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EXHIBIT 10.1
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(B)(4), 200.83
AND 230.406.
PROFESSIONAL SERVICES, LICENSING AND ACQUISITION AGREEMENT
This PROFESSIONAL SERVICES, LICENSING AND ACQUISITION AGREEMENT (this
"Agreement") is entered into effective as of June 21, 2000 (the "Effective
Date") by GENERAL MAGIC, INC., a Delaware corporation having a place of business
at 420 North Mary Avenue, Sunnyvale, California 94086 ("Magic"), and GLOBAL
SERVICES NETWORK, INC., (USA) an Oregon corporation having a place of business
at 400 Southwest Sixth Avenue, Suite 102, Portland, Oregon 97204 ("GSN").
BACKGROUND
A. Magic has designed, developed, and marketed a distributed platform for
the development and deployment of end-to-end voice solutions known as
"magicTalk".
B. GSN has developed a business concept relating to the provision of
[**] to [**].
C. GSN desires to have Magic, and Magic is willing to, develop certain
magicTalk-based applications to implement GSN's business concept, as set forth
in this Agreement.
D. Concurrently herewith, the parties are entering into an agreement,
pursuant to which Magic will provide hosting services for GSN-branded messaging
services, using such customized applications ("Hosting Agreement").
E. Concurrently herewith, the parties are entering into an agreement
pursuant to which GSN will issue GSN common stock to Magic ("Stock Purchase
Agreement").
Therefore, the parties agree as follows:
AGREEMENT
1. DEFINITIONS. As used in this Agreement:
1.1 "Developed Applications" means the computer software (in Source Code
and Object Code), technology, algorithms, formulas, techniques, and know-how to
be developed or customized by Magic under this Agreement.
1.2 "GSN Background Technology" means the items listed in the Statement of
Work to be delivered by GSN to Magic, including but not limited to the GSN [**].
1.3 "GSN [**]" means the business concept and related documentation
relating to the provision of [**] to [**] as further described in Exhibit A.
1.4 "GSN Services" means the [**] to be provided to GSN Subscribers by or
on behalf of GSN, with the use of the Developed Applications. The GSN Services
are further described on Exhibit A.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
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1.5 "GSN Subscriber" means the residents of any countries other than the
countries or territories listed in Exhibit E who use the GSN Services.
1.6 "Implementation Plan" means the plan in the Statement of Work for
developing and implementing the Customized Applications.
1.7 "Intellectual Property Rights" means all current and future worldwide
copyrights, trade secrets, patents and other patent rights, utility models, and
other intellectual property rights (other than trade names, trademarks, and
service marks), including all applications and registrations with respect
thereto.
1.8 "Jointly Developed Technology" means any and all software, technology,
algorithms, formulas, techniques, and know-how jointly developed by personnel of
Magic and GSN under this Agreement in such a manner that would be deemed
co-inventorship under U.S. patent law or co-authorship under U.S. copyright law.
1.9 "Launch Date" means the date set forth in the Hosting Agreement when
the GSN Services are first made generally available to GSN Subscribers.
1.10 "magicTalk Platform" means Magic's proprietary voice user interface
platform, known as "magicTalk," as it exists as of the Effective Date, and is
furthered described in Exhibit A.
1.11 "Magic Technology" means any and all software, technology, algorithms,
formulas, techniques, and know-how developed by or for Magic including but not
limited to the magicTalk Platform, the Developed Applications, and any
enhancements to each furnished by Magic to GSN pursuant to this Agreement, along
with the technical and user documentation for the foregoing, excluding in each
case any Third Party Technology.
1.12 "Object Code" means the fully compiled version of a software program
that can be executed by a computer and used by an end user without further
compilation.
1.13 "Portico Service" means the voice-based personal virtual assistant
service developed and marketed by Magic under the brand Portico.
1.14 "Statement(s) of Work" means the statement of work for the Developed
Applications attached hereto as Exhibit B which may be updated by mutual
agreement of the parties in writing from time to time, and such other statements
of work as the parties may agree on during the term of this Agreement.
1.15 "Source Code" means the human readable source code version of a
software program that requires compilation or other manipulation before it can
be executed by a computer.
1.16 "Specifications" means the functional specifications for the Developed
Applications set forth in the Statement of Work.
1.17 "Third Party Technology" means any and all third party software,
technology, algorithms, formulas, techniques, and know-how listed in Exhibit D,
as updated by Magic from
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time to time, that are incorporated in the magicTalk Platform which Magic does
not have the right to sublicense and deliver to GSN.
2. DELIVERY, DEVELOPMENT, IMPLEMENTATION, HOSTING AND MIGRATION
2.1 Delivery and Development. Within fourteen (14) days after the
Effective Date, GSN will deliver the documents embodying the GSN [**] to Magic.
