EXHIBIT 10.14
OEM DEVELOPMENT AND LICENSE AGREEMENT
WHEREAS, Media 100 develops and markets certain software and other
computer-related products and services and desires to include Supplier's
software product as a component of Media 100's product or services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree to the following terms and conditions, which set forth the
rights, duties, and obligations of the parties.
1. DEFINITIONS. The following terms, when used with initial capital
letters in this Agreement, shall have the following definitions, unless the
context in which the term is used expressly provides otherwise.
"ACCEPTANCE CRITERIA" means a set of criteria (set forth in the
Specifications) that will be used to judge whether a Deliverable meets the
Specifications.
"AFFILIATE" means with respect to any entity, any other entity controlling,
controlled by or under common control of such entity.
"APPLICATIONS PROGRAMMING INTERFACE" means the specifications of a Supplier
Product which define the external programming interface between that Supplier
Product and other Object Code. The Applications Programming Interface
includes the elements of such programming interface that are directly exposed
and recommended as mandatory to implement extension to that Supplier Product.
"APPLICATIONS PROGRAMMING INTERFACE ITEMS" means the following set of items
implementing the Applications Programming Interface: (a) System Documentation
describing the Applications Programming Interface; (b) fully functional and
tested Supplier Product (Object Code and System Documentation) designed for
use on, and implementing the Applications Programming Interface; and (c) a
fully functional and tested validation test suite and System Documentation
describing the associated test procedures.
"CONFIDENTIAL INFORMATION" means 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",
"Source Code", 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) calendar 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.
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"BUNDLED PRODUCT" means the combination of a Restricted Streaming Product and
a Supplier Product being distributed to third parties in accordance with this
Agreement.
"CONTRACTOR" of a company means a person or group of persons (whether
incorporated or not) providing services to that company as independent
contractors.
"DELIVERABLES" means the Supplier Product or any portion thereof to be
delivered by the Supplier identified in Exhibits A and B.
"DERIVATIVE WORKS" means a revision, modification, translation, abridgment,
condensation or expansion of the Supplier Product or Documentation or any
form in which the Supplier Product or Documentation may be recast,
transferred, or adapted, which, if prepared without the consent of Supplier,
would be a copyright infringement.
"DISTRIBUTOR" means any third party which acquires possession of the Supplier
Product from Media 100 and is not a Reseller or End User and distributes it
to a Reseller.
"DOCUMENTATION" means End User Documentation and System Documentation. "END
USER DOCUMENTATION" means those software user manuals, reference manuals and
installation guides, or portions thereof, which are distributed in
conjunction with the Supplier Product including but not limited to those set
forth in Exhibit C. "End User Documentation" excludes System Documentation.
"SYSTEM DOCUMENTATION" means all user manuals and other written materials,
including style guides, that relate to particular Source Code or Object Code,
including without limitation materials useful for understanding, designing,
developing, building, implementing, maintaining and operating Source Code or
Object Code (for example, logic manuals, flow charts and principles of
operation) and machine-readable text or graphic files subject to display or
printout.
"END USER" means an entity that acquires the Supplier Product for Internal
Use and is not an affiliate of Media 100's enterprise. "End User" does not
include an entity that distributes, resells, sells, licenses, rents or leases
the Supplier Product to other parties in the regular course of business.
"ERROR" means any mistake, problem or defect that causes either an incorrect
functioning of code or an incorrect or incomplete statement or graphic in
Documentation, if such mistake, problem or defect (a) renders the code
inoperable, (b) causes the code to fail to meet the Specifications or
Acceptance Criteria, (c) causes the Documentation to be inaccurate or
inadequate in any material respect, (d) causes incorrect results, or (e)
causes incorrect functions to occur.
"EVENT OF BANKRUPTCY" with respect to a company means (a) the commencement by
the company of a voluntary case under the United States Bankruptcy Code or
under any similar law, (b) the commencement against the company of an
involuntary case under the United States Bankruptcy Code or under any similar
law if the case is not vacated within ninety calendar days, (c) the entry of
a final order by a court of competent jurisdiction finding the company to be
bankrupt or insolvent, ordering or approving its liquidation, reorganization
or any modification or alteration of the rights of its general creditors or
assuming custody of or appointing a receiver or other custodian for all or a
substantial
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part of its property and such order shall not be vacated or stayed upon
appeal or otherwise stayed within ninety calendar days or (d) the company
making an assignment for the benefit of, or entering into a composition with,
its creditors, or appointing or consenting to the appointment of a receiver
or other custodian for all or a substantial part of its property.
"INTERNAL USE" means use for purposes that do not directly produce revenue
for the user.
"MAJOR AND MINOR UPDATES" means updates, if any, to the Supplier Product.
Major Updates involve additions of substantial functionality while Minor
Updates do not. Major Updates are customarily designated by a change in the
number to the left of the decimal point of the number appearing after the
product name while Minor Updates are customarily designated by a change in
such number to the right of the decimal point. Major Updates exclude software
releases which are reasonably designated by Supplier as new products. Where
used herein "Updates" shall mean Major Updates or Minor Updates
interchangeably.
"MARKS" means Supplier's trademarks, service marks, logos, designations and
insignias.
"MILESTONE SCHEDULE" means the schedule for delivery of Deliverables and
payment therefor attached to this Agreement as Exhibit B.
"MILESTONE" means the milestones set forth in the Milestone Schedule.
"MEDIA 100 RELATED PERSONS" means Media 100 and Media 100's subsidiaries, and
their respective directors, officers, employees, agents and Contractors.
"MEDIA 100" means Media 100 Inc.
"MONTH(S)" and "MONTHLY" refers to a calendar month.
"OBJECT CODE" means any computer programming code that loads and executes
without further processing by a software compiler or linker or that results
when Source Code is processed by a software compiler.
"RESELLER" means any third party which is not a Distributor but acquires the
Supplier Product from Media 100 or an authorized Distributor and resells,
licenses, rents, or leases to End Users.
