EXHIBIT 10.12
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
TECHNOLOGY LICENSE AGREEMENT
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This Technology License Agreement ("Agreement") is entered into as of July
1st, 1997 ("Effective Date") by and between Reality Simulation Systems
Acquisition Corporation ("RSS"), a California corporation, with its principal
place of business 0000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, and
InteGraphics Systems, Inc. ("IGS"), a California corporation, having its
principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
WHEREAS, RSS has developed or will develop *** graphics technology useful
in personal computers and consumer electronics products;
WHEREAS, IGS desires to obtain a license to such RSS technology to develop
a semiconductor and certain driver software for use in *** and *** graphics
applications, and RSS desires to grant IGS a license, pursuant to the terms and
conditions in the Agreement, to its technology;
WHEREAS, RSS wishes to obtain a license to sell and distribute products and
chips and IGS desires to grant RSS such a license pursuant to the terms and
conditions of this Agreement; and
WHEREAS, RSS and IGS each desire to distribute the products developed
hereunder on an exclusive basis to separate geographic and platform markets.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
1. Definitions.
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1.1 "AGP Technology" shall mean the graphics port protocol promoted by
Intel Corporation, a Delaware corporation, and implemented by IGS, and further
specified in Exhibit A hereto. The AGP Technology includes, without limitation,
Source Code, test vectors, schematics, and descriptive specifications.
1.2 "CyberPro3000 Products" shall mean products based on or
incorporating *** Verilog Source Code and further specified in Attachment
B hereto regardless of the name or commercial designation of such products. Any
CyberPro3000 Products Introduced by or for a party for a period of twelve (12)
months following completion of the first production CyberPro3000 Product for
commercial sale which is substantially similar to the CyberPro3000 Products
shall also be a CyberPro3000 Product hereunder.
1.3 "Derivative Work" shall mean:
(a) for copyrights and copyrightable materials, any modification,
revision, port, translation, abridgement, condensation or expansion of the pre-
existing work, or any portion thereof, or any form in which the preexisting work
is recast, transferred, transformed or adapted;
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(b) for patents and patentable materials, any improvement
thereon; and
(c) for trade secrets and materials protected by trade secret,
any new material derived from such existing trade secret or materials, including
new material which may be protected by copyright, patent or trade secret or any
combination of the foregoing.
1.4 "Documentation" shall mean any user documentation or materials
relating to CyberPro3000 Products and *** Verilog Based Products, including,
without limitation, screen displays, "read me" files and reference, user,
installation, systems administrator and technical guides.
1.5 "IGS Chip" shall mean the IGS graphics chip based on the ***
Technology, produced by or for IGS hereunder and further specified in Attachment
A, including, without limitation, any and all semiconductor masks used to
fabricate or manufacture such chips. Any graphics chip Introduced by or for IGS
for a period of twelve (12) months following completion of the first production
CyberPro3000 Product for commercial sale which is substantially similar to the
IGS Chip shall also be an IGS Chip hereunder.
1.6 "IGS Market" shall mean the platform(s) and territory(ies)
specified in Attachment C hereto.
1.7 "IGS Software" shall mean the IGS driver software specified in
Attachment A.
1.8 "Introduced" shall mean the announcement of a product by press
release, trade show announcement, or other like marketing technique.
1.9 "*** Technology" shall mean the RSS Software and Verilog
Source Code (in both *** and *** forms).
1.10 "Proprietary Rights" shall mean patents, patent rights, copyright
rights, trademark rights, trade secret rights, mask work rights, and all other
intellectual property rights worldwide.
1.11 "RSS Market" shall mean the platform(s) and territory(ies)
specified in Attachment C.
1.12 "RSS Software" shall mean the RSS driver software specified in
Attachment A.
1.13 "Source Code" shall mean those statements in a computer language
which, when processed by a compiler, assembler or interpreter, become executable
by a computer and includes, without limitation, all comments, notes, flow
charts, decision tables, argument lists and other human readable references
relating to the operation, purpose, compilation, assembly or interpretation
thereof.
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1.14 "*** Technology" shall mean the successor technology to the ***
Technology specified in Attachment E hereto.
1.15 "Verilog Source Code" shall mean the IGS Chip and associated
electronics as described and documented in a human readable hardware description
language which can reproduce the same netlist description of the *** Verilog.
1.16 "*** Verilog Based Products" shall mean CyberPro3000 Products
based on or incorporating the *** Verilog Source Code regardless of the name or
commercial designation of such products.
2. License Grant to IGS.
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2.1 Subject to all of the terms and conditions of this Agreement, RSS
hereby grants to IGS a royalty-bearing (as provided in Section 10 below), non-
transferable, non-sublicenseable (except as provided in Section 2.1(e) below)
license to:
(a) use and reproduce for its internal purposes only the RSS
Software Source Code and modify, create and prepare Derivative Works thereof.
IGS assumes all responsibility for integrating the RSS Software into the IGS
Software;
(b) use and reproduce for its internal purposes only the ***
Verilog Source Code, make speed improvements through layout, process, and
silicon integration refinements, and manufacture IGS Chips and successor
therefrom;
(c) use, reproduce, manufacture. market, display, license, sell
and distribute solely within the IGS Market the RSS Software (in object code
form only) and only as embedded and incorporated into CyberPro3000 Products and
*** Verilog Based Products;
(d) use, reproduce, manufacture, market, display, license, sell
and distribute the Documentation solely within the IGS Market and only together
with CyberPro3000 Products and *** Verilog Based Products; and
(e) reproduce, license and distribute the RSS Software Source
Code to such third parties as the parties mutually approve in writing and for
the sole purpose of allowing such third parties to provide end user technical
support; provided such third parties agree in writing to be bound by all of the
obligations and restrictions herein with regard to such Source Code.
