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Exhibit 10.7
CONFIDENTIAL TREATMENT REQUESTED
DEVELOPMENT & LICENSE AGREEMENT
THIS DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is entered into
on September ____, 1998, ("Effective Date") between MICROSOFT CORPORATION, a
Washington corporation with its principal location at One Microsoft Way,
Redmond, WA, 98052 U.S.A. ("Microsoft") and INTELLON CORPORATION, a Florida
corporation with its principal location at 5100 West Silver Springs Blvd.,
Ocala, FL, 34482, U.S.A. ("Intellon"). Microsoft and Intellon are each referred
to herein as a "Party" and collectively as the "Parties".
RECITALS
WHEREAS, a technology commonly referred to as "Power Line Carrier" or
"PLC" is being developed by various companies including Intellon, which
technology uses the alternating current ("AC") wiring in a home or building to
move and control data between electronic devices connected to the home's or
building's AC wiring, by using the AC outlets as power and dataports for the
electronic devices;
WHEREAS, Intellon has developed a PLC technology known as the "Spread
Spectrum Carrier (SSC)" which technology is used for controlling electronic
devices connected to AC wiring and is developing a second PLC technology known
as "Intellon Enhanced Orthogonal Frequency Division Multiplexing (IEOFDM)" which
technology is used for networking electronic devices connected to AC wiring;
WHEREAS, Microsoft is willing to make certain payments to Intellon as
specified below in consideration of Intellon granting Microsoft the below
specified license rights with respect to the technology utilized in the SSC and
the IEOFDM as accepted by Microsoft;
WHEREAS, upon Microsoft's acceptance of the SSC and the IEOFDM
technologies, Microsoft further desires to discuss with Intellon, Intellon's
modification of the SSC and the IEOFDM in order to optimize such technology and
devices for Microsoft applications and whereas Intellon is willing to undertake
such customization;
NOW THEREFORE, in consideration of the foregoing and of the mutual
promises herein contained, the Parties hereby agree as follows:
AGREEMENT
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings whenever initially capitalized:
"Affiliates" means an entity which controls, is controlled by, or is
under common control with either Microsoft or Intellon. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a legally recognizable entity,
whether through the ownership of voting shares, by contract, or otherwise. In
the case of such an entity that is a partnership, limited liability company,
corporation, or similar entity and that has partners, members, or shareholders
with equal ownership interests or equal control interests (by contract or
otherwise), each such partner, member, or shareholder shall be deemed to possess
the power to direct or cause the direction of the management and policies of
that entity.
"ASIC" means an application specific integrated circuit.
1
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
"Authorized Manufacturer" means an entity authorized to manufacture
``Royalty-Bearing ASICs.
"Confidential Information" means: (i) any trade secrets relating to
either Party's product plans, designs, costs, prices and names, finances,
marketing plans, business opportunities, personnel, research development or
know-how; (ii) any information designated by the disclosing Party as
confidential in writing or that the disclosing person states to be considered
proprietary or confidential, or that would logically be considered proprietary
or confidential under the circumstances of the disclosure; and (iii) the terms
and conditions of this Agreement. "Confidential Information" shall not include
information that: (i) is or becomes generally known or available by publication,
commercial use or otherwise through no fault of the receiving Party; (ii) is
known and has been reduced to tangible form by the receiving Party at the time
of disclosure and is not subject to restriction; (iii) is independently
developed or learned by the receiving Party without reference to any information
received by that Party from the disclosing Party; (iv) is lawfully obtained from
a Third Party that has the right to make such disclosure; or (v) is made
generally available by the disclosing Party without restriction on disclosure.
"Derivative Technology" means: (i) for copyrightable or copyrighted
material, any translation (including translation into other computer languages),
portation, modification, correction, addition, extension, upgrade, improvement,
compilation, abridgement or other form in which an existing work may be recast,
transformed or adapted; (ii) for patentable or patented material, any
improvement thereon; and (iii) for material which is protected by trade secret,
any new material derived from such existing trade secret material, including new
material which may be protected by copyright, patent and/or trade secret.
"IEOFDM" means Intellon's PLC signaling technology for networking
electronic devices at a minimum of 2 Mbps, which device is based on the
Orthogonal Frequency Division Multiplexing (OFDM) modulation technique and which
is more fully described in the attached Exhibit A.
"Intellectual Property" means (i) any existing or future patent
applications and issued patents ; (ii) any mask works; (iii) any copyrights or
moral rights; and (iv) any trade secret or other proprietary rights (other than
trademarks, trade names or service marks).
"Intellon Intellectual Property" has the meaning set forth in Section
3.6.
"Microsoft PLC Compatible" means, with respect to a PLC modem device,
that such device is (i) able to interoperate with Microsoft Products within the
limited field of use set forth in Section 4.1.1 and (ii) intended to be marketed
under such a trademark or logo (or similar trademark or logo) pursuant to a logo
program intended to be established by Microsoft.
"Microsoft PLC Product" means any Microsoft Product, including any
subassembly or portion thereof, that embodies the Phase 1 Intellectual Property,
Intellon Intellectual Property or Phase 2 Intellectual Property.
"Microsoft Product" means a product marketed by Microsoft under its
trademark(s) or brand name(s), whether such trademark(s) or brand name(s) appear
alone or in conjunction with the trademark(s) or brand name(s) of Third Parties;
provided that a product labeled as "Microsoft PLC Compatible" without any
additional indication or use of the Microsoft trademark shall not be considered
a Microsoft Product for purposes of this Agreement.
2
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
"Phase 1" refers to the development by Intellon, and delivery to
Microsoft for its acceptance, of the Phase 1 Deliverables.
"Phase 1 Acceptance Criteria" means the criteria and methods used to
evaluate the Phase 1 Deliverables to determine whether or not they are
acceptable.
"Phase 1 Deliverables" collectively refers to the items set forth in the
Phase 1 Statement of Work which are required for delivery to Microsoft by
Intellon.
"Phase 1 Intellectual Property" means the Intellectual Property embodied
in Phase 1 Deliverables or necessary for the commercialization of the Phase 1
Deliverables.
"Phase 1 Requirements" means the description of the functional
characteristics necessary of the Phase 1 Deliverables.
"Phase 1 Schedule" means the schedule(s) for completion of the Phase 1
Statement of Work.
"Phase 1 Specifications" means the detailed technical specifications for
the Phase 1 Deliverables.
"Phase 1 Statement of Work" means a schedule of tasks and
responsibilities to be accomplished in the creation and delivery of the Phase 1
Deliverables.
"Phase 2" refers to the development by Intellon, and delivery to
Microsoft for its acceptance, of the Phase 2 Deliverables.
"Phase 2 Acceptance Criteria" means the criteria and methods used to
evaluate the Phase 2 Deliverables to determine whether or not they are
acceptable.
"Phase 2 Budget" means the budget for the completion of the Phase 2
Statement of Work.
"Phase 2 Deliverables" collectively refers to the items set forth in the
Phase 2 Statement of Work required for delivery to Microsoft by Intellon, and
shall include without limitation the elements set forth in Exhibit D.
"Phase 2 Intellectual Property" means the Intellectual Property (other
than Phase 1 Intellectual Property and Intellon Intellectual Property) created
by or for Intellon and/or Microsoft embodied in the Phase 2 Deliverables or
necessary for the commercialization of the Phase 2 Deliverables.
"Phase 2 Requirements" means the description of the functional
characteristics necessary of the Phase 2 Deliverables.
"Phase 2 Schedule" means the schedule for the completion of the Phase 2
Statement of Work.
"Phase 2 Specifications" means the detailed technical specifications for
the Phase 2 Deliverables.
"Phase 2 Statement of Work" means a schedule of tasks and
responsibilities to be accomplished in the creation and delivery of the Phase 2
Deliverables.
"Royalty-Bearing ASIC" means an ASIC which is subject to the license
grants in Section 2.3 and 3.6, any part of which is protected by a patent, mask
work, or copyright included within the definition of
3
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
Phase 1 Intellectual Property or Intellon Intellectual Property, and which is
not an integrated portion and/or component of a Microsoft Product.
"Safe Ad Date" means the date on which Microsoft's retailers are
authorized by Microsoft to advertise the availability of a Microsoft PLC
Product.
"SSC" means Intellon's PLC signaling technology for controlling
electronic devices, which is based on the Binary Phase Shift Keying (BPSK)
modulation technique and which is more fully described in the attached Exhibit
A.
"Third Party" means a party other than Microsoft or its Affiliates or
Intellon or its Affiliates.
All other initially capitalized terms shall have the meanings
hereinafter or hereinabove assigned to them.
2. PHASE 1.
The purpose of Phase 1 is to demonstrate that the Phase 1 'Deliverables
meet Microsoft's technology requirements for Power Line Carrier.
2.1. DEFINITION, DEVELOPMENT, AND DELIVERY OF THE PHASE 1
DELIVERABLES.
2.1.1. The Phase 1 Requirements, Phase 1 Specifications, Phase 1
Acceptance Criteria, Phase 1 Schedule and Phase 1 Statement of
Work for the Phase 1 Deliverables are attached as Exhibit C.
2.1.2. Intellon shall develop, manufacture and deliver the Phase
1 Deliverables to Microsoft in accordance with the Phase 1
Schedule, Phase 1 Requirements, Phase 1 Specifications, and
Phase 1 Statement of Work. If Intellon fails to deliver any
Phase 1 Deliverable within fifteen (15) working days of the
applicable date specified in the Phase 1 Schedule, then
Microsoft may, at its option: (i) extend the time period for the
delivery of the Phase 1 Deliverables; or (ii) terminate this
Agreement upon written notice without any opportunity for cure.
2.2 EVALUATION, ACCEPTANCE, AND CORRECTION OF THE PHASE 1
DELIVERABLES. Microsoft shall evaluate the Phase 1 Deliverables and
shall submit a written acceptance or rejection of the same to Intellon
within thirty (30) business days following Microsoft's receipt of the
Phase 1 Deliverables, such acceptance to be based on whether the Phase 1
Deliverables were delivered in their entirety and whether the Phase 1
Deliverables as delivered meet the Phase 1 Acceptance Criteria, Phase 1
Requirements, Phase 1 Specifications and Phase 1 Statement of Work.
Microsoft's acceptance will be given either in writing or via email, and
Microsoft shall not unreasonably withhold its acceptance. If Microsoft
determines that the Phase 1 Deliverables were not delivered in their
entirety or if Microsoft identifies errors in the Phase 1 Deliverables
(i.e. noncompliance with the Phase 1 Acceptance Criteria, Phase 1
Requirements, Phase 1 Specifications and Phase 1 Statement of Work),
then Microsoft shall notify Intellon in writing of the incomplete nature
of the delivery and/or the errors identified by Microsoft and Intellon
shall deliver to Microsoft a complete and/or corrected version of the
Phase 1 Deliverables within such time as may be mutually agreed upon in
writing between Microsoft and Intellon, or if the Parties cannot agree
within three (3) days, then such delivery shall be made within thirty
(30) days thereafter. If Microsoft identifies incompleteness in the
corrected Phase 1 Deliverables or errors in the corrected Phase 1
4
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
Deliverables, then Parties shall repeat the foregoing process one more
time (e.g, if Microsoft identifies errors in the corrected Phase 1
Deliverables, Microsoft shall notify Intellon in writing and Intellon
shall have the opportunity to correct those errors and deliver a second
corrected Phase 1 Deliverables to Microsoft for its acceptance). If
Microsoft determines that the second corrected Phase 1 Deliverables were
not delivered in their entirety or identifies errors in the second
corrected Phase 1 Deliverables, then Microsoft may, at its option: (i)
extend the time period for Intellon to deliver acceptable Phase 1
Deliverables; or (ii) terminate this Agreement upon written notice
without opportunity for cure.
2.3 LICENSE GRANT TO THE PHASE 1 INTELLECTUAL PROPERTY. Intellon
hereby grants to Microsoft, a non-exclusive, perpetual, irrevocable,
royalty-free (except with respect to Royalty-Bearing ASICs, as provided
in Exhibit B), fully paid up, worldwide right and license to:
2.3.1 Use, copy, edit, format, modify, and translate the Phase 1
Intellectual Property and Phase 1 Deliverables and create and
have created Derivative Technology of the Phase 1 Intellectual
Property and Phase 1 Deliverables;
2.3.2 Make, sell, rent, lease or otherwise distribute, and have
made, reproduced, rented, leased or otherwise distributed, to and
by Third Parties, products that incorporate the Phase 1
Intellectual Property and Phase 1 Deliverables and any Derivative
Technology thereof created by Microsoft;
2.3.3 Make, use, sell, rent, lease or otherwise distribute and
have made, reproduced, rented, leased or otherwise distributed,
to and by Third Parties, software products that support products
or applications incorporating the Phase 1 Intellectual Property
and Phase 1 Deliverables and any Derivative Technology thereof
created by Microsoft; and
2.3.4 Grant the rights set forth in Section 2.3.1 and 2.3.2 in
the Phase 1 Intellectual Property and Phase 1 Deliverables to
Third Parties.
