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EXHIBIT 10.21
ADSL LICENSE AGREEMENT
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INDIVIDUAL AGREEMENT ON THE LICENSING OF THE ADSL CHIPSET
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CONTENTS
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CONTENTS________________________________________________________________________________________2
ARTICLE 1 - DEFINITIONS_________________________________________________________________________5
ARTICLE 2 - LICENSE_____________________________________________________________________________9
2.1 DESIGN- AND DEVELOPMENT RIGHTS___________________________________________________________9
2.2 MANUFACTURING RIGHTS_____________________________________________________________________9
2.3 HAVE-MADE RIGHTS________________________________________________________________________10
2.4 DISTRIBUTION RIGHTS_____________________________________________________________________10
2.5 RIGHT TO USE SOFTWARE___________________________________________________________________10
2.6 GENERAL LICENSING PROVISIONS____________________________________________________________11
ARTICLE 3: MODALITIES OF RIGHTS GRANTED________________________________________________________12
3.1 ADDITIONAL ALCATEL INFORMATION__________________________________________________________12
3.2 RIGHT TO DESIGN, DEVELOP AND IMPLEMENT MODIFICATIONS____________________________________12
3.3 GRANT BACK OF RIGHTS TO ALCATEL_________________________________________________________13
ARTICLE 4 - TECHNICAL DOCUMENTATION____________________________________________________________13
ARTICLE 5 - TECHNICAL ASSISTANCE_______________________________________________________________15
ARTICLE 6 - TRAINING___________________________________________________________________________16
ARTICLE 7 - SOFTWARE___________________________________________________________________________16
ARTICLE 8 - COPYRIGHT AND TRADEMARKS___________________________________________________________17
ARTICLE 9 - COMPENSATION_______________________________________________________________________18
9.1 INITIAL PAYMENTS________________________________________________________________________18
9.2 MINIMUM ROYALTIES_______________________________________________________________________18
9.3 ROYALTIES ON SALES OF PRODUCTS__________________________________________________________19
9.4 ROYALTIES ON SALES OF SAM_______________________________________________________________19
9.5 ROYALTIES ON SALES OF DERIVATIVES_______________________________________________________19
9.6 CALCULATION OF ROYALTIES USING THE FAIR MARKET VALUE____________________________________20
9.7 SALES TO ALCATEL________________________________________________________________________20
9.8 ROYALTY STATEMENTS______________________________________________________________________20
ARTICLE 10 - PAYMENT TERMS_____________________________________________________________________21
ARTICLE 11 - CONFIDENTIALITY___________________________________________________________________22
ARTICLE 12 - OTHER OBLIGATIONS_________________________________________________________________22
ARTICLE 13 - WARRANTY AND LIABILITIES__________________________________________________________24
ARTICLE 14 - TAXES AND DUTIES__________________________________________________________________25
ARTICLE 15 - TERM AND TERMINATION______________________________________________________________25
ARTICLE 16 - SOLICITING EMPLOYEES______________________________________________________________26
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ARTICLE 17 - FORCE MAJEURE_____________________________________________________________________27
ARTICLE 18 - MANUFACTURE DISCONTINUANCE________________________________________________________27
ARTICLE 19 - GOVERNING LAW AND SETTLEMENT OF DISPUTES__________________________________________28
ARTICLE 20 - MISCELLANEOUS PROVISIONS__________________________________________________________28
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ANNEXES:
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ANNEX 1: SCOPE OF ADSLC, SACHEM AND SOFTWARE CORE TECHNOLOGY
ANNEX 2: IMPLEMENTATION SCHEDULE
ANNEX 3: TECHNICAL ASSISTANCE
ANNEX 4: TRAINING PLAN
ANNEX 5: MODEL END-USER LICENSE AGREEMENT
ANNEX 6: NON DISCLOSURE AGREEMENT
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INDIVIDUAL AGREEMENT ON
THE LICENSING OF THE ADSL CHIPSET
This agreement (hereinafter referred to as "the AGREEMENT") is made and
effective as of this 20th of April 1998 by and between:
INTEGRATED TELECOM EXPRESS INC., a corporation organized and existing under
the laws of California, having its principal office at 2710 Walsh Avenue,
Santa Clara, California CA 95051, USA (hereinafter referred to as "ITEX")
and
ALCATEL BELL N.V., a company organized and existing under the laws of
Belgium, having its registered offices at 1, Francis Wellesplein, Antwerp,
Belgium, hereinafter referred to as "ALCATEL",
Where appropriate, ALCATEL and ITEX hereinafter collectively referred to as
"Parties" and individually referred to as "a Party"
WHEREAS, ALCATEL manufactures ADSL equipment which it sells world-wide and is
developing further generations of such ADSL equipment; and
WHEREAS, ALCATEL has designed CHIPSETS (as defined hereinafter) to implement
the ADSL transceiver function and requires such CHIPSETS to be manufactured
using advanced semiconductor manufacturing technologies, and to be sold on
the open market; and
WHEREAS, ITEX desires to receive a license to [*] the CHIPSET and related
software;
WHEREAS, ALCATEL is willing to grant to ITEX a license to [*] the CHIPSET and
related software;
WHEREAS, ITEX has developed a low-cost, DMT-based ADSL solution but requires
[*]and
WHEREAS ITEX wishes to ensure interoperability of its ADSL solution with
ALCATEL's Digital Subscriber Loop ATM Multiplexers ("DSLAM"); and
WHEREAS, ALCATEL and ITEX are both involved in standardization committees and
wish to co-operate in accelerating the completion of the ADSL standards based
on the Discrete MultiTone modulation technique;
AND WHEREAS, the Parties wish now to lay down the terms and conditions of
such licensing and co-operation by entering into this AGREEMENT.
NOW THEREFORE, in consideration of the premises and the undertakings of the
Parties contained therein, it is agreed as follows:
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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ARTICLE 1 - DEFINITIONS
1.1 In this AGREEMENT unless the context otherwise requires the
following expressions shall have the following meanings:
ADSLC: ADSL standard compliant semiconductor device, integrating A/D
and D/A converters, AGC, and analogue filters, as resulting from the
TECHNOLOGY and which may encompass such IMPROVEMENTS and/or
MODIFICATIONS as may be achieved in accordance with this AGREEMENT.
ADSL CHIPSET OR CHIPSET: the ADSLC and SACHEM combined, as resulting
from the TECHNOLOGY and which may encompass such IMPROVEMENTS and/or
MODIFICATIONS as may be achieved in accordance with this AGREEMENT,
implementing, in combination with the SOFTWARE, the FUNCTIONALITY.
ADSLC SOFTWARE: Any SOFTWARE which specifically relates to the ADSLC
and/or the part of the FUNCTIONALITY which is proper to the ADSLC,
and which is required by ITEX for the purpose of developing the SAM,
in accordance with Section 2.3 herein.
AFE: The ADSLC plus the discrete components which are part of
ALCATEL's ADSL analogue front-end, and including the integration in
the ADSLC of digital filtering functions, that are normally part of
the SACHEM, as resulting from the TECHNOLOGY and described in the
TECHNICAL DOCUMENTATION, and which may encompass such IMPROVEMENTS
and/or MODIFICATIONS as may be achieved in accordance with this
AGREEMENT.
AFFILIATED COMPANIES: With respect to any party, a corporation or
other entity which is directly or indirectly controlled by a Party,
but only so long as such control subsists or which is directly or
indirectly controlling or under the same control as a Party, but
only so long as such control subsists. Control means the direct or
indirect ownership of more than 50% of the shares entitled to vote
upon election of directors or persons performing similar functions
or having the right or the power to elect a majority of the members
of the governing board.
AGREEMENT YEAR: a twelve (12) month period which commences on
January 1 of each calendar year and ends on December 31 of the same
year during the TERM of this AGREEMENT. The first AGREEMENT YEAR
shall commence on the EFFECTIVE DATE and shall end on December 31 of
the same calendar year.
AUTHORIZED DISTRIBUTORS: Any and all distributor, reseller, retailer
or any other participant in ITEX's distribution channels, who may be
involved in distributing PRODUCTS, SAM and/or DERIVATIVES.
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CONFIDENTIAL INFORMATION: Any and all documents, software (object
code, source code and API) and other information conveyed by the
disclosing party to the receiving party pursuant to this AGREEMENT
in whatever media or method, which is marked or labeled as
confidential. When disclosed orally, such information shall be
identified as being confidential at the time of disclosure with
subsequent confirmation in writing within thirty (30) days of the
disclosure.
CORE ELEMENTS: Elements in either the ADSLC, the SACHEM or the
SOFTWARE which are identified in Annex 1.4 as a CORE ELEMENT.
DERIVATIVES: a combination of either the ADSLC, the SACHEM or the
ADSL CHIPSET with other technology such that the FUNCTIONALITY or
the part thereof which is proper to either the ADSLC or the SACHEM,
whichever applies, is preserved in the combination. If a DERIVATIVE
results in a single chip, then the added technology may not relate
to narrowband voice and data applications (such as those informally
described as 'POTS') at the network side (such as informally
described as "central office" or "remote access multiplexer"), other
than those necessary to implement the FUNCTIONALITY.
EFFECTIVE DATE: The date of execution of this AGREEMENT first set
forth herein above.
END USER: Person or corporate body having lawfully obtained directly
or indirectly from ITEX a PRODUCT, SAM or DERIVATIVE, or any
equipment containing the SACHEM or ADSLC for his personal or
professional use, which is exclusive of any further act of
manufacturing or distribution of such item.
END USER LICENSE: License for the END USER to use the SOFTWARE or
ADSLC SOFTWARE which is to be granted in accordance with the
provisions hereof, and which shall contain at least the provisions
of the model END USER LICENSE attached hereto as Annex 5.
FAIR MARKET VALUE: The equivalent of NET SALES for the CHIPSET of
substantially the same quantity and performance which would be
charged by ITEX to non-affiliated customers in an arms-length
transaction.
FUNCTIONALITY: The full functionality as described in the ADSL
System Reference Model comprised in Annex 1 between the V-C/U-C2
interfaces of the ATU-C, and between the T- R/U-R2 interfaces of the
ATU-R (editions 0 and 1 of the ALCATEL 1000 ADSL Interoperability
Specification Document, chapter 4), thus ensuring full
interoperability at the point of U-C/U-R with the ALCATEL 1000 ADSL
product line at the central office side.
IMPLEMENTATION SCHEDULE: The chronological schedule set forth in
Annex 2 for the transfer of the TECHNOLOGY by ALCATEL to ITEX.