2.2 Upon completion of the first production CyberPro3000 Product for
commercial sale which substantially conforms to the specifications in Attachment
B;
(a) RSS will grant IGS, subject to all the terms and conditions
of this Agreement (including, without limitation, Sections 9, 10.3(b) and 16,
but not Section 8.2), a non-exclusive, non-transferable, non-sublicenseable,
royalty-bearing license to use and reproduce for its internal purposes only the
*** Verilog Source Code and modify, create and prepare Derivative Works
thereof for the sole purpose of developing and manufacturing the IGS Chip (for
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(b) For the purposes of distinguishing the *** and *** versions
of the Verilog Source Code, and by extension the CyberPro3000 Products and
*** Verilog Based Products, IGS agrees to perform, prior to tape out at
RSS' request, Verilog design verification tests provided by RSS to IGS
("Verification Tests"). IGS shall complete each Verification Test and provide to
RSS a written report detailing all the results of each Verification Test within
*** (***) days of RSS request or IGS' receipt of such Verification Test,
whichever is later. IGS further agrees to allow RSS to physically inspect each
and every IGS site during IGS' normal business hours to verify IGS' compliance
with this Section 2.2 and to determine, by whatever means necessary, the version
of the Verilog Source Code used in each IGS chip (and any successor chip based
in whole or in part on *** Technology) prior to tapeout. In the event of any
dispute between IGS and RSS arising under this Section 2.2, both parties agree
to settle the dispute by arbitration as outlined in Section 20.4. If IGS agrees
beforehand to pay Unencripted Royalties no inspection will be required.
3. License Grant to RSS.
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3.1 Subject to all of the terms and conditions of this Agreement, IGS
hereby grants to RSS a non-exclusive, non-transferable, non-sublicenseable
(except as provided in Section 3.2 and 6.3 below), royalty-bearing (as provided
in Section 10 below), fully paid-up, worldwide license to:
(a) use, reproduce, manufacture, market, display, distribute,
modify and create Derivative Works based on the AGP Technology if developed
internally by IGS for the CyberPro3000 products or *** Verilog Based Products.
(b) use, reproduce, manufacture, market, display, license, sell
and distribute solely within the RSS Market the IGS Software (in object code
form only) and IGS Chip and only as embedded and incorporated into CyberPro3000
Products or *** Verilog Based Products; and
(c) reproduce, license and distribute the IGS Software Source
Code by IGS to such third parties as the parties mutually approve in writing and
for the sole purpose of allowing such third parties to provide end user
technical support; provided such third parties agree in writing to be bound by
all of the obligations and restrictions herein with regard to such Source Code.
3.2 The license grant under Section 3.1 is sublicensable by RSS only
to a third party manufacturer mutually agreed upon by both parties who will
provide a source of CyberPro3000 Products and *** Verilog Based Products to both
IGS and RSS, provided, however, that such third party manufacturer shall be
bound in writing to all restrictions on RSS under this Agreement and further
provided that such third party manufacturer shall not have the right to
manufacture such products for any third party. The parties hereby acknowledge
and agree, that at RSS expense, Seiko Epson Corporation ("Seiko"), a Japan
corporation, shall be an authorized third party manufacturer under this Section
3.2 upon Seiko's written agreement to be bound by all restrictions on RSS under
this Agreement.
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bound by all restrictions on RSS under this Agreement.
4. Restrictions.
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4.1 The license grants herein shall be not be exercisable by a party's
contractors, except those contractors who agree in writing to be bound to all of
such party's obligations and restrictions under this Agreement.
4.2 Each party agrees to include and not to obscure or modify the
other party's copyright and other notices which appear in or on the CyberPro3000
Products, *** Verilog Based Products, *** Technology or Documentation.
4.3 Each party agrees not to develop or use any benchmarking tests
which cheat on results of he CyberPro3000 Products, *** Verilog Based products
or portions thereof.
4.4 No rights or licenses are granted or deemed granted to any
Proprietary Rights of either party to the other party to any subject matter of
this Agreement except those rights or licenses expressly and unambiguously
granted herein.
4.5 In no event whatsoever, except as expressly and unambiguously
stated herein, shall a party use, disclose or distribute to any third party
Source Code, or any portion thereof, of the other party including, without
limitation, *** and *** Verilog Source Code (in the case of IGS).
5. Right of First Refusal. RSS agrees that IGS shall, for a period of
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three (3) months following the Effective Date and to the exclusion of all other
parties, have the first opportunity to acquire a non-exclusive, worldwide
license to use, reproduce, market, manufacture, display, license, sell,
distribute and modify the *** Technology for use in graphics chips.
6. Distribution Rights.
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6.1 IGS shall have the exclusive, non-transferable (except as provided
below) right to market, sell and distribute CyberPro3000 Products and ***
Verilog Based Products in the IGS Market and RSS shall have the exclusive, non-
transferable (except as provided below) right to market, sell and distribute
CyberPro3000 Products and *** Verilog Based Products in the RSS Market except
that the exclusive rights granted under this Section 6.1 shall automatically and
irrevocably become non-exclusive as to both parties:
(a) on ***; or
(b) in the event that a party fails to sell *** (***) units of
CyberPro3000 Products and/or *** Verilog Based Products within *** (***) months
of the first retail sale of a CyberPro3000 Product or *** Verilog Based Product.
6.2 The parties acknowledge and agree that IGS may continue to develop
graphics technology after the Execution Date and that, as to products Introduced
by IGS after the
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sale, no right, tide or interest in or to any Proprietary Rights in such
products is transferred under this Agreement and IGS may freely market, sell,
distribute or otherwise transfer such products in all markets worldwide.
6.3 A party's exclusive rights under Section 6.1 above may be
transferred only with the prior written approval of the non-transferring party,
except that RSS may, in its sole discretion and without the prior written
approval of IGS, transfer its exclusive rights hereunder to S-MOS Systems Inc.
("S-MOS"), a California corporation.