"RESTRICTED STREAMING PRODUCTS" means the Media Cleaner Product of Terran
Interactive, Inc. (a subsidiary of Media 100), and any product which is
reasonably a derivative or extension of such product; provided each such
product shall be considered a "Restricted Streaming Product" only if it can
ONLY produce streaming media output; for the purposes of this provision,
products designed to or capable of output to physical media (such as video
tape or DVD disk) or in "mini-DV" format shall not be considered to produce
only streaming media output and thus not be "Restricted Streaming Products";
however, the ability to store a streaming media output on physical media
shall not disqualify a product otherwise compliant from being a "Restricted
Streaming Product".
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"SALE," "SELL" and other similar terms, when used in connection with the
marketing and distribution of the Supplier Product shall mean the granting of
a license or sublicense and shall not be deemed for any purpose to mean a
transfer of title or other rights of ownership to the Supplier Product, other
than the rights to copy and use as specifically set out in this Agreement.
"SOURCE CODE" means the human-readable form of programming code and related
System Documentation, including all comments and any procedural language.
Source Code does not include End User Documentation.
"SPECIFICATIONS" mean specifications for the Supplier Product API necessary
to ensure effective integration with the Restricted Streaming Products and as
set forth in Exhibit B
"SUBSIDIARY" of an entity means a corporation, company or other entity (a)
more than fifty percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are; or (b) which does not have outstanding shares or
securities, as may be the case in a partnership, joint venture or
unincorporated association, but more than fifty percent (50%) of whose
ownership interest (representing the right to make decisions for such
corporation, company or other entity) is; in each of (a) and (b) now or
hereafter, owned or controlled, directly or indirectly, by the entity in
question, as the case may be, but such corporation, company or other entity
shall be deemed to be a Subsidiary only so long as such ownership or control
exists.
"SUPPLIER PRODUCT" means the Supplier's product identified in Exhibit A that
Media 100 is authorized to sublicense, market and sell under this Agreement,
including each of the Deliverables, if any.
"SUPPLIER RELATED PARTY" means Supplier and Supplier's subsidiaries,
Affiliates, directors, officers, employees, agents and Contractors.
"SUPPLIER" means the company identified as such on the signature page to this
Agreement.
"SUPPORT SPECIFICATIONS" means the items set forth in Exhibit C.
"TERM" means the term of this Agreement, as it may be extended or earlier
terminated in accordance with Section 10.
2. DELIVERY OF DELIVERABLES; ACCEPTANCE.
(a) DELIVERABLES. To the extent the Supplier Product or any part thereof
is an existing product, then Supplier will deliver to Media 100 such existing
materials in connection with the execution of this Agreement, and each Update
thereto immediately upon such materials being released by Supplier, and Media
100 will make any payment specified in respect thereto as indicated in
Exhibit A. These deliverables will be in object code form only. Despite the
foregoing and except as provided by separate agreement, Major
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Updates will not be supplied by Supplier after May 31, 2003 and no Updates
will be delivered after Supplier terminates its general distribution of the
Supplier Product.
To the extent the Supplier Product consists of Deliverables to be created
under this Agreement, Supplier will deliver to Media 100 the Deliverables in
accordance with due dates for each set forth on the Milestone Schedule. Upon
acceptance of each Deliverable pursuant to the provisions of this Section 2,
Media 100 will make the payment specified on the Exhibit B - Milestone
Schedule. These deliverables will be in object code form only.
Supplier agrees that it will provide the Applications Programming Interface
for the Supplier Product by delivery to Media 100 of the Applications
Programming Interface Items together with such Supplier Product, and
thereafter promptly following any changes made thereafter to such items.
(b) CREATION OF MILESTONE SCHEDULE. As of the date of execution of this
Agreement, Exhibit B - Milestone Schedule and Exhibit C -- specifications of
API, are not completed. The parties will use all reasonable efforts to
complete Exhibits B and C and attach them hereto as promptly as possible. In
general, the parties expect that an alpha release of the API will be
available in February 2000 and that the commercial release version of such
product will be available no later than the anniversary of this Agreement.
(c) ENGINEERING SUPPORT FOR DEVELOPMENT. Supplier will make available
sufficient internal engineering support from its organization to ensure that
the Supplier Product is commercially viable from a technical point of view,
it being understood that the foregoing does not obligate Supplier to hire
personnel not then employed at the Supplier, and is only a statement of
allocation of resources, not a representation or promise that the Supplier
Product will in fact be commercially viable. Appropriate Media100 engineering
personnel will reasonably cooperate with Supplier's personnel.
(d) REVIEW. Media 100 may conduct periodic reviews, including reviews at
Supplier's premises to take place at a mutually convenient time, of the
Supplier Product. At Media 100's reasonable request, Supplier will provide
Media 100 with written reports regarding its work on the Supplier Product and
with copies of any work in progress and related materials.
(e) CHANGES TO THE SPECIFICATIONS.
(i) Additional Specifications for the API may be agreed upon by
the parties until Media 100's final acceptance of the Supplier Product.
Media 100 acknowledges that significant changes to the Specifications
may result in a change in the delivery time table.
(ii) If any such modification of the Specifications by Media 100
does require Supplier's expenditure of significantly more time and
effort, additional fees must be agreed upon in writing by the parties
prior to implementation of modifications.
(f) ACCEPTANCE OF SUPPLIER PRODUCT.
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(i) Delivery will occur when Supplier delivers a testable
Deliverable to Media 100 accompanied by a written statement listing the
items delivered and stating that they are ready for Media 100's
acceptance testing. Delivery of software will be via electronic
transmission only, unless Media 100 gives Supplier written notice that
such a Deliverable is to be delivered via another medium. Media 100,
with the assistance of Supplier if requested by Media 100, will examine
and test each Deliverable upon delivery to determine whether the
Deliverable conforms to the Acceptance Criteria for the Deliverable.
Within thirty (30) calendar days or such other number of days specified
in the applicable Acceptance Criteria after such delivery, Media 100
will provide Supplier with written acceptance of such Deliverable or a
specific and objective statement of Errors to be corrected prior to
the next Milestone.
