Certain portions of this exhibit have been omitted pursuant to Rule 24b-2 and are subject to a confidential treatment request. Copies of this exhibit containing the omitted information have been filed separately with the Securities and Exchange...
EXHIBIT
10.1
[Certain
portions of this exhibit have been omitted pursuant to Rule 24b-2 and are
subject to a confidential treatment request. Copies of this exhibit containing
the omitted information have been filed separately with the Securities and
Exchange Commission. The omitted portions of this document are marked with
a
***.]
AMENDMENT
NO. 6 TO MACROMEDIA FLASH COMMUNICATION
SERVER
LICENSE AGREEMENT
This
Amendment No. 6 (“Amendment 6”) to the Macromedia Flash Communication Server
License Agreement by and between VitalStream, Inc. (“Licensee”), a Delaware
corporaation with its principal place of business at Xxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000 and Adobe Systems Incorporated, a Delaware corporation
with its principal place of business at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
(“Adobe”), is effective as of December 1, 2006 (the “Amendment 6 Effective
Date”).
WHEREAS,
the parties entered into the Macromedia Flash Communication Server License
Agreement dated as of November 17, 2003 (the “Original Agreement”), as amended
by (a) Amendment No. 1 to the Original Agreement dated as of March 2004
(“Amendment 1”), (b) Amendment No. 2 to the Original Agreement dated as of March
2004 (“Amendment 2”), (c) Amendment No. 3 to the Original Agreement dated as of
August 0, 0000 (“Xxxxxxxxx 0”), (x) Amendment No. 4 to the Original Agreement
dated as of March 1, 2005 (“Amendment “), and (e) Amendment No. 5 to the
Original Agreement dated as of December 30, 2005. All of the foregoing
amendments together with the Original Agreement, shall be referred to herein
as
the “Agreement”; and
WHEREAS,
the parties desire to expand their business relationship;
NOW,
THEREFORE, in consideration of the foregoing and other valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties agree
as
follows:
Except
as
expressly provided herein, all capitalized terms used in this Amendment 6
but
not otherwise defined herein shall have the meanings given such terms in
the
Agreement and, unless otherwise specified, references to Sections refer to
Sections of the Agreement.
1.
|
Sections
2(A) and 2(B) of the Agreement are hereby deleted in their entirety
and
replaced with the following:
|
“A.
License Fees. Starting with the Amendment 6 Effective Date and at each annual
anniversary of the Amendment 6 Effective Date thereafter during the Term,
Licensee shall pay Adobe an annual, non-cancelable and non-refundable prepayment
of the license fees payable by Licensee for use of the Service (each, a
“Prepayment Fee”). Each annual Prepayment Fee shall be applied, on a monthly
basis, against the license fees payable by Licensee for use of the Service
during the applicable month, which license fees consist of either (i) the
Customer License Fee, or (ii) the Minimum Transfer Fee (each as defined below),
whichever is greater during such month, measured on a per-Customer basis.
Except
for the amount of Carryover Amount (as defined below), to which the following
shall not apply, the Prepayment Fee actually paid by Licensee to Adobe shall
determine the price point for the Customer License Fee and the Minimum Transfer
Fee payable during the applicable twelve-month period to which the Prepayment
Fee applies, as such price points are set out in the table below.
Annual
Commitment
|
Customer
License Fee
|
Minimum
Transfer Fee
|
$
***
|
***
|
***
|
$
***
|
***
|
***
|
$
***
|
***
|
***
|
$
***
|
***
|
***
|
$
***
|
***
|
***
|
$
***
|
***
|
***
|
$
***
|
***
|
***
|
$
***
|
***
|
***
|
Either
or
both of the Customer License Fee and/or the Minimum Transfer Fee may be referred
to herein as a “License Fee”.
i.
|
For
each Customer, to the extent the Minimum Transfer Fees for a given
month
exceeds the Customer License Fee for such month, then Licensee
shall pay
the Minimum Transfer Fee in lieu of the Customer License Fee for
that
particular Customer, for that particular month.