6.4 A party may appoint a third party distributor to exercise such
party's distribution rights under this Section 6 to a third party distributor
who agrees in writing to be bound by all the terms and conditions of this
Agreement.
7. Ownership.
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7.1 As between the parties and subject to the licenses granted herein,
RSS owns all right, title and interest in and to all of the *** Technology and
Documentation and all copies and portions thereof and all Proprietary Rights
thereto. As between the parties and subject to the license granted herein, IGS
owns all right title and interest in and to the IGS Chip and all Proprietary
Rights thereto, subject to RSS' rights in the *** Technology. IGS agrees to
assign and hereby does assign to RSS any and all Proprietary Rights IGS may
acquire in the *** Technology or Documentation or any Derivative Work of the
foregoing. In the event RSS is unable for any reason to secure IGS' authorized
signature to apply for or to pursue any application for any United States or
foreign letters patent or copyright registrations or other intellectual property
protection relating to Proprietary Rights assigned to RSS hereunder, then IGS
hereby irrevocably designates and appoints RSS and its duly authorized officers
and agents as its agent and attorney-in-fact, with full power of substitution,
to act for and in its behalf and stead to execute and file any such applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of letters, patent or copyright registrations or other intellectual
property protection thereon with the same legal force and effect as if executed
by IGS.
7.2 The foregoing ownership provision in Section 7.1 shall not be
construed to Emit either party's right to independently develop or acquire
similar products or technology without use of the other party's Confidential
Information (as defined in Section 16 below), products or technology; provided
that, except for the licenses expressly granted in this Agreement, nothing in
this Section 7.2 shall be deemed to grant either party a license under the other
party's Proprietary Rights.
7.3 In the course of marketing the CyberPro3000 Products and ***
Verilog Based Products, IGS will use the then current names and designations
used by RSS therefor ("Marks") but will not represent or imply that it is RSS or
a part of RSS. However, all advertisements, promotional materials, packaging and
anything else bearing a Xxxx, including, without limitation, any product based
on or incorporating *** Technology or Derivative Works thereof, shall identify
RSS as the Xxxx owner and shall be subject to the prior written approval of RSS,
which approval shall not be unreasonably withheld. IGS also agrees not to use or
contest, during or after the term of this Agreement, any name, xxxx or
designation used by RSS
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advertisements, promotional materials, packaging and anything else bearing a
Xxxx, including, without limitation, any product based on or incorporating ***
Technology or Derivative Works thereof, shall identify RSS as the Xxxx owner and
shall be subject to the prior written approval of RSS, which approval shall not
be unreasonably withheld. IGS also agrees not to use or contest, during or after
the term of this Agreement, any name, xxxx or designation used by RSS anywhere
in the world (or any name, xxxx or designation similar thereto). IGS
acknowledges and agrees that all use of Marks by IGS shall inure to the benefit
of RSS.
8. Delivery of RSS Software.
------------------------
8.1 RSS will use its diligent commercial efforts to deliver to IGS the
RSS Software and *** Verilog Source Code in accordance with the milestones set
forth in Attachment D hereto.
8.2 IGS may perform acceptance tests on the RSS Software and ***
Verilog Source Code for a period of thirty (30) days following IGS' receipt
thereof for conformance with RSS' specifications therefor as set forth in
Attachment A. If IGS discovers material non-conformance in conducting such
acceptance tests and provides RSS with sufficient written instructions,
equipment, machines and documentation ("Nonconformance Materials") to allow RSS
to readily reproduce the problems at its facility, RSS shall, at its cost, use
reasonable efforts to make corrections or develop workarounds within thirty (30)
days after receipt of the required Nonconformance Materials or such longer
period as the parties agree in writing after conferring in good faith. The RSS
Software and *** Verilog Source Code will be deemed accepted upon the earliest
of the following: (i) IGS provides written notice of acceptance, (ii) thirty
(30) days after IGS commercially ships or licenses CyberPro3000 Products, or
(iii) thirty (30) days after delivery to IGS of the RSS Software or *** Verilog
Source Code or a correction thereto if IGS has not first provided the necessary
Nonconformance Materials. IGS shall have the right to terminate this Agreement
if RSS has not corrected any material non- conformance in the RSS Software or
*** Verilog Source Code in connection with this Section 8.2 within one hundred
twenty (120) days of IGS' delivery to RSS of Nonconformance Materials therefor.
9. Protection of the *** Technology.
--------------------------------
9.1 In addition to its obligations under Section 16 below, IGS shall
restrict access to and shall not disclose any *** Technology to any person or
entity except to a limited number (but in no event more than ten (10)) of IGS'
employees and independent contractors (i) located at 0000 Xxxxxx Xxxxx, Xxxxx
Xxxxx, XX. 00000, and (ii) who have a need to access the *** Technology to
enable IGS to exercise its rights and perform its obligations under this
Agreement. Within thirty (30) days after request from RSS but not more than
three (3) times each year, IGS shall provide RSS with a list of the names of any
and all individuals (employees, independent contractors, employees of
independent contractors, and any other individuals) who then have or have had,
at any time since IGS last provided such a list, access to the *** Technology.
IGS shall inform all persons who are given access to the *** Technology that the
*** Technology contains confidential trade secrets of RSS and is the
Confidential Information (as defined in Section 16 below) of RSS. IGS shall
employ its best efforts to prevent unauthorized physical or electronic access,
use, reproduction, transmission, display, disclosure and
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at RSS' request, but no more than three (3) times each calendar year, for the
purpose of (i) confirming that it is protecting the *** Technology in accordance
with this Agreement, and (ii) reminding its employees and independent
contractors of the limited rights and obligations of IGS and each employee and
independent contractor pertaining to the *** Technology. Following each review,
IGS will notify RSS in writing that IGS conducted the review and (a) that no
violations were discovered, or (b) that violations were discovered, a
description of the nature and extent of the violations, and a description of the
actions taken by IGS to correct the violations. IGS shall take all actions
reasonably required to recover and prevent further use, reproduction and
disclosure of the *** Technology in the event of loss or misappropriation;
provided that if IGS fails to enforce any confidentiality obligations of its
employees or independent contractors or fails to recover and prevent further use
of the *** Technology, then RSS may take all necessary steps, including, without
limitation, initiating legal action, to enforce such agreements to protect its
interests in the *** Technology. IGS shall be fully responsible for the conduct
of all of its employees, independent contractors, agents and representatives who
may in any way breach this Section 9 or Section 16 below and shall indemnify RSS
for any damages relating to or arising from such breach.