(ii) Supplier will correct the Errors in any Deliverable set forth
in the statement of Errors and redeliver the Deliverable to Media 100
within thirty (30) calendar days or such other number of days specified
in the applicable Acceptance Criteria after receipt of the statement of
Errors, and Media 100 will within fourteen (14) calendar days after
such redelivery provide Supplier with written acceptance or another
statement of Errors. The procedure set forth in this clause (ii) will
be repeated until Media 100 accepts the Deliverable.
(iii) If Media 100 fails to give a statement of Errors within the
specified time, Media 100 will be deemed to have accepted the
Deliverables as of the expiration of such specified time; provided that
such acceptance shall not affect the Supplier's obligation hereunder to
correct any Errors after such acceptance.
(g) APPLICATIONS PROGRAMMING INTERFACE; SUPPLYING SOURCE CODE. Supplier
agrees that the Applications Programming Interface Items to be delivered to
Media 100 are intended to be used for, among other things, extension of the
user interface functionality of Supplier Products by Media 100 without the
use of Source Code of the Supplier Products, and Supplier has and will in
creating such Applications Programming Interface's do so taking into account
the need to facilitate such use. It is the Supplier's intention that the
creation of such Applications Programming Interface will give Media 100 the
same capability to extend user interface functionality as the Supplier has.
In the event the Applications Programming Interface, as so supplied, fails to
permit a reasonably skilled programmer the ability to do so, or if the
parties otherwise agree it is appropriate for Supplier to provide Media 100
access to modules of Source Code to perform development work, the Supplier
shall immediately give Media 100 access to those modules of Source Code
necessary for Media 100 to perform such work, but only to the extent and for
the time reasonably required for Media 100 to perform such work. Any
modifications to Source Code made by Media 100 (but not the project developed
by Media 100 using Source Code) shall belong to Supplier, and Media 100 shall
convey any ownership rights it has in the modifications to the Source Code to
Supplier.
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3. GRANT OF LICENSES.
(a) LICENSE GRANT. Subject to the terms and conditions of this
Agreement, Supplier grants to Media 100 a non-exclusive, worldwide, perpetual
license to the Supplier Product: (i) to use, reproduce and distribute the
Supplier Product and System Documentation internally within Media 100; (ii)
to create or have created Derivative Works based upon or compatible with the
Supplier Applications Programming Interface (whether Supplier Applications
Programming Interface-compliant or not) with or without the use of code
supplied by Supplier and to reproduce and distribute internally the
Derivative Works in Source Code form or in Object Code form; (iii) to the
extent Source Code is supplied pursuant to Section 2(g) or 3(c), to create or
have created Derivative Works by modifying the Source Code of the Supplier
Product and to reproduce and distribute internally the Derivative Works in
Source Code form or in Object Code form; (iv) to create or have created
Derivative Works by modifying the End User Documentation of the Supplier
Product and to reproduce and distribute internally such Derivative Works in
any form; (v) to distribute externally to End Users, either directly or
through distributors, but only in bundled form with Restricted Streaming
Products, copies in Object Code form only of the Supplier Product or
Derivative Works and copies in any form of the End User Documentation or any
Derivative Works of the End User Documentation, such distribution shall be in
accordance with Media 100's standard software distribution license agreement
for a particular channel of distribution; and (vi) to exercise all rights to
the Supplier Product with regard to pictorial, graphic or audio/visual works,
including icons, screens, music and characters, that are created as a result
of execution of any code or any Derivative Work thereof in accordance with
the granted license
(b) PROPRIETARY NATURE OF PRODUCTS AND OWNERSHIP. No title to or
ownership of software licensed under this Agreement or proprietary technology
in hardware acquired under this Agreement is transferred to Media 100.
Notwithstanding any provision of this Agreement to the contrary, Supplier, or
the licensor through which Supplier obtained the rights to distribute the
Supplier Product, owns and retains all title and ownership of all
intellectual property rights in the Supplier Product, including all software,
firmware, software master diskettes, copies of software, master diskettes,
documentation and related materials that are acquired, produced or shipped by
Supplier under this Agreement, and all modifications to and derivative works
of software acquired under this Agreement that are made by Supplier or any
third party (other than on behalf of Media 100). Supplier does not transfer
any portion of such title and ownership, or any of the associated goodwill,
to Media 100. Supplier shall own all Derivative Works of the Supplier Product
produced or created by or on behalf of Media 100 provided that Supplier shall
have no rights independently to market or sublicense any Derivative Works
created by Media 100 without Media 100's prior written approval. Media 100
shall have rights to use such Derivative Works subject to the terms and
conditions of this Agreement.
(c) ACCESS TO SOURCE CODE. Supplier agrees to execute a standard
software escrow agreement (the "Escrow Agreement") supplied by an escrow
agent selected by Media 100 and reasonably acceptable to Supplier (the
"Escrow Agent"), and in connection therewith Supplier agrees that from time
to time upon request of Media 100, Supplier shall deposit
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in escrow with the Escrow Agent the latest versions of all intellectual
property, as defined in section 101 of Title 11 of the United States Code,
with respect to those portions of the software and other technology
incorporated in the Supplier Product and reasonably relevant to the
implementation of this Agreement (the "Technology") including without
limitation all Source Code, designs, patents and Documentation ("Supplier
Product Materials"), to be made available to Media 100 upon the conditions
set forth in this Section. Media 100 will pay the Escrow Agent's charges.
Regardless of whether "Source Code Escrowed" is indicated on Exhibit A and
regardless of whether this license is identified in Exhibit A as including
the right to Source Code, in the event that a trustee in bankruptcy is
appointed for Supplier, then unless and until such trustee has rejected this
Agreement, the trustee shall, at the written request of Media 100, (i)
continue to perform all of the obligations of Supplier under this Agreement,
or (ii) promptly deliver to Media 100 the Technology, including all Supplier
Product Materials held by the trustee, including any embodiment of such
intellectual property to the extent protected by applicable nonbankruptcy
law, and in either case not interfere with the rights of Media 100 to use
such intellectual property (including such embodiment) as provided in this
Agreement or any agreement supplementary hereto, including any right to
obtain such intellectual property or such embodiment from any Escrow Agent
under an Escrow Agreement.