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IMPROVEMENTS: Changes which do not affect or modify the CORE ELEMENTS
except for implementing alternative semiconductor/IC technology, nor
the FUNCTIONALITY or that part of the FUNCTIONALITY which is proper to
either the SACHEM or the ADSLC or the SOFTWARE, or CORE ELEMENTS, and
which
(i) are introduced in the manufacture of the hardware of the
PRODUCT
or
(ii) which correct defects in, or improve the performance of the
SACHEM or ADSLC.
For example, changes that, without affecting the FUNCTIONALITY or
that portion of FUNCTIONALITY due to the SACHEM or ADSLC
respectively, optimize the power consumption, the speed
characteristics, the chip area dimensions, and the interfaces of the
SACHEM and ADSLC would be considered as IMPROVEMENTS.
INTELLECTUAL PROPERTY RIGHTS: Any and all patents, patent applications,
copyrights, mask work rights, trade secrets know-how or other
intellectual property rights of whatever nature other than trademarks
and trade-names which have been, or will be applied for, acquired or
secured before the effective date of or during the term of the
AGREEMENT, throughout the world, by ALCATEL or any of its AFFILIATED
COMPANIES, with regard to which ALCATEL has the right to enter into
this AGREEMENT, and which are necessary to and/or essential to the
reasonable practice or exercise of any rights granted under the
AGREEMENT, exclusive however of any and all intellectual property
rights of whatever nature which are related to foundry process
technology and/or are developed by ALCATEL MICROELECTRONICS.
MODIFICATIONS: Any change in relation to the design, development or
production process of the CHIPSET, the SOFTWARE, the SACHEM or the
ADSLC which:
(i) affects or modifies the FUNCTIONALITY of the PRODUCT;
(ii) requires ITEX to gain access to and/or to make changes which
affect or modify CORE ELEMENTS, whether or not such actions
affect or modify the FUNCTIONALITY.
NET SALES: The amount represented by the sales (excluding freight, VAT
or other invoiced sales taxes if separately stated in the invoice
applicable) or other disposal including leases and sublicenses of the
PRODUCT as invoiced by ITEX to its customer.
PRODUCT: The SOFTWARE in combination with either the SACHEM, the ADSLC
or the CHIPSET.
REFERENCE MATERIALS: Any and all hardware, software and/or
documentation which is not a part of the PRODUCT and which is supplied
to ITEX as part of the TECHNICAL DOCUMENTATION for the sole purpose of
illustration of technique, without ITEX having the right to use such
software and/or documentation as part of its PRODUCTS, AFE'S or
DERIVATIVES. REFERENCE MATERIALS shall be identified as such in
Annex 1.
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SACHEM: ADSL digital semiconductor device integrating all fixed and
adaptive digital functions needed to perform the Discrete MultiTone
("DMT") modulation technique including all fixed and adaptive Digital
Signal Processing ("DSP") functions and error correction codes like
Reed-Solomon & interleaving plus Trellis coding/Viterbi decoding, as
resulting from the TECHNOLOGY and which may encompass such IMPROVEMENTS
and/or MODIFICATIONS as may be achieved in accordance with this
AGREEMENT.
SAM: Any current or future ITEX scaleable ADSL Modem product combining
the AFE, the ADSLC SOFTWARE, and a DMT signal processor, other than the
SACHEM, for implementing a scaleable rate ADSL solution.
SOFTWARE: Software in object code, documented source code and
documented Application Programming Interface (API) form as further
described in Annex 1, and excluding any REFERENCE MATERIALS, whether or
not made available as software.
TECHNICAL DOCUMENTATION: All of ALCATEL's manuals and documentation in
which the PRODUCT is recorded and all other technical and
organizational documentation associated with the PRODUCT and its
manufacture including but not limited to designs, drawings, charts,
manuals, material lists, blueprints, formulae, reproductions, written
and printed instructions, descriptions, reports, material and equipment
specifications, pictures and diagrams, computer print outs, magnetic
tapes or disks or similar storage devices as implemented by ALCATEL.
TECHNOLOGY: INTELLECTUAL PROPERTY RIGHTS, the SOFTWARE and all
information with respect to the manufacture and sales of the PRODUCT
which is embodied in the TECHNICAL DOCUMENTATION or given orally during
the term of the AGREEMENT or any extension thereof under the form of
technical assistance or training.
TERM: The period starting on the EFFECTIVE DATE and having the duration
specified in Article 15, or if this AGREEMENT shall be terminated prior
to the expiration of such period, the period from the EFFECTIVE DATE to
the date on which the AGREEMENT shall be terminated.
T1.413: The T1.413 issue 2 standard as set out by the ANSI in its
current form and any future evolutions of (including additions to) the
same that are adopted during the term of this AGREEMENT, including but
not limited to any standards adopted for G.Lite or splitterless ADSL
implementations as may be emdodied, for example, in issues 3 or 4.
UMC GROUP: United Microelectronics Corporation (UMC) and/or the
following related semiconductor manufacturing entities:
(i) United Semiconductor Corporation (USC)
(ii) United Integrated Circuits Corporation (UICC)
(iii) United Silicon Inc. (USIC)
all of which are Taiwanese joint venture foundries in which UMC has
ownership superior to twenty five percent (25%), and have facilities in
the Science Industrial Park, Hsinchu, Taiwan.
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1.2 In this AGREEMENT unless the context otherwise requires, references:
1.2.1 to this AGREEMENT shall be construed as a reference to this AGREEMENT
as amended, novated, supplemented or varied from time to time and shall
include any document which is supplemental to, is expressed to be
collateral with, or is entered into pursuant to, or in accordance with,
the terms of this AGREEMENT;
1.2.2 to recitals, clauses and schedules are references to recitals to this
AGREEMENT, clauses to this AGREEMENT, and schedules to this AGREEMENT;
1.2.3 to persons shall include individuals, bodies corporate (wherever
incorporated), unincorporated associations and partnerships;
1.3 Words denoting the singular shall include the plural and vice versa.
1.4 The headings are inserted for convenience only and shall not affect the
construction of this AGREEMENT.
1.5 The Annexes comprise Annexes to this AGREEMENT and form part of this
AGREEMENT.
ARTICLE 2 - LICENSE
2.1 DESIGN- AND DEVELOPMENT RIGHTS
Within the framework of this AGREEMENT and for the TERM thereof, ALCATEL grants
to ITEX the [*] right, under the INTELLECTUAL PROPERTY:
2.1.1 subject to the provisions of Clause 3 hereof to [*], and,
2.1.2 subject to the provisions of Clause 3 hereof and solely to the extent
permitted therein, to [*], and
2.1.3 subject to any such SAM being at all times fully interoperable with
ALCATEL's current and/or future ADSL product line, to [*]
2.2 MANUFACTURING RIGHTS
Within the framework of this AGREEMENT and for the TERM thereof, ALCATEL grants
to ITEX the [*] right, under the INTELLECTUAL PROPERTY to [*]
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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2.3 HAVE-MADE RIGHTS
2.3.1 Within the framework of this AGREEMENT and for the TERM thereof, upon
request of ITEX and subject to the prior written approval of ALCATEL,
which will not be unreasonably withheld, ALCATEL grants to ITEX the
[*] right, under the INTELLECTUAL PROPERTY to [*] provided however
that the third party that will perform any such manufacturing shall
have assumed in writing the obligations set forth in Section 7.2 and
Article 11.
2.3.2 In the event that ITEX would elect to exercise its have made rights, as
granted herein, other than through the UMC GROUP, ALCATEL
MICROELECTRONICS shall be granted the right of first refusal under such
terms and conditions (including pricing) as were offered to ITEX by the
most eligible bidder for the award of such manufacturing by ITEX.
2.4 DISTRIBUTION RIGHTS
Within the framework of this AGREEMENT and for the TERM thereof, ALCATEL grants
to ITEX the [*] right, under the INTELLECTUAL PROPERTY to [*]
2.5 RIGHT TO USE SOFTWARE
2.5.1 Within the framework of this AGREEMENT and for the TERM thereof,
ALCATEL grants to ITEX the [*] right, under the INTELLECTUAL PROPERTY:
(i) to [*] solely for the purposes set forth in Sections 2.1, 2.2 and
2.3.
(ii) to [*], but exclusively for the purposes set forth in Section
2.1.3 and solely to the extent thereof.
2.5.2 If ITEX elects to exercise its [*] rights as described in Section 2.3
herein above, rights to [*] as set forth herein shall, solely to the
extent required for the purpose thereof, extend to the third party that
will perform such manufacturing as allowed under Section 2.3.
2.5.3 Within the framework of this AGREEMENT and for the TERM thereof,
ALCATEL furthermore grants to ITEX the [*] right, under the
INTELLECTUAL PROPERTY RIGHTS to [*], which shall not be less protective
of ALCATEL's rights and interests in the SOFTWARE as the model END-USER
LICENSE, attached hereto as Annex 5, copy of which shall be sent to
ALCATEL.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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2.5.4 Within the framework of this AGREEMENT and for the TERM thereof,
ALCATEL furthermore grants to ITEX the [*] right, under the
INTELLECTUAL PROPERTY RIGHTS to [*] which shall not be less protective
of ALCATEL's rights and interests in the SOFTWARE as the model END-USER
LICENSE, attached hereto as Annex 5, copy of which shall be sent to
ALCATEL.
2.5.5 In order to enable ITEX to achieve [*] as identified in Sections 2.5.3
and 2.5.4, and within the framework of this AGREEMENT and for the TERM
thereof, ALCATEL furthermore grants to ITEX the [*] to its AUTHORIZED
DISTRIBUTORS such rights as identified in Sections 2.5.3 and 2.5.4,
provided that such AUTHORIZED DISTRIBUTOR have assumed written
obligations similar to those provided for in Section 7.2 and Article
11, copy of which shall be sent to ALCATEL.
2.5.6 For the purposes set forth in the Sections 2.5.3, 2.5.4 and 2.5.5, ITEX
shall be entitled to provide a copy of the SOFTWARE or the ADSLC
SOFTWARE as applicable, to its AUTHORIZED DISTRIBUTORS, in object code
only, and solely for the purpose of providing, under the conditions of
the END-USER LICENSE, a copy of the SOFTWARE or the ADSLC SOFTWARE, in
object code only, to the END-USER.
2.6 GENERAL LICENSING PROVISIONS
2.6.1 Upon request of ITEX, the Parties will discuss a possible extension of
the license granted hereunder to components developed by ALCATEL or for
which ALCATEL is able to grant a license and which are used by ALCATEL
in its ADSL customer premises modem design.