9.3 IGS expressly agrees to keep the *** Technology and Derivative Works
thereof and any portions or copies of the foregoing at IGS' offices located at
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX. 00000, and not to move, transmit, view,
access, store, situate or otherwise transfer, distribute, display or relocate
for any period of time whatsoever, physically, electronically or otherwise, or
allow any third party to do any of the foregoing, any *** Technology or
Derivative Works thereof or any portions or copies of the foregoing without the
prior written approval of RSS.
10. License Fees: Royalties.
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10.1 Initial Payments. In consideration of the licenses granted to
----------------
IGS by RSS herein, upon execution of this Agreement, IGS shall pay RSS a non-
refundable, non-recoupable, non-creditable RSS Software license fee in the
amount of *** Dollars ($***) and a non-refundable, non-recoupable, non-
creditable *** Verilog Source Code license fee in the amount *** Dollars
($***).
10.2 Milestone Payments. In consideration of RSS' development of the
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*** Technology for use in CyberPro3000 Products, IGS shall pay RSS the following
non-refundable, non-recoupable, non-creditable milestone payments upon RSS'
completion of the milestones below and further specified in Attachment D:
(a) *** Dollars ($***) upon sign-off by IGS of a test sample of
the IGS Chip;
(b) *** Dollars ($***) upon the commercial production release of
the IGS Chip; and
(c) *** Dollars ($***) upon the commercial production release of
the RSS Software.
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Notwithstanding anything else in this Agreement, the first commercial sale
of a CyberPro3000 Product shall conclusively be deemed to satisfy each and every
milestone requirement in this Section 10.2 and IGS shall immediately pay to RSS
any milestone payment(s) not yet paid hereunder.
10.3 Royalties.
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(a) Each party shall pay royalties to the other party for each
unit of CyberPro3000 Product sold, distributed or otherwise transferred under
this Agreement by or for such selling party as follows:
Number of Units Royalty Per Unit
--------------- ----------------
1-*** $***
***- *** $***
***- *** $***
***+ $***
(b) Each party shall pay royalties to the other party for each
unit of *** Verilog Based Product sold, distributed or otherwise transferred
under this Agreement by or for such selling party in the amount of *** ($***)
for each unit of the first *** (***) units of *** Verilog Based Products,
licensed, distributed or otherwise transferred.
(c) All royalties shall be due and paid at the same time as the
quarterly reports are provided under Section 10.5 below. No royalties shall
accrue with respect to either party after ***, provided all royalties accrued
prior to *** have been paid in full on or before ***. Royalties shall continue
to accrue after ***with respect to a party which has not paid royalties as
provided in this paragraph (c) until such time as that party has paid all
outstanding and accrued royalties in full. No royalties shall be payable for (i)
units of CyberPro3000 Products and *** Verilog Based Products that are returned
and for which a credit has been made to a customer or (ii) commercially
reasonable quantities of CyberPro3000 Products and *** Verilog Based Products
used for testing, demonstration and similar purposes provided a party is not
paid for such use.
10.4 New Markets. In the event the parties agree in writing to amend
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either the IGS Market or RSS Market to add any additional platform or territory,
all royalties for units of CyberPro3000 Products sold in such new market shall
be calculated based only on the unit sales applicable to such additional
platform(s) or territory(ies), as the case may be.
10.5 Payments; Reports; Audit. Each party shall bear its own
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manufacturing, marketing, sales and distribution costs including, without
limitation, taxes, duties and other government assessments. All late payments
will be assessed a service fee of one and one-half percent (1.5%) per month or
the maximum rate allowed under applicable law, whichever is less. Each party
shall provide to the other party, within thirty (30) days after the end of each
calendar quarter, quarterly written reports of the total number of units of
CyberPro3000 Products and
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*** Verilog Based Products distributed by or for such party and the royalties
payable, if any, which have accrued under Section 10.3 above. Each party shall
keep complete and accurate books and records of its sales and distribution of
CyberPro3000 Products and *** Verilog Based Products all other transactions
relating thereto in sufficient detail to enable any payments due hereunder to be
determined and verified. Each party shall have the right (at its expense, upon
reasonable notice and during the audited party's normal business hours) to have
an independent certified public accountant inspect and audit the books and
records of the other party for the purpose of verifying any reports, information
or payments provided or due hereunder. Such accountant shall be bound in
confidence not to use or disclose any information except to the extent necessary
to inform the auditing party of any non-compliance with the reports, information
or payments provisions of this Agreement. All underpayments revealed by such
audit shall be paid within thirty (30) days of the audit results. If such audit
reveals an underpayment in excess of five percent (5%), the underpaying party
shall bear the expense of the audit. Each party may exercise its right to audit
no more than once per year unless an underpayment of over five percent (5%) has
been discovered in the prior audit. In such event, the underpaid party shall
have the right to audit once every three (3) months until the results of the
three (3) most recent audits show less than a five percent (5%) underpayment.
11. Training and Support.
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11.1 The parties agree to cooperate in the development and support of
the *** Technology, IGS Software, IGS Chip and CyberPro3000 Products.
Accordingly, each party shall provide, at the other party's request and expense,
up to *** (***) man hours of training and technical support during the providing
party's normal business hours. A party may request additional training and
technical support at the providing party's then current consulting fee, which
request shall not unreasonably be denied.