Except as expressly licensed to Microsoft in this Agreement, Intellon
retains all right, title and interest in and to the Phase 1 Intellectual
Property and Phase 1 Deliverables.
2.4 PAYMENT FOR THE PHASE 1 DELIVERABLES AND THE LICENSE GRANTS. In
consideration of Intellon's developing, manufacturing and delivering the
Phase 1 Deliverables to Microsoft and in consideration of the license
rights granted Microsoft in the Phase 1 Intellectual Property and Phase
1 Deliverables, Microsoft agrees to pay Intellon the sum of Six Million
Dollars (US $6,000,000). ********** of this amount shall be paid within
********** of the **********. The balance of ********** shall be paid
within ********** of Microsoft's ********** above.
3. PHASE 2.
The purpose of Phase 2 is for Microsoft and Intellon to engage in a
development program to create ASIC devices for the Microsoft PLC program.
3.1 AGREEMENT OF THE PARTIES WITH RESPECT TO INTELLON'S DEVELOPMENT
OF THE PHASE 2 DELIVERABLES. Following Microsoft's acceptance of the
Phase 1 Deliverables pursuant to Section 2.2, the Parties agree to meet
and discuss Intellon's developing the Phase 2 Deliverables for
Microsoft. If the Parties reach written agreement on an initial version
of the Phase 2
5
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
Requirements, the Phase 2 Specifications, the Phase 2 Acceptance
Criteria, the Phase 2 Statement of Work, the Phase 2 Schedule, and the
Phase 2 Budget, then the Parties shall execute and attach to this
Agreement a written document confirming the same which includes the
initial version of the Phase 2 Requirements, the Phase 2 Specifications,
the Phase 2 Acceptance Criteria, the Phase 2 Statement of Work, the
Phase 2 Schedule and the Phase 2 Budget. Intellon understands that
Microsoft in its sole discretion, may elect to make additions, deletions
or other changes, to the Phase 2 Requirements which may affect the Phase
2 Deliverables and/or the Phase 2 Specifications at any time during
Phase 2. Upon notice of any such changes by Microsoft, Intellon and
Microsoft shall work together to make any necessary changes to the Phase
2 Deliverables, the Phase 2 Specifications, the Phase 2 Acceptance
Criteria, the Phase 2 Statement of Work, the Phase 2 Schedule and/or the
Phase 2 Budget as may be necessary in order to accommodate any such
changes. If the Parties fail to promptly reach written agreement on the
initial Phase 2 Specifications, Phase 2 Acceptance Criteria, Phase 2
Schedule, Phase 2 Statement of Work, and Phase 2 Budget, then Microsoft
shall be under no obligation to proceed with Phase 2.
3.2 CREATION, MANUFACTURE AND DELIVERY OF THE PHASE 2 DELIVERABLES.
Following the Parties reaching agreement on Intellon's development of
the Phase 2 Deliverables as set forth in Section 3.1 above, Intellon
shall develop, manufacture and deliver the Phase 2 Deliverables to
Microsoft in accordance with the Phase 2 Requirements, Phase 2
Specifications, Phase 2 Statement of Work, Phase 2 Schedule and the
Phase 2 Budget. If Intellon fails to deliver any Phase 2 Deliverable
within fifteen (15) working days of the applicable date specified in the
Phase 2 Schedule, then Microsoft may, at its option: (i) extend the time
period for the delivery of the Phase 2 Deliverable in question; or (ii)
terminate this Agreement upon written notice without opportunity for
cure.
3.3 EVALUATION, ACCEPTANCE, AND CORRECTION OF THE PHASE 2
DELIVERABLES. Microsoft shall evaluate each of the Phase 2 Deliverables
and shall submit a written acceptance or rejection of the same to
Intellon within thirty (30) business days following Microsoft's receipt
of a given Phase 2 Deliverable, Microsoft's acceptance to be based on
whether the Phase 2 Deliverable was delivered in its entirety and
whether the Phase 2 Deliverable as delivered meets the Phase 2
Acceptance Criteria, Phase 2 Requirements, Phase 2 Specifications and
Phase 2 Statement of Work. Microsoft's acceptance will be given either
in writing or via email, and Microsoft shall not unreasonably withhold
its acceptance. If Microsoft determines that the given Phase 2
Deliverable was not delivered in its entirety or if Microsoft identifies
errors in the Phase 2 Deliverable (i.e. noncompliance with the Phase 2
Acceptance Criteria, Phase 2 Requirements, Phase 2 Specifications and
Phase 2 Statement of Work), then Microsoft shall notify Intellon in
writing of the incomplete nature of the delivery and/or the errors
identified by Microsoft and Intellon shall deliver to Microsoft a
complete and/or corrected version of the given Phase 2 Deliverable
within such time as may be mutually agreed upon in writing between
Microsoft and Intellon, or if the Parties cannot agree within three (3)
days, then such delivery shall be made within thirty (30) days
thereafter. If Microsoft identifies incompleteness in the corrected
Phase 2 Deliverable or errors in the corrected Phase 2 Deliverable, then
Parties shall repeat the foregoing process one more time (e.g., if
Microsoft identifies errors in the corrected Phase 2 Deliverable,
Microsoft shall notify Intellon in writing and Intellon shall have the
opportunity to correct those errors and deliver a second corrected Phase
2 Deliverable to Microsoft for its acceptance). If Microsoft determines
that the second corrected Phase 2 Deliverable was not delivered in its
entirety or identifies errors in the second corrected Phase 2
Deliverable, then Microsoft may, at its option: (i) extend the time
period for Intellon to deliver an acceptable Phase 2 Deliverable; or
(ii) terminate this Agreement upon written notice without opportunity
for cure.
6
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
3.4 PAYMENT FOR THE PHASE 2 DELIVERABLES. Microsoft shall pay the
reasonable costs and expenses incurred by Intellon in connection with
the development of the Phase 2 Deliverables (hereinafter the "Expenses")
as provided in the Phase 2 Budget. All Expenses will be consistent with
the Phase 2 Budget unless otherwise approved in writing by Microsoft.
3.5 PHASE 2 INTELLECTUAL PROPERTY. Microsoft shall own all right,
title and interest in and to the Phase 2 Deliverables (subject to
Intellon's ownership of the included Phase 1 Intellectual Property and
Intellon Intellectual Property) and Phase 2 Intellectual Property as of
the date of creation. In consideration of the Expenses paid or to be
paid by Microsoft, Intellon hereby assigns to Microsoft all necessary
right, title and interest in and to the Phase 2 Deliverables (subject to
Intellon's ownership of the included Phase 1 Intellectual Property and
Intellon Intellectual Property) and Phase 2 Intellectual Property. Such
assignment includes, without limitation, the following:
3.5.1 Subject to Intellon's ownership of the included Phase 1
Intellectual Property and Intellon Intellectual Property, any and
all copyrights and equivalent rights that Intellon may possess or
acquire in the Phase 2 Intellectual Property throughout the
world, including all renewals and extensions of such rights that
may be secured under the laws now or hereafter in force and
effect in the United States of America or in any other country or
countries;
3.5.2 Subject to Intellon's ownership of the included Phase 1
Intellectual Property and Intellon Intellectual Property, any and
all rights in and to any inventions, ideas, designs, concepts,
techniques, discoveries, or improvements, whether or not
patentable, embodied in Phase 2 Intellectual Property or Phase 2
Deliverables or developed in the course of Intellon's creation of
the Phase 2 Intellectual Property or Phase 2 Deliverables,
including but not limited to all trade secrets, utility and
design patent rights and equivalent rights in and to such trade
secrets, inventions and designs throughout the world regardless
of whether or not legal protection for the Phase 2 Intellectual
Property or Phase 2 Deliverables is sought;
3.5.3 Copies of any documents, magnetically or optically encoded
media, or other materials created by Intellon in the course of
creating and developing the Phase 2 Intellectual Property or
Phase 2 Deliverables; and
3.5.4 Subject to Intellon's ownership of the included Phase 1
Intellectual Property and Intellon Intellectual Property, any and
all "moral rights" that Intellon may have in the Phase 2
Deliverables or Phase 2 Intellectual Property. Intellon also
hereby forever waives and agrees never to assert any and all
"moral rights" it may have in the Phase 2 Intellectual Property
or Phase 2 Deliverables, even after termination of this
Agreement.
Intellon shall execute and deliver such instruments and take such other
action as may be requested by Microsoft to perfect or protect
Microsoft's rights in the Phase 2 Intellectual Property and Phase 2
Deliverables and to carry out the assignments contemplated in this
Section 3.5, and assist Microsoft and its nominees in every proper way
to secure, maintain, protect and defend for Microsoft's own benefit all
such rights in the Phase 2 Intellectual Property and Phase 2
Deliverables in any and all countries. Intellon shall cooperate with
Microsoft in the filing and prosecution of any copyright registrations
or patent applications that Microsoft may elect to file on the Phase 2
Intellectual Property or Phase 2 Deliverables. Intellon shall ensure
that each of its
7
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 8
CONFIDENTIAL TREATMENT REQUESTED
employees and independent contractors involved with the development of
the Phase 2 Intellectual Property or Phase 2 Deliverables is
contractually obligated to assign to it all rights, including patents
and copyrights, that such employee or independent contractor may obtain
in the Phase 2 Intellectual Property or Phase 2 Deliverables. Intellon
shall obtain written approval from Microsoft for any independent
contractor involved in the development of the Phase 2 Intellectual
Property or Phase 2 Deliverables and shall have each independent
contract execute an assignment in the form set forth in Exhibit E.
Microsoft agrees to use commercially reasonable best efforts to respond
to Intellon's request for written approval within three (3) business
days of Microsoft's receipt of such request.
3.6 LICENSE OF THE INTELLON INTELLECTUAL PROPERTY TO MICROSOFT.
During Phase 2, Intellon may offer for evaluation to Microsoft, in
writing, technology and associated Intellectual Property, other than the
Phase 1 Intellectual Property, created by or for or licensed by Intellon
(from Third Parties) independent of and outside the scope of the Phase 2
Requirements, Phase 2 Specifications and Phase 2 Statement of Work that
may enhance or otherwise benefit a Microsoft PLC Compatible product.
Upon Microsoft's evaluation and written acceptance of such technology,
the Intellectual Property embodied in such technology shall be Intellon
Intellectual Property. The Parties shall attach a document to this
Agreement confirming the nature of such Intellectual Property and
Microsoft's acceptance thereof. Upon such acceptance, Intellon shall be
deemed to have granted to Microsoft a non-exclusive, perpetual,
irrevocable, royalty-free (except with respect to Royalty-Bearing ASICs,
as provided in Exhibit B), fully paid-up, worldwide right and license
to:
3.6.1 Use, copy, edit, format, modify, and translate the Intellon
Intellectual Property and create and have created Derivative
Technology of the Intellon Intellectual Property;
3.6.2 Make, sell, rent, lease or otherwise distribute, and have
made, reproduced, rented, leased or otherwise distributed, to and
by Third Parties, products that incorporate the Intellon
Intellectual Property and any Derivative Technology thereof
created by Microsoft;
3.6.3 Make, use, sell, rent, lease or otherwise distribute and
have made, reproduced, rented, leased or otherwise distributed,
to and by Third Parties, software products that support products
or applications incorporating the Intellon Intellectual Property
and any Derivative Technology thereof created by Microsoft; and
3.6.4 Grant the rights set forth in Sections 3.6.1 and 3.6.2 in
the Intellon Intellectual Property to Third Parties.
Except as expressly licensed to Microsoft in this Agreement, Intellon
retains all right, title and interest in and to the Intellon
Intellectual Property.
