EXHIBIT 10
Amendment No. 1 to the
May 9, 1997
License, Development and Marketing Agreement
Between Microsoft Corporation and Citrix Systems
This Amendment No. 1 is entered into as of April 17, 1998 (the "Amendment
Effective Date"), by and between Microsoft Corporation ("Microsoft") and Citrix
Systems, Inc. ("Citrix"), to amend the License, Development and Marketing
Agreement, dated May 9, 1997 (the "Agreement").
Provided this Amendment has been properly executed on behalf of the parties by
their duly authorized representatives, the parties agree to modify the Agreement
as follows:
1. Introduction and Effect of this Amendment.
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Microsoft and Citrix desire to establish an alternative achievement
milestone for Citrix which, if met, would enable Citrix to achieve the
financial benefits outlined in Section 9.2.1.1. The concept behind
the alternative provided for in this Amendment is that in the event
the milestone is achieved, Citrix is accepting pre-defined quarterly
fees (described in Section 9.7 below) in lieu of the royalties
provided for in Sections 9.1.2 and 9.2 of the Agreement, in exchange
for Microsoft's commitment to make commercially reasonable efforts to
package the Hydrix functionality in its relatively high-volume Windows
NT Server product.
This Amendment shall add new Sections 9.7, 8.14 and 8.15 to the
Agreement. In addition, Section 10.3(ii) shall be amended to add the
words "and 9.7" after the words "under Sections 9.1 and 9.2". All
provisions of the Agreement not so modified shall remain in full force
and effect. All defined terms in the Agreement shall have the same
meaning in this Amendment unless expressly provided to the contrary.
2. The Milestone.
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9.7 In the event Citrix achieves the milestone defined below in this
Section 9.7 (the "Milestone"), the provisions of this Section shall
replace and supersede the provisions of Sections 9.1.2 and 9.2 of the
Agreement In the event Citrix does not achieve the Milestone, the
provisions of Section 9.1.2 and 9.2 shall remain unaltered and in full
force and effect.
9.7.1 If Citrix achieves the Milestone, then Microsoft shall pay
Citrix (i) Ten Million Dollars ($10,000,000) in recognition
of Citrix engineering efforts expended in achieving the
Milestone, payable upon release to manufacturing of Hydrix
4.0; and (ii) a quarterly payment of Fifteen Million Dollars
($15,000,000) per calendar quarter for six (6) quarters
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beginning with the first quarter after the release to
manufacturing of Hydrix 4.0, payable on the first day of such
calendar quarter.
9.7.1.1 In the event Citrix achieves the Milestone and Microsoft
ships Multi-User client device support for any device
other than a Windows Client Device following the two and
one-half year period described in Section 8.7 but before
payment in full of all amounts due under Section 9.7.1,
then Citrix, in its sole and absolute discretion, may
continue to receive the quarterly payments provided for
in Section 9.7.1 or may elect to receive a lump sum
payment from Microsoft of all outstanding amounts due
under Section 9.7.1, payable in full to Citrix within
thirty (30) days from the date of its written demand to
Microsoft.
9.7.1.2 For purposes of this Section 9.7, Citrix shall have
achieved the Milestone of (i) the final commercial
version of Hydrix 4.0 is released to manufacturing by
Microsoft on or before May 15, 1998; or (ii) Closure of
all [Confidential Treatment Requested]* is achieved on
or before April 30, 1998.
9.7.1.3 For purposes of this Section 9.7, [Confidential
Treatment Requested]* shall mean and include only: (i)
those [Confidential Treatment Requested]* listed in
Schedule 9.7.1.3 (which are a subset of the Hydrix 4
[Confidential Treatment Requested]* database as of March
17, 1998), (ii) incomplete correction of the
[Confidential Treatment Requested]*, and (iii) any
regressions to Hydrix functionality caused by
corrections to [Confidential Treatment Requested]*. The
set of [Confidential Treatment Requested]* shall not be
expanded by the Hdyra Test and Acceptance Document dated
March 5, 1998.
9.7.1.4 For purposes of this Section 9.7, Closure shall occur
when, in Microsoft's sole and absolute judgment, the
criteria for closure of [Confidential Treatment
Requested]* has been met as determined in accordance
with Version 1.2 of the Hydra Test and Acceptance
Document dated March 5, 1998 or a mutually agreed-upon
subsequent version, including passage of all applicable
acceptance tests.
* [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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9.7.1.5 Citrix delivered initial test results to Microsoft on
April 7, 1998. Microsoft shall notify Citrix in writing
or via electronic mail (with confirmed receipt) no later
than April 20, 1998, whether Closure has been achieved.
If Microsoft determines Closure has not been achieved,
Microsoft's written notice shall identify all
deficiencies and Citrix shall have until April 30, 1998,
to meet the applicable criteria. If Citrix disagrees
with Microsoft's determination of deficiencies, the
parties agree to utilize the escalation procedure
described in Schedule 9.7.1.5 or a mutually agreed
alternative procedure. In all matters relating to
achievement of Closure, Microsoft and Citrix shall act
in good faith.
9.7.2 By September 30, 1998, Microsoft will notify Citrix if
Microsoft will include the Hydrix functionality in its
standard Windows NT Server product, in addition to any other
packaging for Hydrix that Microsoft may offer in its sole and
absolute discretion. If Microsoft does not elect to make such
inclusion, quarterly payments due Citrix will continue per
Section 9.7.1 through the quarter ended September 30, 1998,
at which time the balance of all outstanding amounts due
under Section 9.7.1 shall become payable over the succeeding
three (3) quarters, in equal quarterly increments.
8.14 Microsoft agrees that it will configure the initial release of the
Windows-Based Terminal ("WBT") Kit so that an OEM may, if it chooses,
configure the Hydrix client software with or without Microsoft's
Remote Desktop Protocol ("RDP") installed. Microsoft also agrees to
bundle ICA client documentation in the initial release of the WBT Kit
under the same terms as it bundles ICA client software as set forth
in Section 8.11 of the Agreement, provided such documentation does
not exceed the length of the RDP documentation provided by Microsoft
with the WBT Kit, and meets Microsoft's standards for style and
quality.
8.15 Microsoft agrees to use good faith efforts to develop Internet
commercial use licensing for Hydrix.
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IN WITNESS WHEREOF, the parties have duly authorized their representatives
to make and sign this Amendment No. 1.
CITRIX SYSTEMS, INC. MICROSOFT CORPORATION
By: /s/ Edward E. Iacobucci By: /s/ Paul Maritz
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Name: Edward E. Iacobucci Name: Paul Maritz
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Title: Chairman Title: Vice President
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Date: 4/17/98 Date: 4/17/98
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Schedule 9.7.1.3
[Confidential Treatment Requested]*
* [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Schedule 9.7.1.5
[Confidential Treatment Requested]*
* [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.