Regardless of whether "Source Code Escrowed" is indicated on Exhibit A and
regardless of whether this license is identified in Exhibit A as including
the right to Source Code, if the trustee rejects this Agreement, and Media
100 elects under section 365(n)(1)(B) of Title 11 of the United States Code
to retain its rights under this Agreement, the trustee shall promptly deliver
to Media 100 all intellectual property, as defined in section 101 of Title 11
of the United States Code, with respect to the Technology, including all
Supplier Product Materials held by the trustee, including any embodiment of
such intellectual property to the extent protected by applicable
nonbankruptcy law, and not interfere with the rights of Media 100 to use such
intellectual property (including such embodiment) under this Agreement or any
agreement supplementary hereto, including any right to obtain such
intellectual property or such embodiment from any Escrow Agent under any
Escrow Agreement.
4. SUPPORT, MARKETING AND DISTRIBUTION.
(a) MAINTENANCE AND SUPPORT. Supplier shall provide Media 100 with
maintenance and support according to the terms and conditions specified in
Exhibit D.
(b) NONEXCLUSIVITY; NO MARKETING OBLIGATION. Media 100 understands that
Supplier reserves the right to directly license and sell the Supplier Product
and to appoint other OEM's, distributors and resellers without restriction as
to number or location. Supplier understands that Media 100 has no obligation
to incorporate, bundle or market the Supplier Product with or into any Media
100 products, or otherwise, unless Media 100 believes in its sole discretion
that such action is desirable from the Media 100's perspective.
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(c) USE OF AUTHORIZED OEM TITLE. During the term of this Agreement,
Media 100 may refer to itself and Supplier may refer to Media 100, in
connection with exercising its rights under this Agreement, as a Supplier
"Authorized OEM".
(d) PUBLIC ANNOUNCEMENTS AND PROMOTIONAL MATERIALS. Supplier and Media
100 shall cooperate with each other so that each party may issue a press
release other than as a customer reference concerning this Agreement,
provided that each party must approve such press release prior to its release.
(e) SOFTWARE. When marketing products incorporating the Supplier
Product, Media 100 agrees to exercise commercially reasonable efforts (and no
less effort than expended with respect to its own products) to ensure that
each End User receiving the products or services through Media 100 or Media
100's lines of distribution understands and agrees to be bound by a Media 100
standard Software License Agreement consistent with the line of distribution.
(f) USE OF SUPPLIER MARKS AND TRADE NAMES. Media 100 is authorized to
use the Supplier Marks applicable to the Supplier Product in connection with
its marketing of products or services incorporating the Supplier Product.
Media 100 agrees not to alter, erase or overprint any notice provided by
Supplier without the prior written consent of Supplier or affix any Supplier
Marks. Media 100 recognizes Supplier's ownership and title to the Trade Names
and Marks. Media 100 will abide by Supplier's generally applicable and
reasonable usage guidelines established by Supplier from time to time.
5. FEES AND PAYMENT.
(a) ROYALTY AND LICENSE FEES. As license fees for the rights herein
granted, Media 100 shall pay to Supplier royalties on Media 100 sales and
related licensing or sublicensing of Bundled Product at the rates and on the
terms specified in Exhibit A hereto.
Media 100 is free to determine its own resale prices for the Bundled Product
it is authorized to license and sell hereunder. Although Supplier may publish
suggested list prices, these are suggestions only and not binding in any way.
Royalties shall accrue for a particular transaction in the Media 100 fiscal
quarter in which Media 100 recognizes for its financial statement purposes
the revenue for the shipment by Media 100 of the relevant quantity of the
Bundled Product (to a distributor or end-user). Media 100 shall pay Supplier
such license fees accrued during each such fiscal quarter, within forty-five
(45) days following the end of such fiscal quarter, and shall be accompanied
by a report in reasonable detail showing the calculation of such fees. All
payments shall be made in United States dollars. For sales for which Supplier
would otherwise be entitled to a royalty on a non-dollar based amount, Media
100 will make payment to Supplier in U.S. Dollars based upon the exchange
rate used in connection with preparing its internal financial statements with
respect to such transaction. In no event shall Media 100 be responsible to
protect the value of sums against currency fluctuation, effects of inflation,
or other economic or monetary adjustment. The
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applicable fees for the products and services provided under this Agreement
do not include any sales, use or similar taxes ("Taxes") payable on the part
of the acquisition of the Supplier Product from Supplier. Such Taxes, if
applicable and imposed on Supplier, shall be presented in a billing statement
by Supplier to Media 100, and shall be payable by the Media 100 as specified
herein; provided that Media 100 shall not be liable for any taxes based upon
Supplier's net income or real or personal property owned by Supplier. Any
payment to Supplier shall be net of any required withholding due to taxes
under applicable law. Media 100 is responsible for Taxes resulting from its
sales of Bundled Products to its customers.
(b) INTERNATIONAL SALES RESTRICTIONS. If any payment to Media 100 with
respect to sales in any country is blocked or subject to restrictions by
governmental authorities, royalties with respect to such sales may either be
held in the blocking or restricting country (if permitted by local
regulations) or may be removed from such country and paid to Supplier,
subject to whatever restrictions, limitations and/or taxes may be imposed by
the government of such country on receipts from the underlying sale. If the
government of a country requires a reduction in the royalty rate set forth in
this Agreement as a condition of approving the payment of royalties to
Supplier, Supplier agrees to reduce such rate for that country so as to
provide for the maximum royalty payment allowed by such government. When
deemed reasonably necessary by Media 100, Supplier shall enter into separate
agreements with affiliates of Media 100 for the purpose of facilitating the
payment of royalties.