11.2 The parties shall together and in good faith negotiate with
third parties for the right to bundle mutually acceptable third party products
with the CyberPro3000 Products and *** Verilog Based Products.
12. Representations and Warranties.
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12.1 Each party represents and warrants that:
(a) it has the corporate power and authority to enter into and
to fulfil its obligations under this Agreement;
(b) it will use its diligent commercial efforts to successfully
market, distribute and support the CyberPro3000 Products in the IGS Market (in
the case of IGS) and the RSS Market (in the case of RSS) on a continuing basis
and to comply with good business practices and all laws and regulations relevant
to this Agreement or the subject matter hereof;
(c) it is fully responsible for the satisfaction and support of
its customers. Each party will be responsible for, and shall indemnify, defend
and hold the other party harmless from, all claims, damages, settlements,
expenses and attorneys' fees incurred by a party
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with respect to the other party's customers and their claims; and
(d) to keep for three (3) years after termination of this
Agreement records of all CyberPro3000 Product and *** Verilog Based Product
sales and customers sufficient to adequately administer a recall of any such
products and to fully cooperate in any decision by RSS or IGS to recall,
retrieve and/or replace any such products.
12.2 IGS represents and warrants that:
(a) it has the right to grant RSS the licenses in Section 3
including, without limitation, the license to the AGP Technology;
(b) IGS shall not enter into any manufacturing, fabrication or
foundry agreement with any third party for the CyberPro3000 Products, ***
Verilog Based Products or IGS Chips which does not expressly grant RSS the
irrevocable right to obtain manufacturing, fabrication or foundry services for
CyberPro3000 Products, *** Verilog Based Products or IGS Chips from such third
party on the same terms as IGS and grant RSS discounts, credits or other
favorable terms (including, without limitation, price) based on the number of
units thereof produced by such third party manufacturer for IGS; and
(c) the deliverables provided by it hereunder shall be the same
in every respect as the products shipped by IGS to its customers and that it
will, without charge, provide to RSS for the term of this Agreement, all
improvement, upgrades, updates, bug fixes and other enhancements which IGS makes
generally available to its customers.
13. Warranty; Disclaimer. RSS represents and warrants that (i) the
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*** Technology, as delivered by RSS hereunder, will conform substantially to
RSS' specifications therefor, provided that IGS' sole remedy for breach of the
warranty in this clause (i) shall be IGS' rights under Section 8.2; and (ii) to
the best of RSS' knowledge, the RSS Software does not infringe any United States
Proprietary Rights of any third party, provided that IGS' sole remedy for breach
of the warranty in this clause (ii) shall be IGS' rights under Section 15.
EXCEPT AS EXPRESSLY AND UNAMBIGUOUSLY SET FORTH IN TIES SECTION 13, RSS MAKES NO
WARRANTIES TO ANY PERSON OR ENTITY WITH RESPECT TO ANY PRODUCTS, *** TECHNOLOGY
OR DOCUMENTATION OR ANY PORTION OR DERIVATIVE WORK THEREOF OR ANY SERVICES OR
LICENSES AND HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NONINFRINGEMENT.
14. Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
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OTHERWISE (EXCEPT SECTION 15 BELOW), NEITHER PARTY WILL BE LIABLE WITH RESPECT
TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOST DATA, (II) COST OF PROCUREMENT OF SUBSTITUTE
GOODS, TECHNOLOGY OR SERVICES, (III) ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
11
THE MILESTONE PAYMENTS ACTUALLY PAID TO RSS BY IGS PURSUANT TO SECTION 10.2
ABOVE, OR (IV) ANY MATTER BEYOND ITS REASONABLE CONTROL.
15. Indemnification. Each party shall indemnify, defend and hold the
---------------
other party and its officers, directors, agents and employees harmless from
liability, damages, costs, and attorneys' fees, if any, finally awarded in any
suit or the amount of the settlement thereof resulting from any third party
claim that the *** Technology or Derivative Works thereof created by or for RSS
(in the case of RSS) or IGS Chip, IGS Software or Derivative Works thereof or
other deliverable created by or for IGS (in the case of IGS) infringes any
United States patent, copyright or trademark or misappropriates any trade
secret, provided that: (i) the indemnifying party is promptly notified of any
and all threats, claims and proceedings related thereto, (ii) the indemnifying
party shall have sole control of the defense and/or settlement thereof, (iii)
the indemnified party furnishes to the indemnifying party upon the indemnifying
party's request and expense, information reasonably available to the indemnified
party for such defense, and (iv) the indemnified party provides the indemnifying
party with reasonable assistance. Neither party shall admit any such claim
without prior written consent of the other party. Neither party shall have any
obligation under this Section 15 with respect to any *** Technology, IGS Chip,
IGS Software or any portion, component or Derivative Works of the foregoing (a)
not supplied by the indemnifying party, (b) made in whole or in part in
accordance with the indemnified party's specifications, (c) that are modified
after delivery by the indemnifying party, if the alleged infringement relates to
such modification, (d) combined with other products, processes or materials
where the alleged infringement relates to such combination, (e) where the
indemnified party continues allegedly infringing activity after being notified
thereof or after being informed of modifications that would have avoided the
alleged infringement and such modifications are not fully implemented, or (f)
where the indemnified party's use of the *** Technology, IGS Chip, IGS Software
or Derivative Work thereof is not strictly in accordance with the licenses
granted herein.
16. Confidentiality.
---------------
16.1 Each party ("disclosing party") may, from time to time, in
connection with performance under this Agreement, disclose confidential
information ("Confidential Information") to the other party ("receiving party").
