EXHIBIT 10.15
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TECHNOLOGY DEVELOPMENT AND LICENSE
AGREEMENT
by and between
INTERTRUST TECHNOLOGIES CORPORATION
and
MITSUBISHI CORPORATION
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__________________________
October 7, 1996
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- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
TABLE OF CONTENTS
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Page
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ARTICLE 1. DEFINITIONS AND RULES OF CONSTRUCTION........................... 2
1.1 Definitions..................................................... 2
1.2 Rules of Construction........................................... 9
ARTICLE 2. TECHNOLOGY ACCESS AND SUPPORT................................... 10
2.1 Technology Access............................................... 10
2.2 InterTrust Assistance........................................... 10
2.3 Correction of Material Defects.................................. 11
2.4 Status Meetings................................................. 11
2.5 Dedicated Personnel............................................. 11
ARTICLE 3. COOPERATIVE DEVELOPMENT......................................... 11
3.1 Cooperative Development of Trading Model Application............ 11
3.2 Additional Cooperative Applications............................. 12
3.3 Development Fees................................................ 13
ARTICLE 4. LIMITED LICENSE GRANT AND RESTRICTIONS.......................... 13
4.1 License Grant During Option Period.............................. 13
4.2 License Restrictions and Related Covenants...................... 14
ARTICLE 5. MBC OPTION FOR BROADER INTERTRUST LICENSE....................... 14
5.1 MBC Option...................................................... 14
5.2 License Grant................................................... 15
5.3 Sublicense Rights............................................... 16
5.4 No Additional Licenses.......................................... 17
5.5 General Restrictions............................................ 18
ARTICLE 6. MBC SUPPORT AND ADDITIONAL COVENANTS............................ 18
6.1 MBC Support of InterTrust Technology............................ 18
6.2 Customer Agreements............................................. 24
6.3 Legends and Notices............................................. 24
6.4 InterTrust Trademarks........................................... 25
6.5 MBC's Use of MBC Trademarks on Cooperative
Applications and MBC Products................................... 26
6.6 MBC Trademarks.................................................. 26
6.7 Technology Advisory Committee.................................. 26
ARTICLE 7. LICENSE FEES AND PAYMENT TERMS................................. 27
7.1 Fees and Royalties............................................. 27
7.2 Other Fees..................................................... 29
7.3 Payment Procedure.............................................. 29
7.4 Currency....................................................... 29
7.5 Taxes.......................................................... 30
7.6 Interest....................................................... 30
7.7 Audit.......................................................... 30
ARTICLE 8. PROPRIETARY INFORMATION AND OWNERSHIP.......................... 31
8.1 InterTrust Ownership........................................... 31
8.2 MBC Ownership.................................................. 31
8.3 Joint Ownership................................................ 31
8.4 MBC License.................................................... 31
ARTICLE 9 CONFIDENTIALITY................................................. 32
9.1 InterTrust Technical Information............................... 32
9.2 MBC Technical Information...................................... 34
9.3 Exceptions..................................................... 34
9.4 Confidentiality of Agreement and Publicity..................... 34
9.5 Confidentiality of Payments, Audit and
Certification Testing.......................................... 35
9.6 Survival of the NDA............................................ 35
ARTICLE 10 REPRESENTATIONS AND WARRANTIES................................. 35
10.1 Representations and Warranties of Both Parties................. 35
10.2 Representations and Warranties of InterTrust................... 36
10.3 Limitation..................................................... 36
ARTICLE 11. INDEMNIFICATION AND REMEDIES................................... 36
11.1 Indemnification................................................ 36
11.2 Cumulative Remedies............................................ 38
11.3 Equitable Remedies............................................. 38
11.4 Exclusion of Damages........................................... 39
ARTICLE 12. TERM AND TERMINATION........................................... 39
12.1 Agreement...................................................... 39
12.2 Events of Termination.......................................... 39
12.3 Effect of Termination.......................................... 41
12.4 Survival...................................................... 41
ARTICLE 13. EXPORT........................................................ 42
13.1 Compliance with Law and Export Controls....................... 42
13.2 Failure to Obtain Export Approval............................. 42
ARTICLE 14. MISCELLANEOUS................................................. 43
14.1 Governing Law................................................. 43
14.2 Venue and Jurisdiction........................................ 43
14.3 Amendment or Modification..................................... 44
14.4 No Assignment................................................. 44
14.5 Notices....................................................... 44
14.6 Waiver........................................................ 45
14.7 No Third Party Beneficiaries.................................. 45
14.8 No Agency..................................................... 45
14.9 Recovery of Costs and Expenses................................ 45
14.10 Severability.................................................. 46
14.11 Counterparts; Facsimiles...................................... 46
14.12 Force Majeure................................................. 46
14.13 English Translation........................................... 46
14.14 Entire Agreement.............................................. 46
EXHIBIT A................................................................. A-1
EXHIBIT B................................................................. B-1
EXHIBIT C................................................................. C-1
EXHIBIT D................................................................. D-1
EXHIBIT E................................................................. E-1
EXHIBIT F................................................................. F-1
EXHIBIT G................................................................. G-1
CONFIDENTIAL
TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
THIS TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT (this "Agreement") is made and
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entered into as of the _____ day of October, 1996 (the "Effective Date") by and
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between:
(i) INTERTRUST TECHNOLOGIES CORPORATION, formerly Electronic Publishing
Resources, Inc., a Delaware corporation ("InterTrust"), with offices
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at 460 Oakmead Parkway, Sunnyvale, California 94086-4708; and
(ii) MITSUBISHI CORPORATION, a Japanese corporation ("MBC"), with offices
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at 6-3, Marunouchi 2-Chome, Chiyoda-ku, Tokyo, Japan;
(individually, a "Party", and collectively, the "Parties") with reference to the
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following:
RECITALS
A. InterTrust has developed and is continuing to develop a unique, general
purpose architecture for, among other things, rights protection and event
management related to electronic commerce. InterTrust's technology is
designed to support an interoperable foundation for the electronic
marketplace.
B. MBC is engaged in the business of trading goods and services and is
interested in: (i) developing and establishing an electronic trading
environment incorporating InterTrust's technology, including electronic
commerce trading capabilities on the Internet's World Wide Web; (ii)
developing and establishing advertising technology and services to serve
the World Wide Web; (iii) providing clearinghouse services for transactions
that are performed in connection with such electronic trading and
advertising environments; and (iv) providing further electronic commerce
applications and services related thereto.
C. As discussed by the Parties and as described in the Parties' Memorandum of
Understanding dated April 2, 1996: (i) MBC, with the assistance of
InterTrust, intends to develop a trading model for electronic trading and
such other Cooperative Applications as the Parties may mutually agree; and
(ii) InterTrust intends to grant MBC certain licenses to use and
incorporate InterTrust Technology in MBC's products and services for use in
connection with electronic commerce activities as set forth herein.
D. In furtherance of the relationship between the Parties, InterTrust and MBC
will also enter into a Series B Preferred Stock Purchase Agreement (in the
form attached hereto as Exhibit A) (the "Stock Purchase Agreement") at a
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closing to be held concurrent with the receipt by InterTrust of the sum set
forth in Section 7.1 (a)(i) hereof (the "Closing").
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MBC/Intertrust Agreement
E. This Agreement, together with the Stock Purchase Agreement, sets forth the
terms and conditions with respect to, respectively: (i) the licensing of
InterTrust Technology and cooperative development of the Trading Model
Cooperative Application and certain other Cooperative Applications; and
(ii) MBC's investment in InterTrust.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties agree to the following terms and conditions:
ARTICLE 1. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Definitions. In addition to the other capitalized terms defined
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elsewhere in this Agreement, the following terms shall have the meanings set
forth below:
"Active Key Technology" means: (i) MBC's proprietary metering system
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that is based on a central server that securely performs certain metering
and fulfillment functions by (a) transmitting a decryption key from such
central server to a user's computing system each time such user engages in
the decrypting of encrypted content and (b) auditing and recording the
transmission of such decryption keys from such central server to enable
payment fulfillment; and (ii) such extensions, modifications, improvements
or alterations made to such technology in the future.
"Affiliate" or a Person "affiliated" with another Person, means a
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Person that directly or indirectly owns or controls more than fifty percent
(50%) of the ownership interest of such other Person, which interest
represents the right to: (i) elect the board of directors or other similar
managing authority; or (ii) generally make or cause the making of
management decisions directly; provided, however, that an Affiliate shall
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remain an Affiliate for only so long as such ownership interest remains in
effect.
"Application Products" means any software tool, template, application
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system or other software product that: (i) is developed using InterTrust
Technology and/or Modified Technology; (ii) directly contains or
incorporates InterTrust Technology solely in the form of Authorized
Application Software, and/or Modified Technology in either Object Code
and/or Source Code, in accordance with the licenses granted by InterTrust
to MBC hereunder; (iii) is not enabled to permit the performance of any
Clearinghouse Functions; and (iv) is in Compliance with InterTrust
Specifications.
"Authorized Application Software" means such software representations
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of InterTrust Technology in Object Code and/or in Source Code (solely as
such Object Code and Source Code are identified and designated by
InterTrust on Exhibit B, which Exhibit may be amended from time to time by
InterTrust in its sole discretion), that are permitted
CONFIDENTIAL
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for distribution in accordance with the applicable licenses hereunder and
as incorporated in Application Products in such form as specified on
Exhibit B.