|
ii.
|
“Customer
License Fee” means all fees that Licensee receives from Customers for the
use of the Service, including but not limited to monthly revenue
for
actual usage, commitments, coverage, and setup fees, multiplied
by the
applicable percentage set out in the table in this Section
2(A).
|
iii.
|
If
Licensee does not elect a Prepayment Fee for each subsequent twelve-month
period after the payment of the Initial Prepayment Fee by providing
Adobe
with written notice at least 30 days prior to the expiration of
the
then-current twelve month period, then the Prepayment Fee will
be the same
level as the prior twelve-month period.
|
iv.
|
During
the Term, Licensee may remit to Adobe additional amounts of Prepayment
Fee
(“Additional Prepayment Fee”) at the end of any calendar quarter, provided
that Licensee has provided at least 15 days prior written notice
to Adobe
of the payment of such Additional Prepayment Fee. If Licensee pays
to
Adobe an Additional Prepayment Fee, then as of the date that Adobe
receives such Additional Prepayment Fee, the price points for the
Customer
License Fee and Minimum Transfer Fees payable during the remainder
of
then-current term shall be adjusted to reflect the price points
applicable
to the sum of the then-current Prepayment Fee and the Additional
Prepayment Fee. For the avoidance of doubt, only License Fees payable
by
Licensee after the Additional Prepayment Fee has been received
by Adobe
shall be expended at the revised License Fee price points.
|
-2-
B.
Prepayment Fee. The Prepayment Fee (including, for avoidance of doubt,
the Initial Prepayment Fee and any Additional Prepayment Fee) is non-cancelable
and non-refundable, (except for refunds made pursuant to Section 7 of the
Agreement, as amended by Section 5 hereof; if the Prepayment Fee and, if
applicable, any Additional Prepayment Fee, having not been fully expended,
then
Licensee shall be entitled to receive a refund in the amount of that portion
of
the Prepayment Fee, and, if applicable, any Additional Prepayment Fee, that
had
not been expended as of the date of such termination, which refund payment
shall
be made by Adobe to Licensee within 30 days of the date of termination, and
any
portion of the refund not paid within such 30 days shall be subject to a
late
charge of 1.5% per month of the maximum rate allowed by applicable law,
whichever is less, on the overdue balance. Notwithstanding any refund of
the
Prepayment Fee, including any Additional Prepayment Fee, as described in
the
preceding sentence, Licensee shall continue to pay License Fees at the price
points that were applicable to the Prepayment Fee and any Additional Prepayment
Fee prior to the termination of the Agreement if Licensee continues to use
the
Software to provide the Service to Customers. Once the Prepayment Fee has
been
expended during a particular twelve-month term or in the event of any refund
of
Prepayment Fee as described directly above, for the remainder of that term,
Licensee shall remit to Adobe the applicable License Fees payable by Licensee
in
accordance with the payment instructions set out in Section 3 of the
Agreement.
i.
|
Prepayment
Fee Election.
Licensee hereby elects a Prepayment Fee of $*** (“Initial Prepayment Fee”)
for the first twelve-month period beginning on the Amendment 6
Effective
Date (“Initial Amendment Term”).
|
ii. |
Carryover
Amount.
Licensee may deduct from the Initial Prepayment Fee a total of
$*** as a
deduction for unexpended pre-paid royalties paid to Adobe under
the
Agreement prior to the Amendment 6 Effective Date (“Carryover Amount”).
Licensee may only expend the Carryover Amount against License Fees
payable
during the Initial Amendment Term.
|
iii.
|
Initial
Prepayment Fee Due Date.
Licensee shall pay to Adobe the Initial Prepayment Fee minus the
Carryover
Amount ($*** - $*** = $***) as
follows:
|
Amount
|
Due
Date
|
$***
|
30
days from the Amendment 6 Effective Date
|
$***
|
270
days from the Amendment 6 Effective
Date
|
iv.
|
Price
Points during Initial Amendment Term.