(c) RECORDS EXAMINATIONS. Media 100 agrees to allow Supplier to examine
its records to determine compliance or noncompliance with this Agreement. Any
examination will be conducted only by an authorized representative of
Supplier, and will occur during regular business hours at Media 100's offices
and will not interfere unreasonably with Media 100's business activities.
Examinations will be made no more frequently than annually, and Supplier will
give Media 100 fifteen (15) business days or more prior written notice of the
date of the examination and the name of Supplier's authorized representative
who will be conducting the examination. The audit will be conducted at
Supplier's expense, unless the audit reveals an underpayment for the reviewed
period of more than five percent, in which case the reasonable audit cost
will be borne by Media 100. . All information obtained by Supplier's
authorized representative conducting the audit will be maintained
confidential by the representative. The examiner will give Media 100 and
Supplier an examination report containing only the information necessary to
indicate compliance or non-compliance with this Agreement. Underpayments will
be promptly paid. All late payments will bear interest at the rate of one
percent per month until paid.
6. WARRANTIES.
(a) GENERAL. Supplier represents and warrants (i) that the Supplier
Product being delivered to Media 100 is identical to that generally marketed
by Supplier, except to the extent specifically agreed to between the parties;
and (ii) it has and will have full and sufficient authority to assign or
grant the rights and/or licenses granted in the Supplier Product pursuant to
this Agreement.
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(b) NO VIRUS. Supplier has taken reasonable steps to test the Supplier
Product for programming devices (e.g., viruses, key locks (including, without
limitation, that control the number of users), backdoors, etc.) that would
(i) disrupt the use of the Supplier Product or any system, device or software
to which the Supplier Product is interfaced or other computer equipment with
which such equipment communicates; (ii) destroy or damage data or make data
inaccessible or delayed, except for file and purge routines necessary to the
routine functioning of the Supplier Product; or (iii) permit Supplier
personnel, agents or subcontractors access to any portion of the Supplier
Product other than as necessary to carry out the terms of this Agreement.
Supplier agrees to use programming practices and security procedures to avoid
insertion of such devices and to scan for viruses before sending any media
containing programming code to Customer.
(c) NO EXPORT RESTRICTION. Supplier further represents and warrants that
to its knowledge, except as disclosed to Media 100 the Supplier Product does
not contain cryptographic code or any other code that would subject it any
United States export license restrictions.
THE WARRANTIES DESCRIBED IN THIS SECTION 6 ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT.
7. INDEMNIFICATION.
(a) INDEMNIFICATION. Supplier will indemnify, defend and hold Media 100,
its affiliates and, subsidiaries, and its and their respective directors,
officers, employees and agents (collectively, "Media 100 Persons") harmless
from any and all damages, liabilities, costs and expenses incurred by any
Media 100 Person as a result of any claim, judgment or adjudication against
Media 100 Person that alleges that the Supplier Product, Trade Names or the
Marks infringe any trademark, copyright, patent or trade secret rights of any
third party. Media 100 shall promptly notify Supplier in writing of any claim
for which it seeks indemnification, provided the failure or delay in doing so
shall not relieve Supplier from any obligation to indemnify any Media 100
Person except to the extent such delay or failure materially prejudices the
defense of any such claim. Supplier will have control of the defense of any
action and all negotiations for settlement and compromise, but shall not make
any settlement binding on any Media 100 Person without Media 100's consent
except if such settlement provides a complete and absolute release of such
person. Media 100 shall provide Supplier with reasonable assistance and
information necessary to perform the above, with Supplier to be responsible
for any out-of-pocket expenses of any Media 100 Person in providing such
assistance. If any Media 100 Person desires to have separate legal
representation in any such action, such Media 100 Person shall be responsible
for the costs and fees of its separate counsel.
(b) LIMITATION ON INDEMNIFICATION. Supplier shall have no liability for
infringement to the extent based on (i) modification of the Products by Media
100 or to Media 100's specifications, or (ii) the combination or use of the
Supplier Product with any other computer program, equipment, product, device,
item or process to the extent (A) such
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program, equipment, product, device or process is not furnished by Supplier
and (B) such infringement would have been avoided by the use of the Supplier
Product alone and in its unmodified form. Moreover, Supplier shall have no
liability for infringement, unless it knew or should have known of the
infringement on the date of this Agreement or any significant amendment
thereto and had not previously disclosed the possibility of such infringement
to Media100 in writing specifying either the specific technology, algorithm,
standard or similar item which is anticipated to be the source of
infringement, or the party from which infringement is reasonably expected.
8. CONFIDENTIAL INFORMATION.
(a) RESTRICTION ON USE. Each party and its Related Persons shall treat
as confidential all Confidential Information of the other party, shall not
use such Confidential Information except as contemplated under this
Agreement, and each party and its Related Persons shall not disclose such
Confidential Information to any third party except as may be reasonably
required in connection with the manufacture, use, sale or distribution of
products pursuant to this Agreement, and subject to confidentiality
obligations at least as protective as those set forth in this Agreement.
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 confidential
information of like importance to the disclosing party to prevent the
disclosure of Confidential Information disclosed to it by the other party
under this Agreement.
(b) EXCEPTIONS. Notwithstanding the above, neither party shall have
liability to the other with regard to any Confidential Information of the
other which
(i) was in the public domain at the time it was disclosed or enters the
public domain without violation of this Agreement by the receiver;
(ii)was 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)is disclosed with the prior written approval of the discloser;
(iv)was independently developed by the receiver without any use of the
Confidential Information and by employees or other agents of (or
Contractors hired by) the receiver who have not been exposed to the
Confidential Information;
(v) 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)is disclosed to third parties by the discloser, intentionally without
restrictions similar to those contained in this Agreement;
(vii) to the extent disclosed in accordance with 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; or
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(viii) is inherently disclosed in the use, lease, sale or other
distribution of, or publicly available supporting documentation for, any
present or future product or service by or for the receiving party or any
of its Subsidiaries as otherwise permitted in this Agreement.
(c) TERMINATION OF OBLIGATIONS.