"Authorized Clearinghouse Provider" means any Person that is expressly
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licensed by InterTrust to engage in specified Clearinghouse Function
activities and services, but only to the extent: (i) of the scope of such
license; and (ii) that such license is valid and in force.
"Authorized Clearinghouse Software" means such software
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representations of InterTrust Technology in Object Code form (solely as
such Object Code is identified and designated by InterTrust on Exhibit B,
which Exhibit may be amended from time to time by InterTrust in its sole
discretion), that are permitted for distribution, as incorporated in
Clearinghouse Products, in accordance with the applicable licenses
hereunder.
"Clearinghouse Function(s)" means any one or more activities, as well
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as services resulting therefrom, that use any InterTrust Technology and/or
Modified Technology, or use information derived at least in part from use
of such technology, to: (i) enable payment fulfillment or provision of
other consideration (including service fees, product fees or any other fees
and/or charges) based at least in part on a Control Use; (ii) perform
audit, billing, payment fulfillment (or provision of other consideration)
and/or other clearing activities involving more than one Person; and/or
(iii) compile, aggregate, use and/or provide information relating to more
than one Person's use of one or more Secure Containers and/or Content,
including Contents of Secure Containers or any other Content Managed at
least in part using any InterTrust Technology and/or Modified Technology.
Clearinghouse Functions shall include, for example: (a) financial
clearing; (b) providing object registry services and rights, permissions,
prices, and/or other Rules and Controls information for registered objects;
(c) electronically certifying information used with or required by Rules
and Controls such as authenticating identity, class membership or other
attributes of rights context; (d) providing information based upon usage
auditing, user profiling, and/or market surveying related to more than one
Person's use of one or more Secure Containers and/or Content; and (e)
employing information derived from user exposure to Content, such as
advertising.
"Clearinghouse Products" means any software tool, template,
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application system or other product that: (i) is developed using
InterTrust Technology and/or Modified Technology; (ii) directly contains or
incorporates InterTrust Technology solely in the form of Authorized
Clearinghouse Software, and/or Modified Technology only in Object Code, in
accordance with the licenses granted by InterTrust to MBC hereunder; (iii)
is enabled to permit the performance of any Clearinghouse Functions; and
(iv) is in Compliance with InterTrust Specifications.
"Clearinghouse Prototype Components" means certain software components
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of InterTrust Technology, as set forth on Exhibit B as part of the SDK 1.0,
that are designed to provide sample software for development of
Clearinghouse Products.
CONFIDENTIAL
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"Compliance" or "Compliant" means fully consistent with and fully
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conforming to all applicable portions of: (i) the most current version of
the InterTrust Specifications (including, as applicable, any New
Specification, as defined in Section 6.1(b) hereof) existing on the date of
MBC's first distribution, sale or other transfer of any applicable
Cooperative Application, MBC Product, or first use thereof in connection
with any service associated therewith, as the case may be; and thereafter
(ii) the most current InterTrust Specifications in accordance with Section
6.1(b) hereof, as applied to any such Cooperative Application, MBC Product
or service associated therewith. A Cooperative Application, MBC Product,
or any service associated therewith that has not passed any required
certification tests as set forth in Section 6.1 hereof shall be deemed non-
Compliant with InterTrust Specifications.
"Content(s)" means any analog or digital information representing, for
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example: text, graphics, animation, video, sound, still images, computer
programs or executable components, and data. Content shall include, for
example, any electronic representation of: (i) Rules and Controls; and
(ii) electronic information derived from the Management of Content.
"Content Transaction" means any event or combination of events: (i)
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Managed, in whole or in part, through the use of any InterTrust Technology
and/or Modified Technology; and (ii) in connection with which compensation
(or other consideration) is due or payable to MBC and/or any other one or
more Persons, at least in part, for any (a) sale, rental, lease, license,
vending and/or other comparable provision of rights related to Content, or
(b) use of, including any interaction with, Content (including provision of
access to Content or production of modified Content).
"Control Use" means any use of InterTrust Technology and/or Modified
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Technology to Manage Content including initiating and/or otherwise
governing any consequence related to the use and/or processing of Content
and/or provision of goods or services conveyed by or associated with such
Content. Control Use shall include, for example: (i) metering, auditing,
charging, and/or billing, for access to or any other interaction with any
Content; and/or (ii) administering permitted and/or prohibited uses of
Content.
"Cooperative Application(s)" means any Application Product and/or
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Clearinghouse Product that: (i) is developed pursuant to the Trading
Model Cooperative Project Plan or an applicable Cooperative Application
Project Plan in accordance with Sections 3.1 and 3.2 hereof, respectively;
(ii) is marketed solely under any MBC Trademarks (except where use of
InterTrust Trademarks is also required hereunder, or other trademarks of
Persons are also included in a limited manner to identify technology or
services associated therewith) all in accordance with Section 6.5 and other
provisions hereof; (iii) is in Compliance with the InterTrust
Specifications; and (iv) directly contains or incorporates InterTrust
Technology solely in the form of, as applicable, Authorized Application
Software or Authorized Clearinghouse Software, and/or Modified
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Technology solely in Object Code, in accordance with the licenses granted
by InterTrust to MBC hereunder.
"Customer" means any Person that receives or acquires a Cooperative
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Application or Licensed Product from MBC (as provided hereunder) with a
present intention: (i) to use such application or product privately as an
end-user, or further distribute such application or product, without
modification, to an end-user or one or more other Persons for distribution,
without modification, to an end-user; or (ii) to use such products solely
to develop and market a Vertical Application under MBC Trademarks.
Customer shall not include any Person who has a present intention to
perform any Clearinghouse Function unless such Person is an Authorized
Clearinghouse Provider.
"DigiBox(TM) Technology" means certain InterTrust technology designed
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to implement Secure Containers and assist in the Management of Content
associated with Secure Containers.
"Distributable Documentation" means such portions of the Documentation
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that InterTrust has specifically and in writing identified as being
suitable for general distribution by MBC to Customers, as such portions of
the Documentation may from time to time be cataloged by InterTrust and
provided to MBC.
"Documentation" means certain English language versions of
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documentation and/or instructions as specifically designated by InterTrust
that may assist MBC and/or its Customers (as specified by InterTrust) in
the use of InterTrust Technology and that InterTrust may from time to time
provide with the InterTrust Technology (including any Distributable
Documentation) as initially identified in Exhibit B hereto, which Exhibit
may be amended from time to time by InterTrust in its sole discretion.
"Gross Commercial Value" means all sums of money, and/or the fair
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market value of any other consideration, charged or provided in connection
with a Content Transaction, and/or in connection with performing any other
activity within the Clearinghouse Functions. Such consideration shall
include consideration based upon Management of Content or information
derived at least in part therefrom, including, for example, consideration:
(i) paid by a user as a consequence of, for example, user exposure to, or
other interaction with, Content; (ii) paid by a user as a consequence of
the acquisition of one or more rights related to said Content; or (iii)
paid by a proxy or subsidizing payer (such as an advertiser) based upon
user exposure to or other interaction with Content, where, for example,
after (due to or based on) receipt of information about user exposure to
Content, such advertiser pays consideration based at least in part on value
resulting from such exposure or interaction. Notwithstanding the
foregoing, Gross Commercial Value shall not include any sales, use, value-
added or other taxes (except withholding taxes) imposed by any national,
state, local or foreign government and paid by MBC as a consequence of
clearing a Content Transaction and/or as a consequence of performing any
other activities within the Clearinghouse Functions.
CONFIDENTIAL
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"Intellectual Property Rights" means all patents, patent rights,
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copyrights, trademarks, trade secrets, and other proprietary rights in any
jurisdiction, and all applications and registrations therefor.
"InterTrust Commerce Technology" means certain InterTrust technology
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directly relating to distributed rights management and/or distributed
electronic commerce Management systems and methods, including, without
limitation, the InterTrust products described in Exhibit B hereto.
"InterTrust Specifications" means the InterTrust Technology
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specifications, as established or modified by InterTrust in its sole
discretion in accordance with Section 6.1(b) hereof, that are provided to
MBC. Such InterTrust Specifications may include: (i) required design
criteria for products and services employing InterTrust Technology and
Modified Technology, including, for example, product and related criteria
for ensuring the architectural and functional integrity, standardization,
security capability, and interoperability of InterTrust based technology,
components, products and services (including, for example, criteria for
electronic environments employing InterTrust Commerce Technology for rights
and/or other event related process management); (ii) procedures and
requirements for installation, initialization, backup, restore and security
updates; and (iii) required certification tests and procedures to verify
Compliance of Licensed Products, Cooperative Applications and related
services with such InterTrust Specifications.
"InterTrust Technology" means any technology developed by and/or for
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InterTrust directly related to electronic rights and/or event management
and made available by InterTrust to MBC under this Agreement including,
without limitation, certain InterTrust Commerce Technology and
Documentation, as referenced in Exhibit B hereto (as such Exhibit may be
modified by InterTrust in its sole discretion from time to time to
accommodate, for example, any updates and upgrade releases made available
pursuant to Section 2.1 hereof).