During the Initial Amendment Term, Licensee shall be entitled to
(a) apply
the portion of the Initial Prepayment Fee actually paid by Licensee
($***)
against License Fees at the following price points (1) Customer
License
Fees at ***%, or (2) Minimum Transfer Fees at $*** per GB, provided,
however the price points may be adjusted if Licensee makes an Additional
Prepayment Fee, and (b) apply the portion of the Initial Prepayment
Fee
equal to the Carryover Amount ($***) against License Fees at the
following
price points (1) Customer License Fees at ***%, or (2) (i) Minimum
Transfer Fees at $*** per GB or (ii) solely for the VIP Customers
(pursuant to the terms of Section 5 of Amendment 5 and Exhibit
E of
Amendment 5), a Minimum Transfer Fees at $*** per GB. If Licensee
makes an
Additional Prepayment Fee, for the avoidance of doubt, only License
Fees
payable by Licensee after the Additional Prepayment Fee has been
received
by Adobe shall be expended at the revised License Fee price points
(applicable to the sum of the then-in-effect Prepayment Fee plus
the
amount the of Additional Prepayment
Fee).
|
-3-
2.
|
The
last sentence of Section 2(C) of the Agreement is hereby deleted
in its
entirety.
|
3.
|
Section
2(D) of the Agreement is amended to add the following to the end
of the
sentence:
|
“Notwithstanding
the foregoing or anything else herein to the contrary, Licensee
may only
expend the Carryover Amount against License Fees payable during
the
Initial Amendment Term.”
|
4.
|
Section
2(E) of the Agreement is hereby deleted in its entirety and replaced
with
the following:
|
“The
License Fees include the fees payable for Maintenance and Support during
the
Term, which fees are non-refundable and non-cancelable (except in accordance
with Section 7 of the Agreement, as amended by Section 5 hereof and Section
1.5(d)(iv), and Licensee shall be entitled to the pro rata portion of all
Maintenance and Support fees paid by Licensee in respect of periods following
the date of such termination, which refund payment shall be made by Adobe
to
Licensee within 30 days of the date of termination, and any portion of the
refund not paid within such 30 days shall be subject to a late charge of
1.5%
per month of the maximum rate allowed by applicable law, whichever is less,
on
the overdue balance) notwithstanding anything in this Agreement to the contrary.
The portion of the License Fee applicable to Maintenance and Support is equal
to
twenty percent (20%) of the License Fee payable hereunder. For example, if
License Fees are equal to $100,000 for a given month, of this amount $80,000
will be applicable to the fee for the license to the Software, and $20,000
will
be applicable to the fee for Maintenance and Support. For the avoidance of
doubt, Licensee shall be required to maintain Maintenance and Support during
the
term of this Agreement as of the Amendment 6 Effective Date.”
5.
|
The
second sentence in Section 3 of the Agreement is hereby deleted
in its
entirety and replaced with the following:
|
“All
payments to Adobe shall be made via wire transfer to: The Northern Trust
Company
00 Xxxxx XxXxxxx Xxxxxx Xxxxxxx, XX 00000-0000 ABA#: 0710 0015 2.”
6.
|
The
third and fourth sentence of Section 4 of the Agreement is hereby
deleted
in its entirety and replaced with the following:
|
“The
report shall be sent in MS Excel softcopy format to xxxxxxx@xxxxx.xxx.
Licensee contact information for such report shall be Licensee’s
Controller.”
