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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-Q/A
AMENDMENT NO. 1
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
Commission file number _33-87164
GENERAL MAGIC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0250147
(State of incorporation) (IRS Employer Identification Number)
420 NORTH MARY AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 774-4000
(Address and telephone number of principal executive offices)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. YES X NO
--- ---
25,598,318 shares of the registrant's Common Stock, $0.001 par value, were
outstanding as of October 31, 1995.
THIS DOCUMENT CONTAINS 3 PAGES.
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The undersigned registrant hereby amends the following item of its Quarterly
Report for the period ending September 30, 1995 on Form 10-Q, as filed with the
Securities and Exchange Commission on November 13, 1995 (the "Report), as set
forth in the pages attached hereto:
ITEM 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
The exhibits required by Item 601 of Regulation S-K are hereby
amended by filing herewith an amended Exhibit 10.54 (Telescript and Magicmail
Software License Agreement dated August 3, 1995 between General Magic and France
Telecom), which reflects a revised redacted version of such agreement in
accordance with an Order for Confidential Treatment of the Securities and
Exchange Commission.
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Exhibit Number Exhibit Title
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10.54* Telescript and Magicmail Software License Agreement dated
August 3, 1995 between General Magic and France Telecom
11.1** Computation of Net Loss Per Share
27.1 Financial Data Schedule
* The Securities and Exchange Commission has granted
confidential treatment for portions of this document.
** Incorporated by reference to the registrant's Form 10-Q
dated September 30, 1995.
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(b) No report on Form 8-K was filed during the quarter ended
September 30, 1995.
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GENERAL MAGIC, INC.
FORM 10-QA, September 30, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: May 21, 1996 /s/ Wendy Olszewski
-----------------------------------
Name: Wendy Olszewski
Title: Acting Chief Financial Officer,
Controller
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EXHIBIT 10.54
Order for Confidential Treatment Granted.
TELESCRIPT & MAGICMAIL
SOFTWARE LICENSE AGREEMENT
BETWEEN
GENERAL MAGIC, INC.
AND
FRANCE TELECOM
August 3, 1995
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TABLE OF CONTENTS
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1. Definitions............................................................ 1
1.1 "Acceptance".................................................. 1
1.2 "Authorized Support Center"................................... 1
1.3 "CS" or "Compliance Specification"............................ 2
1.4 "Delivery Environment"........................................ 2
1.5 "Development Site"............................................ 2
1.6 "Documentation"............................................... 2
1.7 "Error"....................................................... 2
1.8 "First Production Version".................................... 3
1.8.1 "Accepted First Production Version"................. 3
1.9 "Intellectual Property Rights"................................ 3
1.10 "Licensed Country(ies)"....................................... 3
1.11 "Licensed Technology"......................................... 3
1.12 "Licensee Public Services".................................... 3
1.13 "Licensee Technical Contacts"................................. 3
1.14 "Magic Trademarks"............................................ 3
1.15 "Maintenance Terms"........................................... 4
1.16 "Mandatory Error Corrections"................................. 4
1.17 "Mandatory Release"........................................... 4
1.18 "Non-Mandatory Release"....................................... 4
1.19 "Object Code"................................................. 4
1.20 "Pilot"....................................................... 4
1.21 "Resolution".................................................. 4
1.22 "Scripts"..................................................... 4
1.23 "Service Telescript Engine" or "STSE"......................... 4
1.24 "SII" or "Service Interoperability and Interconnection
Specification"................................................ 4
1.25 "Source Code"................................................. 5
1.26 "Subscriber".................................................. 5
1.27 "System Level Documentation".................................. 5
1.28 "Telescript Based Public Services"............................ 5
2. License Grants......................................................... 5
2.1 Object Code and Scripts....................................... 5
2.2 Source Code................................................... 5
2.3 Telescript Developers Kit..................................... 6
2.4 Documentation................................................. 6
2.5 To Licensee's Contractors..................................... 6
2.6 Forecast of Future Licensed Technology Modifications.......... 6
3. Technology Fees and Royalties.......................................... 6
3.1 License Fees and Royalties.................................... 6
3.2 Section Intentionally Deleted................................. 6
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3.3 Section Intentionally Deleted.......................................... 6
3.4 Section Intentionally Deleted.......................................... 6
3.5 Payments to Magic...................................................... 6
3.6 Audit Rights........................................................... 7
3.7 Currency............................................................... 7
3.8 Finance Charge......................................................... 7
3.9 Most Favored Status.................................................... 7
4. Delivery........................................................................ 8
5. Acceptance...................................................................... 8
5.1 Creation of Quality Plan............................................... 8
5.2 Quality Plan Audit..................................................... 9
5.3 Test Plan.............................................................. 9
5.3.1 Contents of Test Plan......................................... 9
5.3.2 Process for Establishing the Reference Platform and the
QoS........................................................... 9
5.3.3 Process for Establishing the Test Suites and Test Tools....... 10
5.4 Test Reports........................................................... 10
5.5 Acceptance Procedure................................................... 10
6. Disclaimer of Warranty.......................................................... 11
6.1 Factual Representations................................................ 11
6.2 Disclaimer of Warranties............................................... 11
7. Support......................................................................... 12
7.1 Maintenance and Support Services....................................... 12
7.2 Compatibility Across Releases.......................................... 12
7.3 Support of Subscribers................................................. 12
7.4 Training Programs...................................................... 12
7.5 Project Coordinators................................................... 12
7.5.1 Appointment of Project Coordinators........................... 12
7.5.2 Project Coordinator Procedures and Meetings................... 13
7.5.3 Technical Coordinator......................................... 13
7.5.4 Commercial Coordinator........................................ 13
7.5.5 Services Not Included......................................... 13
7.5.6 Confidential Information...................................... 14
7.5.7 On-Site Project Director Services............................. 14
7.5.8 Election of Project Commercial Coordinator; Termination of
Project Technical Coordinator................................. 14
7.6 Consulting Services.................................................... 14
7.7 Source Code Escrow..................................................... 14
7.8 Section Intentionally Deleted.......................................... 15
7.9 Project Coordinator Fees............................................... 15
7.10 CPI Adjustment......................................................... 16
7.11 Computation and Payment of CPI Adjustment.............................. 16
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8. Control of and Modifications to Licensed Technology...................... 16
8.1 Definitional Control of the CS and the SII Specification........ 16
8.2 Process of Modifying the CS and SII Specification............... 17
8.2.1 Giving Notice.......................................... 17
8.2.2 Providing and Acting Upon Input........................ 17
8.3 Implementation.................................................. 17
8.4 Use of a Superseded Release..................................... 18
8.5 CS and SII Specification Compliance............................. 18
8.6 No Reverse Engineering.......................................... 18
8.7 Deemed Compliance with the CS and SII Specification............. 18
9. Proprietary Rights....................................................... 18
9.1 Ownership of Licensed Technology................................ 18
9.2 Ownership of Modifications...................................... 18
9.3 Proprietary Notices............................................. 19
9.4 Restricted Rights............................................... 19
9.5 Foreign Government Agreements................................... 19
9.6 RSA Software.................................................... 19
10. Term and Termination..................................................... 20
10.1 Term............................................................ 20
10.2 Default......................................................... 20
10.3 Insolvency...................................................... 21
10.4 Delivery Obligations............................................ 21
10.5 The Effect of Termination....................................... 21
10.5.1 General Termination.................................... 21
10.5.2 No Fault Termination................................... 21
10.6 Survival........................................................ 22
10.7 Termination Due to Lack of Profitability........................ 22
10.8 Termination After Pyramid....................................... 22
11. Infringement Indemnity................................................... 22
11.1 Magic Indemnity................................................. 23
11.1.1 Indemnity.............................................. 23
11.1.2 Exceptions............................................. 23
11.1.3 Limitation............................................. 24
11.2 Licensee Indemnity.............................................. 24
11.2.1 Limitation............................................. 24
12. Confidential Information................................................. 24
12.1 Information..................................................... 24
12.2 Confidentiality................................................. 24
12.3 Confidentiality of Source Code and System Level Documentation... 25
12.4 Confidentiality of Scripts...................................... 26
12.5 Exceptions...................................................... 26
12.6 Term............................................................ 27
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13. Public Relations........................................................ 27
14. Sales and Marketing..................................................... 27
14.1 Independent Programs........................................... 27
14.2 Magic Assistance............................................... 27
14.3 Co-Marketing Programs.......................................... 27
15. Limitation of Liability................................................. 28
15.1 Maximum Magic Liability........................................ 28
15.2 Maximum Licensee Liability..................................... 28
15.3 Exceptions..................................................... 28
15.4 Limitation of Magic Liability.................................. 28
15.5 Limitation of Licensee Liability............................... 29
16. Branding................................................................ 29
16.1 Trademark License.............................................. 29
16.2 Use On Licensee Offerings...................................... 29
16.3 Compliance with the CS and the SII Specifications.............. 29
16.4 Exceptions to Logo Usage....................................... 29
16.5 Licensee Marks................................................. 29
16.6 Non-Interference............................................... 30
17. Third Party Beneficiaries............................................... 30
17.1 AT&T........................................................... 30
17.1.1 Third Party Beneficiary............................... 30
17.1.2 Restrictions on Use of Jointly Owned Technology....... 30
17.2 Neuron Data.................................................... 30
18. General Provisions...................................................... 31
18.1 Independent Contractors........................................ 31
18.2 Arbitration and Governing Law.................................. 31
18.3 Section Intentionally deleted.................................. 31
18.4 Section Intentionally deleted.................................. 31
18.5 Assignment..................................................... 31
18.6 Waiver......................................................... 32
18.7 Notices........................................................ 32
18.8 Export Controls................................................ 32
18.9 Force Majeure.................................................. 32
18.10 Taxes.......................................................... 32
18.11 Severability................................................... 33
18.12 Section Headings............................................... 33
18.13 Entire Agreement............................................... 33
EXHIBIT A LICENSED TECHNOLOGY................................................... A-1
EXHIBIT B DEVELOPMENT SITE...................................................... B-1
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EXHIBIT C DELIVERY MILESTONES................................................... C-1
EXHIBIT D MAINTENANCE TERMS..................................................... D-1
1. NEW RELEASES, ERROR REPORTS AND RESOLUTIONS.................... D-1
1.1 New Releases and Enhancements......................... D-1
1.2 Error Reporting and Tracking.......................... D-1
1.3 Classification of Errors.............................. D-1
1.4 Magic's Response to Error Reports..................... D-1
1.5 Acceptance of Resolutions............................. D-2
2. Services Not Included.......................................... D-2
2.1 Other Products........................................ D-2
2.2 Modifications......................................... D-2
2.3 Non-Current Release................................... D-2
2.4 Other Technologies.................................... D-2
2.5 Other Errors.......................................... D-2
2.6 On-Site Support....................................... D-2
3. Previous Releases.............................................. D-2
4. Backwards Compatibility........................................ D-3
4.1 Telescript Language................................... D-3
4.2 Applications and Tools................................ D-3
5. Licensee's Responsibilities.................................... D-3
5.1 Distribution of Releases.............................. D-3
5.2 Information and System Access Provided by Licensee.... D-3
6. Description of Error Resolution Services Provided by Licensee.. D-4
6.1 First Tier Support.................................... D-4
6.2 Access to Licensee Staff.............................. D-4
6.3 Reproducible Errors................................... D-4
6.4 Insufficient Licensee Support......................... D-4
7. General Rights to Ownership.................................... D-4
EXHIBIT E MAGIC TRADEMARKS...................................................... E-1
1. Registered trademarks.......................................... E-1
2. Pending trademarks............................................. E-1
EXHIBIT F PRICING............................................................... F-1
1. License Fees................................................... F-1
2. Royalties...................................................... F-1
2.1 Usage Fees............................................ F-1
2.2 Deposits on Minimum Royalties......................... F-2
2.3 Electronic Merchant Fees.............................. F-2
EXHIBIT G SAMPLE DELIVERY ACKNOWLEDGMENT FORM.................................. G-1
EXHIBIT H ESCROW AGREEMENT...................................................... H-1
1. Appointment.................................................... H-1
2. Deposit of Escrow Materials.................................... H-1
3. Transfer of Copy Title......................................... H-2
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4. Purpose....................................................... H-2
5. Escrow Release and Software License........................... H-2
6. Counternotice................................................. H-2
7. Disputed Notice............................................... H-3
8. Arbitration of Disputed Notice................................ H-3
9. Termination................................................... H-3
10. Notices....................................................... H-4
11. Liability of Escrow Agent..................................... H-4
12. Governing Law; Forum Selection................................ H-4
13. Entire Agreement.............................................. H-5
14. Validity...................................................... H-5
15. Resignation/Replacement....................................... H-5
16. Fees and Expenses............................................. H-5
17. Indemnification............................................... H-5
18. Copies of Notice.............................................. H-6
EXHIBIT I-1 EMPLOYEE NON-DISCLOSURE AGREEMENT.................................. I-1
EXHIBIT I-2 CONTRACTOR NON-DISCLOSURE AGREEMENT................................ I-2
EXHIBIT I-3 OPERATION OF SECURE COMPUTER SYSTEMS............................... I-3
1. Secure Computer System........................................ I-3
1.1 Site Security Provisions............................. I-3
1.2 Secure Computer System Security Provisions........... I-3
2. Development Site.............................................. I-4
EXHIBIT J ADDITIONAL LICENSED COUNTRIES........................................ J-1
EXHIBIT K BUSINESS PLAN FRAMEWORK.............................................. K-1
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GENERAL MAGIC, INC.
SOFTWARE LICENSE AGREEMENT
(TELESCRIPT/MAGICMAIL)
This SOFTWARE LICENSE AGREEMENT (the "Agreement") is made and entered
into as of the date last signed below (the "Effective Date") by and between
GENERAL MAGIC, INC., a Delaware corporation, having its principal office at 420
N. Mary Avenue, Sunnyvale, California 94086 ("Magic"), and FRANCE TELECOM, a
French Exploitant Public, having its headquarters at 6, Place d'Alleray 75015
Paris, France ("Licensee").
RECITALS
A. Magic is developing technology for consumer-oriented computer and
communication products and services utilizing "software agents" to perform tasks
on behalf of the user.
B. Licensee desires to license such technology from Magic for the
development of enhanced electronic messaging and transactional service
offerings, and Magic desires to license such technology to Licensee for such
purpose.
C. The parties understand that to develop enhanced electronic messaging
service offerings Licensee will need to develop its own software based on the
technology.
AGREEMENT
In consideration of the mutual promises contained herein, Licensee and
Magic agree as follows:
1. Definitions. Capitalized terms used herein shall have the following
meanings:
1.1 "Acceptance" shall mean that event signified by either (i) an
acknowledgment signed by Licensee that the release of the Licensed Technology
which is subject to acceptance (which includes the First Production Version and
each subsequent Mandatory Release) has successfully met the acceptance criteria
set forth in Section 5 (Acceptance), or (ii) Licensee's failure to provide Magic
with such written acknowledgment or a statement of Errors within the sixty (60)
day period from the date of delivery of such release to Licensee to examine and
test in accordance with Section 5 (Acceptance).
1.2 "Authorized Support Center" shall mean an entity that is
licensed by Magic to provide support and system integration of Telescript Based
Public Services.
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1.3 "CS" or "Compliance Specification" shall mean the specification,
as provided by Magic, that sets forth the external behaviors and functionality
of the Licensed Technology. The CS will be uniform for all licensed Telescript
Based Public Services with the same release of the applicable Licensed
Technology. Section 8 (Control of and Modification to the Licensed Technology)
of this Agreement sets forth the contents of the initial CS, and how Magic will
evolve the CS.
1.4 "Delivery Environment" shall mean the required execution
environment(s) specified in Exhibit A (Licensed Technology).
1.5 "Development Site" shall mean the Licensee site listed in
Exhibit B (Development Site).
1.6 "Documentation" shall mean the documentation for the Licensed
Technology distributed by Magic as further defined in Exhibit A (Licensed
Technology).