"InterTrust Trademarks" means InterTrust's names, logos and other
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marks as listed on Exhibit C hereto, as such Exhibit may be modified by
InterTrust from time to time.
"Japanese Company" means any entity organized under the laws of Japan
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that is not owned or controlled, directly or indirectly, by an Affiliate
organized under the laws of any jurisdiction other than the laws of Japan.
"Kernel Technology" means those components of InterTrust Technology
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described by InterTrust on Exhibit B hereto as core technologies of such
InterTrust Technology, as such core technologies thereon may be amended
from time to time by InterTrust in its sole discretion.
CONFIDENTIAL
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"Licensed Rights" means all of InterTrust's worldwide Intellectual
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Property Rights (other than trademark rights) in and to the InterTrust
Technology, the Modified Technology and/or the Cooperative Applications,
that InterTrust (during the term of this Agreement) owns or has the right
to grant licenses of the scope granted herein without the agreement of, or
requirement for payment (or the granting of other consideration) to, any
Person.
"MBC Product(s)" means any Application Product(s) and/or Clearinghouse
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Product(s) (other than Cooperative Application(s)) that: (i) is developed
by MBC; and (ii) is branded and marketed solely under the MBC Trademarks
(except where use of InterTrust Trademarks is also required herein, or
other trademarks of Persons are also included in a limited manner to
identify technology or services associated therewith) and as stipulated in
Section 6.5 and other provisions hereof.
"MBC Trademarks" means any names, logos and other marks owned or
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licensed for use exclusively by MBC or its Affiliates, that are limited in
use exclusively to representing the identities of such companies and over
which MBC and/or such Affiliates exercise exclusive control with respect to
the commercial use thereof. Such MBC Trademarks are listed on Exhibit C
hereto, as such Exhibit C may be modified by MBC from time to time.
"Manage" or "Management" means any form of electronic governance,
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regulation, management and/or control, in any way and by any means, of, as
applicable in the context in which reference is made herein: (i) rights,
processes and/or obligations related to or associated with use of
(including access to, transport of, and/or storage of), Content, including
Content related disposition, and/or consequences thereof; and/or (ii)
events or event processes related or associated in any manner to the use of
(including access to), attempted use of, and/or disposition of, Content,
including any consequences thereof.
"Material Defects" means defects or bugs in the InterTrust products
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incorporating InterTrust Technology (as defined in Exhibit B hereto) and as
delivered by InterTrust to MBC, wherein such defects or bugs cause one or
more such InterTrust products to fail to perform: (i) materially in
conformance with the capabilities ascribed to such products in the
applicable portions of InterTrust Specifications; and (ii) in a
commercially reasonable manner in accordance with reasonable software
industry practices relating to such capabilities. Material Defects shall
not include any defects or bugs introduced as a result of any modification
of (or to) the InterTrust Technology by MBC or any Person.
"Modified Technology" means all modification of, and enhancements
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and/or additions to, the InterTrust Technology, created by MBC, including
without limitation all "derivative works" as such term is defined in the
U.S. Copyright Act (17 U.S.C. (S) 101 et seq., as amended), but only to the
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extent such modifications, enhancements, additions and/or derivative works
are permitted under Article 4 and/or Article 5, as applicable, and
elsewhere in this Agreement. Modified Technology shall not include any
modifications, enhancements, additions and/or derivative works of
InterTrust Technology (or of other
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Modified Technology) whatsoever, made by or for MBC or any Person that fall
outside the scope of this Agreement.
"Object Code" shall mean the computer executable binary code derived
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from compiled Source Code for execution on a computing system.
"Person" means any individual, corporation, partnership, firm, joint
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venture, association, joint-stock company, trust, unincorporated
organization, government body or agency, or other entity not a Party to
this Agreement.
"Prime Partner" means any Japanese Company or group of Japanese
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Companies with whom InterTrust may enter into any agreement or set of
agreements, pursuant to which InterTrust directly: (i) provides early
access to InterTrust Technology prior to InterTrust's first commercial
release thereof to the general public; (ii) undertakes one or more
cooperative development projects to jointly develop products based upon
InterTrust Technology; (iii) grants a general purpose license to use
InterTrust Technology in Japan (excepting limitations with respect to
performing Clearinghouse Functions); and (iv) grants a license to perform,
and sublicense others to perform, clearing services of a substantially
comparable or broader scope than the licenses granted in Sections 5.2 and
5.3 hereof.
"Rights User Node" means a client installation that supports
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Management of Content.
"Rules and Controls" means any information that describes, and/or
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provides means for performing, permitted and/or required operations related
to Content, including, for example, Management of such Content.
"Secure Containers" means electronic containers that: (i) employ
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cryptographic techniques to provide protection for Content; and (ii)
support the use of Rules and Controls to Manage Content.
"Source Code" shall mean a human-readable, non-executable set of
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instructions for a computer program, from which it may be possible,
together with related source materials and documentation, to discern the
logic, algorithms, internal structure, operating features and any other
design characteristic of such computer program.
"Special Advanced Technology [*]" means the period
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commencing on the Effective Date and continuing for [*] months after the
cessation of any development work on a first commercial version of the [*]
(as provided in Section 3.1, including as an MBC Product pursuant thereto)
and/or any other Cooperative Application pursuant to Section 3.2 hereof,
but no less than [*] months from the date on which [*] first makes
available to [*] the [*] (as set forth on Exhibit [*] hereto); provided
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that if [*] ceases such development work and, thereafter, recommences such
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CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
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development work in accordance herewith, such recommenced development work
shall not serve to restart the [*].
"Systems Developer's Kit 1.0" or "SDK 1.0" means the software tools
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and applications incorporating the InterTrust Technology, as provided by
InterTrust to MBC under this Agreement and described in Exhibit B hereto
(as such Exhibit may be modified from time to time by InterTrust in its
discretion).
"Vertical Applications" means any one or more software programs and/or
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services employed to support a business model addressing a specific area of
business activity, but not broadly: (i) providing general purpose
electronic commerce tools; or (ii) supporting other business models,
wherein such other models have substantially different characteristics and
business operations. Vertical Applications include, for example, software
applications employed to support each of the following: (a) electronic
Content super-distribution and Content metering; (b) secure banking and
funds transfer; or (c) smart card security and control systems.
1.2 Rules of Construction. As used in this Agreement, all terms used
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in the singular shall be deemed to include the plural, and vice versa, as the
context may require. The words "hereof," "herein" and "hereunder" refer to this
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Agreement as a whole, including any exhibits hereto, as the same may from time
to time be amended or supplemented and not to any subdivision contained in this
Agreement. When used herein, "including" shall mean "including, without
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limitation," and "discretion" shall mean "sole discretion." References herein
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to section and/or exhibit shall be to the applicable section and/or exhibit in
this Agreement. Descriptive headings are inserted for convenience only, and
shall not be utilized in interpreting this Agreement. This Agreement has been
negotiated by the Parties and their respective counsel and shall be fairly
interpreted in accordance with its terms and without any strict construction in
favor of or against either Party. In the event this Agreement is translated
into any language other than English, the English language version hereof shall
be the sole definitive version.
ARTICLE 2. TECHNOLOGY ACCESS AND SUPPORT
2.1 Technology Access. InterTrust shall make available to MBC such
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InterTrust Technology as set forth on Exhibit B hereto (as such Exhibit may be
amended from time to time by InterTrust pursuant to this Agreement), that may
include certain related technology that may not be proprietary to InterTrust
(the "InterTrust Technology Requirements") (subject to InterTrust's obtaining
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appropriate permits and licenses under export control laws as further set forth
in Article 13 hereof). InterTrust Technology as made available hereunder will
contain the SDK 1.0, with the functionality ascribed thereto as set forth on
Exhibit B, and other products that may be specified by InterTrust in its
discretion on Exhibit B. InterTrust's estimated schedule for the InterTrust
Technology Requirements is initially set forth on Exhibit B and may be revised
by InterTrust as reasonably appropriate, in InterTrust's sole reasonable
determination. MBC acknowledges and agrees that Clearinghouse Prototype
Components and Sample Applications (as defined in Exhibit B) that may be
provided to MBC as part of InterTrust Technology are not
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- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
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designed, intended or warranted by InterTrust in any manner for commercial use.
For a period of [*] years after the Effective Date, InterTrust will make
available to MBC all standard update and upgrade releases to the InterTrust
Technology that InterTrust develops from time to time and makes generally
available to its Prime Partners. [*]
2.2 InterTrust Assistance. After the Closing, InterTrust shall provide
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reasonable training and consulting assistance ("Assistance") to MBC to assist
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MBC in its evaluation and/or use of such InterTrust Technology Requirements (as
InterTrust generally makes such Assistance available to its Prime Partners). It
is contemplated that such Assistance shall commence in the fourth quarter of
1996, subject, as appropriate, to availability of resources and any requirements
of law. Up to a limit of [*] hours of such Assistance, to be
measured based upon InterTrust's man-hours expended, shall be made available to
MBC per year for a period of [*] years following the Effective Date,
without charge except as specified below, subject to reasonable agreement
between the Parties on scheduling, availability of resources and related
matters. Such Assistance may include certain training sessions to which certain
other InterTrust licensees (in addition to MBC) may be invited to attend. In
such an event, InterTrust will notify MBC in advance of such other participants.