2.6.2 Unless and to the extent as set forth herein, the rights granted herein
shall not encompass the right to grant sublicenses.
2.6.3 The rights granted under this Article 2 are solely granted for the TERM
of this AGREEMENT. Any extension beyond the TERM of the license and
rights granted under this AGREEMENT and the terms and conditions
thereof shall form the object of new negotiations between the Parties.
2.6.4 The rights granted hereunder are only granted to the extent
(i) as the TECHNICAL DOCUMENTATION is specified in Annex 1 and
(ii) ALCATEL owns the TECHNOLOGY and/or is entitled to grant licenses.
2.6.5 THIS ARTICLE 2 ENCOMPASSES THE FULL SCOPE OF RIGHTS GRANTED BY ALCATEL
TO ITEX AND THIS AGREEMENT DOES IN NO EVENT CONFER OR IMPLY THE GRANT
OR AGREEMENT TO GRANT ANY LICENSE OR OTHER RIGHTS WHATSOEVER, WHETHER
EXPRESSLY OR IMPLIED, TO ITEX, EXCEPT AS SPECIFICALLY SET FORTH IN THIS
ARTICLE 2.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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ARTICLE 3: MODALITIES OF RIGHTS GRANTED
3.1 ADDITIONAL ALCATEL INFORMATION
3.1.1 ALCATEL shall advise ITEX in writing of any MODIFICATIONS and
IMPROVEMENTS which are devised by ALCATEL and relate to the PRODUCT.
With respect to IMPROVEMENTS, ALCATEL shall provide ITEX with
respective TECHNICAL DOCUMENTATION at no additional cost necessary for
the manufacture of such IMPROVEMENTS. Any such IMPROVEMENTS shall be
included in the rights granted under Article 2 herein. The transfer of
MODIFICATIONS will be subject to a new technology transfer agreement
with ALCATEL, after the Parties have reached an agreement on all terms
and conditions, inclusive the price of such transfer.
3.1.2 Notwithstanding the above, any and all MODIFICATIONS ALCATEL may
design, develop and implement, and which reflect the evolution of the
T1.413 issue 2 standard and to the extent thereof, shall be included in
the rights granted under Article 2 herein.
ALCATEL shall provide ITEX with respective technical documentation at
no additional cost necessary for the manufacture of such MODIFICATIONS,
whereupon ITEX shall take such measures as appropriate to maintain or
restore compliance of the FUNCTIONALITY with the T1.413 standard as it
may have evolved.
3.1.3 Nothing in this AGREEMENT shall imply or be deemed to imply an
obligation for ALCATEL to engage in any design and/or development
activity relating to IMPROVEMENTS and/or MODIFICATIONS to the PRODUCT,
nor shall this AGREEMENT imply or be deemed to imply an obligation to
communicate, to grant rights to and/or to transfer to ITEX any
information received from third Parties, whether related to the
PRODUCT, the TECHNOLOGY or the T1.413 standard or not.
3.2 RIGHT TO DESIGN, DEVELOP AND IMPLEMENT MODIFICATIONS
3.2.1 The rights granted to ITEX under Clause 2 hereof encompass the right
for ITEX to [*] exclusively and solely to the extent that:
(i) such MODIFICATION is [*] for the purpose of designing and
developing the AFE, in accordance with Section 2.1.3 herein
above,
or
(ii) the T1.413 standard evolves in a way which makes the
FUNCTIONALITY as laid down in the TECHNOLOGY to become
non-compliant with the T1.413 standard, and ALCATEL fails or
refuses to design, develop and implement such MODIFICATIONS as
identified under Section 3.1.2 herein above, within such
reasonable time frame as the Parties shall agree upon.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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3.2.2 In order to enable ITEX to [*] as set forth herein above, ALCATEL will
disclose within a [*] time frame after such request of ITEX, the source
code and a documented API of the SOFTWARE in accordance with Section
7.1. It is understood by ITEX that ALCATEL will not give any technical
support to ITEX for the purpose of [*] other than as provided for in
Annex 3.
3.3 GRANT BACK OF RIGHTS TO ALCATEL
Any and all rights granted herein to ITEX to [*] shall be conditional upon:
3.3.1 ITEX promptly informing ALCATEL thereof and making available at
ALCATEL's request and [*] of ALCATEL a modified test program or the
relevant source code as the case may be, and any normally associated
technical information necessary for manufacture.
3.3.2 The granting by ITEX to ALCATEL and its AFFILIATED COMPANIES of a [*]
right, under any claims of any patents of any country obtained by ITEX
and under any other intellectual property rights at any time during the
term of the AGREEMENT to [*] IMPROVEMENTS or MODIFICATIONS. For the
avoidance of doubt, such rights to be granted to ALCATEL shall not
refer to any pre-AGREEMENT intellectual property rights owned by ITEX,
save to the extent such rights are necessary for the purpose of
exercising the rights granted to such IMPROVEMENTS or MODIFICATIONS.
3.3.3 In the event that ITEX does not intend to file in any country, or
intends to file in certain countries only during the TERM of this
AGREEMENT, application for patents for any of its inventions or those
of its employees as defined in the paragraph above, ITEX undertakes to
give ALCATEL timely advice of such intent and to assign or cause to be
assigned to ALCATEL, if so requested, for itself, the entire right,
title and interest in and to such inventions, for all countries in
which ITEX does not intend to file. All expenses relating to the filing
by ALCATEL will be borne by ALCATEL. In such case, ITEX will receive a
license for exploitation as per the terms and conditions of this
AGREEMENT, until expiry of the last to expire of any such patents filed
by ALCATEL in accordance herewith.
ARTICLE 4 - TECHNICAL DOCUMENTATION
4.1 ALCATEL shall make available to ITEX a complete set of TECHNICAL
DOCUMENTATION for the manufacture and sales of the PRODUCT as described
in Annex 1 and relating to the ADSLC, allowing for the design and
development of the AFE in accordance with Section 2.1.3 herein above,
and as described in Annex 1.3 The scope of TECHNOLOGY to be covered by
such TECHNICAL DOCUMENTATION is identified in Annex 1.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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4.2 The TECHNICAL DOCUMENTATION as described under Section 4.1 above shall
be made available in line with the IMPLEMENTATION SCHEDULE in Annex 2
hereto, always provided that all payments due in accordance with
Article 10 herein below have been duly effected.
4.3 No TECHNICAL DOCUMENTATION shall be supplied for those items of the
PRODUCT which are commercially available on the open market or which
are not made by ALCATEL. Likewise no TECHNICAL DOCUMENTATION shall be
made available for such parts of equipment which are not specifically
related to the PRODUCT, even though they are used in or in combination
with the PRODUCT.
4.4 No TECHNICAL DOCUMENTATION shall be made available by ALCATEL which is
specifically related to projects worked out by ALCATEL for other
customers than ITEX, such as but not limited to software packages and
test programs.
4.5 The TECHNICAL DOCUMENTATION specified in Annex 1 hereto shall consist
of the latest documentation as available at ALCATEL at the [*] The
TECHNICAL DOCUMENTATION shall be made available in [*] copies or any
other appropriate means. With respect to MODIFICATIONS and
IMPROVEMENTS, Article 7 shall apply.
4.6 The text appearing on the TECHNICAL DOCUMENTATION will be in the
English language.
4.7 All TECHNICAL DOCUMENTATION shall be supplied by ALCATEL DDP Santa
Clara according to INCOTERMS 1990 (ICC Publication No. 460). Each
package of the TECHNICAL DOCUMENTATION referred to in Section 3.1 shall
be accompanied by a list specifying those TECHNICAL DOCUMENTATION to be
contained herein. ITEX shall check the completeness of the packages
immediately after their receipt. If, through a fault of ALCATEL, any
such TECHNICAL DOCUMENTATION should be missing, ALCATEL shall at the
request of ITEX, deliver the missing TECHNICAL DOCUMENTATION without
undue delay provided the request is made within [*] days from the
receipt by ITEX of said TECHNICAL DOCUMENTATION.
4.8 All TECHNICAL DOCUMENTATION made available by ALCATEL to ITEX shall
remain the property of ALCATEL. ITEX shall use them only for exercising
its rights granted under this AGREEMENT. ITEX shall be entitled to
duplicate, copy, translate, alter or redraw the TECHNICAL DOCUMENTATION
only as far as necessary for the exercise of such rights. All
duplications, copies, translations, alterations and re-drawings shall
bear the same proprietary reference as the originals. In such
duplications, copies, translations, alterations and re-drawings,
ALCATEL shall have and reserves the same rights as those to the
TECHNICAL DOCUMENTATION originally made available by ALCATEL to ITEX.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
ARTICLE 5 - TECHNICAL ASSISTANCE
5.1 In order to assist ITEX in applying the TECHNOLOGY for the purposes set
forth in Article 2, including ITEX's testing of its SAM device for
interoperability with ALCATEL's current and future ADSL product line
ALCATEL shall render to ITEX technical assistance as specified in Annex
3 attached hereto at the times and for the periods outlined in Annex 3.
ALCATEL warrants, that the engineers and technicians rendering the
technical assistance have the skill and experience adequate to perform
the functions mentioned in Annex 3.
5.2 The technical assistance shall be rendered in English.
5.3 ALCATEL agrees that its personnel working in ITEX's organization shall
adhere to the working hours and working days in force in ITEX's
facilities, and ITEX agrees that its personnel working in ALCATEL's
organization shall adhere to the working hours and working days in
force in ALCATEL's facilities.
5.4 ITEX agrees that ALCATEL's personnel working in ITEX's premises will
remain employees of ALCATEL in every respect. ALCATEL's personnel shall
comply with all reasonable rules which ITEX imposes on such visitors.
ITEX shall use its best efforts to protect the safety and health of
ALCATEL's personnel.
ALCATEL agrees that ITEX's personnel working in ALCATEL's premises will
remain employees of ITEX in every respect. ITEX's personnel shall
comply with all reasonable rules which ALCATEL imposes on such
visitors. ALCATEL shall use its best efforts to protect the safety and
health of ITEX's personnel.
5.5 Either Party shall have the right, to request the other Party to
replace any of the other Party's personnel rendering or receiving
technical assistance in the first Party's premises whenever it is
proven that such personnel does not meet the professional standards
defined in Section 5.1 above or is essentially or continuously not
conforming with the terms laid down in this Article 5 or to the
reasonable rules and discipline in force at the first Party's
facilities.