1.7 "Error" shall mean a defect in the executable Licensed
Technology that makes the executable Licensed Technology operate in a manner
which is non-compliant with the CS or that does not conform to the
Documentation. Errors shall be divided into the following categories:
Level 1: Errors in Licensed Technology (1) that is not operating
as only a Pilot program; and (2) that cause the Licensed Technology (but not the
Documentation) to fail to operate in a material manner causing the loss of
control of the computer hardware or software (a crash), loss of data in main or
peripheral memory, or unrecoverable loss of or damage to a message; (3) to which
there is no practical means of circumventing the Error available to the
Licensee; and (4) that prevent Licensee from offering a Telescript Based Public
Service.
Level 2: Errors in the Licensed Technology that causes a major
function of the Licensed Technology (but not the Documentation) to fail to
operate in a material manner; Errors that would be Level 1 Errors but for a
work-around solutions available to the Licensee that provides a practical means
to circumvent the Error; and Errors that would be Level 1 Errors but which
affect only a Pilot program and do not prevent Licensee from offering a
Telescript Based Public Service.
Level 3: Errors in the Licensed Technology causing the Licensed
Technology (but not the Documentation) to fail to operate in a material manner
resulting in an inconvenient situation in which the software is stable but does
not function in the most convenient or expeditious manner.
Level 4: Errors in the Licensed Technology (including
Documentation) which (1) are minor or cosmetic in nature; or (2) for which there
is a known method to easily avoid the Error. This includes minor annoyances,
missing error messages, Documentation Errors and other problems that can be
easily circumvented or tolerated.
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1.8 "First Production Version" shall mean the version of the
Licensed Technology designated in Exhibit C (Delivery Milestones) as being the
First Production Version.
1.8.1 "Accepted First Production Version" shall mean that
version of the Licensed Technology for which Acceptance has occurred.
1.9 "Intellectual Property Rights" shall mean all current and future
worldwide patents and other patent rights, utility models, copyrights, mask work
rights, trade secrets, and all other intellectual property rights, including
without limitation all applications and registrations with respect thereto, but
excluding trademarks, trade names, and other product, service, or company
identifiers.
1.10 "Licensed Country(ies)" shall mean the country of France,
including all of its overseas Departments and possessions. The definition of,
"Licensed Country(ies)" may be expanded to include any of the countries listed
in Exhibit J (Additional Licensed Countries) upon (i) Magic's acceptance of
Licensee's business plan for expanding "Licensed Country(ies) to include such
country and (ii) the parties agreement as to an appropriate license fee for the
addition of such country, which shall be established by taking into account the
economic nature of the desired additional country. Magic shall not unreasonably
withhold its acceptance of Licensee's business plan and appropriate license
fees, even if there is already a licensed Telescript Based Service Provider in
such country. The parties may agree in writing to add countries to Exhibit J
(Additional Licensed Countries). Magic will not unreasonably withhold its
consent from Licensee's request to add specific countries to Exhibit J
(Additional Licensed Countries). A framework for acceptable business plans is
attached as Exhibit K (Business Plan Framework).
1.11 "Licensed Technology" shall mean the software and Documentation
listed in Exhibit A (Licensed Technology) and all subsequent versions of such
software and Documentation that are provided by Magic to Licensee pursuant to
the terms of this Agreement, including but not limited to Mandatory Error
Corrections, Mandatory Releases, Non-Mandatory Releases and other modifications,
Error corrections and enhancements of such software and Documentation.
1.12 "Licensee Public Services" shall mean Telescript Based Public
Services developed and provided by Licensee.
1.13 "Licensee Technical Contacts" shall mean the three (3) Licensee
employees listed in Attachment 1 (Licensee Technical Contacts) to Exhibit D
(Maintenance Terms). Licensee may modify the Licensee Technical Contacts from
time-to-time on sixty (60) days written notice to Magic.
1.14 "Magic Trademarks" shall mean the names, trademarks, (whether
registered or unregistered), and logos owned by Magic and listed on Exhibit E
(Magic Trademarks).
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1.15 "Maintenance Terms" shall mean the terms and conditions in
Exhibit D (Maintenance Terms), which govern Licensee's issuance of Error
reports, and Magic's obligation to provide Resolutions.
1.16 "Mandatory Error Corrections" shall mean corrections to the
Licensed Technology that have passed Magic's quality assurance testing and that
must be made to maintain compliance with the CS or the SII Specifications.
1.17 "Mandatory Release" shall mean a new release of the Licensed
Technology subsequent to the Accepted First Production Version which implements
a revision to the CS or the SII Specification.
1.18 "Non-Mandatory Release" shall mean any release of the Licensed
Technology subsequent to the Accepted First Production Version which is not a
Mandatory Error Correction or a Mandatory Release.
1.19 "Object Code" shall mean the machine readable version of the
Licensed Technology. Exhibit A (Licensed Technology) indicates which elements of
the Licensed Technology will be provided in Object Code form. The term, "Object
Code" shall not include "Scripts."
1.20 "Pilot" shall mean a non-commercial, non-royalty bearing,
investigative evaluation of the Licensed Technology by Licensee.
1.21 "Resolution" shall mean a modification made to the Licensed
Technology by Magic or a workaround developed by Magic that is meant to correct
or minimize an Error in the Licensed Technology.
1.22 "Scripts" shall mean computer software applications written in
either the High or Low Telescript programming language, and which operate in
conjunction with the Telescript Based Public Services. Exhibit A (Licensed
Technology) indicates which elements of the Licensed Technology will be provided
as Scripts.
1.23 "Service Telescript Engine" or "STSE" shall mean the Service
Telescript Engine listed in Exhibit A (Licensed Technology). The STSE will be
provided in Object Code form only.
1.24 "SII" or "Service Interoperability and Interconnection
Specification" shall mean the specifications provided by Magic to all licensees
of Telescript Based Public Services that establish the minimum level of
interconnectivity that must exist between all Telescript Based Public Services.
Telescript Based Public Service providers must decide among themselves as to how
to achieve the minimum level of interconnectivity required by the SII
Specifications. Section 8 (Control of and Modification to the Licensed
Technology) of this Agreement sets forth the contents of the initial SII, and
how Magic will evolve the SII Specification.
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1.25 "Source Code" shall mean the human readable version of the
Licensed Technology. Exhibit A (Licensed Technology) indicates which elements of
the Licensed Technology will be provided in Source Code form. The term, "Source
Code" shall not include "Scripts."
1.26 "Subscriber" shall mean an individual or business entity
registered to use the Licensee Public Services.
1.27 "System Level Documentation" shall mean all Documentation that
is marked as being System Level Documentation, including summaries and
translations thereof created by Licensee.
1.28 "Telescript Based Public Services" shall mean the enhanced
electronic messaging services based on the Licensed Technology provided to the
general public, including, but not limited to the Licensee Public Services.
2. License Grants.
2.1 Object Code and Scripts. To (i) incorporate the Object Code and
Scripts into other software to develop, implement and provide Licensee Public
Services in the Licensed Country(ies); (ii) reproduce and use the Object Code
and Scripts incorporated in Licensee Public Services solely for the provision of
Licensee Public Services in the Licensed Country(ies) and (iii) sublicense the
Object Code and the Scripts as set forth in Section 18.5 (Assignment) for the
purpose of developing, implementing and/or providing the Licensee Public Service
in the Licensed Country(ies). For purposes of this Agreement, "providing the
Licensee Public Service in the Licensed Country(ies)" shall mean that (i) the
Licensed Technology resides and is executed in the Licensed Country(ies), (ii)
the services offered via the Licensee Public Service are oriented solely to
Subscribers located in the Licensed Country(ies) and (iii) Licensee's marketing
activity regarding its Licensee Public Service is oriented solely towards
potential Subscribers that are located in the Licensed Country(ies).
Notwithstanding the forgoing sentence, Licensee may (a) allow Subscribers
located in countries other than the Licensed Country(ies) to access the Licensee
Public Service in the Licensed Country(ies) via local carrier services as a
convenience to such Subscribers (primarily for expatriates and traveling
citizens of the Licensed Country(ies)) and (b) make such capability known to its
Subscribers solely through incidental advertising efforts.
2.2 Source Code. To use, reproduce, modify, translate, adapt,
arrange and create derivative works of the Source Code at the Development Site
to (i) develop Licensee Public Services, (ii) provide Error corrections,
maintenance, performance enhancements and support of its Licensee Public
Services, and (iii) compile the Source Code to create Object Code. All
disclosures of the Source Code shall be pursuant to the terms of Section 12.3
(Confidentiality of Source Code and System Level Documentation), and all
derivative works created pursuant to this Section 2.2 must comply with the
requirements of Section 8 (Control of and Modifications to Licensed Technology).
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2.3 Telescript Developers Kit. To use the Telescript Developers Kit,
as described in Exhibit A (Licensed Technology) solely for the purposes of (a)
testing and evaluating the Telescript Developers Kit and/or (b) developing
original Scripts and/or (c) developing Scripts derived from the sample Scripts
contained in the Telescript Developers Kit. All Scripts created or derived by
Licensee pursuant to this Section 2.3 must comply with the requirements of
Section 8 (Control of and Modifications to Licensed Technology).
2.4 Documentation. To use, reproduce, create summaries of and,
except as limited pursuant to Section 12 (Confidential Information), distribute
the Documentation to its employees and contractors solely for the purpose of
developing and supporting the Licensee Public Services.
2.5 To Licensee's Contractors. Subject to the terms and conditions
of Section 12 (Confidentiality Information) and all other relevant terms and
conditions in this Agreement, Licensee may use contractors to exercise all of
the licensed rights granted in this Section 2 (License Grants). Licensee will
provide Magic with the names of all such contractors on Magic's request.
2.6 Forecast of Future Licensed Technology Modifications. On the
first month of each full quarter in which this Agreement is in effect, Magic
shall provide Licensee with a non-binding description of all Mandatory Releases
and NonMandatory Releases then scheduled for release by Magic during the
immediately following eighteen (18) month period.
3. Technology Fees and Royalties.
3.1 License Fees and Royalties. Licensee shall pay Magic the fees
set forth in Exhibit F (Pricing).
3.2 Section Intentionally Deleted.
3.3 Section Intentionally Deleted.
3.4 Section Intentionally Deleted.
3.5 Payments to Magic. Within thirty (30) days after the end of each
calendar quarter Licensee shall provide Magic with a good faith estimate of the
total royalty compensation that became due to Magic during that quarter pursuant
to Exhibit F (Pricing). Additionally, within thirty (30) days after the end of
each semiannual calendar period Licensee shall make royalty payments to Magic in
the amount of the total estimated royalties that became due during such
semiannual calendar period. Licensee shall make all such estimates and royalty
payments based on Licensee's then current, unaudited information, but Licensee
does not warrant that this information shall be valid in all respects. After
Licensee's annual audit of its fiscal results, Licensee shall advise Magic of
any adjustments required as a result of the audit, and the applicable party
shall promptly remit to the other party all
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amounts due. All information provided by Licensee to Magic under this Section
3.5 shall be subject to the confidentiality obligations set forth in Section 12
(Confidential Information).
3.6 Audit Rights. On at least twenty (20) days notice to Licensee,
and no more frequently than once every twelve (12) months, Magic shall be
entitled to retain an independent accounting firm reasonably acceptable to
Licensee to audit those books and records of Licensee, which directly pertain to
the payment of fees to Magic thereunder, for the sole purpose of confirming the
accuracy of such payments. Any such audit shall be performed at Magic's expense
during normal business hours and, at Licensee's option, subject to the
independent accounting firm's execution of Licensee's standard confidentiality
agreement. The independent accounting firm shall not, however, be prohibited
from reporting to Magic the results of the audit. In the event of any
underpayment or overpayment of fees the applicable party shall promptly remit to
the other party all amounts due. In the event that Licensee's gross negligence
or willful misconduct results in the underpayment of either (i) ten percent
(10%) or more for the period audited, or (ii) One Hundred Fifty Thousand U.S.
Dollars (US$150,000) or more, Licensee shall remit to Magic in full the
accounting firm's fee for such audit.
3.7 Currency. All fees and other payments to Magic hereunder shall
be in United States dollars. Fees based on sales in other currencies shall be
converted to dollars according to the official rate of exchange for that
currency, as published in the Wall Street Journal (Western Edition) on the last
day of the calendar quarter in which the fee accrued (or, if not published on
that day, the last publication day for the Wall Street Journal during that
month).
3.8 Finance Charge. Licensee shall pay a finance charge of 1% per
month compounded (or the highest amount permitted by applicable law if this rate
exceeds the highest rate permitted by law) on all amounts due because of
underpayments of fees discovered by Magic pursuant to an audit under Section 3.6
(Audit Rights). The finance charge shall accrue retroactively from the date the
amount not paid was due and payable.
3.9 Most Favored Status. Within thirty (30) days after each calendar
quarter while this Agreement is effective, Magic will deliver to Licensee a
redacted copy of all agreements with Telescript Based Public Service provider
entered into by Magic during such quarter. Such copies shall be redacted to
maintain as confidential the identity of such Telescript Based Service Provider,
and to delete proprietary or confidential licensee information, provided that no
provision related to Economic Terms shall be redacted. In the event that Magic
does not believe that a specific Telescript Based Service Provider is similarly
situated to Licensee, Magic shall, with such redacted copy, provide Licensee
with a written explanation of Magic's beliefs. In the event that Magic provides
Licensee with such an explanation, then such Telescript Based Service Provider
shall be deemed to be not similarly situated to Licensee unless Licensee objects
to Magic's determination thereof and the parties either come to written
agreement about the status of the Telescript Based Service
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Provider or a determination pursuant to Section 18.2 (Arbitration and Governing
Law) is made that the Telescript Based Service Provider is in fact similarly
situated.
Licensee will have thirty (30) days after receipt of a redacted copy of
an agreement with a similarly situated Telescript Based Public Service Provider
to notify Magic that Licensee desires to substitute each and every Economic Term
granted to such service provider for all (but not less than all) of the Economic
Terms of this Agreement (as the same may theretofore have been modified pursuant
to this Section). For the purposes of this Section, "Economic Terms" shall mean
all terms and conditions with respect to: license fees, royalty rates, advances
on royalties, volume commitments, payment of development fees (such as funding
the development of specific product features or sharing non-recurring
engineering costs), marketing expenditure commitments (such as undertaking
specific trade show, advertising and joint marketing programs, or paying for
certain Magic promotional expenses), and support obligations (including but not
limited to Project Director fees). If Licensee elects to substitute the Economic
Terms of any such agreement for the Economic Terms of this Agreement, the
substituted Economic Terms shall become effective on the first day of the
subsequent calendar quarter. No terms and conditions of this Agreement other
than Economic Terms shall be modified, added or deleted pursuant to this
Section.
4. Delivery. Magic will deliver to Licensee Magic's then current
release of the Licensed Technology within thirty (30) days of the Effective
Date. Magic will use commercially reasonable efforts to deliver subsequent
releases of the Licensed Technology to Licensee in accordance with the schedule
set forth in Exhibit C (Delivery Milestones). Magic's delivery of each version
of the Licensed Technology will be accompanied by a Delivery Acknowledgment
Form, in the form attached hereto as Exhibit G (Sample Delivery Acknowledgment
Form) which has been signed by Magic. Delivery of each such version will be
deemed complete (i) when the Delivery Acknowledgment Form is signed by Licensee
and returned to Magic; or (ii) fourteen (14) days after the date of Licensee's
receipt of such Delivery Acknowledgment Form in the event that Licensee fails to
return such Form and fails to notify Magic in writing of any missing
deliverables within such fourteen (14) day period. In the event Magic is unable
to deliver the First Production Version in accordance with the milestone
schedule set forth in Exhibit C (Delivery Milestones), Licensee's sole and
exclusive remedy shall be to elect one of the following remedies by giving Magic
notice thereof: (i) to extend the delivery period for a mutually agreeable time,
or (ii) to terminate this agreement as set forth in Section 10.4 (Delivery
Obligations).