3.7 LICENSE OF THE PHASE 2 INTELLECTUAL PROPERTY TO INTELLON. Subject
to the restrictions set forth in Section 4.2, effective as of the date
Microsoft accepts the Phase 2 Deliverables, Microsoft shall be deemed to
have granted to Intellon for use in and only in ASICs or subassembly
products a non-exclusive, perpetual, irrevocable, royalty-free (except
as provided in Exhibit B), fully paid-up, worldwide right and license
to:
8
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 9
CONFIDENTIAL TREATMENT REQUESTED
3.7.1 Use, copy, edit, format, modify and translate the Phase 2
Intellectual Property and create and have created Derivative
Technology of the Phase 2 Intellectual Property so long as
interoperability with Microsoft PLC Products is not affected;
3.7.2 Make, sell, rent, lease or otherwise distribute, and have
made, reproduced, rented, leased or otherwise distributed, to and
by Third Parties, ASICs or subassemby products that incorporate
the Phase 2 Intellectual Property and any Derivative Technology
thereof created by Intellon; and
3.7.3 Grant only the rights to use and copy the Phase 2
Intellectual Property set forth in Section 3.7.1 and the rights
set forth in Section 3.7.2 in the Phase 2 Intellectual Property
to Third Parties.
Except as expressly licensed to Intellon in this Agreement, Microsoft
retains all right, title and interest in and to the Phase 2 Intellectual
Property.
4. RESTRICTIONS ON USE; ADDITIONAL UNDERTAKINGS OF THE PARTIES WITH
RESPECT TO DERIVATIVE TECHNOLOGY.
4.1 LIMITED FIELD OF USE OF THE LICENSE GRANTS TO MICROSOFT.
4.1.1 The license grants to Microsoft set forth in Sections 2.3,
3.6 and 4.3 shall be limited with regard to products to the field
of wired media networking of personal computers, peripherals,
consumer electronics, telephony products, control systems and any
and all other devices of any nature intended for use within the
home or office. Microsoft and its sublicensees are explicitly
restricted from exercising the rights set forth in Sections 2.3.2
and 3.6.2 with regard to the Phase 1 Intellectual Property or
Intellon Intellectual Property to develop products intended for
use within the following areas: local exchange bypass; wide area
networks (WAN); WAN gateways; products which terminate voice,
data, or video network from outside the user premises, with the
exception of providing the local area network connection within
products which are bridges from external networks to local area
networks within the customer premises; networks connecting
devices located in transportation vehicles such as automotive or
commercial vehicles, railway cars, marine vessels, or aircraft;
or any other communications or control applications not within
the home or office. This field of use limitation is not intended
to prevent Microsoft from developing and selling software having
application outside the field of use when such software supports
products or applications incorporating the Phase 1 Intellectual
Property, Phase 1 Deliverables, or Intellon Intellectual
Property, or any Derivative Technology thereof created by
Microsoft.
4.1.2 Microsoft shall have the option to obtain unrestricted
field of use for wired media networking for the rights set forth
in Sections 2.3, 3.6 and 4.3 for an additional license fee of
Twenty Million Dollars ($20,000,000). This option shall expire
four (4) years after the Effective Date. On payment by Microsoft
to Intellon of the additional license fee of Twenty Million
Dollars ($20,000,000), Section 4.1.1 of this Agreement shall
cease to have effect.
9
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 10
CONFIDENTIAL TREATMENT REQUESTED
4.1.3 Unless mutually agreed upon by the Parties, Microsoft shall
require any Authorized Manufacturer licensed by Microsoft to
limit the use of ASICs and subassembly products embodying the
Phase 1 Intellectual Property or Intellon Intellectual Property
to products which are certified as and appropriately marked as
"Microsoft PLC Compatible."
4.2 RESTRICTIONS ON USE OF PHASE 2 INTELLECTUAL PROPERTY BY INTELLON.
4.2.1 Intellon agrees that it will not, during the period
commencing on the Effective Date and ending on the earlier of (i)
the first anniversary of the Safe Ad Date of the first Microsoft
PLC Product or (ii) two (2) years from the Effective Date ("the
Exclusivity Period"), offer any Third Party that designs,
manufactures or sells USB/PLC/SWAP hubs; AC switching, dimming or
control modules; IR blasters; or PC to PC, or PC to PC
peripheral, networking modules; the right (a) to license all or
any portion of the Phase 2 Intellectual Property or Derivative
Technology thereof licensed to Intellon pursuant to Section 4.4
or (b) to purchase from Intellon, its manufacturers or other
licensees, any ASICs or other products that embody the Phase 2
Intellectual Property or Derivative Technology thereof licensed
to Intellon pursuant to Section 4.4.
4.2.2 Notwithstanding Section 4.2.1, Intellon shall be released
from the restrictions in Section 4.2.1 to the extent, but only to
the extent, that Microsoft sells, or directly authorizes (or
indirectly allows) a Third Party ASIC or subassembly manufacturer
to sell, ASICS or subassembly products that embody Phase 1
Intellectual Property or Intellon Intellectual Property for use
in products other than Microsoft Products.
Example: If Microsoft enters into a written agreement with a
Third Party hardware product manufacturer for the sublicensing
or other distribution of a product which is not a Microsoft
Product containing an ASIC or subassembly product which
embodies Phase 1 Intellectual Property or Intellon
Intellectual Property and thereby allows such hardware product
manufacturer to contract for the manufacture and purchase of
the ASIC or subassembly product from a Third Party, Intellon
may offer the right to purchase ASICs or subassembly products
incorporating Phase 2 Intellectual Property or Derivative
Technology thereof licensed to Intellon under Section 4.4 to
such Third Party hardware product manufacturer to whom
Intellon would otherwise be restricted from offering the right
to purchase such ASICs or subassembly products.
Example: If Microsoft offers any Third Party ASIC or
subassembly product manufacturer the right to sell ASICs or
subassembly products that embody Phase 1 Intellectual Property
or Intellon Intellectual Property to one or more Third Party
hardware product manufacturers for use in products which are
not Microsoft Products, Intellon may offer to sell ASICs or
subassembly products that embody or are based on Phase 2
Intellectual Property or Derivative Technology thereof
licensed to Intellon under Section 4.4 to the same Third Party
hardware product manufacturers.
Example: If Microsoft offers to sell ASICs or subassembly
products that embody or are based on the Phase 1 Intellectual
Property or Intellon Intellectual Property to one or more
Third Party hardware product manufacturers for use in products
which are not Microsoft Products, Intellon may offer to sell
ASICs or subassembly products
10
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 11
CONFIDENTIAL TREATMENT REQUESTED
that embody or are based on Phase 2 Intellectual Property or
Derivative Technology thereof licensed to Intellon under
Section 4.4 to the same Third Party hardware product
manufacturers.
4.2.3 Notwithstanding Section 4.2.1 of this Agreement Intellon
may request in writing that Microsoft approve a specific purchase
from Intellon of specified ASICs or other subassembly products by
a Third Party to whom Intellon would otherwise be restricted
under Section 4.2.1 from offering the right to purchase such
ASICs or other subassembly products. Any such request shall fully
identify such Third Party, describe the product(s) to be sold to
the extent that it can do so without violating any
confidentiality obligations imposed on it by its agreements with
Third Parties and specify the applicable time period. Microsoft,
in its sole discretion, may grant or deny such a request. Any
approval of such request must be in writing, and Microsoft shall
make a good faith effort to respond in writing to such request
within thirty (30) days of notice of such request, provided that
any failure by Microsoft to respond in writing shall not
constitute a breach of this Agreement. If Microsoft has not
provided a written approval of such request by Intellon to
Intellon within thirty (30) days of notice of such request, the
request shall be deemed denied.
4.2.4 Unless mutually agreed upon by the Parties, Intellon shall
require any sublicensee to limit the use of ASICs or subassembly
products embodying Phase 2 Intellectual Property or Derivative
Technology thereof licensed to Intellon under Section 4.4 to
products which are certified as and appropriately marked as
"Microsoft PLC Compatible."
4.3 DERIVATIVE TECHNOLOGY CREATED BY INTELLON.
4.3.1 Intellon shall own all right, title and interest in and to
any Derivative Technology of the Phase 1 Intellectual Property
and Intellon Intellectual Property created by or for Intellon
(except for the Phase 2 Intellectual Property) and, subject to
Microsoft's underlying rights, any Derivative Technology of the
Phase 2 Intellectual Property created by or for Intellon as
permitted in Section 3.7.1. This Agreement does not grant any
rights to Microsoft other than those specifically granted in this
Agreement.
4.3.2 Intellon agrees that in the event that it (i) creates or
has created Derivative Technology of the Phase 1 Intellectual
Property or Intellon Intellectual Property, or Phase 2
Intellectual Property (as permitted by Section 3.7.1),
independent of Phase 2; and (ii) incorporates or has incorporated
such Derivative Technology into its ASICs or subassembly products
that are, or are intended to be, certified and appropriately
marked as Microsoft PLC Compatible; and (iii) such Derivative
Technology affects the interoperability of the ASICs or
subassembly products with Microsoft PLC Products; at any time
during the three (3) year period following Microsoft's acceptance
of the Phase 1 Deliverables, Intellon shall be deemed to have
included such Derivative Technology within the license grant to
Microsoft in Section 3.6. Intellon shall deliver to Microsoft the
source code listings, blueprints, schematics, master design
source tapes, diagrams and descriptions to such Derivative
Technology as is required for Microsoft to be able to exercise
the license rights set forth in Section 3.6 as to such Derivative
Technology and as may be reasonably required for Microsoft to
maintain the interoperability of Microsoft PLC Products with
Intellon ASICs or subassembly products embodying such Derivative
11
Portions of this agreement have been omitted and filed separately with the
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<PAGE> 12
CONFIDENTIAL TREATMENT REQUESTED
Technology. Intellon shall further provide to Microsoft, upon
Microsoft's request, technical support and consulting at
Intellon's then standard commercial rates in connection with
Microsoft's understanding, use and exploitation of such
Derivative Technology.
4.4 DERIVATIVE TECHNOLOGY CREATED BY MICROSOFT.
4.4.1 Microsoft shall own all right, title and interest in and to
any Derivative Technology of the Phase 2 Intellectual Property
created by or for Microsoft and, subject to Intellon's underlying
rights, any Derivative Technology of the Phase 1 Intellectual
Property and Intellon Intellectual Property created by or for
Microsoft. This Agreement does not grant any rights to Intellon
other than those specifically granted in this Agreement.
4.4.2 Microsoft agrees that in the event that it (i) creates or
has created Derivative Technology of the Phase 1 Intellectual
Property, Intellon Intellectual Property or Phase 2 Intellectual
Property, independent of Phase 2; and (ii) incorporates or has
incorporated such Derivative Technology into the ASICs or
subassembly products which are integrated into or are component
parts of Microsoft Products that are, or are intended to be,
certified and appropriately marked as Microsoft PLC Compatible;
and (iii) such Derivative Technology affects the interoperability
of Microsoft PLC Products with Intellon's ASICs or subassembly
products; at any time during the three (3) year period following
Microsoft's acceptance of the Phase 1 Deliverables, Microsoft
shall be deemed to have included such Derivative Technology
within the license grant to Intellon in Section 3.7. Microsoft
shall deliver to Intellon the source code listings, blueprints,
schematics, master design source tapes, diagrams and descriptions
to such Derivative Technology as is required for Intellon to be
able to exercise the license rights set forth in Section 3.7 as
to such Derivative Technology and as may be reasonably required
for Intellon to maintain the interoperability of Intellon ASICs
or subassembly products with Microsoft PLC Products embodying
such Derivative Technology. Microsoft shall further provide to
Intellon, upon Intellon's request, technical support and
consulting at Microsoft's then standard commercial rates in
connection with Intellon's understanding, use and exploitation of
such Derivative Technology.
5. USE OF INTELLON MARKS. In circumstances which Microsoft deems to be
commercially reasonable in its sole discretion, Microsoft will place one of the
two identifying markings listed below or similar markings mutually agreed to
both parties on the commercial retail packaging for Microsoft PLC Products
embodying Phase 1 Intellectual Property, Intellon Intellectual Property, in such
a manner that one of such identifying markings may be reasonably visible by the
consumer.
Connected by Intellon
Powered by Intellon
6. OTHER OBLIGATIONS OF THE PARTIES.
6.1 PRESS RELEASES. The Parties will co-operate with each other on press
releases and similar communications regarding the non-confidential
subject matter of this Agreement. The content, timing and necessity of
all such communications will be mutually agreed upon in writing by both
12
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 13
CONFIDENTIAL TREATMENT REQUESTED
Parties, and neither Party may issue any public announcement or press
release regarding the subject matter of this Agreement without having
received the prior consent of the other Party.