GSN will use its reasonable efforts to deliver all other GSN Background
Technology to Magic, according to the schedule set forth in the Implementation
Plan. Within fourteen (14) days after the Effective Date, Magic will deliver to
GSN any available documentation concerning the administration of the magicTalk
Platform [**] that Magic has the right to sublicense and deliver to a third
party. Magic will use commercially reasonable efforts to develop and deliver the
Developed Applications to GSN, in accordance with the Specifications and the
Implementation Plan. GSN understands and agrees that development of the
Developed Applications may not be commercially or technically feasible, and that
Magic will not be in breach of its obligations to GSN under this Agreement if
Magic's reasonable commercial efforts are not sufficient to successfully
complete the development of the Developed Applications. The parties agree that
any delay by one party in performing the tasks which are identified as its
responsibility in the Statement of Work and which are prerequisite for the
performance of the other party shall extend the no-delaying party's milestone
dates for its performance on a day-for-day basis (or longer if the nature of the
delay precludes the timely performance of the long lead time items of other
obligations whose deferral causes more than a day-for-day schedule slip).
2.2 Acceptance Testing. In accordance with the Implementation Plan, the
parties will conduct testing of the Developed Applications to determine whether
they operate in material conformance with the Specifications. The acceptance
testing will take place in the Magic's network operations center unless
otherwise agreed by the parties. Magic will use commercially reasonable efforts
to correct any reproducible errors in the Developed Applications that cause the
Developed Applications to fail to conform to the Specifications in any material
respect and that are reported to Magic within thirty (30) days of the testing
commencement date. Upon completion of the corrections, GSN will re-commence
acceptance testing. The foregoing procedure will be repeated until the Developed
Applications are accepted by the parties. The acceptance testing procedure for
the Developed Applications will be further delineated in the Statement of Work
for the Developed Applications.
2.3 Changes. After a period of fourteen (14) days after the Effective Date
(during which period the parties will finalize the Statement of Work and the
Specifications), a party desiring to make a change (the "Requestor") to the
Statement of Work or the Specifications must submit a written change request to
the other party (the "Requestee"). The Requestee will use its reasonable efforts
to promptly notify the Requestor of its acceptance or rejection of the change
request. If the change request is accepted by the Requestee, Magic will
determine whether implementing the suggested change would result in a schedule
delay or a costs increase, and will advise GSN on the effect of the suggested
change on schedule and costs. If GSN accepts the change and its effects on
schedule and costs, the applicable Exhibits will be modified to reflect the
change and its effects. Magic will submit a request to GSN (according to the
procedure set forth above in this Section 2.3) for any change identified by
Magic in the ordinary
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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course of development that, if implemented, will facilitate the development
tasks set forth in the Statement of Work.
2.4 Custom Features. After the Launch Date, GSN may request that Magic
develop custom features by submitting to Magic a written request describing the
desired features in reasonable detail. Within thirty (30) days after receiving
such a request, Magic will evaluate the request and provide a written response
to GSN stating either (i) Magic is not willing to develop and implement the
requested custom features due to a lack of qualified personnel, or a lack of
rights or resources due to Magic's commitment to a third party; or (ii) Magic is
willing to develop and implement the requested custom features in a proposed
time frame and budget. Unless Magic refuses to develop and implement the
requested custom features, or GSN rejects Magic's proposed time frame or budget
for developing and implementing such features, the parties will work together to
adopt a development schedule, specifications and payment terms for the requested
features, all of which must be mutually approved in writing. Any and all
software, technology, algorithms, techniques, and know-how developed by Magic
during the custom features development efforts will be deemed Developed
Applications under the terms of this Agreement.
2.5 Hosting. Subject to the terms and conditions of the Hosting Agreement,
Magic will host the Developed Applications to provide the GSN Services to GSN
Subscribers on behalf of GSN. Magic will use its reasonable efforts to maintain
any current third party licenses granting GSN the right to operate the magicTalk
Platform [**] until their expiration. GSN may elect to terminate the Hosting
Agreement according to its terms, and provide the GSN Services by itself or
through a third party. In the event GSN so elects, (a) GSN will be responsible
for obtaining all required licenses for the Third Party Technology, and all
other software, hardware and telecommunications services needed to operate the
GSN Services, at its own expense, and (b) GSN may exercise its license right
under Section 3.5, subject to GSN's payment of the Higher Royalty Rate defined
in Section 5.3.
2.6 Independent Development. Nothing herein precludes Magic from
developing, marketing and distributing any voice-solution technology, provided
that Magic does not violate any of GSN's Intellectual Property Rights.