The parties' obligations under this Section with respect to nontechnical
sales, marketing and financial Confidential Information terminate three (3)
years from the end of the Term, if not terminated earlier pursuant to Section
8(b). The parties' obligations with respect to all technical Confidential
Information shall be terminated only pursuant to Section 8(b).
9. LIMITATION OF REMEDIES.
(a) LIMITATIONS. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, NEITHER SUPPLIER NOR MEDIA 100 WILL BE LIABLE TO THE OTHER PARTY
FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS) SUSTAINED OR INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE
SUPPLIER PRODUCT THAT IS SUBJECT TO THIS AGREEMENT REGARDLESS OF THE FORM OF
ACTION AND WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE. Supplier's liability
to Media 100 under this Agreement shall not exceed the greater of amounts
paid by Media 100 to Supplier under this Agreement. Media 100's liability to
Supplier under this Agreement shall not exceed the amounts payable by Media
100 to Supplier under Section 5.
(b) EXCEPTIONS. The limitation set forth in subsection (a) above do not
apply to any payment under Section 7; to breach of Section 8; to claims by
either party for personal injury or damage to real property or tangible
personal property caused by other's negligence; or in the case of fraud.
10. TERM; TERMINATION.
(a) TERM. This Agreement shall commence on the date it is executed by an
authorized Supplier signatory and continue until terminated in accordance
with its terms.
(b) TERMINATION FOR CAUSE. Either party may terminate this Agreement for
the substantial breach by the other party of a material term. The terminating
party will first give the other party written notice of the breach and a
reasonable period of at least sixty (60) days in which to cure the alleged
breach. If a cure is not achieved during the cure period, then the
non-breaching party may terminate this Agreement upon written notice.
(c) INSOLVENCY, ASSIGNMENT, OR BANKRUPTCY. Either party may terminate
this Agreement upon written notice to the other party if the other party (i)
is not paying its debts as such debts generally become due, (ii) becomes
insolvent, (iii) files or has filed against it a petition (or other document)
under any Bankruptcy Law or similar law that is unresolved within sixty (60)
days of the filing of such petition (or document), (iv) proposes any
dissolution, liquidation, composition, financial reorganization or
13
recapitalization with creditors, (v) makes a general assignment or trust
mortgage for the benefit of creditors, or (vi) if a receiver, trustee,
custodian or similar agent is appointed or takes possession of any of its
property or business.
(d) TERMINATION BY MEDIA 100 FOR CONVENIENCE. Media 100 may terminate
this Agreement for its convenience at any time, for any reason or for no
reason, by giving Supplier written notice of termination prior to the
beginning of the next Media 100 fiscal quarter. Termination will become
effective upon receipt of such notice by Supplier.
(e) EFFECT OF TERMINATION ON OBLIGATIONS. Termination of this Agreement
will not affect any pre-termination obligations of either party under this
Agreement, and any termination is without prejudice to the enforcement of any
undischarged obligations existing at the time of termination. Within thirty
(30) calendar days after termination of this Agreement, Media 100 shall
either deliver to Supplier or destroy all copies of the Supplier Product and
Documentation and any other materials provided by Supplier to Media 100
hereunder in its possession or under its control, and shall furnish to
Supplier an affidavit signed by an officer of Media 100 certifying that, to
the best of its knowledge, such delivery or destruction has been fully
effected. Notwithstanding the foregoing, (i) all licenses to the Bundled
Product granted prior to termination to End Users by or on behalf of Media
100 and in connection with products incorporating the Supplier Product shall
survive any termination of the Agreement, and in particular, it is agreed
that upon the termination of the Agreement for any reason, such termination
shall not abridge or diminish in any way the rights of existing End Users to
the licensed use and enjoyment of any product utilizing or incorporating the
Supplier Product or any Derivative Work already distributed in accordance
with the Agreement prior to its termination; and (ii) for a period of up to
one year after the date of the termination of this Agreement Media 100 may
continue, subject to payment of amounts which may be due as of the date of
such termination and at any time thereafter, to sell the Bundled Product and
grant End User licenses to in connection therewith, under the provisions of
this Agreement solely to (A) work off existing inventory, (B) fulfill
contract commitments existing at the date of termination, or (C) satisfy
binding quotations in effect at the date of termination, and may thereafter
retain such rights as are necessary to support users at the release level
existing at the time of termination.
Upon termination, Media 100's sole monetary obligation arising out of
termination will be to pay Supplier the fees set forth in Exhibit A of this
Agreement.
11. GENERAL PROVISIONS.
(a) FORCE MAJEURE. If either party is prevented from performing any
portion of this Agreement (except the payment of money) by causes beyond its
control, including labor disputes, civil commotion, war, governmental
regulations or controls, casualty, inability to obtain materials or services
or acts of God, such defaulting party will be excused from performance for
the period of the delay and for a reasonable time thereafter.
(b) CHOICE OF LAW; JURISDICTION. The validity, construction and
performance of this Agreement will be governed by and construed in accordance
with the laws of the State of
14
California applicable to contracts executed in and performed entirely within
such State, without reference to any choice of law principles of such State.
With respect to any suit, action or other proceeding arising out of this
Agreement, or any other transaction contemplated thereby, the parties hereto
expressly waive any right they may have to a jury trial and agree that any
proceeding hereunder shall be tried by a judge without a jury. Each party
acknowledges that injunctive relief is an appropriate remedy for a breach of
Sections 3, 8 or 11. The parties agree to non-exclusive personal jurisdiction
and venue of the United States District Court for Massachusetts (and any
Massachusetts State Court) and the United States District Court for the
Northern District of California (and any California State Court in Santa
Clara County) for that purpose.
(c) SURVIVAL OF TERMS. The provisions of this Agreement that by their
nature extend beyond the termination of this Agreement will survive and
remain in effect until all obligations are satisfied. Confidentiality
provisions of Section 8 shall remain in effect until the Confidential
Information is no longer Confidential.