Each recipient party agrees not to use (other than for purposes contemplated by
this Agreement), and will use reasonable efforts to prevent the disclosure to
third parties of, any of the disclosing party's Confidential Information that is
identified as confidential at the time of disclosure and is provided in tangible
form marked "confidential" or "proprietary" (or is reduced to such form within
thirty (30) days after oral disclosure). All RSS Software, Source Code, Verilog
Source Code and Derivative Works of any of the foregoing provided by RSS is
hereby identified and marked as RSS' Confidential Information. The IGS Chip, IGS
Software and Derivative Works provided by IGS are hereby identified as IGS'
Confidential Information. The recipient party's confidentiality obligation
hereunder shall not apply to information that the recipient party can document:
(i) was in the recipient party's possession or known by it
prior to receipt from the disclosing party;
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
12
(ii) is or (through no fault of the recipient party or any of
its employees, contractors, agents or licensees) becomes generally available to
the public;
(iii) is rightfully disclosed to the recipient party by a third
party having no obligations of confidentiality to the disclosing party, provided
the recipient party complies with any restrictions imposed by the third party;
(iv) is independently developed by the recipient party without
use of or reference to the disclosing party's Confidential Information; or
(v) is required by law or regulation to be disclosed
(including, without limitation, in connection with SEC filings), provided that
the recipient party uses reasonable efforts to restrict disclosure and to obtain
confidential treatment therefor.
16.2 Each recipient party acknowledges and agrees that due to the
unique nature of the disclosing party's Confidential Information, there can be
no adequate remedy at law for any breach of its obligations hereunder, that any
such breach may allow the recipient party or third parties to unfairly compete
with the disclosing party resulting in irreparable harm to the disclosing party
and, therefore, that upon any such breach or threat thereof, the disclosing
party shall be entitled to injunctive relief and other appropriate equitable
relief in addition to whatever remedies it may have at law, and to be
indemnified by the recipient party from any loss or harm (including, without
limitation, attorneys' fees) in connection with any breach or enforcement of the
recipient party's obligations hereunder or the unauthorized use or release of
any Confidential Information. The recipient party will notify the disclosing
party in writing immediately upon the occurrence of any such unauthorized
release or other breach of which it is aware.
17. Term and Termination.
--------------------
17.1 This Agreement shall commence on the Effective Date and shall
remain in effect until terminated.
17.2 This Agreement will terminate:
(a) upon thirty (30) days (ten (10) days in the case of
nonpayment) prior written notice if IGS shall be in breach or default of any
material obligation under this Agreement; provided however, IGS may avoid such
termination if, before the end of such notice period, it cures such breach;
(b) immediately if IGS ceases to do business, or otherwise
terminates its business operations;
(c) immediately if IGS seeks protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against IGS (and not
dismissed within sixty (60) days); or
(d) immediately if IGS is unable to grant RSS the AGP
Technology
13
license specified in Section 3.1(a).
17.3 Neither party shall incur any liability whatsoever for any
damage, loss or expenses of any kind suffered or incurred by the other (or for
any compensation to the other) arising from or incident to any termination of
this Agreement by such party which complies with the terms of the Agreement
whether or not such party is aware of any such damage, loss or expenses.
17.4 Upon termination of this Agreement by either party: (i) all
rights and licenses granted hereunder shall immediately terminate, except that
licenses to end user customers for the use of the RSS Software, Documentation,
IGS Chip and IGS Software pursuant to this Agreement shall continue in
accordance with the applicable end user agreements therefor; (ii) IGS will
immediately return to RSS all *** Technology and all materials relating to ***
Technology or portion(s) thereof and all RSS Confidential Information in IGS'
possession, custody or control in whatever form held (including all copies or
embodiments thereof), except that IGS may maintain one (1) copy of the RSS
Software solely to the extent necessary to support its installed base of
customers for the CyberPro3000 Products and *** Verilog Based Products; and
(iii) except to the extent expressly provided to the contrary in this Agreement,
all rights to payment (including, without limitation, milestone payments and
royalties) and the following provisions shall survive the termination of this
Agreement: Sections 4, 7, 9.1, 9.3, 10.5, 12.1(a), (c) & (d), 12.2(a) and 13
through 20, inclusive.
17.5 Termination is not the sole remedy under this Agreement and,
whether or not termination is effected, all other remedies will remain
available.
18. Export Requirements. IGS agrees to comply with the U.S. Foreign
-------------------
Corrupt Practices Act (regarding, among other things, payments to government
officials) and all export laws, restrictions, national security controls and
regulations of the United States and all other applicable foreign agencies and
authorities, and not to export or re-export, or allow the export or re-export
of, any CyberPro3000 Product, *** Verilog Based Product, *** Technology or
Documentation or any copy or direct product thereof (a) in violation of any such
restrictions, laws or regulations or (b) without all required licenses and
proper authorizations, to Cuba, Libya, North Korea, Iran, Iraq or Rwanda or to
any Group D or E country (or any national of such country) specified in the then
current Supplement No. 1 to part 740 of the U.S. Export Administration
Regulations (or any successor supplement or regulations). IGS shall promptly
execute any documents required by U.S. export requirements and demonstrate upon
demand to RSS its compliance with such requirements. IGS shall obtain and bear
all expenses relating to any licenses, exemptions and other requirements with
respect to the export from the U.S. of any and all CyberPro3000 Products, ***
Verilog Based Products, *** Technology, Documentation, information, materials or
items deliverable by RSS hereunder to any location and shall demonstrate to RSS
compliance with all applicable laws and regulations prior to export thereof.
19. Assignment. Neither this Agreement nor any rights, licenses or
----------
obligations hereunder, may be assigned by either party without the prior written
approval of the non-assigning party. Notwithstanding the foregoing, either party
may assign this Agreement (with no rights or obligations retained by the
assignor) to any acquiror of all or substantially all of such party's stock
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
14
assets or business to which this Agreement relates. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, RSS and IGS and
their respective successors and permitted assigns.