5.6 ALCATEL is entitled at its discretion to remove and replace any of its
personnel rendering technical assistance in ITEX's premises. Any
reasonable possible step will be taken to ensure that the continuity of
technical assistance be not disturbed.
5.7 The Parties agree that the total scope of technical assistance to be
rendered by ALCATEL to ITEX hereunder is as specified in Annex 3.
Additional Technical Assistance or any expertise in other fields is
subject to an agreement between the Parties on the applicable terms and
conditions thereto, but at the corresponding rates as indicated in
Annex 3.
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<PAGE>
ARTICLE 6 - TRAINING
6.1 ALCATEL shall train sufficiently qualified employees of ITEX, as
specified in the Training Plan, included in Annex 4 in a facility of
ALCATEL. Such training shall be in accordance with the program and
conditions mentioned therein. The Parties agree that the total duration
of the training hereunder should not exceed the scope of training given
in Annex 4. Upon request of ITEX, ALCATEL and ITEX shall agree upon
additional training at the rates set forth in Annex 4 hereof. The
training shall be in English.
6.2 During their stay at ALCATEL, the trainees shall keep to the training
schedule as will be communicated to them by ALCATEL. ALCATEL warrants
that the courses will be given during working hours at ALCATEL.
6.3 ITEX agrees that during their stay at ALCATEL's premises, the trainees
shall remain in every respect employees of ITEX though reporting to and
being under the educational control of the training manager appointed
by ALCATEL. The trainees shall comply with all reasonable rules which
ALCATEL imposes on such visitors.
ITEX shall bear [*] expenses for such trainees, [*]
At the request of ALCATEL, ITEX shall, at [*] expense,
replace trainees who are no longer fit for the training because of
sickness or for any other reason. The trainee shall be given access to
the facilities, tools, documentation etc. as required pursuant to
Annex 4.
6.4 ITEX agrees, after completion of the training, to employ the trainees
in the discipline and function in and for which they were trained, or
provide correspondingly trained people prior to any departure of
trainees from their function.
ARTICLE 7 - SOFTWARE
7.1 The SOFTWARE will be supplied by ALCATEL in object code and includes a
documented API. The SOFTWARE CORE ELEMENTS and the ADSLC SOFTWARE shall
also be supplied in source code form, and as soon as practical
thereafter in documented form as well. The SOFTWARE shall be supplied
subject to the following conditions:
(i) the source code shall only be used by a limited number of
employees of ITEX who will sign a specific confidentiality
undertaking acceptable to ALCATEL;
(ii) the source code may not be disclosed, transferred in whole or
in part to any non-authorized employee or to any entity other
than ITEX and may not be used in joint development or any kind
of co-operation other than with ALCATEL;
(iii) all other confidentiality obligations, user restrictions,
intellectual property and other relevant provisions contained
elsewhere in the AGREEMENT applicable to CONFIDENTIAL
INFORMATION shall also apply to the source code;
(iv) Other than as specified for the ADSLC SOFTWARE in Section
2.5.1 (ii) hereof, the source code of the SOFTWARE may not be
used to carry out MODIFICATIONS of the PRODUCT other than
those
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
provided for in Section 3.2. In case the PRODUCT would be
modified otherwise than as permitted in accordance with
Article 2, any and all warranties and liabilities with respect
to the PRODUCT will lapse.
(v) no use of the source code of the SOFTWARE is allowed than such
use which is strictly necessary for the purposes of ITEX
exercising the rights granted in Clause 2 hereof.
7.2 The SOFTWARE, the object code as well as the source code and the API
made available by ALCATEL to ITEX shall remain subject to the
proprietary rights of ALCATEL and may not, otherwise than in accordance
with Section 2.5.6, be communicated by ITEX to any third party. ITEX
shall therefore use its [*] to prevent any unauthorized communication
thereof, securing the SOFTWARE by measures which will at least be
equal to the protection ITEX applies to its own proprietary
information, but in no event less than reasonable protective measures
as customary in the trade.
ITEX shall use the SOFTWARE only for such activities for which it has
been made available to ITEX hereunder. Subject only to Section 2.5.6,
ITEX shall not be entitled to reproduce, modify or supplement the
SOFTWARE or any part thereof and may only copy same for recording or
operational purposes or for backup purposes expressly permitted by
ALCATEL in writing.
ITEX shall cause the SOFTWARE and said copies to be marked so as to
indicate their confidential nature and to be used and stored in such a
manner that only those persons in the employ of ITEX whose duties
require the utilisation thereof will have access thereto. ITEX shall
instruct and obligate all such persons in accordance with this Article.
The provisions of this Section 7.2 will survive termination of the
AGREEMENT.
ARTICLE 8 - COPYRIGHT AND TRADEMARKS
8.1 ALCATEL shall make available to ITEX any technical information
published by ALCATEL for the PRODUCT. ITEX may use the contents thereof
for preparation of ITEX's own data sheets and application notes. Any
copying by ITEX of such documentation of ALCATEL shall include
ALCATEL's copyright notice or make explicit reference to it and shall
be submitted to ALCATEL's approval prior to publication.
8.2 Upon request of ALCATEL and subject to the entering by both Parties
into a trade mark/trade name agreement, ITEX shall refer with
reasonable prominence in all its quotation, invoices, catalogues and
sales literature relevant to the PRODUCT, AFE and/or DERIVATIVE as
being manufactured under license from ALCATEL, such references to be
agreed in advance with ALCATEL.
8.3 No right under any trademark or logo of ALCATEL is granted hereby, and
ITEX's products, data sheets and application notes shall not make any
reference to ALCATEL (except for the copyright notice, if and as
required by Section 8.1 above and except for the provisions in Section
8.2 and Section 8.4 hereinafter).
8.4 The PRODUCT purchased by ALCATEL from ITEX shall include a marking of
ALCATEL unless otherwise provided for herein. The marking
specifications thereof will be delivered by ALCATEL.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
Furthermore, ALCATEL may request to include on the PRODUCT a marking of
any third part of ALCATEL's choice. ITEX will grant such request. In
order for ITEX to provide this marking, ALCATEL shall supply a marking
specification not less than sixty (60) days prior to the first
scheduled shipment date of such marked PRODUCT.
ARTICLE 9 - COMPENSATION
9.1 INITIAL PAYMENTS
In consideration of the licenses granted under Clause 2, ITEX shall pay
to ALCATEL an amount [*] according to following schedule:
(i). [*] upon signature of the AGREEMENT;
(ii). [*] upon delivery of the TECHNICAL DOCUMENTATION and
completion of the training to be given by ALCATEL at ALCATEL's
Antwerp premises, in accordance with terms and conditions of
the AGREEMENT;
(iii). [*] upon the successful verification of manufacturing the
CHIPSET or on [*] whichever is earlier.
(iv). [*] upon delivery by ALCATEL to ITEX of a certificate stating
the interoperablity of a SAM with ALCATEL's DSLAM equipment or
on [*] whichever is earlier;
and together with the royalty payments in accordance with Sections
9.8.2 and 10.3:
(v). [*]
(vi). [*]
(vii). [*]
(viii). [*]
Each shall be due within [*] days after ITEX's receipt of a original of
the signed invoice from ALCATEL, to be issued upon completion of each
relevant milestone.
9.2 MINIMUM ROYALTIES
Furthermore, ITEX undertakes to pay to ALCATEL, on a [*], by means of
[*] instalments, [*] royalties as set forth in the following schedule:
(i). [*]
(ii). [*]
(iii). [*]
Running royalty amounts [*], if any, as referred to in this Section
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
9.3 ROYALTIES ON SALES OF PRODUCTS
For all [*] or any [*] part thereof by ITEX, ITEX shall pay to
ALCATEL, during the TERM of this AGREEMENT, royalties on [*] of the
PRODUCT or any [*] part thereof or as the case may be, the [*] of
the PRODUCT or any single part thereof otherwise disposed of by ITEX.
The royalty rate shall amount to the percentages set forth in the
following schedule:
<TABLE>
<CAPTION>
[*] PRODUCTS or CHIPSETS Royalty rate
sold by ITEX
<S> <C>
[*] [*]
[*] [*]
[*] [*]
[*] [*]
</TABLE>
For the purposes of this scheme, sales of either the SACHEM or the
ADSLC separately, shall be counted as the sale of [*] PRODUCT.
9.4 ROYALTIES ON SALES OF SAM
For all [*] by ITEX. ITEX shall pay to ALCATEL, during the TERM of this
AGREEMENT, royalties on [*] of the SAM or as the case may be, the [*]
of the SAM otherwise disposed of by ITEX. The royalty rate shall amount
to the percentages set forth in the following schedule:
<TABLE>
<CAPTION>
[*] SAM Sold by ITEX Royalty
<S> <C>
[*] [*]
[*] [*]
[*] [*]
[*] [*]
</TABLE>
9.5 ROYALTIES ON SALES OF DERIVATIVES
For all [*] by ITEX to third parties other than ALCATEL or its
AFFILIATED COMPANIES, the royalty rates stated in Section 9.3 shall
apply. The royalty rate, however, shall be applied only to a portion of
the [*] or [*] as applicable, [*] of the [*] that comprises
(i) the FUNCTIONALITY or
(ii) that portion of the FUNCTIONALITY attributable to the SACHEM
or ADSLC
(for purposes of the remainder of this Article 9, the preceding clauses
(i) and (ii) shall be collectively referred to as the "PRORATED
FUNCTIONALITY"). For example, if the silicon area of the DERIVATIVE
incorporating the [*] comprises [*] of the [*] surface area, the
royalty due to ALCATEL would be [*]. In no event however, shall the
royalty due per sale of a DERIVATIVE in accordance with this
paragraph 9.5 be calculated on [*] of the [*]
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
9.6 CALCULATION OF ROYALTIES USING THE [*]
If a PRODUCT or any single part thereof or SAM is supplied by ITEX
otherwise than by way of sale or is sold by ITEX to any person in any
circumstances where for any reason the price is not fixed on the basis
of a genuine commercial bargain at arm's length (e.g. on a sale to an
AFFILIATED COMPANY) the royalty payable shall be based on the [*] If a
PRODUCT or any [*] part thereof or SAM is either added to, or
incorporated into another product by ITEX, not itself being a PRODUCT,
a CHIPSET or a SAM, the [*] of such PRODUCT, or any [*] part thereof or
SAM shall be deemed to be the price which would reasonably be
obtainable by ITEX in an arm's length transaction if the PRODUCT, or
any [*] part thereof or SAM were sold separately.