MBC shall be responsible for all expenses: (i) incurred by MBC's personnel in
traveling to and attending any training and support meetings; and (ii) in
connection with any needed translation services in regards to such training and
support meetings. In the event InterTrust's personnel are required to travel
from InterTrust's facilities, MBC shall reimburse InterTrust for all actual and
reasonable travel, living and out-of-pocket expenses incurred by InterTrust's
personnel. In the event that InterTrust or an Affiliate opens an office in
Japan, some or all of such Assistance may be made available at such Japanese
location in accordance with this Section 2.2. Additional Assistance may be made
available by InterTrust to MBC: (a) during the [*] year period following
the Effective Date beyond the [*] hours ([*]) allocated; and (b) after
such [*] year period. To the extent requested by MBC to provide such
additional Assistance, InterTrust shall decide, in the exercise of its sole
discretion, whether to provide such Assistance and, if so, the Parties shall
discuss in good faith the appropriate fees to be paid by MBC to InterTrust for
any such additional Assistance.
2.3 Correction of Material Defects. In addition to InterTrust's own
------------------------------
ongoing quality assurance efforts, for a period of [*] years from the Effective
Date, unless the Parties mutually agree in writing otherwise, InterTrust shall
use reasonable efforts to correct Material Defects or otherwise reasonably
adjust InterTrust Technology to mitigate Material Defects, identified by MBC to
InterTrust in a writing describing the alleged Material Defects in detail.
InterTrust shall have no obligation to: (i) independently investigate or correct
any Material Defects at any site other than an InterTrust facility; (ii)
communicate on the subject of Material Defects with any Person other than MBC;
(iii) correct any Material Defects that have been properly identified by MBC but
that cannot be reliably reproduced; or (iv) perform any services relating to
correction of Material Defects at any site other than an InterTrust facility.
2.4 Status Meetings. To assist the Parties in sharing information,
---------------
and coordinating and evaluating their efforts relating to InterTrust Technology
and their mutual technical and
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10
business objectives, following the Closing the Parties shall meet from time to
time to discuss, among other things: (i) InterTrust's progress in development of
the InterTrust Technology; (ii) implementation of such technology by MBC; (iii)
feedback concerning Assistance provided to MBC; and (iv) other issues concerning
the Parties' mutual technical and business objectives (the "Status Meetings").
---------------
Such Status Meetings shall: (a) be attended at a minimum by each Party's project
manager (as provided in Section 2.5) and two other Senior Engineers involved in
activities pursuant to this Agreement; and (b) take place not less frequently
than bimonthly until January 1, 1998, and, thereafter, as may be agreed by the
Parties.
2.5 Dedicated Personnel. InterTrust and MBC will each appoint a project
-------------------
manager to coordinate its activities pursuant to Sections 2.2 , 2.3, 2.4 and
Article 3. If MBC exercises the Option as provided in Section 5.1, not less than
one half (2) of such InterTrust project manager's working time shall be devoted
exclusively to MBC during the three (3) year period in which Assistance is
provided.
ARTICLE 3. COOPERATIVE DEVELOPMENT
3.1 Cooperative Development of Trading Model Application.
----------------------------------------------------
(a) Scope of Trading Model Cooperative Application Project. Promptly
------------------------------------------------------
following the Closing, the Parties shall discuss the terms and conditions
under which they may cooperate in the development of a trading model that
shall be based upon the InterTrust Technology. The Parties contemplate
that such development will involve some degree of consultation by
InterTrust and/or customized joint development involving both Parties, but
that MBC shall retain primary responsibility for the development,
management, implementation and support of applications that embody the
trading model (the "Trading Model Cooperative Applications"). The Parties
--------------------------------------
shall negotiate reasonably in an attempt to agree on such terms and
conditions, but agreement to such terms and conditions shall be in the
reasonable discretion of each Party, and any failure to agree shall not
constitute a breach of this Agreement. If the Parties fail to agree on
such terms and conditions, MBC shall be entitled to develop such trading
model as an MBC Product.
(b) Project Description. The Trading Model Cooperative Application
-------------------
shall comprise foundation technology for an electronic environment that
enables participants in distribution value chains (such as purchasers,
manufacturers, distributors, financial institutions, insurance companies
and others) to engage in electronic commerce and fulfillment of payments
therefor, including Chain of Handling and Control (as defined in Exhibit F
hereto) as related thereto. The Trading Model Cooperative Application
shall also provide for, without limitation, specifications for host server
software trading systems, software tools, and host and distributed client
applications that may operate therewith, all of which specifications,
technical descriptions and functionality requirements shall be Compliant
with InterTrust Specifications.
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11
(c) Trading Model Cooperative Project Plan. Upon agreement between
--------------------------------------
the Parties concerning the trading model, the Parties shall use
commercially reasonable efforts to agree upon a project plan (the "Trading
-------
Model Cooperative Project Plan"). A statement of the Parties' current
------------------------------
intent with respect to information to be contained within the Trading Model
Cooperative Project Plan includes the information as described on Exhibit
D, as well as other information appropriate to represent the agreement
between the Parties related to such project. The Trading Model Cooperative
Project Plan shall not become effective until each Party has agreed in
writing to the terms of such plan. The provisions of this Agreement, as
supplemented by the Trading Model Cooperative Project Plan consistent with
this Agreement, shall govern the Parties' rights and obligations with
respect to the Trading Model Cooperative Applications.
(d) Progress. In connection with the Trading Model Cooperative
--------
Project Plan, the InterTrust and MBC project managers, and any other
appropriate personnel selected by each Party, shall from time to time, but
no less than once per calendar quarter: (i) meet to discuss and evaluate
the progress of the Trading Model Cooperative Application; (ii) evaluate
development issues for the Trading Model Cooperative Application; (iii) set
mutual action items as may be agreed to by both Parties; and (iv) modify,
amend or adjust the Trading Model Cooperative Project Plan as the Parties
may deem reasonably necessary and appropriate.
3.2 Additional Cooperative Applications. From time to time during the
-----------------------------------
term of this Agreement, the Parties may discuss the terms and conditions under
which they may cooperate with respect to Cooperative Applications in addition to
the Trading Model Cooperative Application. The Parties agree to follow
substantially the same terms and conditions set forth in Sections 3.1(a),
3.1(c), and 3.1(d) with respect to each Cooperative Application (to the extent
applicable), including discussing the types of projects and formulating the
terms of a project plan (a "Cooperative Application Project Plan"), which, upon
------------------------------------
agreement of the Parties, shall be attached as an Exhibit hereto. Without
limiting the foregoing, the Parties shall negotiate reasonably in an attempt to
agree on the terms and conditions to cooperate with respect to one or more
Cooperative Applications, but agreement to such terms and conditions shall be in
the reasonable discretion of each Party, and any failure to agree shall not
constitute a breach of this Agreement. The provisions of this Agreement shall
govern the Parties' actions in implementing any Cooperative Application Project
Plan to which the Parties agree, except to the extent that such provisions
herein are inconsistent with explicit provisions of that specific Cooperative
Application Project Plan, in which event the provision of such Cooperative
Application Project Plan shall govern. A breach of a Cooperative Application
Project Plan, other than those terms relating to Intellectual Property Rights,
ownership or licenses thereof granted by InterTrust, shall not constitute a
material breach of this Agreement, unless expressly stipulated to the contrary
in such Cooperative Application Project Plan.
3.3 Development Fees. The Parties agree that InterTrust shall not be
----------------
obligated to incur costs and expenses for development of Cooperative
Applications under Sections 3.1 and 3.2 hereof that exceed [*] dollars (US$[*])
per calendar year, or [*] dollars (US$[*]) during the term of this Agreement.
For purposes of
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12
determining whether such limits have been reached, InterTrust's costs and
expenses from the Trading Model Cooperative Application and all Cooperative
Applications shall be aggregated together. If InterTrust's costs and expenses
exceed such limits, MBC shall reimburse InterTrust no later than thirty (30)
days after submission by InterTrust to MBC of commercially reasonable
documentation of such costs and expenses above such limits, except insofar as
alternative cost and expense terms and conditions are required by any
Cooperative Application Project Plan, such as prepayment for contemplated costs
to be incurred. Calculations of InterTrust's costs and expenses shall be made
net of reimbursement payments made by MBC (e.g., if MBC reimburses InterTrust
---
for costs and expenses in excess of US$[*] during a calendar year, such
reimbursed costs and expenses shall not count against such US$[*] limit).
ARTICLE 4. LIMITED LICENSE GRANT AND RESTRICTIONS
4.1 License Grant During Option Period. Subject to the terms and
----------------------------------
conditions of this Agreement, during the Option Period (as defined in Section
5.1) InterTrust grants to MBC a limited, nonexclusive, nonsublicensable and
nontransferable worldwide right and license under the Licensed Rights to:
(a) use and reproduce the InterTrust Technology solely for the
purpose of (i) designing, making, and developing MBC Products and/or
Cooperative Applications that are in Compliance with the InterTrust
Specifications; and (ii) exercising the rights granted under Sections
4.1(b) hereof; and
(b) modify the InterTrust Technology, except the Kernel Technology,
to create the Modified Technology and use such Modified Technology solely
for the purpose of enabling incorporation of InterTrust Technology into MBC
Products and/or Cooperative Applications that are in Compliance with
InterTrust Specifications.