6.2 PURCHASE OF CHIPS. For a period of three (3) years following
Microsoft's acceptance of the Phase 2 Deliverables, Microsoft agrees to
identify Intellon as a "Microsoft Approved Manufacturer" of PLC modems
that is authorized to purchase ASICs based on the Phase 1 Intellectual
Property or Phase 2 Intellectual Property, from Microsoft's manufacturer
of such ASICs. Microsoft agrees to use reasonable efforts (but not to
include the payment of financial or other consideration) to have such
Third Party manufacturer sell such ASICs to Intellon under the master
pricing structure and terms and conditions, if any, that Microsoft has
negotiated with such Third Party manufacturer to be available to
purchasers of such ASICs.
6.3 APPLICATION KITS. Subject to the terms and conditions of this
Agreement including without limitation Section 8, either Party may make
available to Third Parties an ASIC applications kit containing technical
and other information to assist such Third Parties to develop Microsoft
PLC Compatible products. During the Exclusivity Period, as that term is
defined in Section 4.2.1 of this Agreement, Intellon shall obtain
Microsoft's written approval prior to Intellon's distribution of any
applications kit embodying Phase 2 Intellectual Property. Nothing in
this section shall be construed to expand the license grants provided in
Sections 2, 3 or 4 of this Agreement.
6.4 SUPPORT TO THIRD PARTIES. Intellon shall act as a free agent
contractor to provide to Third Parties to whom Microsoft has granted
rights in the Phase 1 Intellectual Property, Phase 1 Deliverables, Phase
2 Deliverables, or Intellon Intellectual Property, at the request of
those parties, technical support and consulting at Intellon's then
standard commercial rates in connection with such Third Parties'
understanding, use, and exploitation of the Phase 1 Intellectual
Property, Phase 1 Deliverables, Phase 2 Deliverables or Intellon
Intellectual Property.
6.5 COMPLIANCE TESTING. Microsoft, in its sole discretion, may request
that Intellon provide compliance testing services for Third Parties, for
the purpose of evaluating whether products distributed by such Third
Parties are Microsoft PLC Compatible. In the event that Microsoft
requests and Intellon agrees to provide such compliance testing
services, either Microsoft or the Third Parties may contract with
Intellon, at Intellon's then standard commercial rates and subject to
the mutual agreement of the contracting parties, to develop a compliance
testing suite which includes a "seal of approval" mechanism. Microsoft
shall approve in writing any such compliance testing suite before it is
implemented.
6.6 MARKING FOR ASICS INCORPORATING LICENSED INTELLON PATENTS. In
accordance with the patent marking provisions of U.S.C. Title 35,
Microsoft agrees to use commercially reasonable best efforts to require
its licensees to mark stand-alone ASICs (or the tube or packaging
containing the ASIC) with the numbers of all licensed Intellon U.S.
patents covering the ASIC, which numbers shall be provided by Intellon
to Microsoft. Microsoft agrees, as a condition of any license permitting
the manufacture of a ASIC, to require that Intellon shall be a third
party beneficiary of any such license entitled to enforce the marking
requirement set forth in this Section. There shall be no requirement to
mark Microsoft PLC Products which contain ASICs as a component or
integrated portion thereof with such patent numbers.
7. NO OBLIGATION/INDEPENDENT DEVELOPMENT. Notwithstanding any other provision of
this Agreement, neither Party shall have any obligation to market, sell or
otherwise distribute Intellectual
13
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 14
CONFIDENTIAL TREATMENT REQUESTED
Property licensed from the other Party, either alone or in any product. Except
as provided in Section 8, nothing in this Agreement will be construed as
restricting either Party's ability to acquire, license, develop, manufacture or
distribute for itself, or have others acquire, license, develop, manufacture or
distribute for that Party, similar technology performing the same or similar
functions as the technology contemplated by this Agreement, or to market and
distribute such similar technology in addition to, or in lieu of, the technology
contemplated by this Agreement.
8. CONFIDENTIALITY
8.1 OBLIGATIONS. Each Party shall protect the other Party's Confidential
Information from unauthorized disclosure and use with the same degree of
care that such Party uses to protect its own like information, but in no
event with less than reasonable care. Neither Party will use the other
Party's Confidential Information for purposes other than those necessary
to directly further the purposes of this Agreement. Neither Party will
disclose to Third Parties the other Party's Confidential Information
without the prior written consent of the other Party.
8.2 RESIDUALS. The Parties' obligations of confidentiality under this
Agreement shall not be construed to limit either Party's right to
independently develop or acquire products without use of the other
Party's Confidential Information. Further, either Party shall be free to
use for any purpose the residuals resulting from access to or work with
such Confidential Information, provided that such Party shall maintain
the confidentiality of the Confidential Information as provided herein.
The term "residuals" means information in non-tangible form, which may
be retained by persons who have had access to the Confidential
Information, including ideas, concepts, know-how or techniques contained
therein. Neither Party shall have any obligation to limit or restrict
the assignment of such persons or to pay royalties for any work
resulting from the use of residuals. However, the foregoing shall not be
deemed to grant to either Party a license under the other Party's
copyrights or patents beyond that specifically granted by the terms of
this Agreement.
8.3 CONFIDENTIALITY OF AGREEMENT. Each Party agrees that the terms and
conditions, but not the existence, of this Agreement shall be treated as
the other's Confidential Information and that no terms and conditions of
this Agreement can be disclosed without the prior written consent of the
other Party; provided, however, that each Party may disclose the terms
and conditions of this Agreement: (i) as required by any court or other
governmental body; (ii) as otherwise required by law; (iii) to legal
counsel of the Parties; (iv) in connection with the requirements of an
initial public offering or securities filing; (v) in confidence, to
accountants, banks, and financing sources and their advisors; (vi) in
confidence, in connection with the enforcement of this Agreement or
rights under this Agreement; or (vii) in confidence, in connection with
a merger or acquisition or proposed merger or acquisition, or the like.
8.4 COMPELLED DISCLOSURE. If either Party believes that it will be
compelled by a court or other authority to disclose Confidential
Information of the other, such Party shall give such other Party prompt
notice so that such other Party may take steps to oppose such
disclosure.
9. WARRANTIES.
9.1 BY INTELLON. Intellon warrants and represents that:
14
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 15
CONFIDENTIAL TREATMENT REQUESTED
9.1.1 It has the full power to enter into this Agreement and make
the assignments and grant the license rights set forth herein;
9.1.2 It has not previously and will not grant any rights in the
Phase 1 Intellectual Property, Derivative Technology of the Phase
1 Intellectual Property, the Phase 1 Deliverables, the Phase 2
Deliverables, or the Intellon Intellectual Property to any Third
Party that would prevent Intellon from granting to Microsoft the
rights described in this Agreement or that would prevent
Microsoft from exercising the rights that it is being granted
under this Agreement;
9.1.3 The Phase 1 Intellectual Property, the Phase 1
Deliverables, the Phase 2 Deliverables, the Phase 2 Intellectual
Property (other than as provided by Microsoft) and the Intellon
Intellectual Property are original to Intellon or appropriately
licensed from Third Parties, do not infringe any copyright, trade
secret, or other proprietary rights (other than patents) held by
any Third Party and, to the reasonable knowledge of Intellon
without an obligation to conduct a patent search, do not infringe
any patent rights held by any Third Party;
9.1.4 The Phase 1 Deliverables, Phase 1 Intellectual Property,
Phase 2 Deliverables, Phase 2 Intellectual Property (other than
as provided by Microsoft) and the Intellon Intellectual Property
have been or will be created by employees of Intellon within the
scope of their employment and under obligation to assign
inventions to Intellon, or by independent contractors under
written obligations to assign all rights in the foregoing to
Intellon (as set forth in Section 3.5), or have been or will be
licensed to Intellon with all rights necessary to grant the
rights described in this Agreement; and
9.1.5 In the event any bugs, errors or other deviations from the
Phase 1 Specifications or recurring systemic failures (except for
failures caused by compliance with the Phase 1 Specifications,
Phase 1 Requirements or Phase 1 Statement of Work) are discovered
in the Phase 1 Deliverables within one (1) year of Microsoft's
acceptance of the same, or in the event any bugs, errors or other
deviations from the Phase 2 Specifications or recurring systemic
failures (except for failures caused by compliance with the Phase
2 Specifications, Phase 2 Requirements or Phase 2 Statement of
Work) are discovered in the Phase 2 Deliverables within one (1)
year of Microsoft's acceptance of the same, Intellon will use its
commercially reasonable best efforts to correct such errors or
deficiencies and to deliver to Microsoft corrected Phase 1
Deliverables or Phase 2 Deliverables as the case may be.
9.2 BY MICROSOFT. Microsoft warrants and represents that:
9.2.1 It has the full power to enter into this Agreement and make
the assignments and license rights set forth herein and that it
has not previously and will not grant any rights in the Phase 2
Intellectual Property to any Third Party that would prevent
Microsoft from granting to Intellon the rights described in this
Agreement or that would prevent Intellon from exercising the
rights that it is being granted under this Agreement;
9.2.2 The Phase 2 Intellectual Property provided by Microsoft is
original to Microsoft or appropriately licensed from Third
Parties, does not infringe any copyright, trade secret, or other
proprietary rights (other than patents) held by any Third Party,
and,
15
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 16
CONFIDENTIAL TREATMENT REQUESTED
within the reasonable knowledge of Microsoft, does not
infringe any patent rights held by any Third Party; and
9.2.3 The Phase 2 Intellectual Property provided by Microsoft has
been or will be created by employees of Microsoft within the
scope of their employment and under obligation to assign
inventions to Microsoft, or by independent contractors under
written obligation to assign all rights in the foregoing to
Microsoft, or have been or will be licensed to Microsoft with all
rights necessary to grant the rights described in this Agreement.
10. INDEMNIFICATION.
10.1 INDEMNITY BY INTELLON. Intellon shall, at its expense and
Microsoft's request, defend any claim or action brought against
Microsoft, or Microsoft's affiliates, directors, officers, employees,
OEMs, licensees, distributors, agents and independent contractors
(collectively the "Microsoft Indemnitees"), to the extent it is based
upon a Third Party claim that if true, would constitute a breach of an
Intellon warranty under Section 9.1 (collectively, "Intellon Claims"),
and Intellon will indemnify and hold the Microsoft Indemnitees harmless
from and against any costs, damages and fees reasonably incurred by the
Microsoft Indemnitees, including but not limited to reasonable fees of
outside attorneys and other professionals, that are attributable to such
Intellon Claims. Microsoft shall: (i) provide Intellon reasonably prompt
notice in writing of any such Intellon Claims and permit Intellon,
through counsel chosen by Intellon and acceptable to Microsoft in its
reasonable discretion, to answer and defend such Intellon Claims; and
(ii) provide Intellon with reasonable information, assistance and
authority, at Intellon's expense, to help defend such Intellon Claims.
Intellon will not be responsible for any settlement made by Microsoft
without Intellon's written permission, which permission will not be
unreasonably withheld or delayed. Microsoft reserves the right to retain
its own counsel at its expense to participate in the defense of any
Intellon Claim. Unless Intellon obtains for Microsoft a complete release
of all Intellon Claims thereunder, Intellon may not settle any Intellon
Claim under this Section 10.1 on Microsoft Indemnitees' behalf without
first obtaining Microsoft's written permission, which permission will
not be unreasonably withheld or delayed. In the event Microsoft and
Intellon agree to settle an Intellon Claim, Intellon agrees not to
publicize the settlement without first obtaining Microsoft's written
permission, which permission will not be unreasonably withheld or
delayed. If at any time after such an Intellon Claim has been made,
Microsoft's licensed use of the Phase 1 Intellectual Property, the Phase
1 Deliverables, the Phase 2 Deliverables, the Intellon Intellectual
Property or the Derivative Technology licensed to Microsoft under
Section 4.2.3 ("Intellon Technology") is reasonably expected to be
enjoined, Intellon shall at its sole expense, and prior to the issuance
of any such injunction, either, at Intellon's discretion, (i) procure
for Microsoft the right to continue selling the Microsoft PLC Product(s)
and licensing the Intellon Technology, or (ii) replace the alleged
infringing Intellon Technology with a version that is non-infringing,
with the same functionality and performance and pay Microsoft's actual
cost of recalling and reworking Microsoft PLC Products to install the
non-infringing Intellon Technology. Intellon shall have no liability to
Microsoft under this Section 10.1 to the extent that such infringement
is based upon the use of the Intellon Technology in combination with
other components, equipment or software not furnished by Intellon where
the infringement would not have occurred but for the combination.