5. Acceptance.
5.1 Creation of Quality Plan. Magic agrees to create a quality plan
that describes the rules and procedures for software development and release
management and qualification for the First Production Version and subsequent
releases of the Licensed Technology (the "Quality Plan"). Magic shall keep
Licensee
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reasonably apprised of the status of the development of the Quality Plan and
shall be receptive to Licensee's reasonable input regarding the contents of such
Quality Plan.
5.2 Quality Plan Audit. Beginning October 1, 1995, on at least
forty-five (45) days notice and not more than once every twelve (12) month
period, Licensee shall be entitled to audit those procedures and documents of
Magic's that directly pertain to Magic's quality of software development, and
Magic's maintenance and release management and qualification for the sole
purpose of confirming Magic's compliance with the Quality Plan. Any such audit
shall be performed at Licensee's expense during normal business hours at Magic's
development site, and shall conform to Magic's standard terms and conditions
regarding access to confidential information. Additionally, Licensee's access to
Magic's procedures and documents shall be limited to only those procedures and
documents that Magic may reveal to Licensee without violation of any duty of
confidentiality owned by Magic to its suppliers or licensees.
5.3 Test Plan. Pursuant to the terms in this Section 5.3, the
parties will create a test plan against which Magic will test the First
Production Version, and subsequent test plans against which Magic will test each
Mandatory Release prior to Magic's delivery of each such release (individually,
a "Test Plan").
5.3.1 Contents of Test Plan. Each Test Plan will include the
following elements:
(a) A description of the reference platform used to
perform the tests in the Test Plan (a "Reference Platform").
(b) A definition of the Quality of Service ("QoS")
criteria that will be used to quantify the intended levels of quality of the
release of the Licensed Technology being tested on the Reference Platform.
(c) The definition of sets of test suites (e.g.,
installation/configuration, management, functionality, limits, robustness and
performance) ("Test Suites"). And,
(d) The list of necessary tools needed to execute the test
suites ("Test Tools").
5.3.2 Process for Establishing the Reference Platform and the
QoS. The parties' Technical Project Coordinators shall use diligent efforts to
agree upon the QoS and Reference Platform contents of each Test Plan during
Magic's scheduled release definition process for the associated release. In the
event that the Project Coordinators are unable to agree upon the QoS or the
Reference Platform for a particular for a Test Plan, and their inability to so
agree puts in jeopardy Magic's ability to timely complete its release definition
process, then the responsibility for resolving the impasse shall be escalated to
the parties' Senior Engineering Executive assigned to the Licensed Technology.
Such Senior Engineering Executives shall use
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diligent efforts to resolve the impasse as promptly as possible. In the event
that the Senior Engineering Executives are unable to promptly resolve the
impasse, Magic shall establish the final contents of the QoS and/or Reference
Platform using its reasonable discretion. If, while developing the First
Production Version or a subsequent Mandatory Release, Magic or Licensee believes
that it is necessary to modify the already established QoS or Reference
Platform, the parties shall use the same process to modify the QoS and/or
Reference Platform as is set forth above to create the original QoS and/or
Reference Platform.
Until modified pursuant to this Section 5.3.2, the Reference Platform
shall be Magic's _______________ platform running _______________ , with the
following system configuration:
5.3.3 Process for Establishing the Test Suites and Test Tools.
Magic shall endeavor to provide Licensee with a list of the Test Suites and Test
Tools it plans to include in the Test Plan promptly once the QoS and Reference
Platform are established pursuant to Section 5.3.2 (Process for Establishing the
Reference Platform and the QoS). Licensee shall review the list of Magic's Test
Suites and Test Tools and shall endeavor to promptly notify Magic if it believes
that additional Test Suites or Tools are needed in the Test Plan. In the event
Licensee so notifies Magic, the parties shall negotiate in good faith (i)
whether such Test Suites and/or Test Tools should be included in the Test Plan
and (ii) which of the parties should be responsible for developing or licensing
agreed upon additional Test Tools.
5.4 Test Reports. Delivery of the First Production Version and all
subsequent Mandatory Releases shall be accompanied by a test report that
describes the Reference Platform used to test compliance of the Licensed
Technology with the Test Plan, the results of the tests performed pursuant to
the Test Plan and an assessment of the operation of the Licensed Technology
against the QoS criteria ("Test Report").
5.5 Acceptance Procedure. Licensee shall have sixty (60) days from
Magic's delivery of the First Production Version and any subsequent Mandatory
Release to Licensee pursuant to Section 4 (Delivery) to examine and test such
release to determine that, when executing in the designated Reference Platform,
it (i) substantially conforms to the Documentation and the CS, (ii) is
consistent with the SII Specifications, (iii) meets the QoS criteria in the
applicable Test Plan and (iv) passes the Test Suites in the applicable Test
Plan. If Licensee is not able to reproduce the Reference Platform at its own
facility, then Licensee may, at its own expense, use Magic's Reference Platform
at Magic's facility for a reasonable amount of time to determine whether the
Licensed Technology meets the QoS criteria in the applicable Test Plan. Such use
must be scheduled with Magic at least thirty (30) days in advance and is subject
to availability. Licensee may reject Magic's delivery of the First Production
Version and any subsequent Mandatory Releases only if the release
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does not meet any of the above three requirements. Within the sixty (60) day
acceptance testing period, Licensee shall provide Magic with a written
acceptance, or a rejection statement specifying in detail Licensee's reason for
such rejection. Such release will be deemed to have been accepted by Licensee if
(a) Magic does not receive a rejection statement within such sixty (60) day
period or (b) Licensee commercially offers a Licensee Public Service based on
such release.
In the event that Licensee issues a timely rejection statement to
Magic, Magic shall use commercially reasonable efforts to correct or enhance the
rejected release such that it meets the above three requirements, and redeliver
such release to Licensee within thirty (30) days of Magic's receipt of the
rejection statement. Within thirty (30) days following Magic's redelivery,
Licensee shall provide Magic with a written acceptance, or a rejection statement
specifying in detail Licensee's reason for such rejection. Licensee may reject
the redelivered release only if the redelivered release does not meet any of the
above three requirements. Such redelivered release will be deemed to have been
accepted by Licensee if (a) Magic does not receive a rejection statement within
such thirty (30) day period or (b) Licensee commercially offers a Licensee
Public Service based on such release. Should Licensee issue a timely rejection
of the redelivered release, Licensee's sole and exclusive remedy shall be to
elect one of the following remedies by giving Magic notice thereof (including a
statement of Errors where applicable) within thirty (30) days:
(a) in the event the release is the First Production
Version, (i) extend the correction period for a mutually agreeable time or (ii)
terminate this agreement as set forth in Section 10.4 (Delivery Obligations);
(b) in the event the release is a Mandatory Release, elect
not to implement such Mandatory Release as a basis of its Licensee Public
Services, notwithstanding Section 8 (Control of and Modifications to Licensed
Technology).
6. Disclaimer of Warranty.
6.1 Factual Representations. Magic Represents that to the best of
its knowledge, as of the Effective Date, Magic has not received any written
notice of claim, and does not otherwise have actual knowledge, that Magic's use
of the Licensed Technology infringes upon, conflicts with or otherwise violates
the Intellectual Property Rights of any person.
6.2 Disclaimer of Warranties. Except as provided in Sections 6.1
(Factual Representation) and 17.1.2 (Restrictions on Use of Jointly Owned
Technology), all Licensed Technology delivered to Licensee under this Agreement
and all consulting provided pursuant to this Agreement are provided on an "as
is" basis. EXCEPT FOR THE EXPRESS REPRESENTATION SET FORTH IN SECTION 6.1
(FACTUAL REPRESENTATIONS), MAGIC AND MAGIC'S SUPPLIERS DISCLAIM ALL EXPRESS AND
IMPLIED WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
LICENSED
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TECHNOLOGY AND SUPPORT SERVICES. The disclaimer in this Section 6.2 (Disclaimer
of Warranties) shall not effect Magic's indemnity obligations as set forth in
Section 11.1 (Magic Indemnity).
7. Support.
7.1 Maintenance and Support Services. All versions of the Licensed
Technology delivered to Licensee shall be maintained by Magic pursuant to the
terms and conditions in the Maintenance Terms and this Agreement. In addition to
the maintenance provided to Licensee by Magic under this Section 7 (Support) and
the Maintenance Terms, Magic shall offer to Licensee under separate contract,
additional support, such as development support, technical information support,
second line customer support, and Error, Resolution and new release management
support.
7.2 Compatibility Across Releases. Versions of the Licensed
Technology released by Magic after the Accepted First Production Version shall
be Backwards Compatible as defined in the Maintenance Terms and to the extent
set forth therein.
7.3 Support of Subscribers. Licensee shall provide all technical
support of the Licensee Public Service to the Subscribers. Magic will not
provide direct support to the Subscribers unless otherwise specifically agreed
by Magic, on a case by case basis and subject to Magic's standard support fees.
7.4 Training Programs. Magic will provide training programs for
Licensee pursuant to Magic's then standard terms and conditions for training.
Authorized Service Centers may also make available to Licensee similar training
programs.
7.5 Project Coordinators. During the term of this Agreement, Magic
shall provide the following support services to Licensee regarding the Licensed
Technology:
7.5.1 Appointment of Project Coordinators. As soon as practical
after the Effective Date Licensee and Magic shall each appoint a Project
Technical Coordinator, who shall be responsible for such party's technical
activities and relationships with the other party, consistent with the terms and
conditions of this Agreement. If and when Licensee elects to receive Project
Commercial Coordinator support pursuant to Section 7.5.8 (Election of Project
Commercial Coordinator; Termination of Project Technical Coordinator), Licensee
and Magic shall each appoint a Project Commercial Coordinator, who shall be
responsible for such party's day to day relationship with the other party. In
the event that either party's Project Commercial Coordinator (if elected by
Licensee) or Project Technical Coordinator (collectively, the "Project
Coordinators") shall become unavailable, such party shall name another Project
Coordinator in writing to the other party, pursuant to the Notices provision
contained in Section 18.7 (Notices).
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7.5.2 Project Coordinator Procedures and Meetings. The Project
Coordinators shall, within thirty (30) days after their appointment, agree in
writing to the day to day operations of the parties pursuant to this Section 7.5
(Project Coordinators), including escalation procedures for resolving problems
which may arise, and the names and telephone numbers of necessary personnel
contacts from each party. The Project Coordinators will conduct project reviews,
which shall be held as frequently as shall be mutually agreed by the parties, at
such locations as the parties shall agree. Written minutes will be prepared by
the Project Coordinators and will be issued within five (5) business days
following each project review meeting. With respect to such meetings, it is
expressly understood by the parties that no representations, commitments or
other statements or communications by either party to the other, whether oral or
in writing, shall in any manner modify, expand, limit, terminate, create, or
otherwise in any manner affect the obligations of either party pursuant to this
Agreement unless or until embodied in this Agreement by an amendment thereto.
7.5.3 Technical Coordinator. The Magic Project Technical
Coordinator shall provide the following support services to the Licensee Project
Technical Coordinator: (i) keeping Licensee apprised of the status of Magic's
attempts to provide Resolutions of Licensee's reported Errors; (ii) project
oversight, scheduling and status of Licensed Technology deliverables (iii)
oversight release testing, configuration management and quality assurance; (iv)
preparing Licensee for the receipt of Documentation and Licensed Technology; (v)
keeping Licensee apprised of the Magic's future Licensed Product development
plans; and (vi) answering basic questions regarding the Licensed Technology.
7.5.4 Commercial Coordinator. If and when Licensee elects to
receive Project Commercial Coordinator support pursuant to Section 7.5.8
(Election of Project Commercial Coordinator; Termination of Project Technical
Coordinator), the Magic Project Commercial Coordinator shall provide the
following support services to the Licensee Project Commercial Coordinator: (i)
keeping Licensee informed of Magic's business strategies (to the extent such
disclosure is not limited by nondisclosure obligation), (ii) keeping Magic
informed of Licensee's business strategies (to the extent such disclosure is not
limited by non-disclosure obligation), (iii) assisting Licensee in its
performance of market research, (iv) provide Licensee with other reasonable
information and assistance needed by Licensee to develop effective marketing and
business models.
7.5.5 Services Not Included. The following services are outside
the scope of this Section 7.5 (Project Coordinators): (i) Consulting regarding
Magic products not licensed pursuant to this Agreement; (ii) Consulting
regarding Licensed Technology which has been modified by Licensee or others;
(iii) Consulting regarding other than the current Release of Licensed
Technology; and (iv) Consulting regarding (a) failures of computer hardware,
equipment or programs not supplied by Magic; (b) catastrophe, negligence of
Licensee, operator error, improper use of hardware or software or attempted
maintenance by unauthorized persons; or (c) hardware, software, or firmware
changes to the Licensed Technology that are not
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provided by Magic; and (v) On-site support services, unless mutually agreed to
and subject to Magic's then-current on-site support fees.
7.5.6 Confidential Information. All information shared pursuant
to this Section 7.5 (Project Coordinators) shall be subject to the terms and
conditions contained in Section 12 (Confidential Information).
7.5.7 On-Site Project Director Services. If Licensee requires,
and Magic agrees to provide on-site Project Director services, Licensee agrees
to pay actual costs for travel, lodging, and meals reasonably incurred by Magic.
Under such circumstances, Licensee shall also pay actual costs for supplies and
other expenses reasonably incurred by Magic, which are not of the sort which
would normally be provided or covered by Magic; provided that Licensee has
approved in advance the purchase of such supplies and other expenses. Shipping
and freight for Licensee equipment shall be billed to Licensee at actual cost.
If Licensee so requires, Magic shall submit written evidence of each expenditure
to Licensee prior to receiving reimbursement of any costs and expenses above.
7.5.8 Election of Project Commercial Coordinator; Termination of
Project Technical Coordinator. At any time while this Agreement is in effect,
Licensee may elect to receive Project Commercial Coordinator support by
providing Magic with a written notice of Licensee's election thereof. Such
support shall begin upon Magic's appointment of a Project Commercial Coordinator
and shall continue unless and until Licensee provides Magic with one (1) years
prior written notice of Licensee's intent to terminate such Project Commercial
Coordinator support. Licensee may, at its sole option, terminate the Project
Technical Coordinator support on written notice, effective twelve (12) months
after delivery to Magic, and provided further that Licensee may not deliver such
a notice of termination prior to twenty-four (24) months after the Effective
Date.
7.6 Consulting Services. Upon Licensee's request Magic may, at
Magic's option, provide consulting services regarding the Licensed Technology
delivered to Licensee. Such consulting services may include, for example,
adapting the Licensed Technology into Licensee Public Services, integration
support of third party software packages, functional enhancements, etc. Such
consulting services will be provided only pursuant to the terms and conditions
in Magic's standard Consulting Agreement.
7.7 Source Code Escrow. Magic agrees to enter into the escrow
agreement attached hereto as Exhibit H (Escrow Agreement). Pursuant to the
Escrow Agreement, Magic will deposit the STSE in Source Code form into an escrow
account held for the benefit of Licensee. Such Source Code shall, subject to the
terms and conditions in the Escrow Agreement, be released from escrow and
delivered to Licensee upon the occurrence of one of the following events (a
"Releasing Event"):
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(a) Magic has breached Magic's obligation to provide
Licensee with Resolutions in accordance with the Maintenance Terms, and has not
cured such breach within sixty (60) days after written notification of such
breach.
(b) Magic makes an assignment of its business for the
benefit of creditors, dissolves, or ceases operations in the normal course, or a
proceeding is commenced by Magic under any federal or state bankruptcy law or
otherwise for the general settlement of its debts, or such a proceeding is
commenced against Magic and such proceeding has not been dismissed within ninety
(90) days after it begins, or Magic takes any corporate action authorizing any
of the foregoing, or Magic exercises its rights, pursuant to 11 USC Section 365
of the U.S. Bankruptcy Code, to reject the Agreement.
The Escrow Agreement shall require Licensee to give the escrow agent
and Magic written notice of the occurrence of any Releasing Event, and shall
provide that the Source Code held in escrow shall not be released to Licensee
unless Magic agrees, or arbitrators conclude, that a Releasing Event has
occurred. If the parties dispute the occurrence of a Releasing Event, the
dispute shall be resolved by arbitration in accordance with Section 8
(Arbitration of Disputed Notice) of the Escrow Agreement. Magic will notify
Licensee of Magic's receipt of notice from any other Magic licensee of an
alleged occurrence of a Releasing Event immediately upon receiving such notice.