2.7 Migration. The parties shall each establish a team of qualified
personnel sufficient to facilitate the installation of the Developed
Applications and the migration of any existing GSN subscribers to the GSN
Services. The parties shall make commercially reasonable efforts to transfer all
existing GSN Subscribers to the GSN Services by the migration deadline set forth
in the Statement of Work. Magic shall provide [**].
2.8 Trial Accounts. GSN will provide to Magic up to [**] GSN Subscribers
who will use the GSN Service as hosted by Magic on a trial basis for a period
not to exceed [**] months. The parties' rights and obligations with respect to
these trial accounts will be as set forth in the Trial Hosting Terms attached
hereto as Exhibit H.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
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2.9 Project Managers. Each party will appoint a Project Manager for
supervising the development and implementation work to be undertaken pursuant to
this Agreement. The initial Project Managers will be as set forth in the
Statement of Work. Each party may replace its Project Manager upon notice to the
other party. It will be the responsibility of the Project Managers to ensure
orderly conduct of the development and implementation work and to attempt in
good faith to resolve any disputes between the parties regarding such work. The
Project Managers will be empowered to grant approvals with respect to the
Implementation Plan. However, the Project Managers will not have the authority
to amend the terms of this Agreement.
3. OWNERSHIP, LICENSE GRANT RESTRICTIONS
3.1 Ownership of Intellectual Property Rights. As between Magic and GSN:
(a) Magic will exclusively own of all Intellectual Property Rights in and to the
Magic Technology, including any modifications and enhancements thereto made by
or for Magic; (b) GSN will exclusively own all Intellectual Property Rights in
the GSN Background Technology, including any modifications and enhancements
thereto made by GSN; and (c) the parties will jointly own the Jointly Developed
Technology without any accounting obligation to one another and subject to
Section 3.2. The parties agree that in no event will either the GSN Background
Technology or the Magic Technology be deemed Jointly Developed Technology.
3.2 Protecting Jointly Developed Technology.
(a) As between the parties, Magic will have the exclusive right to
decide: (i) whether to file patent or copyright registration applications on the
Jointly Developed Technology; (ii) the subject matter for which patent
applications and applications for copyright registrations will be prepared; and
(iii) the resources to be utilized in the preparation and prosecution of such
applications. Subject to Section 3.2(b), all costs and expenses arising in
connection with obtaining and maintaining patent protection or copyright
registration for the Jointly Developed Technology will be shared equally among
the parties. GSN shall cooperate with and assist Magic in executing documents
for use in applying for, obtaining, perfecting, evidencing, sustaining and
enforcing the parties' Intellectual Property Rights in the Jointly Developed
Technology. In the event Magic is unable for any reason to secure a signature to
any document it reasonably believes required in order to apply for or execute
any patent, copyright or other application with respect to the Jointly Developed
Technology, GSN hereby irrevocably designates and appoints Magic and its duly
authorized officers and agents as GSN's agents and its attorneys-in-fact to act
for and in its behalf and instead of it, to execute and file any such
application and to do all other lawfully permitted acts to further the
prosecution and issuance of patent, copyrights or other rights thereon with the
same legal force and effect as if executed by GSN.
(b) If Magic notifies GSN that Magic intends to seek patent
prosecution or copyright registration for all or any portion of the Jointly
Developed Technology and GSN chooses not to participate in obtaining and
maintaining patent protection or copyright registration for the Jointly
Developed Technology, GSN will promptly notify Magic in writing to such effect.
If Magic decides to obtain and maintain such patent protection or copyright
registration for the Jointly Developed Technology notwithstanding GSN's election
not to participate, Magic may do so at its sole expense, and Magic will
exclusively own the patent rights or copyrights resulting from its efforts.
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(c) If either party learns of any possible infringement or
misappropriation of the parties' Intellectual Property Rights in the Jointly
Developed Technology, it shall immediately give notice thereof to the other
party. Each party agrees to cooperate with the other's reasonable efforts to
seek legal remedies for such infringement or misappropriation. If a party
decides not to seek legal remedies for such infringement or misappropriation, it
will promptly notify the other party in writing to such effect upon the other
party's inquiry, and the other party may seek legal remedies at its sole
expense, and retain all monies recovered pursuant to such effort.
3.3 Development and Hosting License. GSN hereby grants to Magic a
worldwide, non-exclusive, royalty-free license to use, reproduce, and, to the
extent necessary, modify and create derivative works from, publicly perform,
publicly display the GSN Background Technology for the purpose of developing,
implementing, supporting, hosting, maintaining and enhancing the Developed
Applications pursuant to this Agreement and the Hosting Agreement.