20. Miscellaneous.
-------------
20.1 Entire Agreement: Amendment. This Agreement (and all
---------------------------
Attachments hereto) constitutes the entire and only agreement between the
parties relating to the subject matter hereof, and supersedes all other prior
negotiations, representations, understandings and agreements. No agreements
amending, modifying or supplementing the terms hereof shall be effective except
by means of a written document signed by the duly authorized representatives of
both parties.
20.2 Notices. All notices, consents, or approvals required by this
-------
Agreement shall be in writing and shall be deemed given five (5) days after
being sent by certified or registered air mail, postage prepaid, or when
received after being sent by facsimile (confirmed by such certified or
registered mail) or by commercial overnight courier service with tracking
capabilities, to the parties at the addresses below or such other addresses as
may be designated in writing by the respective parties pursuant to the terms of
this notice provision:
To RSS:
Reality Simulation Systems Acquisition Corporation
0000 Xxxxxxx Xx.
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx
To IGS:
InteGraphics Systems, Inc.
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxx
20.3 Governing Law and Legal Accounts. This Agreement shall be
--------------------------------
governed by and construed under the laws of the State of California and the
United States, without regard to the conflicts of laws provisions thereof and
without regard to the United Nations Convention on the International Sale of
Goods. In any action or proceeding to enforce rights under this Agreement, the
prevailing party shall be entitled to recover its costs and attorneys' fees.
20.4 Arbitration. Except that either party may seek equitable or
-----------
similar relief from a court, any dispute, controversy or claim arising out of or
in relation to this Agreement or at law, or the breach, termination or
invalidity thereof, that cannot be settled amicably by agreement of the parties
hereto, shall be finally settled by arbitration in accordance with the
arbitration rules of the American Arbitration Association ("AAA"), then in force
by one or more qualified, independent arbitrators appointed in accordance with
said rules; provided, however, that arbitration proceedings
15
may not be instituted until the party alleging breach of this Agreement by the
other party has given the other party not less than thirty (30) days to remedy
any alleged breach and the other party has failed to do so. The arbitration will
take place in San Jose, California. The award rendered shall be final and
binding upon both parties. Judgment upon the award may be entered in any court
having jurisdiction, or application may be made to such court for judicial
acceptance of the award and/or an order of enforcement as the case may be.
20.5 Waiver. The failure of a party to enforce a right under this
------
Agreement shall not act as a waiver of that right or the ability to assert that
right relative to the particular situation involved. The waiver by either party
of a breach of any provisions contained in this Agreement shall be effective
only if set forth in a writing signed by both parties and shall in no way be
construed as a waiver of any succeeding breach of such provision or the waiver
of the provision itself.
20.6 Headings. Headings included herein are for convenience only
--------
and shall not be used to interpret or construe this Agreement.
20.7 Severability. If any provision of this Agreement shall be held
------------
void, invalid, illegal or unenforceable, that provision shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable.
20.8 Remedies; Injunctive Relief. Except as otherwise expressly
---------------------------
provided, the rights and remedies of a party set forth herein with respect to
failure of the other party to comply with the terms of this Agreement are not
exclusive, the exercise thereof shall not constitute an election of remedies and
the aggrieved party shall in all events be entitled to seek whatever additional
remedies may be available in law or in equity (including, without limitation,
appropriate injunctive relief).
20.9 Nonsolicitation. During the term of this Agreement and for a
---------------
period of one (1) year after the termination or expiration of the Agreement,
neither party shall, directly or indirectly, solicit the employment or services
of any employee of the other party, or encourage employees to leave the employ
of the other party.
20.10 No Joint Venture. Nothing in this Agreement shall be deemed
----------------
or construed as creating a joint venture or partnership between the parties.
Except as expressly set forth, no party is by virtue of this Agreement
authorized as an agent, employee or legal representative of any other party, and
the relationship of the parties is, and at all times shall continue to be, that
of independent contractors.
20.11 Further Assurances. Each party agrees to cooperate fully with
------------------
the other party and to execute such further instruments, documents and
agreements and to give such further written assurances, as may be reasonably
requested by the other party, to better evidence and reflect the transactions
described in and contemplated by this Agreement, and to carry into effect the
intents and purposes of this Agreement.
16
20.12 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the Effective Date.
REALITY SIMULATION SYSTEMS INTEGRAPHICS SYSTEMS, INC.
ACQUISITION CORPORATION
By: /s/ Xxxxxxx Xxxxx By /s/ Xxxxx Xxx
----------------------------- ----------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxx Xxx
--------------------------- -------------------------
Title: President Title: CEO/President
-------------------------- ------------------------
17
ATTACHMENT A
AGP Technology Specification:
[to be provided]
IGS Chip Specification:
[to be provided]
IGS Software Specification:
[to be provided]
RSS Software Specification:
[to be provided]
18
ATTACHMENT B
CYPERPRO3000 PRODUCTS
[to be provided]
19
ATTACHMENT B [***(TM) Logo]
------------ *** Graphics Chip
PRELIMINARY
Features High Performance *** Engine
***Rendering Engine
. On-chip *** setup The *** Rendering Engine is based on the ***(TM) which performs many of the ***
. *** visibility operations such as *** setup, ***, and *** on chip resulting in minimal overhead on the
. *** filtering host processor to deliver outstanding *** mapped graphics. The patented rendering engine
. *** lighting utilizes and takes advantage at a no *** -buffer memory architecture, increasing the
. *** Interpolation resolution and amount of *** that can be stored in any given memory configuration.
. Per Pixel *** and Depth ***
. Perspective-correct Interpolation Superb *** Graphics Accelerator
. *** pixels/sec, *** MIP-mapped
. ***/sec, *** pixel-***. *** ***(TM) includes a glueless solution for simple, efficient, cost effective high
lighting, alpha, floating point (API performance graphics subsystem design for *** systems. The integrated ***Hz***,
natural) input* dual programmable clocks, write *** and dual command *** reduce system cost while
optimizing memory bandwidth for maximum graphics performance.