The release of source code to a licensee other than Licensee shall not cause or
require such a release to Licensee, provided, however, that the arbitrators for
a claim by Licensee that a Releasing Event has occurred shall be entitled to
apply principles of collateral estoppel in resolving any of Licensee's claims
which are similar in nature to those brought by any other licensee. Magic shall
not grant third parties any security interest in the source code for the
Licensed Core Software Package that would prevent Magic from performing all of
its obligations under the Escrow Agreement, including the grant to the escrow
agent of full and clear title to copies of the "Escrow Materials" as defined in
the Escrow Agreement. Licensee's use of the Source Code released to it pursuant
to the Escrow Agreement shall be subject to the terms and conditions in this
Agreement and the Escrow Agreement.
7.8 Section Intentionally Deleted.
7.9 Project Coordinator Fees. Licensee agrees to contribute toward
the costs of maintaining a Magic Project Technical Coordinator (as that term is
defined in Section 7.5 (Project Coordinators)) at Magic's U.S. corporate
headquarters by paying Magic **** in advance of each such period. In the event
that Licensee elects to receive Project Commercial Coordinator support pursuant
to Section 7.5.8 (Election of Project Commercial Coordinator; Termination of
Project Technical Coordinator), then for so long as such support is in effect,
Licensee agrees to contribute toward the costs of maintaining a Magic Project
Commercial Coordinator (as that term is defined in Section 7.5 (Project
Coordinators)) at Magic's U.S. corporate headquarters by paying Magic ****
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7.10 CPI Adjustment. The fees set forth in Section 7.9 (Project
Coordinator Fees) (the "Adjustable Fees") shall be adjusted annually during the
term of this Agreement on each anniversary of the Effective Date of this
Agreement as follows: if in the twelfth (12th) month following the Effective
Date, the All-urban Consumer Price Index adjusted for changes in the manner in
which such index is based (the "Price Index") shall differ from the Price Index
for the month in which the Effective Date occurred (the "Base Month"), the
then-applicable Adjustable Fees shall be adjusted to a sum computed as follows:
each then-applicable Adjustable Fee shall be multiplied by a fraction, the
numerator of which shall be the Price Index twelve (12) months after the
Effective Date (and each twelve (12) month anniversary of such date thereafter)
and the denominator of which shall be the Price Index for the Base Month. The
products shall be the then-applicable Adjustable Fees payable hereunder for the
period one (1) year after the Effective Date (and each anniversary of such date
thereafter), until the next anniversary (and each anniversary of such date
thereafter) when such then-applicable Adjustable Fees shall again be so
adjusted.
7.11 Computation and Payment of CPI Adjustment. The computation set
forth in Section 7.10 (CPI Adjustment) shall be made by Licensee promptly after
the Price Index as of the first anniversary of the Effective Date of this
Agreement (and each anniversary of such date thereafter) is made available.
Licensee shall give Magic prompt written notice of any adjustment in the
then-applicable Adjustable Fees. Licensee shall pay to Magic within thirty (30)
days after delivery of such notice, the amount of any increase for such fees
previously paid by Licensee beginning one (1) year after the Effective Date (and
each anniversary of such date thereafter) upon which such new Adjustable Fees
became effective. If such adjustment results in a decrease in prices, Licensee
may offset the amount of any overpayment it may have made in previous Adjustable
Fees against the compensation for the Adjustable Fees, respectively, to be paid
to Magic when they next become due.
8. Control of and Modifications to Licensed Technology.
8.1 Definitional Control of the CS and the SII Specification. Both
Magic and Licensee believe that it necessary to define the CS and/or SII
Specification for releases subsequent to release 2.0 with input from Magic's
Licensed Technology licensees. Therefore, Magic will endeavor to create a
Licensed Technology advisory committee ("Advisory Committee") that is chartered
with the responsibility of providing input to Magic regarding the evolution of
the CS and/or SII Specifications for all releases subsequent to release 2.0. If
an Advisory Committee is formed, Magic anticipates that the Advisory Committee,
or a different committee (such as a group organized under the auspices of the
Founding Partners Counsel), will eventually share with Magic or assume
responsibility for the definition of the CS and SII Specifications
("Definitional Committee"). If a Definitional Committee is formed by
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Magic, the parties contemplate that the Definitional Committee would have the
power, by a super-majority vote of the members, to require Magic to deem a
release of the Licensed Technology as not being a Mandatory Release.
Unless and until Magic creates a Definitional Committee, Magic shall
control the definition of the CS and the SII Specification with input as
required by Section 8.2 (Process of Modifying the CS and SII Specification). In
such case, Magic may modify the CS and the SII Specification by the issuance of
a new Mandatory Release at any time; provided, however, that (a) Magic meet all
of the obligations in Section 8.2 (Process of Modifying the CS and SII
Specification) and (b) Magic may elect to make enhancements to the CS and/or SII
Specification which will be implemented only in future releases of the Licensed
Technology.
8.2 Process of Modifying the CS and SII Specification. In the event
that Magic has created an Advisory Committee, Magic must meet all of the terms
and conditions regarding the solicitation of and response to input established
by Magic for such Advisory Committee prior to issuing a new Mandatory Release
that reflects a change to the CS or SII Specification. In the event Magic has
not created an Advisory Committee, Magic shall meet the following terms and
conditions:
8.2.1 Giving Notice. Magic will give Licensee written notice of
all planned Mandatory Releases as early as possible in Magic's release
definition process. Magic, through the Project Technical Coordinator, shall also
use diligent efforts to answer in a timely fashion all of Licensee's reasonable
questions regarding the contents of each planned Mandatory Release, and the
technical consequences of updating the Licensee Public Service to the planned
Mandatory Release.
8.2.2 Providing and Acting Upon Input. If Licensee provides
Magic with a written objection to any of the contents or envisioned consequences
of updating the Licensee Public Service to the planned Mandatory Release within
thirty (30) days of Magic's initial notice of a planned Mandatory Release, then
(i) Magic shall first use diligent efforts to fully understand the nature of
Licensee's objections by discussing such objections with Licensee on all
reasonable engineering levels and (ii) Magic shall then use diligent efforts to
determine whether or not it is reasonably possible to modify the Mandatory
Release such that it both meets Magic's CS and SII Specification goals and is
responsive to Licensee's objections. If, in Magic's reasonable opinion, it is so
possible, Magic will modify the envisioned Mandatory Release accordingly.
8.3 Implementation. Licensee will implement all Mandatory Error
Corrections in the Licensee Public Services within thirty (30) days of the date
of receipt of such Mandatory Error Correction from Magic (or such longer or
shorter time period to be negotiated in good faith between the parties if thirty
(30) days is not commercially reasonable under the circumstances). Licensee
shall implement Mandatory Releases created in accordance with the terms and
conditions in Section 8.2 (Process of Modifying the CS and SII Specifications)
within six (6) months after Acceptance of each such Release. Licensee shall, at
its option, implement Non-
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Mandatory Releases within six (6) months after receipt of each such Release. The
support for a superseded version of the Licensed Technology shall be pursuant to
the terms in the Maintenance Terms.
8.4 Use of a Superseded Release. If Licensee declines to implement a
Non-Mandatory Release of the Licensed Technology as the basis for Licensee
Public Services, Licensee may continue to use the previous release as the basis
for Licensee Public Services, provided such release remains compliant with the
CS and the SII Specifications.
8.5 CS and SII Specification Compliance. Prior to Licensee's first
commercial offering of its Licensee Public Service, and again, prior to the time
Licensee makes a revised version thereof commercially available, Licensee will
(i) certify in writing to Magic that the Licensee Public Service is compliant
with the CS and the SII Specification, (ii) provide Magic with the results of
the test suites provided by Magic and (iii) provide Magic with the results of
any test suites developed by Licensee to test compliance with the CS and SII
Specification, in addition to such test suites themselves.
8.6 No Reverse Engineering. Licensee will not attempt or expressly
permit or authorize any third parties to attempt to reverse compile, disassemble
or otherwise reverse engineer any portion of the Licensed Technology not
provided in Source Code form, including but not limited to the STSE.
8.7 Deemed Compliance with the CS and SII Specification.
Notwithstanding anything to the contrary in this Agreement, Licensee will be
deemed to comply with CS and SII Specification for all releases of the Licensed
Technology prior to release 2.0 if Licensee implements the Licensed Technology
in its Licensee Public Service as delivered by Magic or as modified by Licensee
in a way that is (i) permitted under this Agreement and (ii) permitted by the
Documentation.
9. Proprietary Rights.
9.1 Ownership of Licensed Technology. Except for the rights
expressly enumerated herein, Licensee is not granted any rights to patents,
copyrights, trade secrets, trademarks (whether or not registered), or any other
rights, franchises, or licenses with respect to the Licensed Technology.
9.2 Ownership of Modifications. All modifications and enhancements
of the Licensed Technology developed and made solely by Magic shall be owned
exclusively by Magic. All modifications and enhancements of the Licensed
Technology developed and made solely by Licensee under this Agreement and in
accordance with its terms shall be owned exclusively by Licensee; provided,
however, that (i) any of the Licensed Technology and Documentation incorporated
within such modifications and enhancements will remain the property of Magic
and/or its suppliers and shall be subject to all of the terms and conditions of
this Agreement and (ii) Licensee agrees to negotiate in good faith licenses to
such
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Licensee owned modifications and enhancements that would permit Magic to
incorporate the modifications and enhancements into the Licensed Technology
(with or without additional Magic modifications), and distribute such Licensed
Technology to Magic's other Licensed Technology licensees.
9.3 Proprietary Notices. Licensee agrees that as a condition
of its rights hereunder, each copy of the Licensed Technology and Documentation
shall contain the same proprietary notices which appear on or in such Licensed
Technology and Documentation, and as otherwise reasonably required by Magic.
Licensee agrees that a valid Magic copyright notice for the Licensed Technology
and Documentation will appear on the media.
9.4 Restricted Rights. Licensee will identify and provide any
product or service offering containing any portion of the Licensed Technology in
all proposals and agreements with the United States Government or any contractor
therefor as commercial software developed at private expense and provided with
restricted rights, and legend or mark the portions of the Licensed Technology so
included, as follows:
(a) For acquisition by or on behalf of civilian
agencies, as necessary to obtain protection substantially equivalent to that
afforded to restricted computer software and related documentation developed at
a private expense and which is existing computer software no part of which was
developed with government funds and provided with Restricted Rights in
accordance with subparagraphs (a) through (d) of the "Commercial Computer
Software - Restricted Rights" clause at 48 C.F.R 52.227-19 of the Federal
Acquisition Regulations and its successors; and
(b) For acquisition by or on behalf of units of the
Department of Defense ("DoD") as necessary to obtain protection substantially
equivalent to that afforded to commercial computer software and related
documentation developed at private expense and provided with Restricted Rights
as defined in DoD FAR Supplement 48 C.F.R. 252.227-7013(c)(1)(ii) and its
successors in effect for all solicitations and resulting contracts issued on or
after May 18, 1987.
9.5 Foreign Government Agreements. If Licensee provides any
product or service offering containing any portion of the Licensed Technology to
a governmental entity operating inside the Licensed Country(ies), Licensee will
make reasonable commercial efforts in entering into proposals and agreements
with such governmental entity to insure that the proprietary rights of Magic and
its suppliers receive the maximum protection available from such foreign
governmental entity for commercial software developed at private expense.
9.6 RSA Software. Licensee acknowledges that the Licensed
Technology currently includes security features in software licensed to Magic by
RSA Data Security, Inc. (the "RSA Software"). Licensee agrees that it will not
(i) use the RSA Software contained in the Licensed Technology for any purpose
other than
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porting such security features in the RSA Software to Licensee's execution
environment, (ii) disengage the RSA Software from the Licensed Technology, (iii)
modify the RSA Software or the Magic interface to the RSA Software, or (iv)
access the RSA Software's functions in any way other than through the Magic
interface to the RSA Software. Magic acknowledges that the French Government
might not permit the use within the French territories of the current security
regime implemented in the Licensed Technology, which includes but is not limited
to the RSA Software. Licensee agrees to use best efforts to obtain the necessary
French Government authority to use such security regime as envisioned by the
parties in the French territories. Magic agrees to use best effort (to the
extent permitted by the United States Government and RSA Data Security, Inc.) to
support Licensee's efforts.
In the event that despite the best efforts of both parties, the French
Government does not permit the use of the currently implemented security regime
as envisioned by the parties in the French territories, the parties shall
mutually endeavor to agree upon terms and conditions regarding the architecture
and implementation of an alternate Telescript Based Public Service security
regime. In the event that the parties are unable to agree upon the architecture
and implementation of an alternate Telescript Based Public Service security
regime, either party may terminate this Agreement and all of the terms and
conditions herein upon thirty (30) days written notice to the other party.
Section 10.5.2 (No Fault Termination) sets forth the consequences of such a
termination.
10. Term and Termination.
10.1 Term. Unless terminated earlier pursuant to Section 10.2
(Default), Section 10.3 (Insolvency), 10.4 (Delivery Obligations) or 10.7
(Termination Due to Lack of Profitability), this Agreement shall remain in full
force and effect for a period of six (6) years from the Effective Date.
Thereafter, this Agreement shall automatically be renewed for successive three
(3) year periods unless and until either party gives the other party notice that
the Agreement shall not be renewed at the end of the then current period;
provided that such notice must be given at least one (1) year prior to the
expiration of the then current term period.
10.2 Default. In the event of a material breach of this
Agreement, the non-breaching party may terminate this Agreement by providing
written notice to the other party of the nature of the breach and intent to
terminate. Termination will be effective sixty (60) days after such notice
unless the breach has been corrected by that time or one or both parties have
submitted to ADR or arbitration in accordance with Sections 18.3 (Alternative
Dispute Resolution) and 18.4 (Arbitration) any good faith dispute over the
existence of the breach and, in the event of a determination by ADR or
arbitration that such a breach exists, the breaching party has failed to cure
such breach within sixty (60) days from the date of such determination.
Licensee's attempt to offer services, sell or otherwise dispose of any product
using the Licensed Technology which does not fully comply with the CS and the
SII Specifications will be deemed a material breach of this Agreement.
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10.3 Insolvency. This Agreement may be terminated by either
party on notice, if the other party makes an assignment of its business for the
benefit of creditors, dissolves, or ceases operations in the normal course, or a
proceeding is commenced by such party under any federal or state bankruptcy law
or otherwise for the general settlement of its debts, or such a proceeding is
commenced against such party and such proceeding has not been dismissed within
ninety (90) days after it begins, or such party takes any corporate action
authorizing any of the foregoing. In the event that Licensee does not elect to
treat this Agreement as terminated upon the occurrence of any of the foregoing
events, Licensee may nonetheless treat this Agreement as terminated for breach
should Magic elect to reject this Agreement pursuant to 11 USC Section 305 of
the Bankruptcy Code.
10.4 Delivery Obligations. In the event that (i) Magic does
not deliver the First Production Version to Licensee within six (6) months of
the schedule set forth in Exhibit C (Delivery Milestones) or (ii) Licensee
finally rejects such First Production Version pursuant to the terms of Section 5
(Acceptance), Licensee may terminate this Agreement by written notice to Magic.
In the event of such a termination, Licensee's sole and exclusive remedy shall
be to obtain a refund of any license fees paid by Licensee in accordance with
Section 3.1 (License Fees and Royalties) **** . Such refund shall be paid to
Licensee in two equal annual installments of principal and interest and bearing
interest at the prime rate of interest in effect on the termination date as
published by Bank of America NT&SA.