3.4 Use and Distribution License. The parties acknowledge that Magic may
be interested in developing certain voice-related applications based on the GSN
[**] (other than the Developed Applications) and distributing, licensing or
selling such applications to third parties. GSN agrees that such development,
distribution, sale and licensing will not violate this Agreement or infringe on
GSN's Intellectual Property Rights, provided that Magic pays GSN the license fee
set forth in Section 5.6. Subject to payment of the royalty set forth in Section
5.6, and the restrictions set forth in Section 4.2, GSN hereby grants to Magic a
non-exclusive, worldwide, perpetual, non-revocable license to use, reproduce,
modify, create derivative works based on, distribute, publicly display, and
publicly perform the GSN Background Technology for any purpose, and sublicense
any of the right granted in this Section 3.4, provided that Magic will not
sublicense any of these rights to any GSN competitors listed in Exhibit I.
3.5 Hosting License. Subject to the terms and conditions of this Agreement
and the Hosting Agreement, and upon written notice and payment of the Higher
Royalty Rate defined in Section 5.5, Magic will grant to GSN a worldwide,
non-exclusive license to use, reproduce, modify, distribute, publicly display,
and publicly perform the Object Code of the Developed Applications solely to
provide the GSN Services to GSN Subscribers.
3.6 License Restrictions. Except as expressly permitted in this Agreement,
the licensed party may not reproduce, alter, adapt, modify, create derivative
works from, distribute, sublicense, transfer, rent, lease, loan, timeshare,
otherwise make available to third parties, reverse engineer, decompile,
disassemble, or otherwise attempt to derive the source code for the licensed
technology. All copyright, trademark and other proprietary rights notices on or
in the licensed technology provided by the licensing party to the licensed party
must be reproduced on or in all copies thereof.
3.7 Territorial Restrictions. The parties acknowledge and agree that the
GSN Services may only be provided to residents of [**].
4. MARKETING AND [**]
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
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4.1 Marketing. GSN will use its best efforts to market the GSN Services,
and obtain new GSN Subscribers. GSN will refer any and all customers or
prospective customers who seek voice solutions other than the GSN Services to
Magic exclusively.
4.2 Restriction. [**], Magic will not [**] to the [**]. [**] from the
Effective Date, Magic will not [**]. Nothing in the foregoing precludes Magic
from [**], including but not limited to [**].
4.3 [**]. Promptly after the Launch Date, Magic, at its expense, will use
reasonable efforts to (i) [**], (ii) [**], and (iii) [**]. Between the Effective
Date and [**], in the event [**], Magic will [**], and for a period of [**],
Magic, upon GSN's request, will [**]. Nothing herein precludes Magic from [**];
provided, however, Magic may [**] during such period. If the parties cannot
agree on [**], Magic will [**].
5. FEES AND ROYALTIES
5.1 Development Fee. GSN will pay Magic development fee set forth in
Exhibit C ("Development Fee"), according to the schedule also set forth therein.
GSN will also reimburse Magic for all travel expenses (including airfare,
lodging, local transportation, and meals) incurred by Magic employees or
contractors in the course of working on the development or implementation of the
Developed Applications, provided that GSN has agreed to the trips in advance.
5.2 Renewal Fee. If GSN elects to renew this Agreement after the initial
term, GSN will pay Magic a renewal fee not to exceed [**]. If the parties cannot
agree on the renewal fee, or if GSN has not paid such renewal fee to Magic at
least ninety (90) days prior to the expiration of the term of the Agreement, the
Agreement will automatically expire on the expiration date.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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5.3 Monthly Usage Fee. On the first day of every calendar month, GSN will
pay Magic the monthly usage fee set forth in Exhibit C ("Monthly Usage Fee").
5.4 Royalty. Beginning from the Launch Date:
(a) on the first day of every calendar month, GSN will pay Magic the
monthly minimum royalty set forth in Exhibit C ("Monthly Minimum").
(b) within ten (10) days after the end of each calendar month, GSN
will pay Magic the monthly royalty set forth in Exhibit C ("Monthly Royalty"),
if any.
5.5 Monthly Minimum Renegotiation. Beginning from the second anniversary
of the Effective Date ("Anniversary"), within ninety (90) days before each
Anniversary, the parties will negotiate in good faith a new monthly minimum that
will apply to the year beginning on that Anniversary. If the parties do not
reach agreement on a new monthly minimum thirty days before the Anniversary, GSN
may (a) continue to pay the Monthly Minimum, or (b) terminate this Agreement by
paying Magic the greater of [**].
5.6 Higher Royalty Rate. If GSN elects to have the GSN Services hosted by
itself or a third party as set forth in Section 2.5, the Royalty Rate will
increase to the higher royalty rate set forth in Exhibit C ("Higher Royalty
Rate").
5.7 GSN License Fee. Upon Magic's written notification to GSN of its
election to exercise its license right under Section 3.4, Magic will pay GSN the
license fee set forth in Exhibit C, according to the schedule set forth therein.