10.2 INDEMNITY BY MICROSOFT. Microsoft shall, at its expense and
Intellon's request, defend any claim or action brought against Intellon,
directors, officers, employees, agents and
16
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 17
CONFIDENTIAL TREATMENT REQUESTED
independent contractors (collectively the "Intellon Indemnitees") ,
that, if true, would constitute a breach of a Microsoft warranty under
Section 9.2 (collectively, "Microsoft Claims"), and Microsoft will
indemnify and hold the Intellon Indemnitees harmless from and against
any costs, damages and fees reasonably incurred by the Intellon
Indemnitees, including but not limited to reasonable fees of outside
attorneys and other professionals, that are attributable to such
Microsoft Claims. Intellon shall: (i) provide Microsoft reasonably
prompt notice in writing of any such Microsoft Claims and permit
Microsoft, through counsel chosen by Microsoft and acceptable to
Intellon in its reasonable discretion, to answer and defend such
Microsoft Claims; and (ii) provide Microsoft with reasonable
information, assistance and authority, at Microsoft's expense, to help
Microsoft to defend such Microsoft Claims. Microsoft will not be
responsible for any settlement made by Intellon without Microsoft's
written permission, which permission will not be unreasonably withheld
or delayed. Intellon reserves the right to retain its own counsel at its
expense to participate in the defense of any Microsoft Claim. Unless
Microsoft obtains for Intellon a complete release of all Microsoft
Claims thereunder Microsoft may not settle any Microsoft Claim under
this Section 10.2 on the Intellon Indemnitees' behalf without first
obtaining Intellon's written permission, which permission will not be
unreasonably withheld or delayed. In the event Intellon and Microsoft
agree to settle a Microsoft Claim, Microsoft agrees not to publicize the
settlement without first obtaining Intellon's written permission, which
permission will not be unreasonably withheld or delayed. If at any time
after such a Microsoft Claim has been made, Intellon's licensed use of
the Derivative Technology licensed to Intellon under Section 4.2.4
("Microsoft Technology") is reasonably expected to be enjoined,
Microsoft shall at its sole expense, and prior to the issuance of any
such injunction, either, at Microsoft's discretion, (i) procure for
Intellon the right to continue selling the Intellon products
incorporating the Microsoft Technology and licensing the Microsoft
Technology, or (ii) replace the alleged infringing Microsoft Technology
with a version that is non-infringing, with the same functionality and
performance and pay Intellon's actual cost of recalling and reworking
Intellon products incorporating the Microsoft Technology to install the
non-infringing Microsoft Technology. Microsoft shall have no liability
to Intellon under this Section 10.2 to the extent that such infringement
is based upon the use of the Microsoft Technology in combination with
other components, equipment or software not furnished by Microsoft where
the infringement would not have occurred but for the combination.
11. [INTENTIONALLY LEFT BLANK]
12. TERM AND TERMINATION.
12.1 TERM. The term of this Agreement shall commence as of the Effective
Date and shall continue until terminated as provided in this Section 12
or as set forth in Sections 2.1.2, 2.2, 3.2 or 3.3.
12.2 TERMINATION BY MICROSOFT WITHOUT CAUSE. Microsoft may terminate
this Agreement for any reason, without cause, upon written notice.
12.3 TERMINATION BY EITHER PARTY FOR CAUSE. Either Party may suspend
performance and/or terminate this Agreement immediately upon written
notice at any time if the other Party is in material breach of any
material warranty, term, condition or covenant of this Agreement and
fails to cure that breach within sixty (60) days after written notice
thereof.
17
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 18
CONFIDENTIAL TREATMENT REQUESTED
12.4 TERMINATION DURING PHASE 1.
12.4.1 By Microsoft For Cause. In the event of termination of the
Agreement by Microsoft during Phase 1 pursuant to Section 2.1.2
as a result of Intellon's failure to deliver Phase 1 Deliverables
that are substantially complete within fifteen (15) days after
the delivery date specified in the Phase 1 Schedule for the Phase
1 Deliverables (or as such date as been mutually extended) or a
material breach by Intellon of Section 8 of this Agreement
occurring prior to such delivery date, Intellon shall return to
Microsoft, within five (5) days after the date of termination,
the Three Million Dollars (US $3,000,000) sum paid to it under
Section 2.4 of this Agreement and the license grants in Section
2.3 shall terminate and Intellon shall not be entitled to receive
the balance of Three Million Dollars (US $3,000,000) provided for
in Section 2.4 of this Agreement. In the event of termination of
the Agreement by Microsoft during Phase 1 pursuant to Sections
2.1.2 (except for the cause specified in the previous sentence),
2.2 or 12.3, the license grants in Section 2.3 shall terminate
and Intellon shall not be entitled to receive the balance of
Three Million Dollars (US $3,000,000) provided for in Section 2.4
of this Agreement.
12.4.2 By Microsoft Without Cause or By Intellon For Cause. In
the event of a termination of the Agreement by Microsoft pursuant
to Section 12.2, or by Intellon pursuant to Section 12.3, before
Microsoft's acceptance of the Phase 1 Deliverables, Intellon
shall discontinue all work then being performed under Phase 1
upon receipt or giving of the termination notice, whichever is
appropriate. Intellon shall be entitled to keep all payments
made, or required to be made, by Microsoft under this Agreement
as of the date of termination and the license grants in Section
2.3 shall terminate.
12.5 TERMINATION DURING PHASE 2.
12.5.1 By Microsoft For Cause. In the event of a termination of
the Agreement by Microsoft pursuant to Sections 3.2, 3.3 or 12.3
during Phase 2 prior to Microsoft's acceptance of the Phase 2
Deliverables, Intellon will discontinue all work then being
performed under Phase 2 upon the receipt of the termination
notice. Microsoft shall have the option of either: (i) receiving
from Intellon (within ten (10) days after the date of
termination), and retaining, the work in progress as Phase 2
Intellectual Property in which case Intellon shall be entitled to
keep all payments made, or required to be made, by Microsoft
under this Agreement as of the date of termination and all
license grants and ownership provisions and restrictions under
Sections 3 and 4.2 shall survive termination (but the
cross-licensing provisions of Sections 4.3.2 and 4.4.2 shall
terminate); or (ii) assigning all Phase 2 work in progress to
Intellon (except for any Intellectual Property contributed by
Microsoft to the Phase 2 work in progress) in which case Intellon
shall refund to Microsoft all payments made by Microsoft to
Intellon pursuant to Section 3.4 and the license grants and
ownership provisions under Section 3, 4.3.2 and 4.4.2, and the
restrictions of Section 4.2 on Intellon's sublicensing rights,
shall terminate. In addition to the Sections set forth in Section
12.7 below and set forth in clause (i) of the preceding sentence,
Sections 2, 4.1, 4.3.1, 4.4.1 and 6.6 shall survive termination
in either event.
12.5.2 By Microsoft Without Cause or by Intellon For Cause. In
the event of a termination of the Agreement by Microsoft pursuant
to Section 12.2, or by Intellon pursuant to Section 12.3, during
Phase 2 prior to Microsoft's acceptance of the Phase 2
18
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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 19
CONFIDENTIAL TREATMENT REQUESTED
Deliverables, Intellon will discontinue all work then being
performed under Phase 2 upon the receipt of the termination
notice. Intellon shall turn over to Microsoft all work in
progress applicable to Phase 2 within ten (10) days after the
termination date. Intellon shall be entitled to keep all
payments made, or required to be made, by Microsoft under this
Agreement as of the date of termination. In addition to the
Sections set forth in Section 12.7 below, Sections 2, 3, 4.1,
4.2, 4.3.1, 4.4.1 and 6.6 shall survive termination.
12.6 TERMINATION AFTER PHASE 2.
12.6.1 By Microsoft Without Cause. If Microsoft terminates the
Agreement pursuant to Section 12.2 after Microsoft's acceptance
of the Phase 2 Deliverables, the cross-licensing provisions of
Sections 4.3.2 and 4.4.2 shall terminate. In addition to the
Sections set forth in Section 12.7 below, Sections 2, 3, 4.1,
4.2, 4.3.1, 4.4.1 and 6.6 shall survive termination.
12.6.2 By Either Party For Cause. If either Party terminates the
Agreement pursuant to Section 12.3 after Microsoft's acceptance
of the Phase 2 Deliverables, the cross-licensing provisions of
Sections 4.3.2 and 4.4.2 shall terminate. In addition to the
Sections set forth in Section 12.7 below, Sections 2, 3, 4.1,
4.2, 4.3.1, 4.4.1 and 6.6 shall survive termination.
12.7 EFFECT OF TERMINATION. In the event of termination or expiration
of this Agreement for any reason, Sections 1, 6.1, 7, 8, 9, 10, 12, 13
and 14 (except Section 14.5, which shall terminate) shall survive
termination.
12.8 BREACH OF SECTION 4.1.1. In the event that Microsoft
unintentionally breaches the field of use restrictions set forth in
Section 4.1.1 (i.e., the breach occurs without the manager(s)
responsible for the breach being aware of the existence of the field of
use restriction), within ninety (90) days after receipt of notice of
such breach from Intellon, Microsoft may cure such breach by exercising
the option set forth in Section 4.1.2 if the option by its terms is
still available. If the option is not available or if Microsoft chooses
not to exercise the option, the parties shall enter into good faith
discussions to determine the cure for the breach. Possible cures for the
breach shall include without limitation: (i) Microsoft's termination of
the sale or license of the products which are intended for uses outside
of those authorized in Section 4.1.1 and (ii) agreement between the
parties to remove the Section 4.1.1 restrictions in whole or in part in
return for either a lump sum payment or royalties. The Parties shall
have ninety (90) days in which to negotiate a cure for such breach. If
the cure is (i) above, Microsoft shall have a commercially reasonable
time to effect such a cure.
13. LIMITATION OF LIABILITIES. EXCEPT FOR A BREACH OF SECTIONS 8, 9 OR 10,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY EVENT, EITHER PARTY'S CUMULATIVE
LIABILITY TO THE OTHER PARTY SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY
MICROSOFT TO INTELLON UNDER SECTION 2.4 AND 3.4. THIS LIMITATION OF LIABILITY
SHALL NOT APPLY WITH REGARD TO AN ACTION BY INTELLON TO OBTAIN PAYMENTS REQUIRED
TO BE MADE UNDER SECTIONS 2.4 AND 3.4 AND EXHIBIT B.
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CONFIDENTIAL TREATMENT REQUESTED
14. GENERAL.
14.1 NOTICES. All notices and requests in connection with this Agreement
shall be deemed given as of the day they are received either by
messenger, delivery service, or in the United States of America mails,
postage prepaid, certified or registered, return receipt requested, and
addressed as follows:
TO INTELLON: TO MICROSOFT:
Intellon Corporation Microsoft Corporation
5100 West Silver Springs Blvd. One Microsoft Way
Ocala, FL 34482 Redmond, WA 98052-6399
Attention: Eric Buffkin Attention: V.P. of Hardware
Phone: (352) 237-7416 Phone: (425) 882-8080
Fax: (352) 237-7616 Fax: (425) 936-7329
E-mail: [email protected]
Copy to: Fish & Richardson Copy to: Law & Corporate Affairs
225 Franklin Street Fax: (425) 936-7409
Boston, MA 02110
Attention: G. Roger Lee
Phone: (617) 521-7039
Fax: (617) 542-8906
E-mail: [email protected]
or to such other address as a Party may designate pursuant to this
notice provision.
14.2 INDEPENDENT CONTRACTORS. Intellon and Microsoft are independent
entities, and nothing in this Agreement shall be construed as creating
an employer-employee relationship, a partnership, or a joint venture
between the Parties.
14.3 TAXES.
14.3.1 The amounts to be paid by Microsoft to Intellon herein do
not include any state or local sales or use taxes now or
hereafter imposed on the provision of goods and services to
Microsoft by Intellon under this Agreement. Any such sales or use
taxes that (i) are owed by Microsoft solely as a result of
entering into this Agreement and the payment of the fees
hereunder, (ii) are required to be collected from Microsoft by
Intellon under applicable law, and (iii) are based solely upon
the amounts payable under this Agreement (the "Collected Taxes")
shall be stated separately as applicable on Intellon's invoices
and shall be remitted by Microsoft to Intellon, whereon Intellon
shall remit to Microsoft official tax receipts indicating that
such taxes have been collected by Intellon. Microsoft may provide
to Intellon an exemption certificate acceptable to the relevant
taxing authority (including without limitation a resale
certificate) in which case Intellon shall not collect the taxes
covered by such certificate. Intellon agrees to take such steps
as are requested by Microsoft to minimize such taxes in
accordance with all relevant laws and to cooperate with and
assist Microsoft, at Microsoft's request, in challenging the
validity of any taxes collected from Microsoft by Intellon or
otherwise paid by Microsoft. Intellon shall indemnify and hold
Microsoft harmless from any
20
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CONFIDENTIAL TREATMENT REQUESTED
Collected Taxes, penalties, interest, or additions to tax
arising from amounts paid by Microsoft to Intellon under this
Agreement, that are asserted or assessed against Microsoft to
the extent such amounts relate to amounts that are paid to or
collected by Intellon from Microsoft under this section.