4.2 License Restrictions and Related Covenants. MBC understands and
------------------------------------------
acknowledges that the license granted to it under Section 4.1 hereof does not
include any license under the InterTrust Trademarks or any license under the
Licensed Rights other than expressly granted in Section 4.1. Accordingly, MBC
covenants that it shall not, in the absence of its proper exercise of the Option
granted in Article 5 hereof:
(a) during the Option Period: (i) distribute, offer for sale, sell,
import and/or otherwise transfer MBC Products, Cooperative Applications,
and/or any technology or product incorporating any InterTrust Technology or
Modified Technology to any Person, (ii) perform any Clearinghouse
Functions, and/or (iii) perform or have performed for it any activities
whatsoever under the Licensed Rights other than those activities expressly
set forth in Section 4.1 hereof; and
(b) after the Option Period, except and solely as expressly provided
in Article 5 hereof, (i) perform or have performed for it any activities
or services whatsoever under the Licensed Rights; and/or (ii) continue to
use, reproduce, modify or otherwise exploit in
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13
any manner InterTrust Technology, Modified Technology, MBC Products,
Cooperative Applications, and/or any products or technology incorporating
or derived from any of the foregoing.
Any breach of this Section 4.2 shall constitute a material breach of this
Agreement.
ARTICLE 5. MBC OPTION FOR BROADER INTERTRUST LICENSE
5.1 MBC Option. Upon the Closing, InterTrust shall grant to MBC the
----------
option, as set forth in this Section 5.1, to obtain a license of the scope set
forth in Sections 5.2 through 5.5, such license to be subject to all of the
terms and conditions set forth herein (the "Option"). The Option shall continue
------
during the term hereof and, unless effectively exercised by MBC as set forth in
this Section 5.1, shall expire as of the earlier to occur of: (i) 5:00 p.m.
(Pacific Time) on March 31, 1997; and (ii) the termination of this Agreement for
any reason (the "Option Period"). Notwithstanding the foregoing, if
-------------
InterTrust's release of the beta version of its SDK 1.0 product is delayed
beyond the time set forth on Exhibit B hereof as of the Effective Date
("Estimated Date"), then such Option Period shall be extended by the number of
---------------
days between the actual release of the SDK 1.0 beta version and the Estimated
Date. For any exercise of the Option to be effective, prior to the expiration
of the Option Period, InterTrust must have received from MBC: (a) written notice
from MBC of MBC's decision to exercise the Option (pursuant to the notice
procedures of Section 14.5 hereof); and (b) the payment set forth in Section
7.1 (a)(ii) hereof (according to the payment procedures set forth in Section
7.3) (the "Option Exercise Procedures"). Upon satisfaction of the Option
--------------------------
Exercise Procedures by MBC, InterTrust shall promptly notify MBC that such
notice has been received and that the licenses as set forth in Sections 5.2
through 5.5 hereof shall thereafter be in effect.
5.2 License Grant. Upon MBC's exercise of the Option in accordance
-------------
with Section 5.1, MBC shall receive the following rights, subject to such
restrictions and limitations as set forth herein:
(a) Licenses to InterTrust Technology and Modified Technology.
---------------------------------------------------------
Subject to the terms and conditions of this Agreement, InterTrust grants to
MBC during the term of this Agreement a limited, nonexclusive,
nontransferable (except as expressly provided in Section 5.3) worldwide
right and license under the Licensed Rights to:
(i) use and reproduce the InterTrust Technology solely for the
purpose of (1) designing, making, developing, producing and using MBC
Products and/or Cooperative Applications that are in Compliance with
the InterTrust Specifications; and (2) exercising the rights granted
under Sections 5.2 (a)(ii), 5.2 (a)(iii), 5.2 (a)(iv), 5.2 (b) and 5.2
(c) hereof;
(ii) modify the InterTrust Technology, except the Kernel
Technology, to create the Modified Technology and use such Modified
Technology solely for the purpose of enabling incorporation of
InterTrust Technology into MBC
CONFIDENTIAL
14
Products and/or Cooperative Applications that are in Compliance with
InterTrust Specifications;
(iii) distribute, offer for sale, sell, import and/or otherwise
transfer MBC Products and Cooperative Applications that are
Application Products, and Distributable Documentation, to MBC's
Customers pursuant to a Customer Agreement in accordance with, and as
defined in, Section 6.2 hereof; and
(iv) distribute, offer for sale, sell, import and/or otherwise
transfer MBC Products and Cooperative Applications that are
Clearinghouse Products, solely to Authorized Clearinghouse Providers
under Section 5.2 (b) pursuant to a Customer Agreement specific to
such Authorized Clearinghouse Providers supplied in accordance with,
and as defined in, Section 6.2 hereof.
(b) License to Perform Clearinghouse Functions. Subject to the terms
------------------------------------------
and conditions of this Agreement, InterTrust grants to MBC during the term
of this Agreement a limited, nonexclusive, nontransferable (except as
expressly provided in Section 5.3), worldwide right and license under the
Licensed Rights to perform Clearinghouse Functions solely under the MBC
Trademarks, and solely in cases in which MBC performs and controls such
Clearinghouse Functions in Compliance with InterTrust Specifications. Such
Clearinghouse Functions may be performed solely: (i) to service Rights
User Nodes, each such node having been provided by (1) an MBC Product
and/or Cooperative Application, and solely in connection with such MBC
Product and/or Cooperative Application, or (2) a Person having a valid
written license from InterTrust allowing such Person to permit Authorized
Clearinghouses to service Rights User Nodes provided by it; and/or (ii)
pursuant to a sublicense from an Authorized Clearinghouse Provider having
an express, written license from InterTrust allowing such Authorized
Clearinghouse Provider to enter into such sublicense.
(c) [*] License to Trading Model Cooperative Application.
-----------------------------------------------------
Subject to the terms and conditions of this Agreement, during the
term of this Agreement, MBC shall be entitled to [*] use,
distribute, and sublicense the use of, the Source Code and Object
Code developed solely for (and representing) the [*]to MBC's
Customers pursuant to a Customer Agreement in accordance with
Section 6.2 hereof (the "[*]"). Any and all licenses under
---
the Licensed Rights or any Intellectual Property Rights under the
InterTrust Property (as hereinafter defined) with respect to the
[*] shall be solely of the scope granted pursuant to Sections 4.1
and 5.2(a) hereof, as applicable.
(d) License to InterTrust Trademarks. Subject to the terms and
--------------------------------
conditions of this Agreement, InterTrust grants to MBC during the term of
this Agreement a limited, nonexclusive, nontransferable, worldwide license
to use and display the InterTrust Trademarks solely: (i) on MBC Products,
Cooperative Applications, and with respect to associated services to
indicate that such products, applications and services are in Compliance
with InterTrust Specifications; (ii) on related Distributable Documentation
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15
and marketing materials to identify that InterTrust Technology is being
utilized by MBC; and (iii) as may be reasonably stipulated in writing by
InterTrust. InterTrust shall have the right to approve all uses of
InterTrust Trademarks, including use thereof on MBC Products and
Cooperative Applications, in connection with services (including
performance of Clearinghouse Functions) provided by MBC relating to such
products and applications, and in related documentation and marketing
materials. MBC shall comply with InterTrust's trademark guidelines as set
forth herein, including in Section 6.4 hereof.
5.3 Sublicense Rights. Upon MBC's exercise of the Option in accordance
-----------------
with Section 5.1, and solely as stipulated in this Section 5.3, MBC may enter
into sublicense agreements pursuant to which MBC may authorize certain other
entities to perform portions of the actions licensed to MBC under Sections
5.2(a) and 5.2(b) hereof. Sublicense agreements relating to MBC's rights under:
(i) Sections 5.2(a)(i), 5.2(a)(ii) and 5.2(a)(iii) shall be governed by Section
5.3(a), below; and (ii) Section 5.2(b) shall be governed by Section 5.3(b),
below. All sublicensees must, at a minimum, enter into an agreement with MBC and
with InterTrust pursuant to which such sublicensee agrees in writing to perform
all obligations of MBC and to be bound by all restrictions on MBC under Sections
5.2, 5.4, 5.5, 6.1, 6.2, 6.3, 6.4 and 6.5, and Articles 7, 8, 9, 10, 11, 12, 13
and 14 of this Agreement. In addition, MBC shall guarantee and remain liable to
InterTrust for all sublicensees' performance of such obligations. Sublicensees
shall have no further right to sublicense any right under this Agreement. Prior
to granting any such sublicenses, MBC shall provide InterTrust with the name of
the proposed sublicensee and a copy of the proposed sublicense agreement.
InterTrust shall then have thirty (30) days to authorize such proposed
sublicense in which event InterTrust shall provide MBC with a copy of an
agreement containing the terms upon which InterTrust grants such authorization,
that shall be executed by InterTrust, MBC and the sublicensee prior to the
execution of any sublicense agreement hereunder. InterTrust's decision to
authorize or refuse to authorize the sublicensee shall be in InterTrust's sole
discretion, and can be exercised on any basis. If InterTrust fails to authorize
the sublicense, the sublicense agreement shall not take effect.