10.5 The Effect of Termination.
10.5.1 General Termination. Except as set forth in
Section 9.6 (RSA Software), Section 10.7 (Termination Due to Lack of
Profitability), Section 10.8 (Termination After Pyramid) and Section 11.1.1
(Indemnity), upon the expiration or termination of this Agreement for any cause,
all licenses granted to Licensee hereunder and all rights and obligations in
Section 3 (Technology Fees and Royalties) shall survive for a period of two (2)
years (or earlier at Licensee's discretion) subsequent to such expiration or
termination so that Licensee may wind down its Licensee Public Service, at which
time all such licenses granted to Licensee pursuant to this Agreement shall
terminate and Licensee shall cease to accrue any additional payment obligations.
Upon the expiration of the wind-down period, Licensee will return to Magic or
destroy all copies of the Licensed Technology in its possession or under its
control and will certify to Magic in writing that it has done so. Upon the
termination of such wind-down period (or earlier at Licensee's discretion),
Licensee shall notify its subscribers that it is no longer a licensed provider
of Licensee Public Services.
10.5.2 No Fault Termination. Upon the termination of
this Agreement pursuant to Section 9.6 (RSA Software), Section 10.7 (Termination
Due to Lack of Profitability), Section 10.8 (Termination After Pyramid) or
Section 11.1.1 (Indemnity), all rights and obligations in this Agreement except
for those set forth in Section 10.6 (Survival) shall immediately terminate. All
moneys paid by Licensee to
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Magic up to the date of such termination shall be non-refundable, but no new
payment obligations shall arise after such termination under this Agreement or
as a result of the termination. Such termination shall be deemed to be a
"no-fault" termination.
10.6 Survival. The parties' rights and obligations which by
their nature are intended to survive the termination of this Agreement, together
with the parties' rights and obligations with respect to the following sections,
shall survive any termination of this Agreement: 6 (Disclaimer of Warranty), 9
(Proprietary Rights), 12 (Confidential Information), 13 (Public Relations), 15
(Limitation of Liability), 16 (Branding) and 18 (General Provisions); and, for a
period of five (5) years from the date of termination, Section 11 (Infringement
Indemnity).
10.7 Termination Due to Lack of Profitability. If, at the end
of Licensee's third year of general commercial availability of a Licensee Public
Service in a specific Licensed Country, Licensee makes the good faith
determination that its Licensee Public Service is not currently or cannot
reasonably be expected to continue to be profitable in such Licensed Country,
Licensee may give Magic written notice of its intent to renegotiate on a
prospective basis, the License fees and royalties associated with Licensee's
operation of the Licensee Public Service in such Licensed Country. The parties
shall begin good faith renegotiation of such fees within thirty (30) days of
Magic's receipt of such notice. In the event that the parties are unable to
reach agreement on renegotiated fee amounts within sixty (60) days of Licensee's
original notice, Licensee may terminate the Agreement as it applies to the
Licensee Public Service in such Licensed Country upon one (1) year prior written
notice (or a shorter period noticed by Licensee) to Magic unless the parties
agree to fee amounts prior to the expiration of such notice period.
10.8 Termination After Pyramid. Licensee is planning to
operate in the Licensed Territory a Pilot service known internally to Licensee
as "Pyramid." The parties will meet after the culmination of the Pyramid Pilot
to discuss in good faith the results of such Pilot, the envisioned commercial
viability of a commercial Licensee Public Service and any modifications to this
Agreement or the Licensed Technology that would increase the potential for
success of the envisioned Licensee Public Service. If Licensee reasonably
believes as a result of the Pyramid Pilot that a Licensee Public Service would
not be commercially viable, then Licensee may terminate this Agreement upon
sixty (60) days written notice. In the event of such a termination, Licensee
will not develop or implement a technology that is similar to the Licensed
Technology unless Licensee can establish by written evidence that such similar
technology was developed without direct or indirect reference to General Magic's
Confidential Information.
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11. Infringement Indemnity.
11.1 Magic Indemnity.
11.1.1 Indemnity. Magic will defend and indemnify
Licensee against all claims by third parties alleging that any Licensed
Technology provided or licensed by Magic infringes any third party's
Intellectual Property Rights, subject to the limitation of liability set forth
in Section 15 (Limitation of Liability) and provided that Licensee gives Magic
prompt notice of any such claim, exclusive authority to defend and settle all
such claims, and reasonable cooperation, at Magic's expense, for the defense of
any such claim. Licensee shall be entitled to participate in the defense of any
action at its expense.
In the event Licensee is enjoined from its use of the Licensed
Technology, then Magic may, at Magic's sole option and expense (i) procure for
Licensee the right to use or sublicense the potentially infringing Licensed
Technology or Documentation or (ii) modify or replace the potentially infringing
Licensed Technology or Documentation provided that such replacement (a) is
functionally equivalent to the Licensed Technology or Documentation being
replaced and (b) does not unreasonably adversely impact the commercial viability
of the Licensee Public Service. In the event that neither option (i) or (ii) is
commercially practical, then Magic may terminate the Agreement, including all
licenses granted herein, and refund to Licensee all license fees and royalty
payments that accrued during the period in which Licensee used the enjoined
release, provided that such fees and royalties were actually paid by Licensee to
Magic. In the event that Magic terminates the Agreement pursuant to this Section
11.1.1, such a termination shall not relieve Magic's indemnity obligation under
this Section 11.1.1 for the subject claim.
11.1.2 Exceptions. Magic shall have no
indemnification obligation to the extent that such infringement or claim is
caused by (i) software developed at Licensee's request and in accordance with
specifications or designs of Licensee, (ii) Licensed Technology that has been
modified by someone other than Magic (unless such modification has been
incorporated by Magic as a part of the Licensed Technology) where the claim is
caused by or arises out of the modification, (iii) the use of the Licensed
Technology in connection or combination with software or hardware not provided
by Magic, where the claim is caused by the combination with the other software
or hardware with which the Licensed Technology is combined, or (iv) the use of
any non-current release of the Licensed Technology where the current release is
noninfringing, at least equivalent in functionality and performance to the
infringing release, and has been made available to Licensee, and Magic has
provided Licensee with written notice that it has reason to believe that such
non-current release of the Licensed Technology may be infringing; provided,
however, that this shall not excuse Magic from indemnity obligations with
respect to prior use by Licensee of a then-current release. Magic agrees to
inform Licensee if Magic has serious reason to believe that software developed
in accordance with Licensee's specifications or designs will result in
technology that infringes a third party's Intellectual Property Rights.
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11.1.3 Limitation. THE FOREGOING WILL BE LICENSEE'S
SOLE AND EXCLUSIVE REMEDIES FOR ANY CLAIMS OF INFRINGEMENT OF ANY INTELLECTUAL
PROPERTY RIGHTS.
11.2 Licensee Indemnity. Licensee agrees to defend or settle
at its expense any suit or proceeding brought against Magic incident to any
infringement or claimed infringement of any patent, copyright, trade secret,
trademark, or other intellectual property right arising out of and to the extent
such infringement or claimed infringement is directly caused by (i) compliance
with Licensee furnished specifications or designs, (ii) modifications of the
Licensed Technology made by Licensee, (iii) the use of the Licensed Technology
by Licensee in connection or combination with software or hardware not provided
by Magic where the claim is caused by or arises out of the combination with the
other software or hardware with which the Licensed Technology is combined, or
(iv) the use of any non-current release of the Licensed Technology by Licensee
or their customers where the current release is noninfringing, at least
equivalent in functionality and performance to the infringing release, and has
been made available to Licensee along with a written notice promptly upon
concluding that Magic has reason to believe that the non-current release may be
infringing. Licensee shall pay all settlements and damages awarded as a final
judgment by a court of competent jurisdiction, subject to the limitation of
liability set forth in Section 15 (Limitation of Liability), provided Licensee
is promptly notified by Magic in writing of any such claim and, at Licensee's
expense, is given full and exclusive control of said suit (including settlement
authority), and all reasonably requested assistance from Magic.
11.2.1 Limitation. THE FOREGOING WILL BE MAGIC'S SOLE
AND EXCLUSIVE REMEDIES FOR ANY CLAIMS OF INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHTS.
12. Confidential Information.
12.1 Information. The term "Confidential Information" shall
mean any information disclosed by one party to the other pursuant to this
Agreement which is in written, graphic, machine readable or other tangible form
and is marked "Confidential," "Proprietary," or in some other manner to indicate
its confidential nature. Confidential Information may also include oral or
visual information disclosed by one party to the other pursuant to this
Agreement, provided that such information is designated as confidential at the
time of disclosure and is reduced to writing by the disclosing party within a
reasonable time (not to exceed thirty (30) days) after its oral or visual
disclosure, and such writing is marked in a manner to indicate its confidential
nature and delivered to the receiving party.
12.2 Confidentiality. Each party shall treat as confidential
all Confidential Information of the other party, shall not use such Confidential
Information except as contemplated herein, and shall not disclose such
Confidential Information to any third party except as may be reasonably required
in connection with the manufacture, use, or offering of Licensee Public Services
pursuant to this
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Agreement, and subject to confidentiality obligations at least as protective as
those set forth herein. Without limiting the foregoing, each of the parties
shall use at least the same degree of care which it uses to prevent the
disclosure of its own confidential information of like importance but in no
event less than reasonable care, to prevent the disclosure of Confidential
Information disclosed to it by the other party under this Agreement. Magic
acknowledges that Licensee may currently or in the future be developing
information and technology internally, or obtaining information and technology
from other parties, that may be similar to the Magic Confidential Information.
12.3 Confidentiality of Source Code and System Level
Documentation. Licensee acknowledges and agrees that the Source Code and System
Level Documentation warrant the imposition of additional security precautions to
those contained in Section 12.2 (Confidentiality), and agrees to protect all
Source Code and System Level Documentation, by implementation of the following:
Licensee agrees that it will not:
(i) disclose all or any portion of the Source Code or
System Level Documentation to third parties, with the exception of Licensee
employees and independent contractors that meet the following criteria
("Authorized Employees" and "Authorized Contractors," respectively):
(a) who require access thereto for a purpose
authorized by this Agreement; and
(b) who have signed the appropriate employee
or contractor agreement substantially in the form attached as Exhibit I-1
(Employee Non-Disclosure Agreement), Exhibit I-2 (Contractor Non-Disclosure
Agreement), as applicable. Licensee guarantees the compliance of such employees
to the Employee Non-Disclosure Agreement.
(ii) reproduce the Source Code or System Level
Documentation, or any portion thereof, in any form or medium, without Magic's
prior written permission except as necessary for developing and maintaining
Licensee Public Services in accordance with Sections 2.2 (Source Code) of this
Agreement, and for archival storage;
(iii) allow hard copy printouts of any portion of the
Source Code or System Level Documentation to exist except within the secured
areas of the Development Site;
(iv) store or otherwise use the Source Code except on
a computer system which is a Secure Computer System as defined in Exhibit I-3
(Operation of Secure Computer Systems) within a Development Site; or
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(v) use Source Code or System Level Documentation for
any purpose not specifically authorized in this Agreement.
Furthermore, Licensee agrees to maintain a log which contains a list of
all Authorized Employees and Authorized Contractors who actually have had access
to Source Code or System Level Documentation. Licensee agrees to comply with
Magic's requests, from time to time, to provide Magic with copies of this list
and updates thereto, and all such Confidentiality Agreements entered into by
Licensee with its Authorized Employees and Authorized Contractors. Licensee
agrees not to provide access to Source Code or System Level Documentation to any
employee or contractor for the purpose of using such Source Code or System Level
Documentation to develop any products other than those authorized by this
Agreement. Licensee agrees to promptly notify Magic of any lost or missing items
and to use reasonable commercial efforts to recover such items. Licensee shall
advise all Authorized Employees and Authorized Contractors of their
responsibilities under the Confidentiality Agreement both at the time such
person's access to the Source Code or System Level Documentation commences, and
at the time such access terminates.
12.4 Confidentiality of Scripts. Licensee agrees to limit
access to the Scripts listed in Exhibit A (Licensed Technology) and associated
Documentation to employees with a need to know to perform activities authorized
under this Agreement and Authorized Contractors. All human-readable versions of
such Scripts and associated Documentation or portions thereof shall be stored in
a locked room or cabinet when not in use. Licensee agrees to keep a current,
complete and accurate log of all people given access to such Scripts and
associated Documentation, which it will make available to Magic on request.
12.5 Exceptions. The following information is excluded from
the obligations of confidentiality set forth in this Section 12 (Confidential
Information):
(i) information in the public domain at the time it
was disclosed or enters the public domain through no fault of the receiver;
(ii) information known to the receiver, without
restriction, at the time of the disclosure as shown by the files of the receiver
in existence at the time of disclosure;
(iii) information disclosed by the receiver to a
third party with the prior written approval of the discloser;
(iv) information independently developed by the
receiver without any use of the Confidential Information and by employees or
other agents of (or independent contractors hired by) the receiver who have not
been exposed to the Confidential Information;
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(v) information that becomes known to the receiver,
without restriction, from a third party without breach of this Agreement by the
receiver and otherwise not in violation of the discloser's rights;
(vi) information disclosed to third parties by the
discloser, intentionally without restrictions similar to those contained in this
Agreement; or
(vii) information disclosed pursuant to the order or
requirement of a court, administrative agency, or other governmental body;
provided, however, that the receiver shall provide prompt notice thereof to
enable the discloser to seek a protective order or otherwise prevent such
disclosure.
The fact that any specific element of the Licensed Technology fits
within any of the foregoing exceptions shall not permit Licensee to use or
disclose the Licensed Technology as a whole or any other elements of the
Licensed Technology, except as contemplated herein.
12.6 Term. The receiving party's obligations with respect to
all Confidential Information, including but not limited to the Licensed
Technology, shall be terminated only pursuant to Section 12.5 (Exceptions).
13. Public Relations. Each party shall designate a single point of
contact to handle public relations matters. The parties agree that neither will
issue any press release or other public communication concerning this Agreement
or the relationship between the parties without the prior written approval of
the other; provided, however, that notwithstanding the provisions of this
Section 13, Licensee may make such disclosures concerning this Agreement (e.g.,
in its filings with the Securities and Exchange Commission) as it believes in
good faith are appropriate pursuant to applicable laws and regulations. Nothing
in this Section 13 shall prevent Licensee from preparing its distribution
channels for the introduction of Licensee Public Services according to
Licensee's regular marketing practices.
14. Sales and Marketing.
14.1 Independent Programs. Licensee and Magic will be
individually responsible for their own sales and marketing activities. Except as
otherwise set forth in this Agreement, each of Licensee and Magic shall be free
to develop and implement its own sales and marketing programs.
14.2 Magic Assistance. Magic agrees that upon reasonable
request from Licensee it will assist in public or marketing events; provided,
however, that Licensee shall reimburse Magic for reasonable out of pocket costs.
14.3 Co-Marketing Programs. Licensee acknowledges that Magic
may, from time to time and in Magic's sole discretion, organize cooperative
marketing programs between some or all of its Telescript Based Public Service
providers and other Magic technology licensees. In the event Magic requests that
Licensee
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participate in any such programs (financially or otherwise) Licensee may, in
its sole discretion, participate on a level that is equal to the other
participants.
15. Limitation of Liability.
15.1 Maximum Magic Liability. IN NO EVENT SHALL MAGIC'S
COMBINED LIABILITY TO LICENSEE PURSUANT TO THIS AGREEMENT EXCEED **** ;
PROVIDED, HOWEVER, THAT ANY MAGIC LIABILITY IN EXCESS OF **** , UP TO THE TOTAL
COMBINED LIMIT , SHALL BE PAID BY MAGIC ONLY AS AN OFFSET AGAINST LICENSEE'S
FUTURE ROYALTY OBLIGATIONS THAT ACCRUE HEREUNDER (INCLUDING BUT NOT LIMITED TO
ANY MINIMUM ROYALTY OBLIGATIONS IMPOSED ON LICENSEE HEREBY). THIS LIMITATION ON
MAGIC'S LIABILITY IS CUMULATIVE, WITH ALL PAYMENTS BEING AGGREGATED TO DETERMINE
SATISFACTION OF THE LIMIT. THE EXISTENCE OF ONE OR MORE CLAIMS OR SUITS WILL NOT
ENLARGE THE LIMIT. THESE LIMITATIONS APPLY TO ALL CAUSES OF ACTION UNDER OR
RELATING TO THIS AGREEMENT.