14.3.2 All amounts to be paid by Microsoft to Intellon herein
exclude any foreign, U.S. federal, state, local, municipal or
other governmental taxes arising as a result of the transactions
contemplated under this Agreement including, without limitation,
(a) taxes imposed or based on or with respect to or measured by
any net or gross income or receipts of Intellon, (b) any
franchise taxes, taxes on doing business, gross receipts taxes or
capital stock taxes (including any minimum taxes and taxes
measured by any item of tax preference), (c) any taxes imposed or
assessed after the date upon which this Agreement is terminated,
(d) taxes based upon or imposed with reference to Intellon's real
and personal property ownership (e) any taxes imposed with
respect to the employees or independent contractors of Intellon
(including, without limitation, federal insurance contributions
act (FICA) taxes, federal unemployment tax act (FUTA) taxes, or
income tax withholding or any similar state taxes) (f) any taxes
similar to or in the nature of those taxes described in (a), (b),
(c), (d) or (e) above, now or hereafter imposed on Intellon or
any Third Parties with which Intellon enters into agreements
relating to its undertakings hereunder (collectively "Taxes").
Microsoft is not liable for any Taxes, duties, levies, fees,
excises or tariffs or any penalties, interest or any additions
thereon, incurred in connection with or related to the sale of
goods and services under this Agreement, provided that Microsoft
shall pay Intellon Collected Taxes in accordance with subsection
(a) above. Such Taxes (other than Collected Taxes) shall be the
responsibility of Intellon, including penalties, interest and
other additions thereon, and Intellon agrees to indemnify, defend
and hold Microsoft harmless from any Taxes or claims, causes of
action, costs (including without limitation, reasonable
attorneys' fees), penalties, interest charges and other
liabilities of any nature whatsoever related to such Taxes.
14.3.3 If taxes are required to be withheld on any amounts
otherwise to be paid by Microsoft to Intellon, Microsoft will
deduct such taxes from the amount otherwise owed and pay them to
the appropriate taxing authority. At Intellon's written request
and expense, Microsoft will use reasonable efforts to cooperate
with and assist Intellon in obtaining tax certificates or other
appropriate documentation evidencing such payment provided,
however, that the responsibility for such documentation shall
remain with Intellon.
14.4 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Washington as though entered into between Washington
residents and to be performed entirely within the State of Washington,
and Intellon consents to jurisdiction and venue in the state and federal
courts sitting in the State of Washington.
14.5 ASSIGNMENT.
14.5.1 Restriction on Assignment and Delegation. This Agreement
shall be binding upon and inure to the benefit of each Party's
respective successors and lawful assigns; provided, however, that prior
to the completion of Phase 1, or prior to the completion of Phase 2 if
the Parties enter into Phase 2, Intellon may not assign its rights or
delegate its obligations under this Agreement to any other party, in
whole or in part, whether by sale of assets, merger (whether or not
Intellon is the surviving entity), or transfer of management or control
of Intellon, or by operation of law or otherwise, without the prior
written approval of Microsoft, which approval
21
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<PAGE> 22
CONFIDENTIAL TREATMENT REQUESTED
shall not be unreasonably withheld. Intellon shall guarantee the
performance by any successor or assignee of any and all of the
obligations imposed by this Agreement.
14.5.2 Effect of Microsoft Termination. This restriction on
assignment and delegation terminates immediately upon Microsoft's
termination of the Agreement under any of the various termination
provisions of Section 12.
14.5.3 Definition of Control. For purposes of this Section,
"control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
a legally recognizable entity, whether through the ownership of voting
shares, by contract, or otherwise. Transfer of more than 30% of any
class of Intellon's voting stock to another person or entity shall
constitute a transfer of control. In the case of such an entity that is
a partnership, limited liability company, corporation, or similar entity
and that has partners, members, or shareholders with equal ownership
interests or equal control interests (by contract or otherwise), each
such partner, member, or shareholder shall be deemed to possess the
power to direct or cause the direction of the management and policies of
that entity.
14.5.4 Obtaining Approval from Microsoft. If Intellon desires to
effect a transaction (e.g., a merger, acquisition, or refinancing) that
would amount to a transfer of control requiring Microsoft's approval
hereunder, Intellon shall request Microsoft's approval in writing.
Microsoft shall inform Intellon of its decision in writing within 15
days. Failure to respond within such time shall be deemed disapproval by
Microsoft.
14.6 CONSTRUCTION. If for any reason a court of competent
jurisdiction finds any provision of this Agreement, or portion thereof,
to be unenforceable, that provision of the Agreement will be enforced to
the maximum extent permissible so as to effect the intent of the
Parties, and the remainder of this Agreement will continue in full force
and effect. Failure by either Party to enforce any provision of this
Agreement will not be deemed a waiver of future enforcement of that or
any other provision. This Agreement has been negotiated by the Parties
and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor
or against either Party.
14.7 ENTIRE AGREEMENT. This Agreement does not constitute an offer by
Microsoft and it shall not be effective until signed by both Parties.
This Agreement constitutes the entire agreement between the Parties with
respect to the Services and all other subject matter hereof and merges
all prior and contemporaneous communications. It shall not be modified
except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of Intellon and Microsoft by their
respective duly authorized representatives.
14.8 EXHIBITS. The following Exhibits are part of this Agreement:
Exhibit A - Power Line Carrier Technology Definition
Exhibit B - Royalties
Exhibit C - Phase 1
Exhibit D - Elements for Phase 2
Exhibit E Independent Contractor Assignment of Rights Form
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of
the Effective Date written above.
22
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Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
<TABLE>
<CAPTION>
MICROSOFT CORPORATION INTELLON CORPORATION.
<S> <C>
-------------------------- -----------------------------------
By (Sign) By (Sign)
-------------------------- -----------------------------------
Name (Print) Name (Print)
-------------------------- -----------------------------------
Title Title
-------------------------- -----------------------------------
Date Date
-----------------------------------
Intellon's Federal Employer ID
number
</TABLE>
23
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Commission pursuant to an application for confidential treatment under Rule 406.
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CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
POWER LINE CARRIER (PLC) TECHNOLOGY DEFINITION
SUMMARY
Two separate PLC technologies are being licensed by Intellon Corporation
to Microsoft Corporation in accordance with the attached license agreement. The
first is called Spread Spectrum Carrier(TM) (SSC). The second is called Intellon
Enhanced OFDM (IEOFDM).
SPREAD SPECTRUM CARRIER
SSC Technology is a method of spread spectrum communications suitable
for carrier sense multiple access (CSMA) networks. SSC Technology utilizes a
series of short, self-synchronizing, frequency swept "chirps" that act as a
carrier. The chirps are always of the same known pattern and detectable by all
of the nodes on the network. This approach is described in U.S. patent number
5,090,024, "Spread Spectrum Communications System for Networks" and number
5,574,748, "Spread Spectrum Communications System for Networks".
Chirps can be divided into two frequency swept portions so that the
beginning and end of the chirp occur at the intermediate frequency of the sweep
range. This allows the frequency transitions to be controlled so that less
out-of-band energy is produced. This technique is described in U.S. patent
number 5,263,046, "Spread-Spectrum Chirp Communication with Sharply Defined
Bandwidth".
In the embodiment of SSC used in conjunction with EIA-600 (SSC), two
modulation schemes are used for symbol transmission by the physical layer.
Amplitude Shift Keying (ASK) is used in the preamble of the message packet. ASK
modulation uses alternating SUPERIOR and INFERIOR states to encode symbols. A
SUPERIOR state is represented by the presence of a chirp and an inferior state
by the absence of a chirp. Because the transmitter is quiet during inferior
states, superior states transmitted by other devices contending for the channel
can be detected during the preamble of the packet. In the preamble, pitch (time
between inception of successive chirps) is slightly longer than in the body of
the packet. This change in pitch allows the receiver to unambiguously determine
the start of packet data and is covered by U.S. patent number 5,278,862, "Timing
for Spread-Spectrum Communication Across Noisy Media".
INTELLON ENHANCED ORTHOGONAL FREQUENCY DIVISION MULTIPLEXING (IEOFDM)
Note: The OFDM program at Intellon is nearing the point at which patents
will be outlined, drafted and filed on crucial and unique pieces of OFDM
technology and implementation. The tutorial shown below outlines the theory of
operation but is not intended to serve as a comprehensive licensing document nor
the final deliverable of the "technology definition document".. It is Intellon's
goal to outline our full patent position and provide Microsoft with a document
similar in scope to that given for SSC (above). This timeframe will in no case
be later than Dec 31, 1998. Until such patents are filed, Intellon will have to
work to protect its proprietary information. As such, Microsoft will have access
to all relevant information but will have to work with Intellon to gain approval
to pass proprietary technical information on to Third Parties such as
sublicensees. Once patents are filed, such precautions shall be lifted
Orthogonal Frequency Division Multiplexing (OFDM) is a spectrum
efficient modulation technique that enables wireless transmission of very high
data rates. Data rates in excess of 100 Million bits per second (Mbps) are
possible. OFDM has characteristics that make it adaptable to environments with
harsh multi-path reflections without equalization. Equalization becomes very
complex and expensive,
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CONFIDENTIAL TREATMENT REQUESTED
if not impossible, for data rates above 10 Mbps. The problems caused by
multi-path reflections increase with distance and data rate.
OFDM has been adopted as the modulation standard in Europe for
terrestrial and satellite audio broadcast (Eureka 147 DAB - Digital Audio
Broadcast - in use in Europe and Canada) and for terrestrial television
broadcast (DVB - Digital Video Broadcast). The decision to select OFDM was
largely due to OFDM's ability to mitigate multi-path reflections while making
efficient use of the available spectrum. The DVB standard provides for net data
rates up to 31.67 Mbps in a channel only 8 MHz wide for distances exceeding 50
miles (using OFDM/64-QAM).
OFDM modulation is essentially the simultaneous transmission of a large
number of narrow band carriers (or subcarriers) each modulated with a low data
rate, the sum total yielding a very high data rate. The history of OFDM dates
back to 1966, when R. W. Chang published his paper on the synthesis of
band-limited orthogonal signals for multichannel transmission (Bell System
Technical Journal). A major contribution to OFDM was later presented in 1971 by
S. B. Weinstein and P. M. Ebert, who used the discrete Fourier transform (DFT)
to perform baseband modulation and demodulation. They also added a guard space
between OFDM symbols to combat intersymbol interference (ISI) caused by
multi-path reflections. In 1980, A. Peled and A. Ruiz introduced the cyclic
prefix in the guard space to solve a final problem with maintaining
orthogonality (lack of which causes interchannel interference (ICI)). With
today's technology, the DFT processor and other circuitry required to implement
OFDM can be built in a very low cost CMOS IC. Very high-speed, low cost
(consumer) transceivers can now be a reality.
THEORY OF OPERATION
The basic idea of OFDM is to divide the available spectrum into many
narrowband, low data rate carriers (or subcarriers). To obtain high spectral
efficiency the frequency response of the subcarriers are overlapping and
orthogonal, hence the name OFDM. Each narrowband subcarrier can be modulated
using various modulation formats where BPSK, QPSK and QAM (or the differential
equivalents) are commonly used.
Since the modulation rate on each subcarrier is very low, each
subcarrier experiences flat fading in a multi-path environment and is easy to
equalize. The need for equalization can be eliminated by selecting a relatively
small subcarrier spacing and using differential QPSK (DQPSK) modulation where
the data is encoded as the difference in phase between subcarriers (see Figure
1). Subcarrier pairs experience flat fading due to the narrow bandwidth they
occupy and the difference in phase and amplitude error between them is small.
Differential modulation can also be encoded as the difference in phase between
the present and previous symbol in time on the same subcarrier.
[GRAPHIC]
Figure 1. Data encoded on the difference in phase between
subcarriers.
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CONFIDENTIAL TREATMENT REQUESTED
TRANSMITTER
OFDM modulation is generated using a fast Fourier transform (FFT)
processor. M bits of data are encoded in the frequency domain onto N subcarriers
as per Figure 2. M = [N-1] x B where B = the number of bits per modulation
symbol. B=2 in the case of QPSK or DQPSK.