(a) Non-Clearinghouse Sublicenses. MBC may enter into sublicense
-----------------------------
agreements with a maximum of [*] sublicensees, pursuant to which MBC may
grant such sublicensees some or all of the rights licensed to MBC under
Sections 5.2 (a)(i), 5.2 (a)(ii) and 5.2 (a)(iii). In addition to other
terms set forth in this Section 5.3 above, such sublicenses shall be
subject to the following terms and conditions:
(i) Products distributed to, and/or services performed by,
Persons other than MBC, must be performed solely under MBC Trademarks
(except where use of InterTrust Trademarks is required herein); and
(ii) Activities authorized under the sublicense shall be limited
to: (a) the development of MBC Products or Cooperative Applications,
which MBC Products or Cooperative Applications shall be solely owned
by MBC; and (b) the development, manufacturing and marketing of
Vertical Applications of InterTrust Technology.
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16
(b) Clearinghouse Function Sublicenses. MBC may enter into sublicense
----------------------------------
agreements pursuant to which MBC may authorize performance of some or all
of the activities licensed to MBC under Section 5.2 (b) by Persons that are
Authorized Clearinghouse Providers, wherein such Persons have been
expressly authorized by InterTrust in writing to perform those
Clearinghouse Functions that form the basis of such sublicense.
5.4 No Additional Licenses. MBC understands and acknowledges that
----------------------
InterTrust is licensing to MBC only certain limited rights to use InterTrust
Technology, which are further limited in certain ways and with respect to
certain fields of use (such as the performance of Clearinghouse Functions),
subject to the terms and conditions herein. Thus, notwithstanding the
generality of any other limitations or restrictions contained in this Agreement,
MBC acknowledges and agrees that the licenses that may be granted under Sections
5.2 and 5.3 are the only licenses granted to MBC, and that no other licenses are
granted, expressly, or by implication or estoppel, now or in the future. In
particular, and without limitation, MBC acknowledges that it: (i) shall have no
license to perform Clearinghouse Functions, or to authorize or assist others to
perform Clearinghouse Functions, other than as expressly set forth in Section
5.2(b); (ii) shall have no license to distribute to any Person any software or
hardware representation of InterTrust Technology other than the Application
Software and/or Authorized Clearinghouse Software as provided herein; and (iii)
shall have no right to enter into sublicenses other than as expressly set forth
in Section 5.3.
5.5 General Restrictions. Whether pursuant to Articles 4 or 5 hereof,
--------------------
and except as specifically provided in this Agreement, MBC covenants that it
shall not during the term of this Agreement or thereafter make, have made, use,
have used, import, lease, sell, transfer, distribute, practice, or have
practiced, make derivative works of, commercially or publicly display or
perform, emulate the functionality of, reverse engineer and/or modify the
InterTrust Technology, the Kernel Technology and/or the Modified Technology. Any
use by MBC of any InterTrust Technology, the Cooperative Applications, the
Kernel Technology and/or Modified Technology outside the scope of the licenses
granted by InterTrust hereunder shall constitute a material breach of this
Agreement.
ARTICLE 6. MBC SUPPORT AND ADDITIONAL COVENANTS
6.1 MBC Support of InterTrust Technology.
------------------------------------
(a) MBC Use of InterTrust Technology. If MBC exercises its Option in
--------------------------------
accordance with Article 5 hereof, in connection with the licenses granted
to MBC and the other terms hereunder, MBC agrees to develop, produce and
generally distribute an MBC Product, the Trading Model Cooperative
Application and/or a Cooperative Application as soon as commercially
reasonable and practicable, and in any case within [*] months following the
date InterTrust makes available to MBC the System Developer Kit 1.0. If MBC
has good reason to believe that SDK 1.0 does not provide functionality
necessary to develop a commercially reasonable trading model and such
technology is not reasonably otherwise available, the Parties will, in good
faith, enter into discussions
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17
concerning possible extensions to such time period. Such time period may be
extended in a project plan pursuant to Article 3 or by mutual written
agreement of the Parties, as applicable; provided that: (i) the Parties
-------- ----
shall have no obligation to agree to any such extension; and (ii) in no
case shall the total period from first delivery of any InterTrust
Technology Requirements exceed [*] months.
(b) Compliance with InterTrust Specifications. In addition to such
-----------------------------------------
other restrictions as provided herein, MBC shall not commence the
distribution, sale or other transfer of any MBC Product and/or Cooperative
Application, or perform any service using such MBC Product and/or
Cooperative Application, unless such MBC Product, Cooperative Application
and/or such service is in Compliance with InterTrust Specifications.
InterTrust may, from time to time in its sole discretion, modify InterTrust
Specifications to accommodate progress in InterTrust Technology and related
product development, and, among other things, to promote architectural and
functional integrity, standardization, security capability and
interoperability of InterTrust-based technology, components, products and
services (a "New Specification"). Such modifications shall be made at such
-----------------
times and involve such modifications as reasonably determined by InterTrust
in view of applicable prevailing U.S. software industry standards and the
circumstances motivating such modification. InterTrust shall use
commercially reasonable efforts to maintain compatability between a New
Specification and the then preceding Specification, unless considerations
of security, interoperability, performance, or functionality enhancement
indicate that such compatibility is not commercially appropriate. To the
extent InterTrust modifies or revises an InterTrust Specification, or
releases a new InterTrust Specification, and such New Specification applies
to any portion of a Cooperative Application and/or MBC Product then being
used to perform services, and/or being distributed, by MBC (as applicable),
MBC shall bring such products and/or services into Compliance with such New
Specification as of the earliest to occur of: (i) the next version,
release, or production cycle of such Cooperative Application, MBC Product
and/or the next use thereof to provide any service related thereto (the
"Next Version"), as earlier applicable, but only to the extent that MBC
-------------
receives notice of such New Specification (in accordance with the
procedures of Section 14.5 hereof) within a reasonably sufficient time of
such Next Version to accommodate new aspects of such New Specification; and
(ii) [*] months after MBC receives a released copy of such New
Specification (pursuant to the notice provision of Section 14.5 hereof).
Subject to reasonable business circumstances, InterTrust and MBC may agree
in writing, each in their sole discretion, to a set period of time longer
than such [*] month period, but no longer than [*] months after MBC
receives a released copy of such New Specification (pursuant to the notice
provision of Section 14.5) to accommodate such new aspects of such New
Specification for certain or all applicable, previously existing MBC
Products, Cooperative Applications and/or related services. Notwithstanding
the foregoing, should serious technical interoperability and/or security
requirements commercially necessitate more prompt action, MBC and
InterTrust will confer and agree upon the most aggressive, practical
schedule feasible to reach Compliance with the New Specification, and MBC
shall take whatever commercially
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18
appropriate steps are reasonable and required under the circumstances to
minimize or eliminate a continuation of such interoperability and/or
security problems.
(c) Compliance Testing. In order to maintain secure interoperability,
------------------
reliability, and system-wide InterTrust integrity, MBC acknowledges that in
support of InterTrust Technology, InterTrust may implement one or more
certification programs designed to ensure that licensed products and/or
associated services (including MBC Products and Cooperative Applications)
use InterTrust Technology and/or Modified Technology in Compliance with
InterTrust Specifications (the "Certification Program(s)"). Such
------------------------
Certification Programs may, in InterTrust's sole discretion require, for
example, MBC to: (i) use a suite of test software provided by InterTrust
for use by MBC to internally test and verify that Cooperative Applications,
MBC Products and/or associated services are in Compliance with InterTrust
Specifications; (ii) submit samples of Cooperative Applications and MBC
Products and any associated programs, parameter data, and any other product
information that may be technically material to Compliance with InterTrust
Specifications prior to first use, distribution, sale, or other transfer to
a Customer other than limited beta testing and pilot model operation as
specified by InterTrust Specifications, so as to allow InterTrust (or an
InterTrust delegate) to perform confidential testing ("Certification
-------------
Testing"); and/or (iii) provide InterTrust with full and detailed
-------
specifications and documentation related to MBC's use of InterTrust
Technology and Modified Technology for MBC Products, Cooperative
Applications and any associated services, wherein such specifications and
documentation are material to such compliance testing and wherein all such
specifications and documentation shall be certified by an authorized
representative of MBC. MBC understands and acknowledges that such a
Certification Program is critical to maintaining the reliability of
products and services employing InterTrust Technology and/or Modified
Technology, and in maintaining public confidence in the integrity of
InterTrust brands as the resource for interoperable electronic commerce.
MBC shall comply with the Certification Program established by InterTrust
including, without limitation, provisions relating to delivery of samples,
correction of non-Compliant products, and applications and associated
services, and inclusion of certification marks or logos on Cooperative
Applications, MBC Products and associated services. In connection with any
Certification Testing, particularly the testing of submitted products
and/or services, as applicable, InterTrust (or an InterTrust delegate) will
respond in a prompt manner, and in no event later than one hundred twenty
(120) days following its receipt of such submitted products, unless
commercially reasonable factors prolong such testing. Such response shall
be in the form of: (a) a written approval that the product or service is
certified (such products and services not being Compliant until such
certification has been granted); or (b) if not approved, a detailed summary
of problems and, where feasible, suggested solutions. InterTrust (or an
InterTrust delegate) will apply the Certification Program, as applicable,
in a non-discriminatory and consistent manner with respect to similar
products and/or services. InterTrust's rights under this Section 6.1 shall
not be affected in any manner by an InterTrust decision not to perform such
Certification Testing.