15.2 Maximum Licensee Liability. SUBJECT TO SECTION 15.3
(EXCEPTIONS) BELOW, LICENSEE'S COMBINED LIABILITY TO MAGIC, PURSUANT TO THIS
AGREEMENT, OTHER THAN FOR COMPENSATION DUE MAGIC HEREUNDER, SHALL NOT EXCEED
**** . THIS LIMITATION ON LICENSEE'S LIABILITY IS CUMULATIVE, WITH ALL PAYMENTS
BEING AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT. THE EXISTENCE OF ONE OR
MORE CLAIMS OR SUITS WILL NOT ENLARGE THE LIMIT. THESE LIMITATIONS APPLY TO ALL
CAUSES OF ACTION UNDER OR RELATING TO THIS AGREEMENT.
15.3 Exceptions. IN THE EVENT OF LICENSEE'S MATERIAL BREACH OF
SECTION 2 (LICENSE GRANTS), OR OF SECTION 12.3 (CONFIDENTIALITY OF SOURCE CODE
AND SYSTEM LEVEL DOCUMENTATION) OR SECTION 12.4 (CONFIDENTIALITY OF SCRIPTS),
LICENSEE'S LIABILITY FOR SUCH BREACH SHALL NOT BE SUBJECT TO THE LIMITATION IN
SECTION 15.2 (MAXIMUM LICENSEE LIABILITY).
15.4 Limitation of Magic Liability. IN NO EVENT SHALL MAGIC BE
LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, OR SPECIAL DAMAGES OF
LICENSEE ARISING OUT OF THIS AGREEMENT EXCEPT THAT WITH RESPECT TO ANY WILLFUL
OR GROSSLY NEGLIGENT AND MATERIAL BREACH OF SECTION 12 (CONFIDENTIAL
INFORMATION) THIS EXCLUSION SHALL NOT APPLY; PROVIDED, HOWEVER, THAT THE
MONETARY LIMITATION SET FORTH IN SECTION 15.1 (MAXIMUM MAGIC LIABILITY) SHALL
APPLY TO ANY DAMAGES AWARDED PURSUANT TO THIS SECTION 15.4.
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15.5 Limitation of Licensee Liability. IN NO EVENT SHALL
LICENSEE BE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, OR SPECIAL
DAMAGES OF MAGIC ARISING OUT OF THIS AGREEMENT EXCEPT THAT WITH RESPECT TO ANY
WILLFUL OR GROSSLY NEGLIGENT AND MATERIAL BREACH OF SECTION 2 (LICENSE GRANTS)
OR SECTION 12 (CONFIDENTIAL INFORMATION) THIS EXCLUSION SHALL NOT APPLY;
PROVIDED, HOWEVER, THAT THE MONETARY LIMITATION SET FORTH IN SECTION 15.2
(MAXIMUM LICENSEE LIABILITY) SHALL APPLY TO ANY DAMAGES AWARDED PURSUANT TO THIS
SECTION 15.5.
16. Branding.
16.1 Trademark License. Magic grants to Licensee the
nonexclusive license and right to use the Magic Trademarks in connection with
Licensee's exercise of the rights granted to it hereunder in the Licensed
Country. All Magic Trademarks are and shall remain the sole property of Magic.
16.2 Use On Licensee Offerings. Licensee agrees to use the
Magic Trademarks in all advertising, documentation and other printed and
electronic media materials concerning the Licensee Public Services. The size and
placement of the Magic Trademarks shall comply with Magic's Guidelines for
Product Logos, but shall otherwise be within Licensee's discretion, provided
that the Magic Trademarks shall be easily visible.
16.3 Compliance with the CS and the SII Specifications.
Licensee agrees that its use of the Magic Trademarks will signify that Licensee
Public Services comply with CS and the SII Specifications. Licensee agrees that
its use of the Magic Trademarks shall be subject to reasonable restrictions and
quality control standards and restrictions on use in accordance with Magic's
Trademark usage guidelines to be provided to Licensee, including the submission
of samples of Licensee's advertising and promotional materials pertaining to the
Licensee Public Services and containing the Magic Trademarks within a reasonable
time after the first use of any such advertising and promotional materials by
Licensee.
16.4 Exceptions to Logo Usage. If Licensee's use of any of the
Magic Trademarks (or any other trademark adopted by Magic pursuant to Section
16.3 (Compliance with the CS and the SII Specifications)) is enjoined, Licensee
shall be under no further obligation to use such Magic Trademark, and the
parties shall cooperate in implementing a substitute logo.
16.5 Licensee Marks. Licensee shall have sole control and
ownership of its own name for Licensee Public Services (the "Licensee Marks"),
which service mark shall be used in conjunction with the Magic Trademarks,
provided that Licensee agrees not to use any trademark or service mark in close
proximity to any of the Magic Trademarks, or to combine the Licensee Marks or
any other trademarks or service marks so as to effectively create a unitary
composite mark without the prior
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written approval of Magic, or to use a trademark that is confusingly similar to
a Magic Trademark.
16.6 Non-Interference. Licensee shall not, during the term of
this Agreement or thereafter, interfere in any manner whatsoever with Magic's
right and title to the Magic Trademarks, so long as such Magic Trademarks do not
cause confusion with any pre-existing marks belonging to Licensee.
17. Third Party Beneficiaries.
17.1 AT&T.
17.1.1 Third Party Beneficiary. Licensee acknowledges
that AT&T Corp. ("AT&T") is a third party beneficiary to this Agreement to the
extent and only to the extent that AT&T desires to enforce the scope of
permitted use of any portions of the Licensed Technology jointly owned by Magic
and AT&T ("Jointly Owned Technology"). Magic shall identify all Jointly Owned
Technology by a notice on or in the Licensed Technology. Magic shall provide
Licensee with a notice on the Effective Date of all the existing Jointly Owned
Technology. Magic does not envision the creation of any additional Jointly Owned
Technology.
17.1.2 Restrictions on Use of Jointly Owned
Technology. Notwithstanding anything to the contrary in this Agreement, Licensee
may not grant sublicensing rights to any Jointly Owned Technology without
Magic's express written permission, granted on a case-by-case basis. Magic will
withhold its permission only if Magic does not have the right to grant Licensee
the right to sublicense Jointly Owned Technology. As of the Effective Date,
Magic does not have the right to grant Licensee the right to grant any
sublicenses in the Jointly Owned Technology. In the event that Licensee desires
to sublicense Jointly Owned Technology but Magic does not give its permission to
do so, Magic and Licensee will cooperate to arrange a direct license from Magic
to Licensee's desired sublicensee of such Jointly Owned Technology. Each
sublicense of Jointly Owned Technology by Licensee must state that AT&T is a
third party beneficiary of all of the terms of such sublicense applicable to the
Telescript Based Public Services to the extent and only to the extent that such
terms relate to any portions of the Jointly Owned Technology. Magic represents
that except for the restrictions on Licensee's use of the Licensed Technology
set forth in this Agreement and the additional restrictions on Licensee's use of
the Jointly Owned Technology set forth in this Section 17.1.2, General Magic's
agreement with AT&T regarding the Jointly Owned Technology imposes no additional
restrictions or requirements on Licensee's ability to use, reproduce and modify
the Jointly Owned Technology. Magic will provide Licensee with a then current
list of all Jointly Owned Technology on or before the Effective Date.
17.2 Neuron Data. Licensee acknowledges that the Licensed
Technology may contain software, in Object Code form, licensed from Neuron Data
(the "ND Software"). Without limiting Licensee's intended rights to use the ND
Software as part of the Licensed Technology hereunder, Licensee agrees that it
will
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not incorporate any portion of the ND Software in to any new or derivative
software tools, Scripts, or Licensee Public Services, or otherwise distribute
the ND Code, without obtaining a license to do so from Neuron Data.
18. General Provisions.
18.1 Independent Contractors. Each party shall perform its
obligations hereunder as an independent contractor and shall be solely
responsible for its own financial obligations. Nothing contained herein shall be
construed to imply a joint venture or principal and agent relationship between
the parties, and neither party shall have any right, power or authority to
create any obligation, express or implied, on behalf of the other in connection
with the performance hereunder.
18.2 Arbitration and Governing Law. All disputes arising in
connection with this Agreement shall be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce. This
Agreement shall be governed by the laws of the State of California, without
regard to the principle of conflict of laws, and to the laws of the United
States of America. The arbitration shall be conducted by a single arbitrator and
the language of the arbitration shall be English. The arbitration shall take
place in New York, New York. The application of the United Nations Convention
for the International Sale of Goods is expressly disclaimed.
18.3 Section Intentionally deleted.
18.4 Section Intentionally deleted.
18.5 Assignment. Magic shall not assign this Agreement or any
rights hereunder, whether by operation of law or otherwise, without the prior
written consent of Licensee except pursuant to a merger, sale of all or
substantially all of its assets, or other corporate reorganization. Any such
attempted assignment shall be void and shall constitute a material default of
this Agreement. Subject to the foregoing, this Agreement shall benefit and bind
the successors and assigns of the parties. Licensee shall be entitled to assign
this Agreement, or to sublicense some or all of its rights hereunder, to any
company or companies owned or controlled by Licensee which agree in writing to
be bound by all of the terms and conditions of this Agreement, in the instance
of an assignment, or all relevant terms and conditions of this Agreement, in the
instance of a sublicense, and to reconvey to Licensee all rights granted by
Licensee in the event that Licensee ceases to own or control such company. For
purposes of this Section 18.5, "control" means, in the case of a corporation,
direct or indirect ownership or control of fifty-one percent (51%) or more of
the outstanding shares of stock entitled to vote for the election of directors
(other than shares of stock whose voting rights are subject to restriction).
Licensee may request that Magic waive such control requirement on a case-by-case
basis, and Magic will not unreasonably deny such request provided that Licensee
maintains de facto control over its proposed assignee/sublicensee. In the case
of any sublicense by Licensee under this Section, royalties shall be payable by
Licensee in accordance with
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Section 3 (Technology Fees and Royalties) with respect to combined applicable
sales by it and the sublicensee. Licensee shall also be entitled to assign this
Agreement in connection with a merger, sale of all or substantially all of its
relevant assets, or other corporate reorganization.
18.6 Waiver. The waiver of one breach or default hereunder
shall not constitute the waiver of any subsequent breach or default.
18.7 Notices. All notices or reports permitted or required
under this Agreement shall be in writing and shall be delivered in person,
mailed by registered or certified airmail (postage prepaid, return receipt
requested) to the party to receive the notice at the address set forth at the
beginning of this Agreement or such other address as either party may specify in
writing. All such notices shall be effective upon receipt.
18.8 Export Controls. Each party agrees to comply with all
United States Department of Commerce and other export controls with respect to
the subject matter hereof.
18.9 Force Majeure. If the performance of this Agreement, or
any obligation of either party hereunder, is prevented, restricted, or
interfered with by reason of fire, explosion, breakdown of plant, epidemic,
earthquake, flood, power failure, war, embargo, law, order, demand or
requirement of any government, or any subdivision or representative of any such
government, strike, boycott, or any other circumstance beyond the reasonable
control of the party affected ("Force Majeure Event"), then the party affected
upon giving prompt notice to the other party, shall be excused from such
performance on a day-to-day basis to the extent of such prevention, restriction
or interference (and the other party shall likewise be excused from performance
of its obligations on a day-to-day basis to the extent such party's obligations
relate to the performance so prevented, restricted or interfered with); provided
that the party so affected shall use its best efforts to avoid or remove such
causes of non-performance and both parties shall proceed with dispatch whenever
such causes are removed or cease. The party affected by a Force Majeure Event
shall keep the other party informed on a regular basis of the prognosis for
removal or recovery from such Force Majeure Event.
18.10 Taxes.
(a) Licensee agrees to pay, indemnify and hold Magic
harmless from any sales, use, import or export, value added, or similar tax or
duty arising out of the transactions contemplated hereby legally imposed
primarily upon Licensee, but for which Magic may have secondary liability.
(b) Magic agrees to pay, indemnify and hold Licensee
harmless from any sales, use, import or export, value added, or similar tax or
duty arising out of the transactions contemplated hereby legally imposed
primarily upon Magic, but for which Licensee may have secondary liability.
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(c) Nothing contained in this Section 18.10 (Taxes)
shall require either party to indemnify the other in respect of any taxes based
upon the other party's net income or gross revenues, or for any withholding
taxes.
18.11 Severability. In the event that any term, clause,
provision, or condition of this Agreement is found invalid by any court, for any
reason whatsoever, such invalidity shall not affect the validity or operation of
any other term, clause, provision, or condition and such invalid term, clause,
provision, or condition shall be deemed to have been deleted from this
Agreement.
18.12 Section Headings. Section headings are inserted herein
for convenience only and form no part of this Agreement.
18.13 Entire Agreement. This Agreement and the exhibits hereto
represent and constitute the entire agreement between the parties with respect
to the subject matter hereof, may only be amended in writing signed by both
parties, and supersede all prior agreements and understandings with respect to
the matters covered by this Agreement. Subsequent to the Effective Date,
Licensee shall prepare a true and accurate French language translation of the
Agreement, which the parties will execute after being verified by Magic as being
true and accurate. The English language version of this Agreement and the French
language translation of this Agreement shall be equally binding in any
arbitration or other proceeding regarding the parties' intent behind the terms
or conditions herein.
IN WITNESS WHEREOF, Magic and Licensee have caused this Agreement to be
executed by their authorized representatives.
MAGIC: LICENSEE:
GENERAL MAGIC, INC. FRANCE TELECOM
By: /s/ Marc Porat By: /s/ Charles Rozmaryn
-------------- --------------------
Print Name: Marc Porat Print Name: Charles Rozmaryn
Title: Chairman and CEO Title: Directeur General
Date: 25 July '95 Date: 3-8-95
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EXHIBIT A
LICENSED TECHNOLOGY
Service Provider Kit (SPK)
Description
The Service Provider Kit is a UNIX-based deliverable that enables a
network operator to build and operate a public Telescript service. The SPK
currently contains the following components. Magic may update and modify the
components as the need arises for purposes of completion and revision: **** .
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EXHIBIT B
DEVELOPMENT SITE
Licensee's use of the Source Code shall be restricted to the following
Development Site:
Name of Development Site Address of Development Site
- ------------------------ ---------------------------
Service d'Etudes Communes de la 42, rue des Coutoures
Post et de France Telecom BP 6243
(S.E.P.T.) 14066 Caen Cedex
France
Centre d'Egudes de Telediffusion 4 rue du Clos Courtel
et Telecommunications (CCETT) BP 59
35512 Cesson-Sevigne Cedex
France
Centre National d'Etudes 38-40 rue du General-Leclerc
des Telecommunications (CNET) 92131 Issy les Moulineaux Cedex
France
and
2, avenue Pierre Marzin
22307 Lannion Cedex
France
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EXHIBIT C
DELIVERY MILESTONES
Telescript Developer Kit/Service Provider Kit **** - ****
****
****
Telescript Developer Kit/Service Provider Kit **** - ****
****
TELESCRIPT DEVELOPER KIT/SERVICE PROVIDER KIT
**** IS THE FIRST PRODUCTION VERSION
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EXHIBIT D
MAINTENANCE TERMS
1. NEW RELEASES, ERROR REPORTS AND RESOLUTIONS.
1.1 New Releases and Enhancements. During the term of the
Agreement, Magic shall deliver to the Licensee Technical Contacts Non-Mandatory
Releases, Mandatory Releases, and Mandatory Error Corrections which are
generally made available to similarly situated licensees who have licensed the
Licensed Technology from Magic. Magic will accept Licensee's written suggestion
of feature enhancements for future releases. Licensee suggestions will be
subject to the provisions in Section 7 (General Rights to Ownership) of this
Exhibit D. Magic is under no obligation to incorporate Licensee suggestions into
the Licensed Technology.