9.7 SALES TO ALCATEL
In consideration of the licenses granted under Article 2, ITEX shall
sell the PRODUCT or any part thereof to ALCATEL, including ALCATEL's
AFFILIATED COMPANIES, for integration in ALCATEL's products, at a price
[*] to the [*] selling price for said device granted by ITEX to any of
its third party customers less [*] For the avoidance of doubt, no
royalties shall be due on sales to ALCATEL and/or its AFFILIATED
COMPANIES in accordance with this Section.
9.8 ROYALTY STATEMENTS
9.8.1 ITEX shall send to the address stated below royalty statements showing:
(i) the [*] of the PRODUCTS, SAM's and DERIVATIVES made by ITEX in
the accounting period;
(ii) the royalty bearing [*] according to Sections 9.3, 9.4 and 9.5
in the accounting period, including sales for which a [*]
is to be taken into account;
(iii) the exchange rates applied according to Section 9.8.3 herein
below;
(iv) the royalty payment due for the accounting period.
9.8.2 The royalty statements shall be made within [*] days after the end of
each [*] accounting period ending on [*] and [*] of each AGREEMENT
YEAR. A last royalty statement shall be due [*] days upon expiration of
the TERM.
9.8.3 For the purposes of calculating the royalty payments, all [*] invoiced
in currencies other than EURO shall be converted into EURO the average
buy/sell closing exchange rate of the National Bank of Belgium on the
last banking day of the respective accounting period.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
ARTICLE 10 - PAYMENT TERMS
10.1 All payments to be made by ITEX to ALCATEL as set forth in Section 9.1
shall be effected in US Dollar to the following Bank Account of ALCATEL
BELL:
[*]
[*]
[*]
All other payments to be made by ITEX shall be effected in EURO to the
following bank account of ALCATEL BELL:
[*]
[*]
[*]
or to such other bank account as may be communicated to ITEX on the
relevant Invoice(s). Should, at any point in time where payments in
EURO are due in accordance with this Section, EURO not hold legal
tender in Belgium, the currency then holding legal tender in Belgium
shall be used in lieu of the EURO. All banking charges incurred inside
of the US and outside Belgium shall be [*] by ITEX and the banking
charges incurred inside Belgium shall be [*] by ALCATEL.
10.2 Within [*] days upon lapse of the dates mentioned in Section 9.1,
payment shall be made of the respective fees defined therein.
10.3 Royalty payments shall be made [*] days after the end of each
accounting period referred to in Section 9.8.2 during the TERM. A last
royalty payment shall be due [*] days upon expiration of the TERM.
10.4 ITEX shall keep for such period as may be required under the applicable
law but not less than [*] years after the date of submission of each
royalty statement referred to in Section 9.8 true and accurate records,
files and books of account kept in USD containing all the data
reasonably required for the full computation and verification of ITEX's
[*] of the PRODUCT and respective royalties to be paid. ITEX shall
permit an independent accounting firm or auditor nominated by ALCATEL
on reasonable notice within the business hours during the TERM and at
any time or times during the [*] years following the TERM to inspect
and audit the said books and accounts and records to take copies
thereof or make extracts therefrom for the sole purpose of verifying
royalty payments and royalty statements due or made out within the
framework hereof. If on any such inspection, a discrepancy is found
between ITEX's [*] for the twelve month period preceding such
inspection as reported to ALCATEL in the statements supplied by ITEX
under Section 9.8 and the actual [*] and/or [*] of ITEX for the same
period as determined in the course of any such inspection and audit
and if such discrepancy is found to be superior to [*] of the actual
[*] and/or [*] of, ITEX shall (without prejudice to any other rights
which ALCATEL may have ) reimburse ALCATEL for [*] cost incurred in
conducting such inspection and audit including [*] of the persons
conducting such inspection and audit and the fees of any person
engaged by ALCATEL to conduct such inspection and audit.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
10.5 In case of late payment ALCATEL will be entitled to add pro rata
temporis, as from the due date of payment till effective payment, a [*]
interest equal to the BIBOR (Brussels Interbank Offered Rate) on [*]
months increased with [*]
ARTICLE 11 - CONFIDENTIALITY
All CONFIDENTIAL INFORMATION exchanged between the Parties within the framework
of this AGREEMENT, shall be subject to such confidentiality undertakings as set
forth in the Non Disclosure Agreement executed between the Parties on the same
date as this AGREEMENT, attached hereto as Annex 6.
ARTICLE 12 - OTHER OBLIGATIONS
12.1 ITEX will develop and process prototypes in accordance with the
milestones set out in the IMPLEMENTATION SCHEDULE attached hereto as
Annex 2. ITEX will manufacture engineering samples of the PRODUCT. Upon
request of ALCATEL, ITEX will enter into a supply agreement with
ALCATEL further specifying the terms and conditions of supply by ITEX
to ALCATEL of the PRODUCT, or part thereof manufactured by ITEX
hereunder which are not yet specified herein.
12.2 The Parties will closely co-operate in the various standardization
committees set up all over the world to promote and complete the ADSL
standards.
12.3 ITEX will utilize its sales and marketing networks world-wide to
promote the sales of the PRODUCT. In order to allow ITEX to familiarize
its sales and marketing networks with the PRODUCT and to promote the
PRODUCT before ITEX's own manufacturing thereof may be started, ALCATEL
will supply the PRODUCT to ITEX under reasonable terms and conditions
to be mutually agreed upon.
12.4 ITEX will use its [*] to produce the PRODUCT, and/or parts thereof in
sufficient volume to meet its customers and ALCATEL's demand therefor.
12.5 ITEX further undertakes during the TERM:
(i) that it shall not use the TECHNOLOGY and ALCATEL's
IMPROVEMENTS and/or MODIFICATIONS for any purpose except as
expressly licensed in accordance with the terms of this
AGREEMENT in the plant of ITEX or the pertinent premises of a
customer;
(ii) that it shall not act as agent of ALCATEL nor make any
representation or give any warranty on behalf of ALCATEL;
(iii) that it shall not during the term of this AGREEMENT for any
reason, be directly or indirectly concerned in the
manufacture, distribution, sale or other supply of any
manufactured goods which by reason of their properties and
performance are commercially competitive with the PRODUCT. For
the avoidance of doubt, this section 12.5(iii) shall not
restrict ITEX in the exercise of the rights granted to ITEX in
Section 2.1.3 hereof in connection with the SAM.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
12.6 ITEX shall indemnify ALCATEL, its directors and employees against all
damages and costs in favour of a third party that ALCATEL, its
directors and employees or any of them may incur in consequence of any
claim (whether in tort or otherwise) in respect of the death or
personal injury of or to any person and/or any loss or damage to any
property and/or any other loss or damage wholly or partially caused
(whether directly or indirectly) by reason of ITEX manufacturing,
selling, supplying, offering for sale, offering to supply, agreeing to
sell and/or agreeing to supply any PRODUCT, or any part thereof which:
(i) is not of merchantable quality; or
(ii) is defective in any respect; or
(iii) is or may be injurious to the health or safety of any person
using or handling the PRODUCT, or part thereof for any
reasonably foreseeable purpose; or
(iv) is or may be injurious to the property of any person referred
to in Section 12.6.
ITEX represents that it shall at all times during the TERM of this
AGREEMENT maintain in force such policies of insurance with a
reputable insurance company as may be required to cover the risk of
any one claim and for each and every claim against any damages,
liabilities, claims and costs arising from any of the causes, events or
circumstances referred to herein above. ITEX shall provide copy to
ALCATEL of any and all relevant insurance policies, and will notify
ALCATEL of any and all expiry, termination, renewal or change occurring
in its relevant insurance portfolio.
12.7 A Steering Committee with [*] from each Party will be established and
will meet as the Parties deem required, in order to review:
(i) the evolution of market requirements;
(ii) the possible corrective actions to be proposed by ITEX to
ALCATEL for the improvement of the PRODUCT in terms of
features, performances, manufacturability and costs;
(iii) all issues relating to new market penetration for the PRODUCT,
as well as other issues of common interest.
12.8 Although ITEX is under no obligation to register shares or engage in an
IPO, and ITEX makes no promises that it will do so, in the event that
ITEX successfully receives all requisite approval for a public offering
of its shares, ITEX will exert [*] to convince its underwriters to
offer ALCATEL the opportunity to purchase in the offering [*] of the
outstanding shares of ITEX (calculated on a post offering basis).
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
23/30
<PAGE>
ARTICLE 13 - WARRANTY AND LIABILITIES
13.1 The TECHNICAL DOCUMENTATION related to the TECHNOLOGY shall correspond
to the latest documentation used by ALCATEL for the respective purposes
at the date of the actual transfer. Should any such TECHNICAL
DOCUMENTATION supplied hereunder contain an error, ALCATEL, after being
notified thereof, shall replace such erroneous TECHNICAL DOCUMENTATION
by a correct one without undue delay. ITEX's claim to replacement of
erroneous TECHNICAL DOCUMENTATION shall be limited to a period of three
(3) months from the handing over or dispatch of the respective package.
13.2 The technical assistance and training pursuant to Articles 5 and 6
shall be provided by qualified and experienced personnel with the same
care as that normally employed at ALCATEL in its own affairs.
13.3 ITEX agrees that, in the event that any third party were to make a
claim against ITEX of infringement of any of the ENUMERATED PATENTS, it
shall be ITEX's sole responsibility to exercise reasonable commercial
efforts to secure any licenses under such ENUMERATED PATENTS that ITEX
may deem necessary. For purposes of this paragraph, the term
"ENUMERATED PATENTS" shall mean: (i) any patents issued as of the
EFFECTIVE DATE to Amati Communications Corporation; (ii) U.S. patent
number 4,438,511, assigned to Telebit Corporation; (iii) U.S. patent
number 4,946,800, assigned to Mr. Chou Li; and (iv) U.S. patent number
4,713,817 WEI, US patent number 4,755,998 and US patent number
4,597,090, all three assigned to Motorola, Inc.
