with customers to complete production versions TBS
of the Application Development board designs.
3. Final documentation from first customer product changes to TBS
be delivered to ZiLOG.
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Exhibit C
Ssatement of Work and Schedule
Milestone Completion Date
1. WCI is to provide 1O Application Development boards 12/23/98
with Z02205 Modem Controllers in sockets as an option
with suitable software for CES demonstrations on
January 8, 9 and 10
2. WCI is to provide 40 Application Development Boards 1/30/99
with software that does not use the Z02205 modem
controller but does use the Z02201 datapump chip.
3. WCI is to provide 10 application production reference 2/15/99
modules and software for use by ZiLOG inside TV's.
4. WCI is to provide 10 set-top box reference modules for 2/15/99
use by ZiLOG.
5. ZiLOG is to assist with CBT21/CE Type approvals TBS
6. ZiLog is to assist with FCC 15/68 Type approvals TBS
7. ZiLOG is to prepare Datasheets for Modules and set-top TBS
box reference designs.
8. ZiLOG is to prepare marketing materials to be fnalized TBS
with WCI Input and approval.
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Exhibit D
Deliverables and Payments
Upon signature of this agreement and on or before December 2 1998 ZiLOG shall
pay WCI the first of three monthly NRE payments of 35,00Q US dollars in return
for completion of milestones as contained in Exhibits A, B, and C.
It is anticipated that customer funding will be acquired beyond the initial
development plan intended to produce capable demonstration units of ZiLOG
integrated arcuits running the WCI MailTV application code and will contribute
towards the completion of production reference module designs.
ZiLOG shall contribute reasonable resources to assist in the assembly of the
Application Development Both demonstration units and production reference
modules. Assistance shall indude use of ZiLOG emulators, One Time Programmable
("OTP") devices, worstations and personnel as will be defined to reasonably
develop the units as defined in Exhibits A and B.
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