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(d) Costs of Certification Program. To defray costs associated with
------------------------------
the performance and administration of the Certification Program, in
connection with the certification of any MBC Product, Cooperative
Application, and/or any related service, MBC shall be charged a reasonable
fee not to exceed industry norms for similar testing activities (and, if
conducted by InterTrust, the full cost of performing and administering such
tests, except as set forth below concerning InterTrust payment of a portion
of such costs). A written estimate of such fee shall be provided to MBC, as
applicable, as soon as reasonably practical upon MBC's submission of
samples (or other required material) for testing. Such fees shall be paid
by MBC, in accordance with standard industry practices, except that
InterTrust shall pay [*] of such fees for any specific certification test
(once such fees in the aggregate have exceeded [*] dollars ($US[*]));
provided that InterTrust's [*] to such fees for such certification tests
-------------
shall not exceed [*] dollars ($US[*]) in the aggregate.
(e) Translation. MBC agrees that InterTrust shall have the right to
-----------
approve all versions of InterTrust Technology, documentation provided by
MBC concerning MBC Products and Cooperative Applications (including
Distributable Documentation), legends and Notices required pursuant to
Section 6.3 hereof and other required notices that may be translated by or
for MBC into any language other than English.
(f) Promotion and Marketing. The Parties shall jointly participate
-----------------------
in, and from time to time (as they may agree) jointly fund, promotional,
marketing, and sales activities designed to: (i) increase industry
awareness of both InterTrust and InterTrust Technology, including, in
particular, InterTrust, and MBC, MBC Products, Cooperative Applications and
any services associated therewith; (ii) attract content developers and
users; (iii) encourage the development of tools and applications that
employ InterTrust Technology, MBC Products and/or Cooperative Applications;
(iv) identify potential development and/or licensing partners for
InterTrust and/or MBC; and (v) encourage broad adoption of InterTrust
Technology in the industry. At no time shall MBC make any representation
or warranty to any Person materially inconsistent with: (a) InterTrust
Specifications or Documentation; or (b) the efforts of the Parties with
respect to promotion, marketing or other matters under this Agreement.
(g) Joint Press Releases. After the Effective Date, the Parties may
--------------------
decide, each in their discretion, to make one or more mutually agreeable
press releases (the "Joint Press Releases"). The content and timing of any
--------------------
Joint Press releases will be subject to mutual agreement of the Parties.
Any such Joint Press Releases might disclose, for example, the existence of
this Agreement and the Parties' intentions to develop important electronic
commerce industry standards and the Trading Model Cooperative Application.
All other public disclosures with respect to the terms hereof shall be made
in accordance with Section 9.4.
(h) [*]. During the [*], [*] shall not participate in, assist or
promote in any manner the development, use or exploitation of any
technology or products that enable or include any
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20
material portion of the [*] (as defined in [*] hereto) at least one
embodiment of which is originally constructed and developed, or designed,
by [*], except to the extent such [*] may be incorporated by [*] in the
[*]. However, nothing in the foregoing shall be construed to restrict [*]
from the development, use or exploitation of any technology or the conduct
of any business in the [*] area, so long as such technology or business
substantially differs from, and does not include any material portion of,
the [*]. If [*] becomes aware that any of its planned activities may be
subject to the restrictions of this Section 6.1(h), [*] shall inform
[*] in writing of the nature of such planned activity, and, thereafter, the
Parties shall engage in good faith discussions having the objective of
determining whether such activities are subject to the restrictions of this
Section 6.1(h). On the other hand, as a precaution for [*], [*] shall, from
time to time, during the [*] inform [*] of any [*] which may become [*] and
is substantially similar to the [*] if [*] senior management become aware
of such substantially similar electronic commerce business.
Notwithstanding the foregoing and it being understood that (a) a research
group within [*] is currently developing the [*] (the [*]) and certain
Independently Developed Technology (as defined below) and (b) [*] has the
opinion that such [*] was originally developed from ideas and technology
not falling within the [*], [*] shall not be restricted from pursuing the
[*] and such [*] in the current development stage thereof. Nonetheless, due
to both Parties' concern that such [*] and/or such Independently Developed
Technology might be developed in the future in a manner falling within the
[*] (even if developed independently of and without reference to [*]
confidential information), to avoid potential conflicts or controversy with
respect to such development, the Parties agree (1) to set up the following
procedures and (2) that this Section 6.1(h) shall not preclude [*] from
promoting, using or exploiting any such [*] not based on [*] confidential
information and any Independently Developed Technology so long as [*]
abides by the following procedures:
(A) [*], prior to the Effective Date, establishes "Chinese Wall"
procedures, including such procedures set forth on Exhibit G hereto,
and throughout the duration of the [*] actively maintains such
procedures, to prevent the exposure of any member of the [*] to any
Chinese Wall Information (as such term is defined in this Section 6.1
(h), below)-- such procedures including mechanisms established to
effectively separate the working activities of members of the [*] from
all persons and groups within [*] that may have knowledge of, or
access or exposure to, such Chinese Wall Information;
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21
(B) [*] employees and consultants follow such "Chinese Wall"
procedures; and
(C) [*] provides [*] with written notice thirty (30) days
before taking any action to plan or develop any product or service
that may include any [*] in any manner whatsoever, whether or not
based on Independently Developed Technology (or disclosing such plan
or development to any Person, or entering into discussions aimed at
allowing any Person to implement or employ such planned or developed
product or service).
As set forth above, "Independently Developed Technology" means any technology
----------------------------------
developed without access to, including any benefit from, any confidential [*]
Technology, Modified Technology and/or any related Confidential or Top Secret
Information (as such terms are defined in Section 9.1 hereof), or any [*]
Information (as defined in Exhibit G) that should be reasonably maintained as
confidential to protect InterTrust's commercial interests under this
Agreement, whether or not such technology embodies or includes any portion of
the [*] (such technology and information to be defined collectively as "the
"Chinese Wall Information").
------------------------
If [*] becomes aware of any breach of Sections (A) through (C) immediately above
(a "Compromising Event"), [*] shall immediately take such steps as appropriate
------------------
under the circumstances to cease such Compromising Event and to prevent the
reoccurrence of Compromising Events. [*] shall also, at a minimum: (w)
immediately inform InterTrust in writing of the occurrence of and
circumstances surrounding a Compromising Event; and (x) investigate the nature
and extent of the contamination caused by the Compromising Event (and report
such findings to [*] in writing). In addition, [*] shall take immediate and
effective measures to remedy all effects of such Compromising Event. If [*]
fails to take those actions set forth in subparagraphs (A), (C), and/or (w)
and (x) of this Section 6.1(h), or to promptly cure any other breach of this
Section 6.1(h) in the manner specified herein and in Section 12.2 (b) hereof,
InterTrust shall be entitled to immediately terminate this Agreement and to
the specific remedies set forth in Section 11.3, in addition to any other
remedies available to InterTrust under this Agreement, at law or in equity.
Promptly following an [*] notification to [*] as provided in subsection (C) of
this Section 6.1(h), [*] and [*] shall initiate discussions in good faith with
the objective of determining whether such [*] or [*] would include any material
portion of the [*]. If, as a result of such discussions, [*] and [*] agree that
such product or service: (y) would not include any material portion of the [*],
then this Section 6.1(h) shall not restrict [*] pursuit of such [*] or [*]; or
(z) would include a material portion of the [*], then [*] shall have the option
to promptly give up any pursuit of such technology or service using a material
portion of the [*] or to [*] upon thirty (30) days prior written notice to [*]
and fulfillment of the terms of Section [*], hereof. If, despite such
discussions, the Parties cannot agree and [*] believes that such planned product
or service would include any material portion of the [*]
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22
[*], [*] shall notify [*] in writing of such belief and allow [*] to make the
choice set forth in subparagraph z immediately above; provided that if MBC has
-------------
not notified [*] of its decision within forty-five (45) days thereafter, [*] may
immediately [*] and [*] shall be obligated to [*] the [*] specified in Section
[*].