13.4 ALCATEL REPRESENTS AND WARRANTS THAT IT HAS MADE DILIGENT INQUIRY AS TO
WHETHER THE TECHNOLOGY INFRINGES THE INTELLECTUAL PROPERTY RIGHTS OF
ANY PARTIES AND HAS DETERMINED THAT AS OF THIS DATE, TO THE BEST OF ITS
KNOWLEDGE, IT IS NOT AWARE OF SUCH INFRINGEMENT. HOWEVER, ALCATEL
CANNOT GUARANTEE THE ABSENCE OF INFRINGEMENT OF SUCH THIRD PARTY RIGHTS
AND IN NO EVENT SHALL ALCATEL BE LIABLE TO ITEX FOR FAILURE TO DEFEND,
PROTECT OR INDEMNIFY AGAINST INFRINGEMENT, CLAIMS OF INFRINGEMENT OR
MISAPPROPRIATION OF ANY PATENT OR PROPRIETARY RIGHT OWNED AND/OR
CLAIMED TO BE OWNED BY ANY THIRD PARTY. Diligent inquiry used herein
means that ALCATEL has made searches in the USPTO Patent Databases (on
Internet), in the IBM US Patent Database (on Internet) and in the
Derwent Patent Data Base using the keywords "Asymmetric AND Digital",
"multicarrier" and "discrete AND multitone.
13.4 ALCATEL BELL represents that it has the right to grant to ITEX such
rights as set forth in Clause 2 herein above with regard to the
INTELLECTUAL PROPERTY RIGHTS owned by the ALCATEL ALSTHOM group of
companies.
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<PAGE>
13.5 This Article 13 sets forth ALCATEL's entire liability and ITEX's entire
remedies with respect to infringement of intellectual property rights
of any kind of a third party arising out of ITEX's actions under this
AGREEMENT. The liability for any loss or damage, whether direct,
indirect, consequential or incidental, arising out of or in connection
with the manufacturing and sale of the LICENSED PRODUCTS by ITEX shall
rest with ITEX.
13.6 ITEX represents that it is not presently controlled (as defined above
in this AGREEMENT) by United Microelectronics Corporation or any other
non-signatory entity. In the event ITEX desires to change control of
the company, and wishes to maintain the current AGREEMENT in force, it
must first obtain the consent of ALCATEL as set forth in Section 15.3
hereof.
13.7 ITEX CANNOT GUARANTEE THE ABSENCE OF INFRINGEMENT OF THIRD PARTY RIGHTS
AND IN NO EVENT SHALL ITEX BE LIABLE TO ALCATEL FOR FAILURE TO DEFEND,
PROTECT OR INDEMNIFY AGAINST INFRINGEMENT, CLAIMS OF INFRINGEMENT OR
MISAPPROPRIATION OF ANY PATENT OR PROPRIETARY RIGHT OWNED AND/OR
CLAIMED TO BE OWNED BY ANY THIRD PARTY IN ANY TECHNOLOGY LICENSED BY
ITEX TO ALCATEL.
ARTICLE 14 - TAXES AND DUTIES
All payments as set forth in this AGREEMENT shall be inclusive of [*]. Any and
all taxes, levies, fiscal or other withholdings due outside the [*] are hereby
explicitly excluded from the amounts set forth in this AGREEMENT, and ITEX shall
bear or reimburse to ALCATEL and all such taxes, levies, fiscal or other
withholdings falling due outside the [*].
ARTICLE 15 - TERM AND TERMINATION
15.1 This AGREEMENT shall become effective on its date of signature written
above and shall remain in force for a period of ten (10) years from the
EFFECTIVE DATE.
15.2 Notwithstanding the provisions of Section 15.1 and forthwith upon the
occurrence of any of the following events, a Party may without
prejudice to any other right or remedy by written notice to the other
Party terminate this AGREEMENT with immediate effect:
(i) if the other Party fails to pay when due any sum payable under
this AGREEMENT;
(ii) if the other Party commits a material breach of any material
obligation under this AGREEMENT, including a breach of any
representation or warranty, and fails to remedy it within [*]
days of receipt of notice from the first Party of such breach;
a breach of any obligation contained in Section 7.2 or Clause
11 will be considered a material breach of a material
obligation; or
(iii) if the other Party enters into liquidation whether compulsory
or voluntary (other than for the purposes of amalgamation or
reconstruction approved in writing by the former Party) or has
a receiver or administrative receiver or administrator or
similar official appointed over all or any of its assets and
is not discharged within a period of [*] days; or
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
25/30
<PAGE>
(iv) if the other Party is declared insolvent or makes any general
composition with its creditors; or
(v) if the other Party ceases or threatens to cease to carry on
the whole or any material part of its business and any such
cessation, in the opinion of the former Party would be likely
to affect adversely the other party's ability to observe and
perform properly and punctually all or any of its obligations
under or pursuant to this AGREEMENT;
15.3 Notwithstanding the provisions of Section 15.1 and forthwith upon the
occurrence of any of the following events, ALCATEL may without
prejudice to any other right or remedy by written notice to ITEX
terminate this AGREEMENT with immediate effect if:
(i) ITEX does not commence to make sales of the PRODUCT in
reasonably commercial quantities within [*] months following
the EFFECTIVE DATE; or
(ii) control (as defined in SUBSIDIARIES) or the power to take
control of ITEX is acquired by any person or group of
associates not having control of ITEX at the date of this
AGREEMENT unless such event occurs with the prior consent in
writing of ALCATEL.
(iii) ITEX challenges the validity or proprietorship of the
registered INTELLECTUAL PROPERTY RIGHTS or does any act or
thing which might impair the rights of ALCATEL in the
TECHNOLOGY or represents that it has any rights in the
TECHNOLOGY other than under and by virtue of this AGREEMENT.
This section does not cover any lawful applications (or
acquisitions) by ITEX of (or for) patent rights either prior
to and/or during the term of this AGREEMENT.
15.4 Termination of this AGREEMENT shall not release either of the Parties
from any other liability which at the time of termination has already
accrued to the other Party, nor affect in any way the survival of any
other right, duty or obligation of the Parties which is expressly
stated elsewhere in this AGREEMENT to survive such termination.
15.5 ITEX undertakes with ALCATEL that upon the expiration of the TERM or
sooner determination of this AGREEMENT, ITEX shall at its own cost
promptly return to ALCATEL or otherwise dispose of as ALCATEL may
instruct all TECHNICAL DOCUMENTATION and all other documentation and
papers supplied to ITEX by ALCATEL and all copies thereof and notes and
extracts taken therefrom by ITEX and shall supply to ALCATEL within [*]
days after the expiration of the TERM or sooner determination of this
AGREEMENT a certificate signed by [*] directors of ITEX as to the
destruction of all such materials.
ARTICLE 16 - SOLICITING EMPLOYEES
ITEX undertakes with ALCATEL that during the TERM it will not directly or
indirectly solicit or endeavor to entice away, offer employment to or employ, or
engage as an independent contractor (other than staff who have applied for
genuine vacancies advertised by the other) any person who is employed or engaged
by ALCATEL, who is employed or engaged or was employed by or engaged by ALCATEL
during the preceding [*] months.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
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<PAGE>
ARTICLE 17 - FORCE MAJEURE
17.1 Force Majeure shall mean all events which are beyond the control of the
Parties to this AGREEMENT, and which are unforeseen, unavoidable or
insurmountable, and which arise after the EFFECTIVE DATE and which
prevent total or partial performance by either Party. Such events shall
include hostilities (whether war be declared or not), embargo or
blockade, failure or delay in transportation, labor disputes involving
complete or partial stoppages, riot, acts done in compliance with
governmental request, earthquakes, explosion, typhoons, flood, fire,
war or any other instances which cannot be foreseen, prevented or
controlled, including instances which are accepted as force majeure in
general international commercial practice.
17.2 If an event of Force Majeure occurs, a Party's contractual obligations
affected by such an event under this AGREEMENT shall be suspended
during the period of delay caused by the Force Majeure and shall be
automatically extended, without penalty, for a period at least equal to
such suspension.
17.3 The Party claiming Force Majeure shall promptly inform the other Party
in writing and shall furnish within thirty (30) days thereafter
sufficient proof of the occurrence and duration of such Force Majeure.
The Party claiming Force Majeure shall also use all reasonable
endeavors to terminate the Force Majeure.
17.4 In the event of Force Majeure, the Parties shall immediately consult
with each other in order to find an equitable solution and shall use
all reasonable endeavors to minimize the consequences of such Force
Majeure.
17.5 This AGREEMENT may be terminated by the Party who is being prejudiced
by the non-performance of the Party claiming the Force Majeure excuse,
by giving written notice of termination to such non-performing Party,
at any time after the Force Majeure event has continued to be in effect
for more than six (6) months from the date on which the excused
performance was originally due hereunder. The non-performing Party
shall however be obligated to exercise its best reasonable efforts to
overcome the effects of Force Majeure during the pendency thereof by
means of substitute performance or any other method which will mitigate
the loss or damage that could result to the other Party from such
non-performance, provided such substitute performance does not result
in financial hardship to the Party involved therein.
ARTICLE 18- MANUFACTURE DISCONTINUANCE
In the event of ITEX's decision to discontinue manufacture of the PRODUCT, ITEX
shall give ALCATEL [*] months prior notice and accept orders from ALCATEL
sufficient to cover its needs for a life time buy to be scheduled for delivery
up to [*] months after the above mentioned [*] months period. Should needs
specified by ALCATEL within the framework of this Article 18 be incompatible
with such reasonable availability of manufacturing capacity for the PRODUCT,
ITEX shall immediately give written notification thereof to ALCATEL, and upon
such notification, the PARTIES shall, at the initiative of either Party, meet in
order to agree in good faith on such arrangements as may be required by their
respective commercial interests.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
27/30
<PAGE>
ARTICLE 19 - GOVERNING LAW AND SETTLEMENT OF
DISPUTES
19.1 This Agreement shall be construed in accordance with and governed by
the Law of Belgium (without regard to its conflicts of law rules),
provided however, that if any provision of Belgian law purports to
change any material term hereunder, to impose any material obligation,
duty, warranty or burden on a party beyond, contrary to, and/or in
addition to those expressly stated herein, then all aspects of this
Agreement so affected shall not be subject to such law, and instead, to
the extent necessary or appropriate to give effect to and/or to
implement the express terms of this Agreement, this Agreement shall be
governed solely and exclusively by the law of the State of California.
19.2 All disputes arising out of and/or in connection with this Agreement
shall be finally settled by arbitration in accordance with the Rules of
the London Court of International Arbitration. The arbitration will be
held in London, England, and will be before a single arbitrator
designated in conformity with the said Rules. The arbitrator (i) shall
be neutral and without business affiliation with either party; (ii)
shall not be a citizen or resident of the United States nor Belgium;
(iii) shall have reasonable expertise in business and financial aspects
of the computer and electronics industry; and (iv) shall make detailed
and complete findings of fact and conclusions of law in writing. The
arbitration proceedings shall be held entirely in the English language
and shall be subject to such conditions and precautions as may be
appropriate to protect the confidential information of each party in a
manner consistent with and at least as secure as the provisions of this
Agreement. In interpreting this Agreement, the arbitrator shall take
into account usage's in the computer electronics and software trade,
particularly with a view to interpreting the confidentiality and trade
secret provisions of this contract in strict terms.