An inverse FFT (IFFT) is performed on the set of frequency subcarriers
to convert to the time domain (see Figure 2) to produce a single OFDM "symbol".
The length of time for the OFDM symbol is equal to the reciprocal of the
subcarrier spacing and is generally a very long time compared to the data rate.
[GRAPHIC]
Figure 2. Transform from the frequency to the time domain and adding
the cyclic prefix
RECEIVER
OFDM signals are demodulated by the reverse process of the transmitter
(see Figure 2) where the cyclic prefix is removed from the time domain signal
and an FFT is performed on each symbol to convert to the frequency domain. Data
is decoded (in the case of DQPSK) by examining the phase difference of adjacent
subcarriers. Additional requirements for the receiver are frequency and time
synchronization. Phase synchronization of the local oscillators is not required
with differential modulation.
MULTI-PATH
A cyclic prefix is added to the OFDM symbol to maintain complete
orthogonality in a time-dispersive channel (caused by multi-path reflections) by
copying the last part of the symbol and adding the copy to the beginning of the
symbol (see Figure 2). The long OFDM symbol time (generally many microseconds)
combined with the cyclic prefix (usually a small percent of the OFDM symbol
time) are key factors that enable performance in a time-dispersive channel. The
cyclic prefix needs to be as long as the longest multi-path delay time to
maintain orthogonality (eliminate ICI) and eliminate ISI.
Conventional modulation suffers from interference caused by time-delayed
reflections of the original signal overlapping successive symbols (ISI).
Consider the transmission of conventional QPSK symbols at a rate of 1 MHz
(yielding 2 Mbps) in a time-dispersive channel with reflections delayed as much
as 1 uS. (Multi-path reflections of 1 uS occur in indoor environments with
several hundred feet of range.) In this example, the symbol time is 1/(1 MHz) =
1 uS. When multiple copies of the original signal arrive at the receiver delayed
up to 1 uS, the symbol being decoded (likely to be the signal from the most
direct path) is interfered with and corrupted by the delayed signals which
contain the previous symbol transmitted 1 uS earlier. This distortion can be
corrected with equalization, but becomes much more difficult when the symbol
rate is increased to 10 MHz, for example, where potentially all 10 preceding
symbols interfere with the symbol currently being decoded.
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With OFDM, many hundreds of bits ( see above: [N-1] x B ) are
transmitted for each symbol making the duration of the symbol many microseconds.
Selecting a cyclic prefix of 1 uS for the example above, all received copies of
the original signal would contain the same OFDM symbol (except shifted in time)
and there would be no ISI.
For long distance transmissions (such as the DVB standard where the
distance may be 50 miles or more), the time-dispersion is much longer (many
microseconds). In this case, the OFDM symbol time is specified to be hundreds of
microseconds and the cyclic prefix many microseconds in order to combat
interference from reflections.
FADING
Even though OFDM can eliminate ISI, there remains a problem called
fading, also caused by multi-path reflections. Fading is caused when the
reflected signals arrive such that they cancel (i.e. 180 degrees out of phase)
the signal arriving first. This usually occurs only at particular frequencies
(or subcarriers in the case of OFDM) since the time delay for the reflections
are generally constant whereas the phase angle for a fixed time delay varies
with frequency. The net result is loss of data from some of the subcarriers that
are attenuated due to fading.
A solution is to add interleaving and error coding to recover the lost
bits. This is commonly referred to as coded OFDM (COFDM). Both the DAB and DVB
standards use COFDM.
THE FOREGOING EXHIBIT A IS AGREED TO AND ACCEPTED BY THE PARTIES:
MICROSOFT CORPORATION INTELLON CORPORATION
-------------------------- ------------------------------------
By (Sign) By (Sign)
-------------------------- ------------------------------------
Name (Print) Name (Print)
-------------------------- ------------------------------------
Title Title
-------------------------- ------------------------------------
Date Date
EXHIBIT B
ROYALTIES FOR
ASICs IN NON-MICROSOFT PRODUCTS
1. ROYALTIES FOR MICROSOFT ASIC SALES TO THIRD PARTIES FOR NON-
MICROSOFT PRODUCTS. In the event that Microsoft sells Royalty-Bearing ASICs
manufactured by or for Microsoft to any Third Party for use in a product that is
not a Microsoft Product :
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CONFIDENTIAL TREATMENT REQUESTED
1.1 Microsoft agrees to pay a royalty of ********** of the amount paid
by Microsoft to its Authorized Manufacturer for the manufacture of
Royalty-Bearing ASICs sold to Third Parties for use in a product that is
not a Microsoft Product. The "amount paid" for purposes of this Section
1.1 shall exclude any set-up charges or other costs not charged on a per
unit basis that are not exclusively for the manufacture of
Royalty-Bearing ASICs. The royalty percentage set forth in this Section
2.1 shall be adjusted to ********** pursuant to the provisions of
Section 3 of this Exhibit B.
1.2 Within forty five (45) days after the end of each calendar quarter
with respect to which Microsoft owes Intellon any royalties, Microsoft
agrees to furnish Intellon with a statement, together with payment for
any amount shown thereby to be due to Intellon. The royalty statement
shall contain information sufficient to discern how the royalty payment
was computed.
1.3 Microsoft shall be entitled to withhold from all royalties otherwise
payable hereunder a reasonable reserve, made in good faith, against
anticipated returns of Royalty-Bearing ASICs, which reserve shall not
exceed ********** of all amounts due hereunder for the two most recent
calendar quarters, without adjustment for reserve, and which reserve
shall be reviewed quarterly in light of the actual returns of the
preceding two (2) quarters. The excess or short-fall, if any, of such
reserve balance at the time of such quarterly review over or under the
actual aggregate amount of returns for such period shall be credited to
or debited against the next payment due Intellon hereunder.
1.4 Intellon shall have the right to have a Third Party approved by
Microsoft conduct an audit of Microsoft's records relating to
Microsoft's sales of Royalty-Bearing ASICs that are not in Microsoft
Products to Third Parties in order to verify the royalties due under
Section 1 of this Exhibit B. Any such audit shall be conducted at a
mutually agreed-upon location (which shall not be on Microsoft property
unless specifically agreed to by Microsoft) during regular business
hours no more than once per calendar year. Intellon shall provide
Microsoft at least thirty (30) day's written notice that Intellon is
initiating an audit and Microsoft shall gather and provide the relevant
records as reasonably requested. Any audit shall be conducted at
Intellon's expense. Prompt adjustment shall be made of any material
discrepancies disclosed by such audit.
1.5 The royalty obligation imposed by Section 1 of this Exhibit B shall
terminate ********** from the Safe Ad Date of the first Microsoft PLC
Product. All ASIC sales by Microsoft after that date shall be
royalty-free.
1.6 Notwithstanding the provisions of this Exhibit B, any
Royalty-Bearing ASIC used by Microsoft or its contractors for
development, marketing, or related purposes, including any such ASIC
distributed as "free," "complimentary," "no charge," or at nominal
prices less than One Dollar (US $1.00) per ASIC to promote or stimulate
sales of Microsoft PLC Compatible products, limited to no more than one
hundred ASICs to any single entity, and any sales to Microsoft employees
that are not subject to resale, shall be exempt from royalty.
1.7 For purposes of calculating the royalty due under Section 1.1 of
this Exhibit, in cases where the SSC or IEOFDM technologies constitute a
subset of the full functions of a Royalty-Bearing ASIC, the percentage
of gates incorporating the SSC or IEOFDM technologies out of the total
number of gates in such ASIC shall be applied to the sales price of the
ASIC to determine the "amount paid' for purposes of Section 1.1 of this
Exhibit. This allocation shall apply only in cases where SSC or
IEOFDM-related gates represent less than ********** of the ASIC gate
total. (For example, if ********** of the gates in such ASIC incorporate
the SSC or IEOFDM
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<PAGE> 29
CONFIDENTIAL TREATMENT REQUESTED
technologies, the royalty shall be calculated based on ********** of the
amount paid; if ********** of the gates in such ASIC incorporate the SSC
or IEOFDM technologies, the royalty shall be calculated based on
********** of the amount paid.) If the percentage of gates in a
Royalty-Bearing ASIC that incorporate the SSC or IEOFDM technologies is
less than ********** allocation shall be applied to determine the amount
paid for purposes of Section 1.1 of this Exhibit.
2. ROYALTIES FOR ASIC SALES TO THIRD PARTIES BY AUTHORIZED MANUFACTURER(s).
2.1 Microsoft agrees that, in any contract whereby Microsoft licenses an
Authorized Manufacturer to manufacture and sell Royalty-Bearing ASICs to
Third Parties, Microsoft shall require such Authorized Manufacturer to
pay a royalty to Intellon in the amount of ********** of the amount
received by such Authorized Manufacturer for each such ASIC (the "Sales
Price"), for sales to any Third Party.
2.2 The royalty percentage set forth in Section 2.1 of this Exhibit B
shall be adjusted to ********** pursuant to the provisions of Section 3
of this Exhibit B.
2.3 Microsoft agrees, in any contract subject to Section 2.1 of this
Exhibit B, to require that any royalties due be paid to Intellon within
forty-five (45) days of the end of the each calendar quarter with
respect to which the Authorized Manufacturer owes Intellon any
royalties, together with a statement containing information sufficient
to discern how the royalty payment was computed.
2.4 For purposes of calculating the royalty due under Section 2.1 of
this Exhibit, in cases where the SSC or IEOFDM technologies constitute a
subset of the full functions of a Royalty-Bearing ASIC, the percentage
of gates incorporating the SSC or IEOFDM technologies out of the total
number of gates in such ASIC shall be applied to the sales price of such
ASIC to determine Sales Price for royalty purposes. This allocation
shall apply only in cases where SSC or IEOFDM-related gates represent
********** of the Royalty-Bearing ASIC gate total. (For example, if
********** of the gates in a Royalty-Bearing ASIC incorporate the SSC or
IEOFDM technologies, the royalty shall be calculated based on **********
of the Sales Price; if ********** of the gates in such ASIC incorporate
the SSC or IEOFDM technologies, the royalty shall be calculated based on
********** of the Sales Price.) If the percentage of gates in a
Royalty-Bearing ASIC that incorporates the SSC or IEOFDM technologies is
less than ********** allocation shall be applied to determine the Sales
Price for royalty purposes.
2.5 In cases where an Authorized Manufacturer manufactures
Royalty-Bearing ASICs as an integrated portion and/or component of a
finished product, the larger of: (i) the per ASIC average selling price
booked by the Authorized Manufacturer for that internal transfer, as
otherwise determined under Section 2.3 of this Exhibit, (ii) the Sales
Price for sales to the second largest outside ASIC customer of the
Authorized Manufacturer, or (iii) in cases where the Authorized
Manufacturer has only one outside ASIC customer, the Sales Price for
sales to that customer, shall be used to determine the Sales Price for
royalty purposes. The foregoing shall be subject to the adjustment set
forth in Section 2.4 of this Exhibit B.
2.6 Microsoft agrees that any contract subject to Section 2.1 of this
Exhibit B shall provide Intellon with the right to have an independent
Third Party conduct an audit of Royalty-Bearing ASIC sales by an
Authorized Manufacturer in order to verify the royalties due under
Section 2 of this Exhibit B. Any such audit shall be conducted during
regular business hours no more than
29
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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 30
CONFIDENTIAL TREATMENT REQUESTED
once per calendar year. Intellon shall provide the Authorized
Manufacturer to be audited with at least thirty (30) day's written
notice that Intellon is initiating an audit. Any such audit shall be
conducted at Intellon's expense.
2.7 An Authorized Manufacturer shall be entitled to withhold from all
royalties otherwise payable hereunder a reasonable reserve, made in good
faith, against anticipated returns of ASICs, which reserve shall not
exceed ********** of all amounts due hereunder for the two most recent
calendar quarters, without adjustment for reserve, and which reserve
shall be reviewed quarterly in light of the actual returns of the
preceding two (2) quarters. The excess or short-fall, if any, of such
reserve balance at the time of such quarterly review over or under the
actual aggregate amount of returns for such period shall be credited to
or debited against the next payment due Intellon hereunder.
3. CHANGE IN ROYALTY PERCENTAGE.
3.1 On the first day of the calendar quarter following the calendar
quarter in which Royalty-Bearing ASICs incorporating IEOFDM reach a
cumulative total of ********* units sold, the royalty percentage due to
Intellon for IEOFDM based Royalty-Bearing ASICs under Section 1 and
Section 2 of this Exhibit B shall be reduced to **********. On the first
day of the calendar quarter following the calendar quarter in which
Royalty-Bearing ASICs incorporating SSC reach a cumulative total of
**********units sold, the royalty percentage due to Intellon for SSC
based Royalty-Bearing ASICs under Section 1 and Section 2 of this
Exhibit B shall be reduced to **********.