1.2 Error Reporting and Tracking. During the term of the
Agreement, the Licensee Technical Contacts may submit Error Reports by
electronic means (preferred), facsimile or in writing to Magic in the form set
forth in Attachment 2 (Error Report) hereto specifying the Errors which Licensee
wishes to have corrected. Errors must be reported with sufficient information so
that they are reproducible at General Magic. Magic shall maintain a tracking
procedure for all properly submitted Error Reports.
1.3 Classification of Errors. Licensee shall use its
reasonable business judgment to assign each reported Error one of the
preliminary Error classification levels set forth in Section 1.7 (Error) of the
Agreement, and shall report such preliminary classification in the Error Reports
that Licensee submits to Magic.
1.4 Magic's Response to Error Reports. Magic will acknowledge
receipt of an Error Report by the end of Magic's next business day. Magic will
then review the Error Report and use its reasonable business judgment to send
back to Licensee with fifteen (15) days, a proposal in response to such Error
Report, including technical solution(s), the Error classification level
perceived by Magic and as according to the Error level definitions set forth in
Section 1.7 (Error) and the intended date for the Resolution to be delivered.
Licensee will inform Magic of its agreement or disagreement within
fifteen (15) days after receipt of Magic's proposal. In case of any
disagreement, Magic and Licensee will use all reasonable efforts to reach an
agreement on a Resolution proposal that is acceptable to both parties.
Magic will use reasonable commercial means to deliver a Resolution of
all Level 1 Errors as soon as possible. Resolution of Level 2, 3 and 4 Errors
will be provided according to the agreed upon Resolution proposal.
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1.5 Acceptance of Resolutions. Licensee shall have thirty (30)
days (or such other time as the parties may mutually agree upon) from the date
on which Magic provides a proposed Resolution to an Error to examine and test
the Resolution to determine if it corrects the mutually agreed upon Error. All
Resolutions will be deemed to have been accepted by Licensee if Magic does not
receive from Licensee within such thirty (30) day period a new Error Report
stating that the Resolution did not correct the Error or that the Resolution
created a new Error. Licensee's sole and exclusive remedy for rejecting a
Resolution is to issue such new Error Report. New Error Reports shall be treated
in accordance with the guidelines set forth in this Exhibit D as original Error
Reports.
2. Services Not Included. The following services are outside the scope
of the Agreement:
2.1 Other Products. Maintenance for Magic products not
licensed under the Agreement;
2.2 Modifications. Maintenance for Licensed Technology which
has been modified by Licensee or others;
2.3 Non-Current Release. Maintenance for other than the
current release of Licensed Technology, except as provided in Section 3
(Previous Releases) of this Exhibit D;
2.4 Other Technologies. Errors which are not generated by the
Licensed Technology as delivered by Magic to Licensee executing on the
designated Delivery Environment. At Licensee's request, Magic may, at its
option, provide support for such Errors pursuant to the terms and conditions in
Magic's standard Consulting Agreement;
2.5 Other Errors. Maintenance which becomes necessary due to:
(i) failure of computer hardware, equipment not supplied by Magic; (ii)
catastrophe, negligence of Licensee, operator error, improper use of hardware or
software or attempted maintenance by unauthorized persons; or (iii) hardware,
software, or firmware changes to the Licensed Technology that are not provided
by Magic; and
2.6 On-Site Support. On-site maintenance, unless mutually
agreed to and subject to Magic's then-current on-site support fees unless
otherwise mutually agreed.
3. Previous Releases. Support for a particular release of the Licensed
Technology shall automatically terminate six (6) months after delivery of a
Non-Mandatory Release to Licensee and six (6) months after Licensee's acceptance
of a Mandatory Release. In the case of a Non-Mandatory Release, the parties
shall, at Licensee's option, negotiate in good faith the terms and conditions of
any continued support of the superseded release to be provided by Magic after
the expiration of such support.
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4. Backwards Compatibility.
4.1 Telescript Language. Each release of the Telescript
Language delivered to Licensee subsequent to release 2.0 of the Telescript
Developer Kit/Service Provider Kit will support programs written in the previous
release of the language, but the new release will indicate the portions of the
previous release, if any, that are considered archaic. These archaic items will
be supported by the new release but may not be supported in future releases.
Only in the event of a serious problem (e.g. a significant security exposure)
will incompatibility be introduced between two consecutive releases. Protocol
specifications for communication between Telescript Engines (e.g. PIP) and
Application Programming Interfaces (e.g. External Methods) will also follow this
practice. Magic shall use reasonable commercial judgment to ensure maximum
compatibility of the Licensed Technology.
4.2 Applications and Tools. Magic will attempt to maintain the
functional compatibility of the applications and tools written in the Telescript
language such that an application written to interact with such applications and
tools will continue to function properly with the next release of such
applications and tools. If this is not commercially or technically feasible,
Magic will develop a plan, in cooperation with Licensee, for the transition from
the current release of the applications and tools to the next release of the
applications and tools. Magic's expenses for such plan will be supported solely
by Magic.
5. Licensee's Responsibilities.
5.1 Distribution of Releases. Licensee shall be responsible
for implementing, at Licensee's expense (except as provided in Section 4.2
(Applications and Tools) of this Exhibit D), all Non-Mandatory Releases,
Mandatory Releases and Mandatory Error Corrections. Licensee and Magic agree
that all Non-Mandatory Releases, Mandatory Releases, and Mandatory Error
Corrections provided by Magic are subject to all the terms and conditions of the
Agreement.
5.2 Information and System Access Provided by Licensee.
Licensee shall fully cooperate with Magic by providing all necessary hardware
and software information, consultation, advice and electronic and physical
access to all relevant hardware and software reasonably required by Magic to
provide the support required under the Agreement. Such cooperation and access
shall be subject to (i) any applicable agreement between Magic and Licensee,
(ii) any applicable agreement between Licensee and third parties and (iii)
Licensee's Security Regulations that have been previously provided to Magic. In
all cases, Licensee shall provide Magic with electronic and physical access to,
at a minimum, those of Licensee's computer systems on which Magic delivered the
version of the Licensed Technology in question and where such Licensed
Technology is available as is, so that Magic may perform its support and
consulting obligations required under this Agreement.
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6. Description of Error Resolution Services Provided by Licensee.
6.1 First Tier Support. Licensee shall provide the first tier
technical support to Subscribers and within the Licensee organization. This
shall include, but not be limited to, Error verification and duplication, and
reasonable efforts to determine and provide to subscriber a Resolution of the
Error, which Resolution Licensee shall forward to Magic.
6.2 Access to Licensee Staff. Licensee shall provide Magic
with access to the necessary Licensee support staff and equipment to address
Level 1 and 2 Errors in a timely manner.
6.3 Reproducible Errors. Licensee will provide sufficient
information with the Error Report so that the Error is reproducible at General
Magic. Incomplete Error Reports will prevent or delay Magic's ability to respond
to Errors.
6.4 Insufficient Licensee Support. Failure by Licensee to
undertake any of the above obligations shall relieve Magic of its support
obligations for such Error.
7. General Rights to Ownership. Licensee acknowledges that all
corrections, enhancements, or revisions of the Licensed Technology or any other
work product provided by Magic in the course of its obligations under this
Exhibit D and the Agreement shall be owned exclusively by Magic and subject to
the conditions of the Agreement. Except for the rights expressly enumerated in
the Agreement, Licensee is not granted any rights to patents, copyrights, trade
secrets, trademarks (whether or not registered), or any other rights, franchises
or licenses with respect to the Licensed Technology.
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EXHIBIT E
MAGIC TRADEMARKS
1. Registered trademarks Use only with the (R) symbol:
2. Pending trademarks Use only with the (TM) symbol:
[TELESCRIPT TRADEMARK] [MAGICMAIL TRADEMARK]
General Magic(TM)
Telescript(TM)
Magicmail(TM)
- - Magic reserves the right to amend this Exhibit E as pending Magic Trademarks
become registered, and as otherwise is necessary to advance a global standard
and secure its trademark rights.
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EXHIBIT F
PRICING
1. License Fees. Within sixty (60) days of Magic's invoice, Licensee
shall pay Magic a one time, non-refundable, except as provided in Section 11.1.1
(Indemnity) of the Agreement, non-recoupable first year license fee of Two
Million Six Hundred Thousand U.S. Dollars (US$2,600,000) for the licenses
described in Section 2 (License Grants). Magic shall not issue such invoice
prior to the Effective Date. Additionally, upon the **** of the Effective Date,
Licensee shall pay Magic a one time, non-refundable, except as provided in
Sections 10.4 (Delivery Obligations) and 11.1.1 (Indemnity) of the Agreement,
non-recoupable license fee of **** for the licenses described in Section 2
(License Grants). Additionally, upon the **** of the Effective Date, Licensee
shall pay Magic a one time, non-refundable, except as provided in Sections 10.4
(Delivery Obligations) and 11.1.1 (Indemnity) of the Agreement, non-recoupable
license fee of **** for the licenses described in Section 2 (License Grants).
2. Royalties.
2.1 Usage Fees. Licensee shall pay Magic an ongoing semiannual
usage fee ("Usage Fee") of **** of the Adjusted Total Gross Semiannual Revenue,
as defined below, for each semiannual calendar period in which the Agreement is
in effect. Semiannual calendar periods shall run from October 1st through March
31st, and from April 1st through September 30th. Notwithstanding the forgoing,
the total maximum amount of Usage Fees owed by Licensee to Magic in any fiscal
year (with fiscal years starting October 1st) following the Effective Date shall
not exceed **** .
"Adjusted Total Gross Semiannual Revenue" shall mean the revenue
received by Licensee or a third party from all sources attributable to the
operation of the Licensee Public Services during the semiannual calendar period
in question less the following:
(a) Late Payment Fees, which shall mean any charges
and interest imposed on a Subscriber's overdue account during the semiannual
calendar period in question;
(b) Pass Through Network Operation Fees, which shall
mean all fees paid by Licensee to third party network service providers and/or
incurred by Licensee for the provision of network services that are reasonably
necessary for the operation of the Licensee Public Service; provided, however,
that in no event shall the reduction from Adjusted Total Gross Semiannual
Revenue for such fees exceed twenty percent (20%) of the Adjusted Total Gross
Semiannual Revenue prior to such deduction in any given semiannual calendar
period;
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(c) Refunds, which shall mean revenue returned to a Subscriber by
Licensee for the failure to provide, or for the provision of defective, Licensee
Public Services during the semiannual calendar period in question, provided that
such failure to provide or provision of defection services was caused by an
Error in the Licensed Technology;
(d) Settlements With Other Telescript Based Public Services, which
shall mean fees paid by Licensee to other providers of Telescript Based Public
Services for use of such Telescript Based Public Services by Licensee Public
Services during the semiannual calendar period in question;
(e) Subscriber Taxes, which shall mean taxes charged to a
Subscriber's account during the semiannual calendar period in question for the
provision of Licensee Public Services;
(f) Uncollectible Accounts, which shall mean those Subscriber's
accounts that have been overdue for at least one hundred sixty (160) days at the
end of the semiannual calendar period in question; and
(g) Electronic Merchant Fees;, which shall mean all fees imposed on
Licensee's Subscribers based on the transaction value of information, goods
and/or services provided pursuant to the use of the Licensee Public Service in
the semiannual calendar period in question, provided that Licensee elects to
impose such fees pursuant to Section 2.3 (Electronic Merchant Fees) of this
Exhibit F.
2.2 Deposits on Minimum Royalties. Upon **** (the, "First Deposit
Date"), Licensee shall pay Magic a one-time, non-refundable but recoupable (as
set forth below) deposit against minimum royalties in the amount of **** .
Additionally, upon the **** of the First Deposit Date, Licensee shall pay Magic
a one-time, non- refundable but recoupable (as set forth below) deposit against
minimum royalties in the amount of **** . Finally, upon each subsequent **** of
the First Deposit Date, Licensee shall pay to Magic a recurring, non-refundable
but recoupable (as set forth below) deposit against minimum royalties in the
amount of **** . Each such deposit on minimum royalties is recoupable only
against Usage Fees that accrue in the twelve (12) months immediately following
the due date for such deposit. After such twelve (12) months expire, such
deposit will automatically become non-recoupable and non-refundable. All Usage
Fee recoupment against deposits on minimum royalties shall be on a
Dollar-for-Dollar basis.
2.3 Electronic Merchant Fees. Licensee represents that it does
not currently impose any fees based on the transaction value of information,
goods and/or services provide to Subscribers by Licensee or any third party
arising out of the use of a Licensee Public Service. If Licensee elects to
impose any such fees Magic and Licensee shall negotiate in good faith a
percentage of such fees to be paid to Magic as royalties.
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EXHIBIT G
SAMPLE DELIVERY ACKNOWLEDGMENT FORM
To:_______________________ Date:________________________
From:_____________________ Contact Person:______________
All materials delivered are covered by the terms and conditions of:
Contract:__________________________ Date of contract:____________
Description of Materials Delivered:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Comments:
______________________________________________________________________
______________________________________________________________________
Acknowledged and Agreed to by:
GENERAL MAGIC, INC. _______________________________
By:_______________________________ By:____________________________
Print Name:_______________________ Print Name:____________________
Date:_____________________________ Date:__________________________
Please sign above, print name, date and return to:
General Magic, Inc., Attn.: Legal Department, 420 N. Mary Ave.,
Sunnyvale, CA 94086
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EXHIBIT H
ESCROW AGREEMENT
This Escrow Agreement is entered into this day of , 199 , between and
among France Telecom ("Licensee"), a French Exploitant Public, having its
headquarters at 6, Place d'Alleray 75015 Paris, France; General Magic, Inc.
("General Magic"), a California corporation, with its principal place of
business at 420 North Mary Avenue, Sunnyvale, CA 94086; and the "Escrow Agent"
set forth at the end of this Agreement.
WHEREAS, General Magic and Licensee have entered into a Telescript &
MagicMail License Agreement dated , 1995 (the "License Agreement"), whereby
Licensee is authorized to incorporate Licensee's Service Telescript Engine and
other related software, all of which is (i) provided to Licensee in object code
form only and (ii) set forth in Appendix A hereto (the "Software");
WHEREAS, General Magic desires to provide assurance to Licensee that,
in the event of certain conditions specified herein, access to the source codes
for the Software and related documentation as specified in Appendix A (together,
the "Escrow Materials") may be obtained for the purpose of providing
maintenance, support, improvement, enhancement, and other modification of or
addition to the Software;
WHEREAS, General Magic desires to enter into a escrow arrangement with
Licensee to provide for the deposit of the Escrow Materials and related
documentation to be held by Escrow Agent pursuant to all of the terms and
conditions of this Agreement; and
WHEREAS, the Escrow Agent is willing to act as escrow agent for General
Magic and Licensee on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants, agreements
and conditions set forth herein, the parties agree as follows:
1. Appointment. General Magic and Licensee hereby appoint Escrow Agent
as the escrow holder under this Escrow Agreement, and the Escrow Agent accepts
such appointment on the terms and conditions set forth in this Escrow Agreement.
2. Deposit of Escrow Materials. General Magic agrees to deposit with
the Escrow Agent one copy of the Escrow Materials within thirty (30) days of
Licensee's Acceptance of the First Production Version (as defined in the License
Agreement). General Magic agrees to deposit updated versions, if any, of the
Escrow Materials every three (3) months during the term of this Agreement.
Escrow Agent shall hold and dispose of the Escrow Materials only in accordance
with the terms of this Escrow
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Agreement. Licensee shall have the right from time to time in its discretion to
obtain access to the Escrow Materials for the sole purpose of verifying (through
compilation and other appropriate tests) that the proper source materials have
been deposited, provided that Licensee shall not retain any copies of the Escrow
Materials used in such verification process. General Magic shall be given
written notice of the date and time of such verification notice sufficiently in
advance to reasonably permit a General Magic representative to attend such
verification, and shall be permitted to have its representative in attendance at
all times during such verification.
3. Transfer of Copy Title. Title to the copies constituting the Escrow
Materials shall vest in the Escrow Agent when material constituting the Escrow
Materials comes into possession of the Escrow Agent. Title to all Escrow
Materials transferred to Licensee hereunder shall vest in Licensee on delivery.
Licensee's rights in the intellectual property embodied in the Escrow Materials
shall be as set forth in the License Agreement.