19.3 Judgment upon the arbitration award rendered may be entered in any
Court having jurisdiction thereof, of having jurisdiction over either
of the parties or their assets, or application may be made to such
Court for a juridical acceptance of the award and an order of
enforcement, as the case may be.
19.4 Nothing in this Agreement shall be deemed as preventing either party
from seeking injunctive relief (or any other provisional remedy) from
any court having jurisdiction over the parties and the subject matter
of the dispute as necessary to protect either party's name, proprietary
and/or intellectual property information, trade secrets, know-how or
any other proprietary rights
ARTICLE 20 - MISCELLANEOUS PROVISIONS
20.1 If any Party fails to give notice or enforce any right under this
AGREEMENT, such failure shall not constitute a waiver of the right,
unless such waiver is contained in written notice signed by the duly
authorized representatives of the waiving Party. If a Party waives its
right in writing, such waiver shall not constitute a waiver of any
other right or of a subsequent violation of the same right.
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<PAGE>
20.2 ITEX shall be entitled at any time to subcontract the performance of
any of its obligations under this AGREEMENT to its SUBSIDIARIES,
provided that such SUBSIDIARIES will comply with all applicable
obligations undertaken by ITEX herein and that ITEX will remain liable
for the performance of such subcontracted obligations towards ALCATEL.
ITEX may not nor may purport to assign, transfer, charge or part with
all or any of its rights and/or obligations under this AGREEMENT or
sub-contract the performance of any of its obligations under this
AGREEMENT without the prior written consent of ALCATEL. Such consent,
however, shall not be necessary for activities and services normally
sub-contracted by ITEX in connection with the design, manufacturing or
testing of its products (or the processes for making the same),
including but not limited to circuit design, simulation, verification,
mask making, testing, and similarly related activities, to the extent
that such activities do not require such subcontractor to be given
access to the TECHNOLOGY or any part thereof.
20.3 This AGREEMENT is made for the benefit of ITEX and ALCATEL and their
respective lawful successors and assignees and is legally binding on
them. This AGREEMENT may not be changed orally, but only by a written
instrument signed by ITEX and ALCATEL.
20.4 The invalidity of any provision of this AGREEMENT shall not affect the
validity of any other provision of this AGREEMENT.
20.5 This AGREEMENT and the Annexes hereto attached to this AGREEMENT
constitute the entire agreement between ITEX and ALCATEL with respect
to the subject matter of this AGREEMENT and supersede all prior
discussions, negotiations and agreements, either oral or written,
between them. In the event of any conflict between the terms and
provisions of this AGREEMENT and its Annexes, the terms and provisions
of this AGREEMENT shall prevail.
20.6 ALCATEL's liability Under this AGREEMENT and its implementation are
fully described in the present AGREEMENT and are limited to the extent
as mentioned in this AGREEMENT.
REGARDLESS WHETHER ANY REMEDY SET FORTH HEREIN FAILS OF ITS
ESSENTIAL PURPOSE OR OTHERWISE, IN NO EVENT SHALL ALCATEL BE LIABLE
FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES OF
ANY KIND, EVEN IF ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH
DAMAGES. ALCATEL'S ENTIRE CUMULATIVE LIABILITY UNDER THIS
AGREEMENT, FROM ALL CAUSES OF ACTION OF ANY TYPE, SHALL BE LIMITED
TO THE AMOUNTS RECEIVED FROM ITEX HEREUNDER WITH A MAXIMUM OF [*]
REGARDLESS WHETHER ANY REMEDY SET FORTH HEREIN FAILS OF ITS
ESSENTIAL PURPOSE OR OTHERWISE, AND SUBJECT TO SUCH
INDEMNIFICATIONS AS MAY BE DUE IN ACCORDANCE WITH SECTION 12.6
HEREOF, WHICH IS SPECIFICALLY EXCLUDED FROM THE PRESENT LIMITATION,
IN NO EVENT SHALL ITEX BE LIABLE RO ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY KIND, EVEN IF ADVISED IN
ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.
* Certain Information in this exhibit has been omitted and filed separately
with the commission. Confidential treatment has been requested with respect
to the omitted portions under 17.C.F.R. section 200.80.80(b)(4), 200.83 and
230.406.
29/30
<PAGE>
20.7 Any notice or written communication provided for in this AGREEMENT by
either Party to the other, including but not limited to any and all
offers, writings, or notices to be given hereunder, shall be made in
English by facsimile, and confirmed by courier service delivered
letter, promptly transmitted or addressed to the appropriate Party. The
date of receipt of a notice or communication hereunder shall be deemed
to be twelve (12) days after the letter is given to the courier service
in the case of a courier service delivered letter and two (2) working
days after dispatch in the case of a facsimile. All notices and
communications shall be sent to the appropriate address set forth
below, until the same is changed by notice given in writing to the
other Party or the Parties:
ITEX:
2710 Walsh Avenue
Santa Clara, California CA 95051, USA
Facsimile No: 408-980-9214
Attention: Daniel Chen, President
ALCATEL:
Francis Wellesplein 1
B-2018 Antwerpen, BELGIUM
Facsimile No: +32 (0)3 240 99 99
Attention: Marc Hermans, Alliance Director
copy to: Alcatel Bell Legal Dept.
20.8 The Annexes 1 through 6 hereto are made an integral part of this
AGREEMENT and are equally binding with these Articles 1 to 20, unless
stated otherwise in the Annexes. These Annexes may be modified by
mutual written agreement of the Parties.
20.9 Neither this AGREEMENT or the Annexes hereto constitute either Party as
the legal representative or agent of the other Party for any purpose
whatsoever. Neither Party shall have the right or authority to assume,
create or incur any liability or obligation of any kind, express or
implied on behalf of the other Party.
IN WITNESS WHEREOF, each of the Parties hereto have caused this AGREEMENT to be
executed in Antwerp, Belgium by their duly authorized representatives on the
date first set forth above.
FOR ALCATEL FOR ITEX
----------------- ---------------
/s/ Martin De Prycker SIGNATURE /s/ Daniel Chen
--------------------- ---------------
MARTIN DE PRYCKER NAME DANIEL CHEN
VICE PRESIDENT AND
GENERAL MANAGER TITLE PRESIDENT AND CEO
INTERNET ACCESS AND
ADSL
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<PAGE>
ANNEXES 1 THROUGH 4 IN THIS EXHIBIT HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>
ANNEX 5 TO THE LICENSE AGREEMENT:
MODEL END-USER LICENSE
--------------------------------------------------------------------------------
ALCATEL
SOFTWARE LICENSE AGREEMENT
CAREFULLY READ ALL OF THE TERMS AND CONDITIONS
OF THIS SOFTWARE LICENSE AGREEMENT
BEFORE YOU USE THE SOFTWARE [add name and release number].
THIS SOFTWARE LICENSE AGREEMENT (THIS "AGREEMENT") IS A LEGALLY BINDING
AGREEMENT BETWEEN THE PURCHASER OF THE SOFTWARE (THE "PURCHASER") AND ALCATEL
BELL N.V. ("ALCATEL"). BY USING, INSTALLING OR CLICKING THE ACCEPTANCE BUTTON OF
THE SOFTWARE (AS UPDATED BY ALCATEL FROM TIME TO TIME, THE "SOFTWARE") THE
PURCHASER IS ACCEPTING TO BE BOUND BY ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT.
1. GRANT OF LICENSE. The Software and all accompanying documentation (the
"Documentation) are licensed to the Purchaser under the terms and conditions set
forth in this Agreement. Subject to such terms and conditions, Alcatel hereby
grants to the Purchaser a non-exclusive, nontransferable right to use the
Software and the Documentation. The Purchaser may use the Software on a single
computer located in the country where the Purchaser purchased the Software or
any other country to which the Software is legally exported. The Software is in
use by a single computer when the Software is installed into the permanent or
temporary memory of that computer. The Software is in use by multiple computers
when (a) the Software is installed on a single computer and at least one copy of
the Software is installed on at least one other computer or (b) the Software is
installed on the storage device of a network server for the purpose of
distribution to at least two other computers. When the Software is in use by
multiple computers, the Purchaser must purchase a separate license for the
Software for each of those computers unless the Purchaser has purchased a
license allowing explicitly use for multiple computers in which case the
Purchaser may use the Software on the agreed upon number of computers.
2. LIMITATIONS ON USE. The Purchaser will not modify or translate the Software
or the Documentation without the prior written consent of Alcatel. The Purchaser
will not reverse engineer, decompile, disassemble or otherwise attempt to
recreate the source code of the Software. The Purchaser will not separate from
the Software any of the component parts of the Software.
3. LIMITATIONS ON DUPLICATION. The Purchaser will not make any copies of the
Software or the Documentation; provided, however, that the Purchaser may make
one complete copy of the Software or the Documentation solely for backup
purposes if such copy of the Software or Documentation contains the notation
"Copyright Alcatel". The Purchaser will not print any on-line or electronic
documentation other than solely for servicing, operating or training purposes.
<PAGE>
4. LIMITATIONS ON TRANSFER. The Purchaser will not sell, rent, lease or
otherwise transfer any or all of the Software, the Documentation or any copies
thereof, without the prior written consent of Alcatel. The Purchaser will not
sublicense, assign, delegate, rent, lease or otherwise transfer any or all of
its rights under this Agreement.
5. OWNERSHIP AND COPYRIGHT. The Purchaser has not acquired, by virtue of this
Agreement, any right of ownership in or to the Software, the Documentation or
any related patent, copyright, trademark or other intellectual property right.
By virtue of this Agreement, the Purchaser has acquired a right of ownership
solely in and to the physical media on which the Software and the Documentation
are recorded or fixed. Alcatel, its licensors and their respective licensors
retain all right, title and interest in and to the Software, the Documentation
and any and all copies thereof, except for the rights expressly granted to the
Purchaser pursuant to this Agreement and as may be granted by Alcatel from time
to time. Such right, title and interest of Alcatel is, and such right, title and
interest of Alcatel's licensors and their respective licensors may be, protected
by applicable copyright laws and international treaties.