***Accelerator
. *** GUI engine
. ***Hz RAMDAC, dual clock ***(TM) Output
. Supports up to ***, *** & ***Hz up
to *** The ***(TM) incorporates a *** technology, *** and an integrated ***
. ***, *** support on-chip for true *** quality output.
. WINBench97 @ ***
Pentium ***: *** (est.)* Since the *** does not display as many vertical lines as a ***, scaling is implemented
to avoid losing information when lines are dropped. The data from the lines which are
***(TM) Output eliminated during scaling is incorporated into adjacent lines, thus avoiding a loss of
. Low cost Accelerator with on-chip data.
digital NTSC/PAL ***
. Proprietary *** filtering Fig. 1 - ***(TM) Chip Block Diagram
. Enhanced *** & *** quality with ***
. *** (***),*** (***) [GRAPHIC OMITTED]
. ***, ***, *** & ***
. Requires only a *** for *** output.
. Support for *** output.
. *** /Composite direct *** output
. Simultaneous & different *** & ***
outputs
. Supports *** (TM) ***
* Mileage might vary depending on
actual system implementation
CONFIDENTIAL
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
20
[***(TM) Logo]
*** Graphics Chip
PRELIMINARY
*** Editing/Conferencing Better *** Capture Quality
. ***, windows plus ***
. High Quality multi-tap filtering *** and *** can capture very high quality *** through the *** port and the
during *** capture. hardware filter. The filter averages the scaled down *** for better quality
. *** Interpolation with edge before minifying for capture. The ***(TM) will support both *** and
smoothing
. Mirror/upside down support for *** formats as well as *** and *** interfaces.
***
. Filtering during down scaling & Enhanced Triple *** Windows
*** capture
Flexible *** Inputs The (***(TM) supports hardware assisted three independently scaleable
. ***, *** & *** support *** windows enabling *** and *** applications.
. Support for ***, ***
. Direct Interface for popular Where necessary, the *** is scaled with interpolation and displayed for
*** better *** quality. This *** chip provides excellent *** and *** when
Multiplatform Support scaling from *** icon size to full screen because it supports both
. Intel(TM), Cyrix(TM), and AMD horizontal and vertical interpolation along with edge smoothing technologies
(TM) for jagged edges, In addition, it eliminates the combing effect of rapid
. PowerPC(TM) movement. When *** is scaled down, the *** is filtered and either *** or ***
Drivers & Software at a much higher quality.
. Microsoft DirectX(TM)
. Apple QuickDraw3D(TM) RAVE
. BIOS Table 1 - Supported *** Resolutions*
Documentation [GRAPHIC OMITTED]
. Technical Manual
Reference Board FB 2MB 4MB 8MB
. Reference Design Board *** *** ***
RSSI Resolutions bpp Supported MEM Supported MEM Supported MEM
0000 Xxx Xxxxxxx Xxxx, Xxxxx #0 ------------------------------------------------------------------------
XXX XXXX, XX 00000 *** *** X 848 X 2,896 X 6,992
PH: 000-000-0000 *** X 248 X 2,296 X 6,392
FX 000-000-0000 *** X 1,696 X 5,792
xxxx://xxx.xxxxxx.xxx -----------------------------------------------------------------------
RSSI assumes no responsibility or *** *** X 173 X 2,221 X 6,317
liability for any errors or *** X 1,284 X 5,380
errors contained in this X 346 X 4,442
document. This includes any -----------------------------------------------------------------------
claim for copyright or patent *** *** X 1,024 X 5,120
infringement or direct, *** X 3,584
indirect, special or X 2,048
consequential damages. The -----------------------------------------------------------------------
information herein is subject to *** *** X 3,072
change without notice from RSSI. *** X 512
AD trademark and registered ***
trademarks are property of their
respective owners.
Glossy rev. 004 06/97 - EH01 * Includes single-butter, double-buffer, *** -butter with remaining ***
map storage as shown above (kB).
x Not supported by traditional *** chips.
CONFIDENTIAL
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
21
ATTACHMENT C
PLATFORMS AND TERRITORIES
As used herein, "Network Computer" and "Settop" shall mean consumer information
appliances based on Java or a real time operating system using embedded central
processing units and a television as a primary display.
IGS market:
--------------------------------------------------------------------------------
Platform Territories
--------------------------------------------------------------------------------
Settop ***
Network Computer ***
Laptop Computer ***
***
***
***
***
***
--------------------------------------------------------------------------------
RSS Market:
--------------------------------------------------------------------------------
Platform Territories
--------------------------------------------------------------------------------
All MAC OS accounts N. American PC desktop accounts
--------------------------------------------------------------------------------
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
22
ATTACHMENT D
MILESTONE SCHEDULE
--------------------------------------------------------------------------------
Milestone Target Date
--------------------------------------------------------------------------------
Execution of Agreement June 1, 1997
Test Sample sign-off July 31, 1997
Commercial Production Release October 31, 1997
--------------------------------------------------------------------------------
23
ATTACHMENT E
*** TECHNOLOGY
. Triangle, Line, Point rendering Input display list can include all basic *** primitives.
. Setup from floating point coordinates No driver overhead for reformatting data
. Perspective correct interpolation All values, including ***
. *** per-pixel lighting Allows *** lights
. *** interpolation per-pixel *** plus MIP-map level and ***
. Specular Lighting Best quality lighting enabled by ***
. Point/Linear/*** filtering *** and *** -quality *** modes
. *** buffer Flexible *** for apps that read *** buffer
. Alpha channel mixing (translucency) No front-back sorting required
. Oversampling anti-aliasing Reduces "***" on *** of triangles and lines
. Anisotropic *** Better filtering than ***
. Sub-pixel accuracy No *** jitter
. Source *** keying For *** with *** texels
. Multiple *** Compact high quality ***
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
24