(d) ENTIRE AGREEMENT. This Agreement, including the following Exhibits,
constitutes the entire Agreement between the parties pertaining to the
subject matter and supersedes all prior agreements and understandings between
the parties, written or oral, with respect to such subject matter. No
representations or statements of any kind made by any representative of
either party which are not stated in this Agreement or other substantially
contemporaneous written agreements between the parties shall be binding on
such party. No course of dealing or course of performance shall be relevant
to explain or supplement any term expressed in this contract. In the event of
any conflict between this Agreement and any purchase order or acknowledgment,
this Agreement shall take precedence over any written or typed instructions
in a written or electronic purchase order or acknowledgment. References to
Sections without decimals (such as "Section 2") shall include all sections
numbered with decimals in such Section (i.e. Section 2.1, 2.2, etc.). The
pre-printed provisions of any written or electronic purchase order or
acknowledgment shall be void and of no effect. This Agreement shall be valid
when signed by authorized officers of both parties. The parties agree that
this Agreement, together with any appendices, addenda or exhibits attached
hereto, may be amended from time to time in writing by mutual agreement of
the parties. No party shall be bound by any change, alteration, amendment,
modification or attempted waiver of any of the provisions of this Agreement
unless in writing and signed by an authorized officer of the party against
whom it is sought to be enforced.
(e) ASSIGNMENT.
(i) The rights and liabilities of the parties hereto will bind and inure to
the benefit of their respective successors, executors and administrators,
as the case may be; provided that neither party may assign or delegate its
obligations under this Agreement either in whole or in part, expressly or
by operation of law, without the prior written consent of the other, except
that each party may assign this Agreement (A) to any Subsidiary or company
of which it is a Subsidiary so long as it remains responsible for such
Subsidiary's performance or (B) to a person or entity into which it has
merged or which has otherwise succeeded to all or substantially all of its
15
business and assets to which this Agreement pertains, by purchase of stock,
assets, merger, reorganization or otherwise, and which has assumed in
writing or by operation of law its obligations under this Agreement. Any
attempted assignment in violation of the provisions of this Section will be
void.
(ii) All rights and licenses granted to a party under this Agreement shall
apply to that party's Subsidiaries so long as such Subsidiaries agree to
comply fully with the obligations imposed on that party by this Agreement
and so long as such Subsidiary continues to be a Subsidiary of a party.
Each party shall remain fully liable for the actions and omissions of its
Subsidiaries relative to rights granted under this Section 11(f).
(f) NOTICE. All notices, demands, requests or other communications that
may be or are required to be given, served or sent by any party pursuant to
this Agreement will be in writing (and shall be deemed to have been duly
given upon receipt), will reference this Agreement and shall be mailed by
first class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by express courier or hand delivery or facsimile
transmission, addressed to the address below the party's name on the
signature page of this Agreement. Each party may designate by notice in
writing a new address to which any notice, demand, request or communication
may thereafter be so given, served or sent. Each notice that is mailed,
delivered or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time
as it is delivered to the addressee (with the return receipt, the delivery
receipt or the affidavit of messenger or courier being deemed conclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
(g) SEVERABILITY. If any term, provision, covenant or condition of this
Agreement is held invalid or unenforceable for any reason, the remainder of
the provisions will continue in full force and effect as if this Agreement
had been executed with the invalid portion eliminated. The parties further
agree to substitute for the invalid provision a valid provision that most
closely approximates the intent and economic effect of the invalid provision.
(h) INDEPENDENT CONTRACTORS. Each party acknowledges that the parties to
this Agreement are independent contractors and that it will not, except in
accordance with this Agreement, represent itself as an agent or legal
representative of the other.
(i) EXPORT CONTROL. Each party agrees that it will comply with the
provisions of United States laws restricting export of any software,
technical data or other information or materials, including without
limitation the United States Export Administration Act and regulations
thereunder, and will not export any software, technical data or other
information or materials to any country in violation thereof. This clause
shall survive termination or cancellation of this Agreement.
(j) HEADINGS. The headings provided in this Agreement are for
convenience only and will not be used in interpreting or construing this
Agreement.
16
(j) NONSOLICITATION. During the term of this Agreement and for one year
thereafter, (i) neither party shall solicit the employees or contractors of
the other for employment or consulting and shall promptly advise the other if
approached by same for such purposes; and (ii) Media100 agrees not to
distribute the Bundled Products through any distributor of Supplier's as of
the date of this Agreement without Supplier's prior written approval, which
approval will not be unreasonably withheld..
(k) ATTORNEYS' FEES. In the event of any dispute in connection with this
Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' and experts' charges, in addition to such other relief as the
court may award.
Executed as of the date first above written.
SUPPLIER: Media 100:
DIGITAL ORIGIN, INC. MEDIA 100 INC.
By By
------------------------------- -------------------------------
Name: Name:
Title: Title:
Address: 460 East Middlefield Road Address: 290 Donald Lynch Boulevard
Mountain View CA 94043 Marlboro, MA 01752-4748
17
EXHIBIT A
SUPPLIER PRODUCT, ROYALTIES
1. SUPPLIER PRODUCT: The Agreement to which this is appended applies
to the following Supplier Product:
a. IntroDV 1.0 For Windows, Software Only Version. The
Digital Origin Software content of retail SKU 0752 (see company website for
complete description). Specifically excludes all other bundled products from
DO or third parties, specifically excluded hardware, cables, and other
miscellaneous contained in that SKU.
2. ROYALTY/LICENSE FEES:
a. DEVELOPMENT PAYMENTS
Payment of $500,000 upon the earlier to occur of February
1, 2000 and Acceptance of all Deliverables of the Supplier Product (in
accordance with Exhibit B).
b. ONGOING ROYALTIES
1. Payment of $250,000 advance pre-paid royalty upon
execution of this Agreement, considered to be the minimum royalty payment for
the quarter ending February 29, 2000.
2. Royalty of 5% of Net Sales of Bundled Product each
quarter. Net Sales means gross receipts from the license or sale of the
Bundled Products less applicable sales and use taxes, shipping, insurance and
reasonable returns.