6. TERM AND TERMINATION. The term of this Agreement commences upon the
first use by the Purchaser of the Software and expires upon the termination
of this Agreement. If the Purchaser fails to comply with any of the terms and
conditions set forth in this Agreement, then (a) this Agreement will
automatically terminate, (b) notwithstanding such termination, the Purchaser
will (i) destroy or permanently erase the Software and any and all copies
thereof and (ii) destroy the Documentation and any and all copies thereof,
and (c) Alcatel may exercise any or all remedies available to it under
applicable laws. In addition, the Purchaser may terminate this Agreement at
any time by (a) destroying or permanently erasing the Software and any and
all copies thereof and (b) destroying the Documentation and any and all
copies thereof.
7. NO WARRANTIES. THE SOFTWARE IS MADE AVAILABLE TO THE PURCHASER ON AN "AS
IS" BASIS WITHOUT ANY EXPRESS, IMPLIED OR STATUTORY WARRANTIES WHATSOEVER,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
Some jurisdictions may not permit the exclusion of implied warranties; so the
above exclusion may not apply to the Purchaser. The Purchaser may have other
rights that vary from jurisdiction to jurisdiction.
Alcatel may from time to time, in its sole discretion, make available to the
Purchaser, with or without charge, updates to the Software or the
Documentation. No such action will create any warranty obligation on the part of
Alcatel.
8. LIMITATION OF REMEDIES. IN NO EVENT WILL ALCATEL, ITS LICENSORS OR THEIR
RESPECTIVE LICENSORS BE LIABLE FOR ANY DAMAGES OR OTHER RELIEF WHATSOEVER
ARISING OUT OF PURCHASER'S USE OR INABILITY TO USE THE SOFTWARE OR THE
DOCUMENTATION, INCLUDING WITHOUT LIMITATION LOST PROFITS, LOST BUSINESS OR LOST
OPPORTUNITY OR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL OR EXEMPLARY DAMAGES OR
LEGAL FEES ARISING OUT OF SUCH USE OR INABILITY TO USE THE SOFTWARE, EVEN IF
ALCATEL, ITS LICENSORS OR THEIR RESPECTIVE LICENSORS HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
<PAGE>
Some jurisdictions may not permit the exclusion or limitation of incidental
or consequential damages; so the above exclusion or limitation may not apply
to the Purchaser.
9. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of Belgium, without giving effect to the conflicts
of laws principles thereof.
10. OTHER TERMS. Additional or different terms and conditions may be
applicable to the Purchaser if so agreed in writing by the vendor of the
Software, Alcatel, its licensors and/or their respective licensors.
<PAGE>
ANNEX 6 TO THE LICENSE AGREEMENT:
NON DISCLOSURE AGREEMENT
--------------------------------------------------------------------------------
This Agreement made of as of the 20th day of April, 1998,
BY and BETWEEN
ALCATEL BELL N.V., a company organized and existing under the laws of Belgium,
having its registered office at 1, Francis Wellesplein, 2018 Antwerp, Belgium,
acting on its own behalf and on behalf of all the companies belonging to the
ALCATEL group ("ALCATEL"),
AND
INTEGRATED TELECOM EXPRESS, INC., a corporation organised and existing under the
laws of California, having its principal office at 2710 Walsh Avenue, Santa
Clara, California CA 95051, (hereinafter referred to as "ITEX"),
WHEREAS, ALCATEL and ITEX (hereinafter referred to as the "Parties") have
executed between them, on the same date as the present Non-Disclosure Agreement,
an Individual Agreement on the Licensing of the ADSL Chipset (hereinafter the
"AGREEMENT");
AND WHEREAS, the carrying out of the AGREEMENT will involve the written or
verbal disclosure and communication to each other of CONFIDENTIAL INFORMATION,
as defined in Clause 1 of the AGREEMENT;
AND WHEREAS, the Parties hereto wish to define their rights with respect to the
CONFIDENTIAL INFORMATION, and to protect their respective rights to such
CONFIDENTIAL INFORMATION.
THIS AGREEMENT WITNESSES that in consideration of the above premises and the
mutual promises herein, the Parties agree as follows:
ARTICLE 1
1.1. The Parties undertake at their discretion to provide the CONFIDENTIAL
INFORMATION to the other Party for purposes of the Project, subject to
the terms, conditions and understandings herein set forth. Nothing
herein obligates the Parties to disclose any particular data or
information whether or not it is part of the CONFIDENTIAL INFORMATION.
<PAGE>
1.2. The CONFIDENTIAL INFORMATION, and all rights to the CONFIDENTIAL
INFORMATION, which has been or will be disclosed to the receiving
Party, shall remain the exclusive property of the disclosing Party and
shall be held in trust by the receiving Party for the benefit of the
disclosing Party. The receiving Party will not examine or use such
CONFIDENTIAL INFORMATION for any purpose except as described in the
AGREEMENT and will not disclose the CONFIDENTIAL INFORMATION or any
part thereof to any third party, either directly or indirectly, in
whatever form or by whatever means. The Receiving Party will only
communicate the CONFIDENTIAL INFORMATION to those employees who have a
need to know within the framework of the Project and shall ensure that
a standard of strict confidentiality is applied by such employees and
that the obligations of non-disclosure and non-use provided herein are
respected by them.
1.3. The CONFIDENTIAL INFORMATION shall not be mechanically copied or
otherwise reproduced by the receiving Party other than as explicitly
provided in the AGREEMENT without the express written permission of the
disclosing Party, except for such copies as the receiving Party may
require pursuant to this Non-Disclosure Agreement for internal
evaluation purposes on a "need to know" basis. All copies shall, on
reproduction by the receiving Party, contain the same proprietary and
confidential notices and legends which appear on the original
CONFIDENTIAL INFORMATION, unless expressly authorised otherwise by the
disclosing Party.
1.4. The receiving Party shall not be liable for disclosure of the
CONFIDENTIAL INFORMATION upon the occurrence of one or more of the
following events:
(a) The expiration of fifteen years from the date of this Non
Disclosure Agreement first set out above;
(b) The receiving Party can establish that the CONFIDENTIAL
INFORMATION is in the public domain other than through a breach of
this Non Disclosure Agreement;
(c) The CONFIDENTIAL INFORMATION is subsequently lawfully obtained by
the receiving Party from a third party or parties without breach
of this Non Disclosure Agreement by the receiving Party as shown
by documentation sufficient to establish the third party as a
source of the CONFIDENTIAL INFORMATION;
(d) The CONFIDENTIAL INFORMATION was known to the receiving Party
prior to such disclosure as shown by documentation sufficient to
establish such knowledge; or
(e) The disclosing Party has provided its prior written approval for
such disclosure by the receiving Party.
<PAGE>
ARTICLE 2
2.1. No license under any patent and no copyright of the disclosing Party or
any right respecting the CONFIDENTIAL INFORMATION other than expressly
set out in the AGREEMENT, is granted to the receiving Party under this
Non Disclosure Agreement by implication or otherwise. This Non
Disclosure Agreement shall not constitute any representation, warranty
or guarantee to the receiving Party by the disclosing Party with
respect to the infringement of patents or other rights of third
parties. The disclosing Party shall not be held liable for any errors
or omissions in the CONFIDENTIAL INFORMATION and for the utilization
and the results of utilization of the CONFIDENTIAL INFORMATION.
ARTICLE 3
3.1. Should either Party decide to terminate the AGREEMENT in accordance
with Clause 15 of the AGREEMENT, both Parties shall within 28 days of
notice of such termination return all CONFIDENTIAL INFORMATION and
copies thereof susceptible of being so returned to the disclosing Party
or shall destroy such CONFIDENTIAL INFORMATION and copies as directed
by the disclosing Party and furnish proof of their destruction provided
that, in the event that the receiving Party has created documents which
commingle the receiving Party's CONFIDENTIAL INFORMATION will that of
the disclosing Party, such documents may be destroyed by the receiving
Party rather than returned.
ARTICLE 4
4.1. This Agreement shall be construed in accordance with and governed by
the Law of Belgium (without regard to its conflicts of law rules),
provided however, that if any provision of Belgian law purports to
change any material term hereunder, to impose any material obligation,
duty, warranty or burden on a party beyond, contrary to, and/or in
addition to those expressly stated herein, then all aspects of this
Agreement so affected shall not be subject to such law, and instead, to
the extent necessary or appropriate to give effect to and/or to
implement the express terms of this Agreement, this Agreement shall be
governed solely and exclusively by the law of the State of California.
<PAGE>
4.2. All disputes arising out of and/or in connection with this
Non-Disclosure Agreement shall be finally settled by arbitration in
accordance with the Rules of the London Court of International
Arbitration. The arbitration will be held in London, England, and will
be before a single arbitrator designated in conformity with the said
Rules. The arbitrator (i) shall be neutral and without business
affiliation with either party; (ii) shall not be a citizen or resident
of the United States nor Belgium; (iii) shall have reasonable expertise
in business and financial aspects of the computer and electronics
industry; and (iv) shall make detailed and complete findings of fact
and conclusions of law in writing. The arbitration proceedings shall be
held entirely in the English language and shall be subject to such
conditions and precautions as may be appropriate to protect the
confidential information of each party in a manner consistent with and
at least as secure as the provisions of this Non Disclosure Agreement.
In interpreting this Agreement, the arbitrator shall take into account
usages in the computer electronics and software trade, particularly
with a view to interpreting the confidentiality and trade secret
provisions of this Non Disclosure Agreement in strict terms.
Arbitration will be final and binding upon the Parties.
4.3 Judgment upon the arbitration award rendered may be entered in any
Court having jurisdiction thereof, of having jurisdiction over either
of the parties or their assets, or application may be made to such
Court for a juridical acceptance of the award and an order of
enforcement, as the case may be.
4.4 Nothing in this Agreement shall be deemed as preventing either party
from seeking injunctive relief (or any other provisional remedy) from
any court having jurisdiction over the parties and the subject matter
of the dispute as necessary to protect either party's name, proprietary
and/or intellectual property information, trade secrets, know-how or
any other proprietary rights.
ARTICLE 5
5.1. No amendment to terms and conditions of this Agreement shall be valid
and binding on the Parties hereto unless made in writing and signed by
an authorised representative of each of the Parties.
5.2. This Agreement shall be binding upon the Parties hereto and their
respective successors and assigns.
SIGNED FOR AND ON SIGNED FOR AND ON
BEHALF OF ALCATEL BEHALF OF ITEX
--------------------- ----------------
/s/ MARTIN DE PRYCKER SIGNATURE /s/ DANIEL CHEN
--------------------- ----------------
MARTIN DE PRYCKER NAME DANIEL CHEN
VICE PRESIDENT AND
GENERAL MANAGER TITLE PRESIDENT AND CEO
INTERNET ACCESS AND
ADSL