5.8 Payment Terms. Any amounts invoiced under this Agreement will be due
within thirty (30) days from date of invoice. Any amount not paid when due
(pursuant to an invoice or otherwise) will accrue interest at the rate of 1.5%
per month or the highest rate permitted by applicable law, whichever is less,
from the due date until paid.
5.9 Records and Audit Rights. During the term of this Agreement and for a
period of at least two (2) years after the termination of this Agreement, each
party will keep and maintain complete and accurate records relating to the fees
set forth in this Section 5, consistent with generally accepted accounting
principles. A public accountant, engaged by either party, may inspect such
records of the other party. The auditing party will bear its own costs and
expenses in performing any such audit unless the audit reveals that the audited
party has underreported or underpaid the correct amount of royalties owed to the
auditing party by five percent (5%) or more, in which case the audited party
will pay or reimburse the auditing party for such costs and expenses.
5.10 Taxes. The payor will be solely responsible for all taxes and other
governmental fees and charges of any kind (other than taxes based on the other
party's net income) arising from or imposed on the payments made to the other
party pursuant to this Agreement, the services performed by the other party for
the payor pursuant to this Agreement, or the license granted by the other party
to the payor.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
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6. CONFIDENTIALITY
6.1 Definition of Confidential Information. For purposes of this
Agreement, "Confidential Information" of a party means the information and
documents identified in this Agreement as confidential information of such
party, as well as any and all other information that (i) such party considers to
be confidential or proprietary to its business (including trade secrets,
technical information relating to ongoing research and development, business
strategies, marketing plans, customer lists, and financial data) and is clearly
labeled or identified as confidential or proprietary when disclosed to the other
party. Subject to Section 6.3 (Exceptions), the Developed Applications will be
considered Confidential Information of Magic and the GSN Background Technology
will be considered the Confidential Information of GSN.
6.2 Confidentiality Obligations. Each party agrees that it will (i) not
disclose the other party's Confidential Information to any third party (other
than independent contractors as provided below); (ii) use the other party's
Confidential Information only to the extent necessary to perform its obligations
or exercise its rights under this Agreement; (iii) disclose the other party's
Confidential Information only to those of its employees and independent
contractors who need to know such information for purposes of this Agreement and
who are subject to confidentiality duties no less restrictive than those in this
Section 6.2; and (iv) protect all Confidential Information of the other party
from unauthorized use, access, or disclosure in the same manner as it protects
its own Confidential Information of a similar nature, and in no event with less
than reasonable care.
6.3 Exceptions. Each party's obligations with respect to any portion of
the other party's Confidential Information will terminate when the receiving
party can document that (i) such Confidential Information was in the public
domain at the time it was communicated to the receiving party by the disclosing
party; (ii) such Confidential Information entered the public domain after it was
communicated to the receiving party by the disclosing party through no fault of
the receiving party; (iii) such Confidential Information was in the receiving
party's possession free of any obligation of confidence at the time it was
communicated to the receiving party by the disclosing party; (iv) such
Confidential Information was obtained by the receiving party from a third party
who had the right to disclose such Confidential Information to the receiving
party free of any confidentiality restrictions; or (v) such Confidential
Information was developed by employees or agents of the receiving party
independently of and without reference to any information communicated to the
receiving party by the disclosing party. In addition, Section 6.2 will not be
construed to prohibit any disclosure that is (a) necessary to establish the
rights or obligations of either Party under this Agreement in connection with a
legal proceeding or (b) required by a valid court order or subpoena, provided in
the latter case that the party required to make such disclosure notifies the
other party (whose Confidential Information is to be disclosed) thereof promptly
and in writing and cooperates with the other party if the other party seeks to
contest or limit the scope of such disclosure.
6.4 Terms of Agreement. Neither party will disclose any terms of this
Agreement to anyone other than its attorneys, accountants, and other
professional advisors, except (i) pursuant to a press release in accordance with
Section 11.9 (Publicity) or as otherwise approved by the other party in writing;
or (ii) as may be required by law or legal process, including but not limited to
any filings required under securities laws and regulations.
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7. TERM AND TERMINATION
7.1 Term. The term of this Agreement will begin on the Effective Date and,
unless earlier terminated pursuant to Section 7.2, will end on the third
Anniversary. This Agreement will renew for additional three-year terms, if GSN
pays the renewal fee set forth in Section 5.2 at least ninety (90) days prior to
the expiration date of each term of the Agreement.
7.2 Termination Rights. Each party will have the right to terminate this
Agreement for cause upon notice to the other party if (i) the other party has
committed a material breach of this Agreement or the Hosting Agreement; (ii) the
other party has not cured such breach within sixty (60) days after receipt of
written notice of such breach from the terminating party, except for a breach of
any payment obligations, which will have a ten (10) day cure period; and (iii)
such breach remains uncured as of the effective date of termination. In
addition, Magic will have the right to terminate this Agreement, effective
immediately upon notice to GSN, if the Launch Date has not occurred within
eighteen (18) months of the Effective Date through no fault of Magic.