3.2 Intellon shall provide timely written notice to Microsoft and to all
Authorized Manufacturers that have paid or are paying royalties to
Intellon pursuant to this Agreement when the sale of Royalty-Bearing
ASICs has reached a cumulative total of ********** ASICs. Such notice
shall inform Microsoft and all Authorized Manufacturers of the date on
which the royalty percentage under this Exhibit B is reduced from
**********. Retroactive adjustment may be made by Microsoft or any
Authorized Manufacturer to reflect the reduction in royalty percentage
as of that date.
3.3 Both SSC ASICs and IEOFDM ASICs are subject to royalty under Section
1.1 and 2.1 of this Exhibit B. Each ASIC type shall be subject to an
independent cumulative total of *********** of that type of ASIC for the
purposes of this Section 3. Each shall be counted as a separate ASIC
(even if sold together) for purposes of calculating when a cumulative
total of ********** ASICs incorporating each technology have been sold
for purposes of this Section 3.
4. INTELLON SUBLICENSEES ROYALTY TO MICROSOFT. Intellon shall require any
of its sublicensees that produce components or products that are protected by
Phase 2 Intellectual Property to pay or provide to Microsoft the identical
royalties, license fees, or any other consideration for the use of such
technologies or intellectual property, that such sublicensees are required to
pay or provide to Intellon. Intellon shall also require that Microsoft shall
have the right to have a Third Party approved by Intellon conduct an audit of
payments made to Intellon by Intellon sublicensees in order to verify the
royalties, license fees or other payments made by such sublicensees to Intellon
and to have any material discrepancies promptly adjusted. Any such audit shall
be conducted during regular business hours no more than once per calendar year.
Microsoft shall provide Intellon with at least thirty (30) day's written notice
that Microsoft is initiating an audit. Any such audit shall be conducted at
Microsoft's expense.
30
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<PAGE> 31
CONFIDENTIAL TREATMENT REQUESTED
THE FOREGOING EXHIBIT B IS AGREED TO AND ACCEPTED BY THE PARTIES:
MICROSOFT CORPORATION INTELLON CORPORATION.
----------------------- ----------------------------------------
By (Sign) By (Sign)
----------------------- ----------------------------------------
Name (Print) Name (Print)
----------------------- ----------------------------------------
Title Title
----------------------- ----------------------------------------
Date Date
31
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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 32
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C - PHASE 1
SSC
APPROACH:
The approach to Phase I (SSC) is to take the requirements identified below and
verify performance to these requirement with an existing Intellon SSC based IC
(P400). An existing P400 evaluation board will be used to gather real world
performance data and a test report will be generated.
The Technology will then be transferred to Microsoft in the form specified in
the Deliverables section below.
REQUIREMENTS:
HOME CONTROL PLC
The Home Control PLC will be used to communicate low data rate commands between
the system hub and other line powered home automation system peripherals,
including AC Modules, IR Modules and embedded controllers in future consumer
devices.
DATA RATE
- Home Control PLC Data Rate - **********
POWER LINE IMPEDIMENTS
The Home Control PLC must function in the presence of these impediments:
- Loading attenuation - **********
- Cross phase attenuation - **********
- Continuous Wave interference - **********
- White gaussian noise - **********
- Dimmer noise - **********
**********
**********
- Multipath distortion - **********
**********
Performance requirements in the presence of these impediments shall be:
- Packet Error Rate - **********
- Working Outlet Percentage - **********
- Working Home Percentage - **********
X-10 INTEROPERABILITY
It has been estimated that over 100,000,000 X-10 devices have been sold since
their introduction in the mid 1970's. The Home Networking PLC must accommodate
this installed base.
32
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<PAGE> 33
CONFIDENTIAL TREATMENT REQUESTED
- Must not interfere with communication between two separate X-10 devices
- Must be able to transmit and receive X-10 commands directly
COST
The typical Home Control installation may have 20 or 30 control modules in
addition to the controller/router. All must include the Home Control PLC. As
such, it must be very low cost.
- Cost per Control PLC node - **********
STATEMENT OF WORK:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
TASK ********
----------------------------------------------------------------------------
<S> <C>
Deliver requirements **********
----------------------------------------------------------------------------
Generate field verification test plans **********
----------------------------------------------------------------------------
Generate acceptance criteria **********
----------------------------------------------------------------------------
Review and mutually agree on field test plan and
acceptance criteria **********
----------------------------------------------------------------------------
Test SSC ICs in real world **********
----------------------------------------------------------------------------
Complete test reports **********
----------------------------------------------------------------------------
Transfer technology **********
----------------------------------------------------------------------------
</TABLE>
DELIVERABLES:
- Device specification (data sheet)
- VHDL logic description source code
- VHDL simulation test bench source code
- Analog cell functional specifications
- I/O cell functional specifications
- Memory cell functional specifications
- Microprocessor firmware source code
SCHEDULE ESTIMATES:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
MILESTONE ESTIMATED COMPLETION
----------------------------------------------------------------------------
<S> <C>
Test plans acceptance criteria and specifications 4 weeks ARO
----------------------------------------------------------------------------
Assemble field data gathering units 10 weeks ARO
----------------------------------------------------------------------------
Data gathering 14 weeks ARO
----------------------------------------------------------------------------
Final test report 16 weeks ARO
----------------------------------------------------------------------------
</TABLE>
Schedule will run in parallel with the OFDM Phase I schedule
33
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 34
CONFIDENTIAL TREATMENT REQUESTED
IEOFDM
APPROACH:
The approach to Phase I (IEOFDM) is to take the requirements identified below
and create a specification for an implementation to meet the stated
requirements. The specification will be reviewed and jointly agreed upon by
Microsoft and Intellon. The specification will then be implemented (using C
language) in an industry standard communications simulator and verified the with
simulation test plan and acceptance criteria. Once the computer simulations have
been completed, the C models used for the simulation will be ported to a system
capable of gathering field data against real world impairments. The computer
simulation results and the field data results will be compiled into a test
report that will document the required performance results and the actual
performance results obtained from the simulation and field testing.
The Technology will then be transferred to Microsoft in the form of C models
used in the simulation, the specifications and the test reports.
REQUIREMENTS:
HIGH-SPEED NETWORKING PLC
The High-Speed Networking PLC will be used to connect the system hub to other
high-speed networking peripherals, including other PCs, networked printers and
future voice acquisition home control modules.
DATA RATE
The High-Speed Networking PLC data rate must support standard networking
activities such as file transfers and printing. The access into the home is
expected to be 1 Mbps through cable modems, ADSL or other high-speed technology.
This sets the minimum for interhome networking data rate.
- High-Speed PLC Data Rate - **********
POWER LINE IMPEDIMENTS
The Home Control PLC must function in the presence of these impediments:
- Loading attenuation - **********
- Cross phase attenuation - **********
- Continuous Wave interference - **********
- White gaussian noise - **********
- Dimmer noise - **********
**********
**********
- Multipath distortion - **********
**********
Performance requirements in the presence of these impediments shall be:
- Packet Error Rate - **********
- Working Outlet Percentage - **********
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<PAGE> 35
CONFIDENTIAL TREATMENT REQUESTED
- Working Home Percentage - **********
X-10 COMPATIBILITY
Since the High-Speed Networking PLC is intended for high performance data
connections only, it need not interoperate with existing X-10 devices. It shall,
however, not interfere with X-10 command transfers.
- Must not interfere with communication between two separate X-10 devices
COST
High data rate performance is the priority for High-Speed Networking PLC. Cost
is still a consideration, but fewer system nodes gives some latitude for a
higher per node cost.
- Cost per High-Speed PLC node- **********
STATEMENT OF WORK:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
TASK RESPONSIBLE PARTY
<S> <C>
----------------------------------------------------------------------------
Deliver requirements **********
----------------------------------------------------------------------------
Generate simulation and field verification test
plans **********
----------------------------------------------------------------------------
Generate acceptance criteria **********
----------------------------------------------------------------------------
Review and mutually agree on simulation test
plan, field test plan and acceptance criteria **********
----------------------------------------------------------------------------
Develop simulation C models for channel and DSP
algorithms to meet requirements **********
----------------------------------------------------------------------------
Complete simulation **********
----------------------------------------------------------------------------
Test simulation models in real world **********
----------------------------------------------------------------------------
Complete test reports **********
----------------------------------------------------------------------------
Transfer technology in form of C simulation
models specifications and test reports **********
----------------------------------------------------------------------------
</TABLE>
DELIVERABLES:
- Specifications
- Simulation and field verification test plans
- Simulation and field verification test reports
- Technology transfer of simulation (C language)
SCHEDULE ESTIMATES:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
MILESTONE ESTIMATED COMPLETION
----------------------------------------------------------------------------
<S> <C>
Test plans acceptance criteria and specifications 4 weeks ARO
----------------------------------------------------------------------------
Develop simulation models 10 weeks ARO
----------------------------------------------------------------------------
Data gathering and computer simulation 14 weeks ARO
----------------------------------------------------------------------------
Final test report 16 weeks ARO
----------------------------------------------------------------------------
</TABLE>
35
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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 36
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
ELEMENTS OF PHASE 2
1. Intellon will create a "Master ASIC Design Source Tape" at the beginning of
Phase 2 and will maintain the tape to the current level of the design
throughout Phase 2. Included in the Master ASIC Design Source Tape are the
following items:
- Device specification (data sheet)
- VHDL logic description source code
- VHDL simulation test bench source code
- Analog cell functional specifications
- I/O cell functional specifications
- Memory cell functional specifications
- Microprocessor firmware source code
2. Intellon will provide the final Master ASIC Design Source Tape to Microsoft
at the completion of Phase 2 and will deliver a current Master ASIC Design
Source Tape for the IC to Microsoft periodically throughout Phase 2 upon
request.
36
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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 37
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT E
INDEPENDENT CONTRACTOR ASSIGNMENT OF RIGHTS FORM
For valuable consideration, receipt of which is hereby acknowledged,
__________________________, a corporation of ________________, with an
office at __________________ (hereinafter, "the Assignor") hereby assigns
to Intellon Corporation, a Florida corporation with its principal offices
at Ocala, Florida, and its successors and assigns (collectively
hereinafter, "the Assignee"), the entire right, title and interest
throughout the world in all inventions, improvements, patent applications,
patents, utility models, design registrations, inventor's certificates,
mask works, copyrights or moral rights, and trade secrets or other
proprietary rights (other than trademarks, trade names, or service marks)
arising out of the work done under the ____________________________________
contract for Intellon Corporation. This assignment includes the right to
claim priority based on the filing date of any application under the
International Convention for the Protection of Industrial Property, the
Patent Cooperation Treaty, the European Patent Convention, and all other
treaties of like purposes, and the right to apply in all countries in the
Assignor's name, or the name of the individual inventors, or in Assignee's
own name, for patents, utility models, design registrations and like rights
of exclusion, and for inventors' certificates for said inventions and
improvements; and Assignor agrees for itself and all its legal
representatives and assigns, without further compensation, to perform such
lawful acts and to sign such further applications, assignments, statements,
and other lawful documents as the Assignee may reasonably request to
effectuate fully this assignment.
Assignor
Date:
--------- -------------------------------------------------------------
By:
Its:
Assignee
Date:
--------- -------------------------------------------------------------
By:
Its:
37
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Commission pursuant to an application for confidential treatment under Rule 406.
<PAGE> 38
CONFIDENTIAL TREATMENT REQUESTED
STATE OF ____________________________________:
:SS.
COUNTY OF ____________________________________:
Before me this ____day of __________, 19__, personally appeared _______________
on behalf of Assignor and known to me to be the person whose name is
subscribed to the foregoing Assignment, and acknowledged that he/she
executed the same as his/her free act and deed for the purposes therein
contained.
Notary Public
My Commission Expires:
[Notary's Seal Here]
STATE OF ____________________________________:
:SS.
COUNTY OF ____________________________________:
Before me this _________day of ____________________________, 19___,
personally appeared on behalf of Assignee and known to me to be the person
whose name is subscribed to the foregoing Assignment, and acknowledged
that he/she executed the same as his/her free act and deed for the purposes
therein contained.
Notary Public
My Commission Expires:
[Notary's Seal Here]
38
Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule 406.