3. Cumulative minimum payment of $250,000 per quarter
for the first 14 quarters of the Agreement, such last payment being for the
quarter ended May 31, 2003. "Cumulative" means that if in a particular
quarter, (a) the cumulative payments under this Agreement under clause (1)
and (2) in previous quarters, plus the amount to be paid based on the
foregoing 5% royalty, is less than (b) $250,000 multiplied by the total
number of elapsed quarters, then the payment due in such quarter is such
difference, up to $250,000.) The $500,000 payment made pursuant to clause (a)
shall not be considered in making the calculation of "cumulative", but shall
be treated as an advance against royalties for the payments for the quarters
ended August 31, 2003, and November 30, 2003 payments under clause (b), such
that only to the extent the 5% royalty set for in clause (b) above exceeds
such amount would Media 100 be obligated to make payments under clause (b)
above for such quarters.
(Note: because of the $250,000 payment on execution, no further minimum
royalty payment is due for the quarter ended February 29, 2000; payment with
respect to such
18
quarter shall only be made if the amount payable under the 5% royalty exceeds
that amount.).
C. TREATMENT OF TERMINATION
1. In the event of termination of the Agreement prior
to February 28, 2001 by Media 100 for cause or convenience pursuant to
Section 10, the $500,000 payment made pursuant to clause (a) above shall be
promptly refunded by Supplier to Media 100 by March 15, 2001. However,
payments made under clause (b) above shall not be refundable.
2. In the event of termination of the Agreement by
Media 100 pursuant to Section 10 prior to the end of a quarter which quarter
is after the quarter ended February 28, 2001, Media 100 shall pay to Supplier
in accordance with the Agreement the payment for such quarter in accordance
with the provisions of (b) above. If Media 100 terminates the Agreement in or
prior to the quarter ended February 28, 2001, or if, pursuant to Section
10(e) above, Media 100 shall provide residual post-termination copies of
materials in a quarter following any quarter in which the Agreement is
terminated, it shall pay to Supplier solely the 5% royalty specified in
clause (b)(2) above with respect to such sales, without any obligation of a
minimum royalty. For avoidance of doubt, in no case will Media 100 have
liability for any minimum royalties following termination of the Agreement
other than as specifically stated in the first sentence of this clause (c)(2).
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EXHIBIT B
MILESTONES SCHEDULE
[to be completed after execution, in accordance with Section 2(b)]
DESCRIPTION OF MILESTONE DUE DATE
20
EXHIBIT C
PRODUCT SPECIFICATIONS
[to be completed after execution, in accordance with Section 2(b)]
21
EXHIBIT D
MAINTENANCE AND SUPPORT
Supplier shall not be responsible for first-level support (i.e., direct
support of customer questions) of products incorporating the Supplier
Product. However, during the term of this Agreement, and for a period of one
(1) year thereafter but not longer than Supplier provides general support for
the Supplier Product or if Supplier terminates the Agreement pursuant to
Section 10(b), Supplier shall provide to Media 100 second level support
services, consistent with the support obligations described below with
respect to the Supplier Product including, without limitation, identification
of defective Source Code and Object Code and providing corrections,
Workarounds and/or patches to correct defects or errors in such Code. During
the term of this Agreement and for one year thereafter, Media 100 shall
provide first-level customer support of products incorporating the Supplier
Product on the same basis as the Restricted Streaming Products or other
comparable products that do not incorporate the Supplier Product.
TECHNICAL SUPPORT. While obligated to provide second level support as
provided above, in addition to the second level support services described
above, (i) Supplier shall appoint a technical contact to whom Media 100 may
address all technical questions relating to Supplier technologies; (ii) the
parties shall determine a mutually acceptable procedure by which Media 100
shall direct its technical questions to the appropriate Supplier technical
contact; and (iii) Supplier shall promptly answer all technical questions
asked by Media 100 relative to the Supplier Product.
TRAINING OF MEDIA 100. Supplier shall provide training of up to two members
of Media 100's technical and marketing staff on the following topics:
IntroDV. Training of Media 100 personnel will be provided by Supplier at
Mountain View CA or other mutually agreeable location. The training duration
is estimated at 2 days. Media 100 is responsible for Media 100 personnel's
out of pocket expenses including travel, room and board. Supplier is
responsible for the facilities, training materials and equipment.
There are no tuition charges. The course will be scheduled at a mutually
agreed upon time.
UPGRADES, UPDATES, ERROR CORRECTIONS AND ENHANCEMENTS. Supplier will include
Media 100 in its alpha programs for any Updates to the technology underlying
the Supplier Product (the "Technology") released during the term of this
Agreement, and will provide Media 100 with the production version of such
upgrades, subject to Section 2(a) of the Agreement. Beta testing will be
managed by Media 100, with support from Supplier. Media 100 may, but is not
required to, incorporate any such Updates in a product.
To enable Media 100 to provide standard support, while Supplier provides
second level support as provided above, Supplier shall provide to Media 100,
at no cost, all pertinent System Documentation for the Supplier Product and
any new releases thereof which is reasonably necessary for the purpose of
providing standard software support for the Supplier Product. Supplier shall
also provide to Media 100, at no cost and on an as needed basis, timely
qualified technical support by phone during Supplier's Business
22
Hours to answer questions from a designated Media 100 representative
consistent with the following support obligations. Errors may be reported, on
a 24 hours per day, 365 day per year basis, by electronic mail, voice mail,
fax or telephonic recording capability.
While Supplier is obligated to provide second level support as provided
above, Supplier will use reasonable commercial efforts to resolve each
significant Error by providing either a reasonable work around, an object
code patch, or a specific action plan for how Supplier will address the
problem and an estimate of how long it will take to rectify the defect.
Notwithstanding the foregoing, Supplier has no obligation to perform services
in connection with (i) Errors resolution from hardware or software not
supplied by Supplier or (ii) which occur in the Supplier Product release
which is not the then-current release.
23