7.3 Effects of Termination. The licenses granted in Sections 3.3, 3.4 and
3.5 will survive for thirty (30) days after the termination effective date.
Within thirty (30) days after the termination effective date, each party will
promptly return to the other party or destroy all copies in its possession or
control of the other party's Confidential Information, and certify in writing to
the other party that it has done so. All amounts accrued before the effective
date of termination will become due immediately.
7.4 Survival. The following Sections will remain in effect notwithstanding
the termination of this Agreement for any reason: Sections 1 (Definitions), 3.1
(Ownership of Intellectual Property Rights), 3.4 (Use and Distribution License),
5.5 (Payment Terms), 5.6 (Records and Audit Rights) (to the extent provided
therein), 5.7 (Taxes), 6 (Confidentiality), 7.3 (Effects of Termination), 7.4
(Survival), 8 (Representations and Warranties), 9 (Indemnification), 10
(Limitation of Liability), and 11 (General).
8. REPRESENTATIONS AND WARRANTIES
8.1 Execution and Performance of Agreement. Each party represents and
warrants as follows: (a) it has full power and authority to enter into and
perform its obligations under this Agreement; (b) its execution and performance
of this Agreement have been duly authorized by all necessary corporate action on
behalf of such party; (c) the person signing this Agreement on behalf of such
party has full authority to do so; and (d) its execution and performance of this
Agreement will not result in a breach of or conflict with any other agreement to
which it is a party or by which it is bound.
8.2 Warranty and Disclaimers. EXCEPT FOR THE WARRANTY SET FORTH IN THIS
SECTION 8.2, MAGIC MAKES NO WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE MAGIC
TECHNOLOGY, THE DEVELOPED APPLICATIONS, THE GSN SERVICES OR ANY SERVICES
PROVIDED TO GSN UNDER THIS AGREEMENT, ALL OF WHICH ARE PROVIDED "AS IS." MAGIC
DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE AND NON-INFRINGEMENT WITH RESPECT TO
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ALL OF THE FOREGOING. MAGIC'S SUPPLIERS DISCLAIM ALL REPRESENTATIONS AND
WARRANTIES, EXPRESS AND IMPLIED.
9. INDEMNIFICATION
9.1 By Magic. Subject to Section 9.2, Magic will defend, at its own
expense, all suits or actions based upon claims that the Developed Applications,
excluding Third Party Technology, and features or content provided by GSN or
third parties, or implemented at GSN's request or in accordance with GSN's
instructions, infringe any U.S. patent, U.S. copyright or U.S. trade secret
(recognized under the Uniform Trade Secret Act) of a third party. Magic will pay
all amounts agreed to in a monetary settlement of the foregoing suits and
actions and all damages awarded as a final judgment by a court of competent
jurisdiction, and subject to the conditions that (i) GSN gives Magic prompt
written notice of the claim, (ii) GSN gives Magic sole control of the defense
and settlement of the claim, and (iii) GSN cooperates with Magic, at Magic's
reasonable request and expense, in the defense or settlement of the claim. GSN
may, at its own expense, participate in any such suit or action with counsel of
its own choice.
9.2 By GSN. GSN will defend, at its own expense, all suits or actions
based upon claims that the GSN Background Technology, or any feature or content
provided by GSN or implemented at GSN's request or in accordance with GSN's
instructions, infringe any U.S. patent, U.S. copyright or U.S. trade secret
(recognized under the Uniform Trade Secret Act) of a third party. GSN will pay
all amounts agreed to in a monetary settlement of all of the foregoing suits and
actions and all damages awarded as a final judgment by a court of competent
jurisdiction, subject to the conditions that (i) Magic gives GSN prompt written
notice of the claim, (ii) Magic gives GSN sole control of the defense and
settlement of the claim, and (iii) Magic cooperates with GSN, at GSN's
reasonable request and expense, in the defense or settlement of the claim. Magic
may, at its own expense, participate in any such suit or action with counsel of
its own choice.
10. LIMITATION OF LIABILITY.
EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9, NEITHER
PARTY WILL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL,
INCIDENTAL, OR SPECIAL DAMAGES, INCLUDING LOST PROFITS OR LOSS OF USE, ARISING
FROM ANY CLAIM ON ANY THEORY OF LIABILITY IN CONNECTION WITH THIS AGREEMENT.
EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9, THE TOTAL,
CUMULATIVE LIABILITY OF EACH PARTY FOR ANY CLAIMS AND CAUSES OF ACTION ARISING
FROM OR RELATING TO THIS AGREEMENT OR ANY BREACH THEREOF UNDER ANY THEORY OF
LIABILITY, WHETHER IN CONTRACT, IN TORT, OR OTHERWISE, WILL NOT EXCEED [**]. ALL
PAYMENTS MADE BY EACH PARTY UNDER THIS AGREEMENT WILL BE AGGREGATED TO DETERMINE
SATISFACTION OF THE LIMIT, AND THE EXISTENCE OF ONE OR MORE CLAIMS WILL NOT
ENLARGE THE LIMIT.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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11. GENERAL
11.1 Relationship of Parties. Nothing in this Agreement will be construed
as creating any agency, partnership, or other form of joint enterprise between
the parties. Neither party will have the authority to act or create any binding
obligation on behalf of the other party, and neither party will represent to any
third party that it has the authority to act or create any binding obligation on
behalf of the other party.
11.2 Notices. All notices, consents, waivers, and other communications
intended to have legal effect under this Agreement must be in writing, must be
delivered to the attention of the General Counsel or President of the other
party at the address set forth at the top of this Agreement by personal
delivery, certified mail (postage pre-paid), or a nationally recognized
overnight courier, and will be effective upon receipt (or when delivery is
refused). Each party may change its address for receipt of notices by giving
notice of the new address to the other party.
11.3 Governing Law and Venue. The United Nations Convention on the
International Sale of Goods will not apply to any aspect of this Agreement. Any
claim arising from or relating to this Agreement brought by GSN against Magic
will be filed exclusively in federal or state courts located in Santa Clara
county, California, and each party irrevocably consents to the jurisdiction of
such courts and waives any objection to venue in such courts. Any claim arising
from or relating to this Agreement brought by Magic against GSN will be filed
exclusively in federal or state courts located in Multnomah county, Oregon and
each party irrevocably consents to the jurisdiction of such courts and waives
any objection to venue in such courts.
11.4 Injunctive Relief. It is understood and agreed that, notwithstanding
any other provision of this Agreement, any breach of Sections 3.3, 3.4, 3.5, 3.6
and 6 by either party will cause irreparable damage for which recovery of money
damages would be inadequate, and that the non-breaching party will therefore be
entitled to seek timely injunctive relief to protect such party's rights, in
addition to any and all remedies available at law.
11.5 Waiver. The failure of either party to require performance by the
other party of any provision of this Agreement will not affect the full right to
require such performance at any time thereafter; nor will the waiver by either
party of a breach of any provision of this Agreement be taken or held to be a
waiver of the provision itself.
11.6 Severability. If any provision of this Agreement is unenforceable or
invalid under any applicable law or is so held by applicable court decision,
such unenforceability or invalidity will not render this Agreement unenforceable
or invalid as a whole, and such provision will be changed and interpreted so as
to best accomplish the objectives of such unenforceable or invalid provision
within the limits of applicable law or applicable court decisions.
11.7 Assignment. Neither this Agreement nor any rights or obligations of
either party under this Agreement may be assigned in whole or in part without
the prior written consent of the other party. Notwithstanding the foregoing,
Magic may, without GSN's written consent, assign this Agreement in whole or in
part to an assignee who acquires all or substantially all of Magic's assets or
stock. Any attempted assignment in violation of the preceding sentence will be
void. This Agreement will bind and inure to the benefit of the respective
successors and permitted assigns of the parties.
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11.8 Force Majeure. Neither party will be liable for any failure to fulfill
its obligations under this Agreement due to causes beyond its reasonable
control, including acts of God, fire, explosion, vandalism, cable cut, storm,
extreme temperatures, earthquake, or other similar catastrophes; any law, order,
regulation, direction, action, or request of a governmental authority having
jurisdiction over either of the parties, or of any department, agency,
commission, court, bureau, corporation, or other instrumentality of any such
government or of any civil or military authority; national emergencies,
insurrection, riots, wars, or strikes, lock-outs, work stoppages, or other labor
difficulties; actions or inactions of a third party provider; or any other
conditions or circumstances beyond the reasonable control of such party which
impede or affect the Developed Applications or the transmission of
telecommunications services.
11.9 Publicity. Upon execution of this Agreement, the parties will issue a
mutually approved joint press release. Any further press releases or public
announcements or statements by either party concerning this Agreement or the
relationship between the parties must be approved in advance by both parties.
11.10 Cumulative Remedies. Each party's rights and remedies in connection
with this Agreement are cumulative and may be exercised singularly or
concurrently.
11.11 Construction. The section headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or extent of such section or in any way affect this
Agreement. Unless otherwise expressly stated, when used in this Agreement the
word "including" means "including but not limited to." Each party represents
that it has had the opportunity to participate in the preparation of this
Agreement and hence the parties agree that the rule of construction that
ambiguities be resolved against the drafting party will not apply to this
Agreement.