4. Purpose. The Escrow Materials shall constitute a reserve to be made
available to Licensee, under the terms of this Escrow Agreement, only upon the
occurrence of one of the "Releasing Events" set forth in Section 7.7 (Source
Code Escrow) to the License Agreement.
5. Escrow Release and Software License. Subject to the provisions of
Sections 6, 7, and 8 below, the Escrow Agent shall be authorized to release the
Escrow Materials to Licensee upon receiving written authorization from Licensee
certifying that Licensee is entitled to the Escrow Materials (the "Notice")
pursuant to Section 4 above. Contingent upon the Escrow Agent's authorized
release of the Escrow Materials, and subject to all of the terms and conditions
in the License Agreement and this Escrow Agreement, Magic hereby grants Licensee
a non-exclusive, license under all Intellectual Property Rights owned or
licensed by Magic to, during the term of the License Agreement, use, reproduce,
modify and create derivative works of the Software in source code form at the
Development Site(s) solely to (i) create error corrections, maintenance and
performance enhancements and support the Licensee Public Service, and (ii)
compile the source code of the Software to create object code. All derivative
works created pursuant to this Section 5 must comply with the requirements of
Section 8 (Control of Modifications of Licensed Technology and Documentation) of
the Agreement. Licensee shall not have the right to sublicense or otherwise
disclose or distribute the source code of the Escrow Materials, and shall
maintain them in confidence pursuant to Section 12.3 (Confidentiality of Source
Code and System Level Documentation) of the License Agreement.
6. Counternotice. Within three (3) business days after receipt of the
Notice, the Escrow Agent shall deliver to General Magic a copy of the Notice and
shall confirm such delivery in writing to Licensee. If the Escrow Agent, within
ten (10) business days after delivery of the Notice by the Escrow Agent to
General Magic, does not receive (a) a written statement from Licensee
withdrawing such
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<PAGE> 58
notice, or (b) a counternotice (the "Counternotice") from General Magic, then
the Escrow Agent shall promptly deliver the Escrow Materials to Licensee.
7. Disputed Notice. If General Magic disputes the existence of the
conditions upon which the Notice is based, then General Magic shall, within ten
(10) business days following its receipt of the Notice, submit a Counternotice
to the Escrow Agent. If the Counternotice is received by the Escrow Agent before
the close of business on the tenth (10th) business day following receipt of the
Notice by General Magic, then the Escrow Agent shall, within three (3) business
days after receipt of the Counternotice, serve a copy of the Counternotice on
Licensee and withhold delivery of the Escrow Materials pending receipt of (a) a
decision evidencing the outcome of the arbitration provided for in Section 8
below, or (b) other written instructions signed by both General Magic and
Licensee. Upon receipt of said decision or other instruction, the Escrow Agent
shall deliver a copy of the Escrow Materials only in accordance with the
decision or instruction.
8. Arbitration of Disputed Notice. General Magic and Licensee agree
that, if the Counternotice is given by General Magic pursuant to Section 6
above, then said parties shall submit the matter to alternative dispute
resolution (("ADR") and arbitration in accordance with Sections 18.3
(Alternative Dispute Resolution) and 18.4 (Arbitration) of the License
Agreement. The sole question in ADR or arbitration shall be whether there
existed, at the time Licensee transmitted the Notice to the Escrow Agent under
Section 5 above, the conditions specified in Section 4 above. If the parties
agree in the ADR process, or the arbitrators find, that the Notice was properly
given by Licensee on the basis of the existence of the conditions specified in
Section 4 above, then the Escrow Agent shall promptly deliver the Escrow
Materials to Licensee. If the parties agree in the ADR process, or the
arbitrators find, that the Notice was not properly given by Licensee on the
basis of the existence of the conditions specified in Section 4 above, then the
Escrow Agent shall not release the Escrow Materials. Licensee may elect to
bypass the ADR process by written notice to General Magic and the Escrow Agent
requesting immediate commencement of arbitration, in which case the arbitrators
shall be instructed to schedule all discovery, briefings and hearings, and
render a final decisions, within forty-five (45) days from their appointment.
9. Termination. This Escrow Agreement and the escrow established
pursuant to this Escrow Agreement shall terminate upon (a) notice of such
termination by Licensee, or (b) termination of Licensee's Software license
pursuant to the License Agreement. General Magic shall give the Escrow Agent
written notice of the termination of Licensee's Software license. Within three
(3) business days after receipt of the notice, the Escrow Agent shall deliver to
Licensee a copy of the notice and shall confirm such delivery in writing to
General Magic. If the Escrow Agent, within ten (10) business days after delivery
of the notice by the Escrow Agent to Licensee, does not receive (a) a written
statement from General Magic withdrawing such notice, or (b) a counternotice
from Licensee, then the Escrow Agent shall promptly deliver the Escrow Materials
to General Magic. If Licensee disputes the existence of the conditions upon
which the notice is based, then the parties shall
H-3
<PAGE> 59
follow the notice and dispute resolution procedures set forth in Sections 7 and
8 above. Upon termination, all materials comprising the Escrow Materials, and
title thereto, shall thereupon be returned to General Magic.
10. Notices.
(a) It is understood that the Escrow Agent will incur no liability
for acting upon any instruction, notice, direction or other document believed by
it in good faith to be genuine and to have been made, signed, sent or presented
by the person or persons authorized to perform such act under the terms of this
Escrow Agreement.
(b) All notices, instructions, deliveries and other communications
required or permitted to be given hereunder or necessary or convenient in
connection herewith shall be in writing and shall be deemed to have been given
when personally delivered, when sent by telecopy, telex, or telegram, or two (2)
days after mailing if mailed by registered or certified mail, return receipt
requested, as follows (provided that notice of change of address shall be deemed
given only when received):
To Escrow Agent: To the address set forth at the end of this Escrow Agreement,
and to the attention of the person signing this Escrow
Agreement on behalf of Escrow Agent;
To General Magic: To the address first set forth above;
To Licensee: To the address first set forth above;
or such other name or address as the Escrow Agent, General Magic or Licensee, as
the case may be, shall designate by notice to the other party hereto in the
manner specified in this Section.
11. Liability of Escrow Agent. The duties and obligations of the Escrow
Agent shall be determined solely by the express provisions of this Escrow
Agreement, and the Escrow Agent shall not be liable except for the performance
of such duties and obligations event of any controversy hereunder or with
respect to any questions as to the construction of this Escrow Agreement or any
action to be taken by the Escrow Agent, the Escrow Agent may, at its expense,
consult with counsel selected and employed by it, and the Escrow Agent shall not
be responsible in any manner whatsoever for any failure or inability of General
Magic, Licensee, or for anyone else, to perform or comply with any of the
provisions of this Escrow Agreement.
12. Governing Law; Forum Selection. This Escrow Agreement shall be
governed by the laws of the State of California, without reference to conflict
of laws principles. All disputes arising out of this Agreement, other than the
arbitration pursuant to Section 8 above, will be subject to the exclusive
jurisdiction and venue
H-4
<PAGE> 60
of the California state courts of Santa Clara County, California (or, if there
is exclusive federal jurisdiction, the United States District Court for the
Northern District of California), and the parties consent to the personal and
exclusive jurisdiction of these courts.
13. Entire Agreement. This Escrow Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and cannot be changed, modified, or terminated orally.
14. Validity. No action taken by the Escrow Agent in accordance with
the terms and provisions hereof shall be deemed to constitute a representation
of the Escrow Agent as to the validity or value of any documents or instructions
held by, or delivered to, it.
15. Resignation/Replacement.
(a) Upon sixty (60) days' prior written notice given to General
Magic and Licensee, the Escrow Agent may resign. Within fifteen (15) days after
the giving of such notice, General Magic and Licensee shall mutually designate a
successor Escrow Agent. Such successor Escrow Agent shall be bound by the terms
and provisions of this Escrow Agreement. In the event that no such agreement is
reached within such fifteen (15) day period, the Escrow Agent shall continue to
hold the Escrow Materials then held by it and shall take no further actions and
shall have no further obligations hereunder except as required by the last
sentence of this Section 15(a). The Escrow Agent named herein shall cooperate
with its successor in order to effectuate the transfer of its duties to the
successor Escrow Agent.
(b) Upon notice, General Magic and Licensee may replace Escrow
Agent with a successor, who shall replace Escrow Agent and be bound by all the
terms and conditions of this Agreement.
16. Fees and Expenses. Licensee agrees to pay the fees of the Escrow
Agent for its services hereunder during the term of this Agreement. Such fees
shall consist of periodical escrow maintenance charges, at Escrow Agent's
standard rates, and fees charged for carrying out its duties hereunder.
17. Indemnification. Licensee and General Magic jointly and severally
agree to indemnify the Escrow Agent from and against any and all third party
liabilities, claims, suits and other proceedings, all judgments and other awards
against the Escrow Agent in connection therewith, and all costs and expenses
incurred in connection with the defense thereof, in each case which may be
imposed on, or incurred by, or asserted against, the Escrow Agent in any way
relating to, or arising out of, this Agreement, or any action taken or omitted
by the Escrow Agent under this Agreement, provided that neither Licensee nor
General Magic shall be liable for that portion of any such indemnification
amount resulting from the Escrow Agent's gross negligence or willful misconduct
or violation by the Escrow Agent of any terms or provisions of this Escrow
Agreement.
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<PAGE> 61
18. Copies of Notice. Escrow Agent shall provide Licensee with copies
of all notices sent by or to Escrow Agent relating to requests for release of
the Escrow Materials by any of General Magic's other licensees.
IN WITNESS WHEREOF, the parties by their duly authorized
representatives have executed this Agreement as of the date set forth above.
LICENSEE: GENERAL MAGIC
FRANCE TELECOM GENERAL MAGIC, INC.
By: /s/ Charles Rozmaryn By: /s/ Marc Porat
Print Name: Charles Rozmaryn Print Name: Marc Porat
Title: Directeur General Title: Chairman and CEO
ESCROW AGENT:
Name:_________________________________
Address:______________________________
By:___________________________________
Print Name:___________________________
Title:________________________________
H-6
<PAGE> 62
APPENDIX A TO ESCROW AGREEMENT
Software; Escrow Materials
Software:
Escrow Materials: All source code, including all comments, in machine readable
form
All flow charts and other design, pre-coding, coding, and other
technical documentation which would be useful in enabling a programmer
to understand and modify the source code.
H-7
<PAGE> 63
EXHIBIT I-1
EMPLOYEE NON-DISCLOSURE AGREEMENT
[INSERT COPY OF LICENSEE'S STANDARD EMPLOYEE NDA]
I-1
<PAGE> 64
EXHIBIT I-2
CONTRACTOR NON-DISCLOSURE AGREEMENT
[INSERT COPY OF LICENSEE'S STANDARD CONTRACTOR NDA]
I-2
<PAGE> 65
EXHIBIT I-3
OPERATION OF SECURE COMPUTER SYSTEMS
1. Secure Computer System. Secure Computer System refers to a computer
system used by Licensee to modify, compile and assemble the Source Code and link
the Object Code in conjunction with the process of designing, developing,
testing, and maintaining Licensee Public Services. It shall consist of an
isolated network containing one (1) or more computer workstations and personal
computers contained in a single building. All such Secure Computer Systems will
be housed in secured sites according to the provisions set forth below:
1.1 Site Security Provisions.
(i) The entire system shall be located in a single building
accessible only by employees, contractors and registered guests at the
Development Site.
(ii) The designated Licensee Systems and Security Administrator
("SSA") shall maintain one master hard copy of the Source Code. Each subsequent
hard copy of the Source Code must have a unique serial number stamped on each
page in red ink, which identifies it as an authorized copy and each page must be
stamped "General Magic Confidential -- Copying Prohibited." The SSA shall
control access to all hard copies of the Source Code by assigning one copy to
each Authorized Employee and Authorized Contractor and maintaining a log of
which copy, identified by its unique serial number, has been distributed to
which employee or contractor. When not in use, all copies of the Source Code
must be kept in a locked drawer, cabinet, or room at the Development Site.
(iii) Licensee shall establish security policies and procedures
so as to prevent removal of the Source Code, or any partial or modified portion
thereof from the secured area except as specified herein.
(iv) The Secure Computer System is not remotely accessible
(e.g., by telecommunications).
1.2 Secure Computer System Security Provisions.
(i) Access to Source Code installed on the Secure Computer
System will be limited to (a) Authorized Employees and Authorized Contractors,
and (b) the SSA for the purposes of system maintenance and backups.
(ii) All such individuals included above shall have signed a
confidentiality agreement in the form attached as Exhibit I-3 (Notice Regarding
Confidentiality of Information).
I-3
<PAGE> 66
(iii) Access to the Source Code will be controlled by password
identification protection software. Passwords will be issued and controlled by
the SSA. Authorized Employees and Authorized Contractors will log-off the
computer (a) before leaving a terminal unattended, and (b) when any person other
than an Authorized Employee, Authorized Contractor, or the SSA is within viewing
range of the terminal. Authorized Employees and Authorized Contractors will only
use the copy of the Source Code installed on a password protected server by the
SSA and will not make copies of the Source Code.
(iv) Backups of the Source Code will be administered by the SSA
and will be securely archived within the controlled access site containing the
Secure Computer System and/or in a locked file at the offices of . All backup
tapes containing Source Code shall be labeled "Licensee Confidential" and shall
be subject to Licensee's maximum security measures. Network system maintenance
shall be conducted under the supervision of the SSA by Authorized Employees and
Authorized Contractors.
(v) Source Code delivered to Licensee will be transported to
the Licensee SSA by one of the following methods: (a) on magnetic media by a
mutually agreed upon carrier, or (b) transmitted by a phone line to a call-back
modem linked to Licensee's Secure Computer System and located within Licensee's
secured site. Such modem shall normally be disconnected and locked-away with
access controlled by the SSA.
(vi) Object Code will be made available to other development
systems located outside of the secured area for the purpose of linking with
other software related to development of the Licensee Public Services. Transfer
of such Object Code will occur through physical transport on magnetic media and
will be managed by the SSA. All unneeded symbol tables, etc. will be removed
from the Object Code prior to transfer.
2. Development Site. If more than one Development Site is listed in
Exhibit B (Development Site), Licensee will maintain a separate Secure Computer
System at each such site. Each site will have its own System and Security
Administrator (SSA) directly responsible to an officer of Licensee.
I-4
<PAGE> 67
EXHIBIT J
ADDITIONAL LICENSED COUNTRIES
MAGIC and LICENSEE may find an interest in expanding the definition of
"Licensed Country(ies)" to include countries in which LICENSEE's affiliates
develop telecommunications operator activities.
A list of such countries is given below.
The list is indicative only and has been established at the Effective
Date. The list is subject to evolution by the mutual written consent of MAGIC
and LICENSEE. The term, "Licensed County(ies)" may be expanded to include any of
the below listed countries only pursuant to the terms and conditions in Section
1.10 (Licensed Countries).
BELGIUM
GERMANY
ITALY
SPAIN
SWITZERLAND
U.K.
GREECE
THE NETHERLANDS
SWEDEN
CZECH REPUBLIC
The Free Zone of KALININGRAD
POLAND
CZECH REPUBLIC
ARGENTINA
MEXICO
INDONESIA
U.S.
JAPAN
J-1
<PAGE> 68
EXHIBIT K
BUSINESS PLAN FRAMEWORK
To Be Agreed Upon Prior to Licensee's First Requested
Extension of the Licensed Territory
K-1
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<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 25855
<SECURITIES> 82265
<RECEIVABLES> 3273
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 111919
<PP&E> 5632
<DEPRECIATION> 443
<TOTAL-ASSETS> 117994
<CURRENT-LIABILITIES> 9278
<BONDS> 1152
0
0
<COMMON> 25
<OTHER-SE> 93604
<TOTAL-LIABILITY-AND-EQUITY> 117994
<SALES> 0
<TOTAL-REVENUES> 9292
<CGS> 0
<TOTAL-COSTS> 1391
<OTHER-EXPENSES> 26905
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<INCOME-TAX> 656
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