7.
|
Section
6 of the Agreement is
hereby deleted in its entirety and replaced
with the following:
|
“Subject
to the payment by Licensee of all License Fees due hereunder, Adobe shall
provide to Licensee, on an on-going basis during the Term, the Adobe Platinum
Maintenance and Support set forth at xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxx/
(“Maintenance and Support”); provided, however if Licensee reasonably and in
good faith disputes an invoice, Licensee shall advise Adobe of any such disputed
invoice that it is withholding for payment prior to the applicable due date
for
payment, and Licensee is not entitled to withhold payment on such invoices
if it
has not provided Adobe with written notice of dispute (detailing the specific
reasons for the dispute) within ten (10)
-4-
days
of
receipt of the applicable invoice. Furthermore Licensee is not entitled to
withhold payment on any undisputed invoices or undisputed portions of any
disputed invoice. Any payments that were disputed and payment withheld in
accordance with the foregoing and later determined to be owed Adobe shall
be
paid promptly with interest accruing from the original due date of such amounts.
Adobe shall provide to Licensee, on an on-going basis during the Term, updates
and upgrades to the Software that Adobe makes generally commercially available
at no additional charge to all other CDN providers at the same tier level.
Licensee shall use reasonable efforts to update the Service with such updates
or
upgrades to the Software provided to Licensee by Adobe within a commercially
reasonable time after Licensee first receives the applicable update or upgrade.”
8.
|
The
first three sentences of Section 7 of the Agreement are hereby
deleted in
their entirety and replaced with the
following:
|
“By
executing this Amendment 6, the parties acknowledge and agree that the Term
of
the Agreement is extended for the duration of the Initial Amendment Term.
Thereafter, Licensee will have the option to renew the Agreement for an
additional twelve-month term by notifying Adobe of such election at least
thirty
days before the expiration of the Initial Amendment Term (“Renewal Term”). After
the Renewal Term, the Agreement may only be renewed upon the mutual agreement
of
the parties and such renewal may be subject to new, mutually-agreed terms
and
conditions. Notwithstanding the Term, (a) if Licensee continues to so provide
the Service to Customers, Licensee may expend any unused portion of the sum
of
any Prepayment Fee and Additional Prepayment Fee towards the payment of License
Fees for a period of up to sixty (60) days after the date of expiration or
termination of the Term; and (b) Licensee may continue to use the Software
and
the Macromedia Flash Communication Server to provide the Service to Customers,
and to pay the fees outlined herein, under contracts with an unexpired term
until the earlier of one year from termination of this Agreement or termination
of each respective Customer contract, and as to such Customers this Agreement
shall remain in effect until such expiration or termination.”
9.
|
Exhibit
C of the Agreement is hereby deleted in its entirety.
|
10.
|
Exhibit
E of the Agreement is hereby deleted in its entirety; provided,
however,
the terms and conditions shall remain in effect for the Initial
Amendment
Term solely with respect to applying the Carryover Amount as set
forth in
Section 2(B)(iv).
|
11.
|
Sections
1, 5, and 6 of Amendment 5 are hereby deleted in their entirety.
|
12.
|
Effect
of Amendment.
Except as otherwise modified herein, the Agreement (and each amendment
thereto) shall continue in full force and effect until expiration
or
termination in accordance with its terms. In the event of any conflict,
ambiguity, or inconsistency between the terms of this Amendment
6 and the
terms of the Agreement, the terms of this Amendment 6 shall control.
This
Amendment 6 may be executed in any number of counterparts, all
of which
taken together will constitute a single instrument. Execution and
delivery
of this Amendment 6 may be evidenced by facsimile
transmission.
|
-5-
The
parties have caused this Amendment 6 to be executed by their respective duly
authorized representatives as of the Amendment 6 Effective Date.
ADOBE
SYSTEMS INCORPORATED
|
VITALSTREAM,
INC.
|
|
By:
/s/ Xxxxxx X.
Xxxxxx
|
By: /s/
Xxxxxx X.
Xxxxxx
|
|
(Signature)
|
(Signature)
|
|
Name:
Xxxxxx X. Xxxxxx
|
Name:
Xxxxxx X. Xxxxxx
|
|
Title:
Senior Director
|
Title:
President and COO
|
-6-