11.12 Entire Agreement and Amendment. GSN acknowledges that it has read,
understands and agrees to be bound by this Agreement, and that this Agreement
and the Hosting Agreement, including the attached Exhibits and Statement(s) of
Work, are the complete and exclusive statement of the agreement between the
parties regarding the subject matter hereof, which supersedes all proposals,
oral or written, all other communications between the parties relating to such
subject matter. In the event of any conflict between this Agreement or a
Statement of Work or any subsequent attachment hereto, the terms of the
Statement of Work shall control.
11.13 Dispute Resolution
(a) The parties shall attempt in good faith to resolve any dispute
arising in connection with this Agreement informally according to the following
procedure. First, the Project Managers (or other appropriate representative)
will meet in person or via telephone with in 72 hours of the dispute or problem
on the project. If the dispute or problem can not be resolved immediately to
either party's satisfaction that party shall provide the other a written
request. Upon written request of a party identifying a dispute to be resolved,
each party will designate an executive management representative with the
responsibility and authority to resolve the dispute. The designated management
representatives shall meet preliminarily within Ten (10) days after the request
is received from the requesting party. At this first meeting, the designated
management representatives shall identify the scope of the dispute and the
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information needed to discuss and attempt to resolve the dispute. These
management representatives shall then gather relevant information regarding the
dispute and shall meet to discuss the issues and negotiate in good faith to
resolve the dispute. Such second meeting shall occur within ten (10) days of the
first meeting.
(b) Nothing in this Section shall restrict the right of either party
to apply to a court of competent jurisdiction for injunctive relief or damages
at any time. However, the right of either party to file a lawsuit does not
abrogate each party's obligations under 11.13 (a) above. Moreover, a party,
which elects to file a lawsuit, shall provide the written notice identified in
Section 11.13 (a) to the other party at the same time the lawsuit is filed with
a court.
(c) The prevailing party in any judicial action brought to enforce or
interpret this Agreement or for relief for its breach shall be entitled to
recover its costs and its reasonable attorneys' fees incurred to prosecute or
defend such action.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
GLOBAL SERVICES NETWORK, INC. GENERAL MAGIC, INC.
By: /s/ B Ponuick By: /s/ Steven Markman
----------------------------- ------------------------------
Name: Blake Ponuick Name: Steven Markman
--------------------------- ----------------------------
Title: President and CEO Title: CEO
-------------------------- ----------------------------
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EXHIBIT A
MAGICTALK PLATFORM, GSN [**] AND GSN SERVICES DESCRIPTIONS
1. MAGICTALK PLATFORM:
2. GSN [**]:
3. GSN SERVICES:
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT B
STATEMENT OF WORK
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT C
FEES AND PAYMENT SCHEDULE
1. DEVELOPMENT FEE AND PAYMENT SCHEDULE:
2. MONTHLY USAGE FEE: [**]/month
3. ROYALTY:
The initial Monthly Minimum will be [**] monthly.
The Monthly Royalty will be a positive number resulted from the following
calculation (there will be no Monthly Royalty if the resulting number is a
negative number):
(Royalty Rate or the Higher Royalty Rate (as applicable) x [**])-[**]
Royalty Rate: [**]
Higher Royalty Rate: [**]
* In the event GSN: (a) reasonably requests [**] or (b)
reasonably notifies Magic of [**], the parties agree that if
GSN hosts with another facility under those circumstances that
the Higher Royalty Rate will not apply [**]. In such events
described above, the Royalty Rate of [**] will apply. In all
other circumstances where GSN moves its hosting from Magic
facilities to a third party facility, the Higher Royalty Rate
of [**] will apply.
4. EXAMPLE: The following examples illustrate the calculation of the amounts
GSN must pay Magic monthly
For example, if there [**] in month X, at the beginning of the month, GSN
will pay Magic a total of [**] ([**] Monthly Usage Fee plus [**] Monthly
Minimum Fee). At the end of the month, GSN will pay Magic
[**](([**]times[**]) minus [**]).
On the other hand, if [**] in month X, at the beginning of the month, GSN
will pay Magic a total of [**] ([**] Monthly Usage Fee plus [**]
Monthly Minimum Fee). At the end of the month, GSN will not have to pay
Magic any more money, because the number resulting from (([**] times {**])
minus [**]) is a negative number.
5. GSN LICENSE FEE:
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT D
THIRD PARTY TECHNOLOGY
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EXHIBIT E
GSN ACCOUNTS
[**], [**], [**], [**], [**], [**], [**], [**], [**], [**], AND [**].
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT H
TRIAL HOSTING TERMS
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EXHIBIT I
GSN COMPETITORS
21