6.2 Customer Agreements. In addition to other provisions hereof, MBC
-------------------
shall not distribute any Cooperative Application or MBC Product to any Person
unless MBC shall have first notified and required such Person to execute a
customer agreement: (i) provided by InterTrust; or (ii) provided by MBC that
(a) has been previously approved in writing by InterTrust and (b) is in
accordance with the terms of this Section 6.2 (the "Customer Agreement"). The
------------------
terms of such Customer Agreement relating to InterTrust Technology may be
amended from time to time by InterTrust as may be reasonably necessary to
protect InterTrust's rights hereunder, but solely for subsequent executions of
such Customer Agreement and as herein provided. The Customer Agreement shall
contain, at minimum and as relevant hereunder, terms that: (1) notify MBC
customers of the restrictions on MBC's rights with respect to performing
Clearinghouse Functions, granting sublicenses, and otherwise restricting the
rights of such customers with respect to use of the MBC Product or Cooperative
Application, as applicable, especially the InterTrust Technology incorporated
therein; (2) prohibit customers from disassembling, modifying or reverse
engineering any portion of the InterTrust Technology incorporated in the MBC
Product or Cooperative Application; (3) stipulate that such customer has no
right to use the MBC Product or Cooperative Application to engage in or perform
any Clearinghouse Functions whatsoever without InterTrust's express
authorization pursuant to a written license agreement directly between such
customer and InterTrust; (4) prohibit such customer from using the Cooperative
Application or MBC Product to make and/or exploit any commercial product other
than a Vertical Application; (5) provide that the Customer Agreement is to and
for InterTrust's benefit and may be enforced by InterTrust at its discretion;
and (6) contain such other provisions as stipulated herein. MBC agrees that to
the extent any form of Customer Agreement might be deemed to be unenforceable or
otherwise ineffective in any jurisdiction, MBC shall substitute other forms of
Customer Agreements, or take other actions, as reasonably specified by
InterTrust, including, for example, specifying other generally accepted, legally
effective forms of Customer Agreement, if such exists for a given jurisdiction,
in order to provide InterTrust with legally enforceable protection contemplated
hereunder, including protection against implied licenses and claims of patent
exhaustion relating to InterTrust Technology. MBC agrees and acknowledges that
MBC's performance of its obligations hereunder is necessary for InterTrust to
adequately protect its Intellectual Property Rights made available hereunder,
and such performance shall constitute a condition precedent to the licenses
granted under Article 5 hereof.
6.3 Legends and Notices.
-------------------
(a) Product Legends and Notices. MBC shall, in accordance with
---------------------------
InterTrust's instructions and/or approved exemplars and samples provided
from time to time by InterTrust to MBC, place Notices (as hereinafter
defined) on all physical embodiments of InterTrust Technology and/or
Modified Technology or materials that describe such
CONFIDENTIAL
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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
23
physical embodiments used by MBC including, but not limited to, the
Cooperative Applications and MBC Products, documentation, marketing and
advertising materials therefor, and for associated services, on all
packaging for any physical media containing any such products, and on all
initialization and/or start-up screens of any stand-alone software
developed by or for MBC using or incorporating InterTrust Technology and/or
Modified Technology. For purposes of this Agreement, the term "Notices"
shall include: (i) Intellectual Property Rights, warranty, and disclaimer
notices; (ii) any symbols or marks stipulating Compliance with InterTrust
Specifications; (iii) a notice stating that MBC Products and Cooperative
Applications are "InterTrust Aware" and are being "delivered using
InterTrust DigiBox and InterTrust Technology" (as such notices may be
amended by InterTrust from time to time); and (iv) other field of use and
product notices stipulated by InterTrust, so long as such notices, in the
reasonable opinion of InterTrust's counsel, assist in protecting InterTrust
intellectual property and other InterTrust rights under the laws of any
relevant jurisdiction. MBC shall not, and shall not permit any Person to,
remove, alter, cover, obfuscate or otherwise deface any InterTrust
Trademarks or Notices on any InterTrust Technology or associated
documentation, marketing and advertising materials therefor. Compliance
with subsections (i) and (iv) above shall constitute conditions precedent
to the licenses granted under Article 5 hereof.
(b) Network Notices. MBC shall, in accordance with InterTrust's
---------------
instructions or approved exemplars and samples provided from time to time
by InterTrust to MBC: (i) place Notices specified by InterTrust, which
Notices shall not unreasonably detract from, or interfere with, MBC content
or branding, on all of MBC's start-up screens or initial user interface
menus of any server host environment generated by or referencing the
Cooperative Applications and/or the MBC Products, and that are accessible
by any Person on any computer network; and (ii) include a link from MBC
home pages or any MBC Web page which materially promotes or otherwise
supports MBC Products, Cooperative Applications and associated services, to
a home page that InterTrust may establish for such purpose on the World
Wide Web or the equivalent thereof on any other electronic network.
(c) Prospective Notice. The Notices shall be effective beginning on
------------------
the date InterTrust gives MBC written notice thereof and MBC shall as soon
as practicable implement and/or comply with applicable portions thereof.
CONFIDENTIAL
24
6.4 InterTrust Trademarks
---------------------
(a) Standards. MBC expressly recognizes the importance of
---------
InterTrust's reputation and goodwill, and of maintaining high, uniformly
applied standards of quality in connection with MBC's use and distribution
of products, applications, and services pursuant hereto bearing InterTrust
Trademarks. Consequently, to maintain InterTrust's interest in and rights
to the InterTrust Trademarks, products, and associated services, and to
maintain in the mind of the public and customers that InterTrust Technology
and its components represent sufficient levels of quality, trustedness and
reliability, MBC shall utilize the InterTrust Trademarks in accordance with
trademark guidelines (including approved samples and exemplars) as provided
herein and as may be provided to MBC by InterTrust.
(b) Trademark Ownership; Contestability. MBC acknowledges and
-----------------------------------
agrees that all uses of InterTrust Trademarks as permitted hereunder, and
the goodwill associated therewith, shall inure solely to the benefit of
InterTrust. MBC agrees that it shall not contest the validity of any
InterTrust Trademarks or registrations thereof or applications with respect
thereto, or InterTrust's exclusive ownership of the InterTrust Trademarks
or their associated goodwill. MBC agrees to make available to InterTrust,
upon request, copies of MBC's records and such other documentary evidence
as is/are retained in the ordinary course of business regarding its use of
the InterTrust Trademarks, and information regarding first use of the
InterTrust Trademarks by MBC in each country.
(c) Confusing Similarity. MBC shall not use any marks identical
--------------------
with or confusingly similar to any of the InterTrust Trademarks, and shall
not register or attempt to register any marks identical with or confusingly
similar to InterTrust's Trademarks.
(d) Prospective Notice. Changes in the InterTrust Trademarks and
------------------
such standards of quality shall be effective beginning on the date
InterTrust gives MBC written notice thereof and MBC shall, as soon as
reasonably practicable thereafter, implement and/or comply with such
respective portions thereof.
6.5 MBC's Use of MBC Trademarks on Cooperative Applications and MBC
---------------------------------------------------------------
Products. To promote the branded and distinct identity of any Cooperative
- --------
Application, MBC Products, associated services or any other products
distributed, sold or otherwise transferred by MBC to Customers as provided
hereunder, MBC acknowledges and agrees that any trademark or logo used by MBC in
commerce to specifically identify a Cooperative Application, MBC Product, or
services associated therewith (other than trademark or logos that serve to
generally identify MBC) shall not, concurrently or thereafter, be used to
identify any product other than MBC Products, Cooperative Applications, or other
products or services licensed hereunder, whether by MBC or pursuant to license
or sublicense from MBC.
6.6 MBC Trademarks. Subject to the terms and conditions of this
--------------
Agreement, MBC grants to InterTrust during the term of this Agreement a limited,
nonexclusive, royalty-free, worldwide license, without the right of sublicense
except to InterTrust's Affiliates, to use the
CONFIDENTIAL
25
MBC Trademarks; provided that, unless otherwise agreed by MBC, such trademarks
-------------
shall be used together with MBC's corporate name or other trademarks as
reasonably directed by MBC from time to time, and solely in connection with any
publicity pursuant to Sections 6.1 (f) or 6.1(g) hereof. InterTrust shall obtain
permission from MBC for any further use of MBC's name and shall comply with MBC
instructions provided in writing by MBC concerning such further use of any MBC
Trademarks.
6.7 Technology Advisory Committee. InterTrust currently intends to
-----------------------------
establish a committee limited to representatives of: (i) leading companies
chosen from certain technology, financial and/or content industries that have
close strategic technology relationships with InterTrust; and (ii) certain
leading experts in technology and business applicable to information and
electronic commerce (the "Technology Advisory Committee"). The Technology
-----------------------------
Advisory Committee will meet regularly at a forum to be selected by InterTrust
for the purpose of discussing and exchanging ideas for improving the
functionality, interoperability, and market acceptability of InterTrust
Technology and related issues pertaining to the electronic commerce industry.
Upon the establishment of the Technology Advisory Committee: (a) InterTrust
shall grant MBC the right to have a seat as a member thereof for a period of
three (3) years, such seat after the Option Period to be contingent upon MBC's
exercise of the Option as set forth in Section 5.1; and (b) MBC shall promptly
notify InterTrust of MBC's designation of an executive to serve on such
committee. MBC shall: (1) be responsible for all acts and omissions of its
representative in connection with the Technology Advisory Committee; and (2) pay
for all its expenses incurred in connection with participation on such
Committee. MBC and its representative shall abide by all rules and policies
established by InterTrust for the Technology Advisory Committee. MBC's
membership on the Technology Advisory Committee shall be subject to termination
in the event that: (A) MBC or its representative materially fails to comply
with any of the rules established by InterTrust for the Technology Advisory
Committee; (B) MBC materially breaches any of its representations, warranties or
obligations under this Agreement; (C) MBC sells or transfers all or any portion
of InterTrust securities obtained by MBC pursuant to the Stock Purchase
Agreement (prior to an initial public offering of InterTrust's equity
securities); (D) MBC engages in any activities that materially conflict with
InterTrust's interests; or (E) InterTrust, in its discretion, dissolves or
discontinues the Technology Advisory Committee.
ARTICLE 7. LICENSE FEES AND PAYMENT TERMS
7.1 Fees and Royalties.
------------------
(a) InterTrust Technology Fees and Royalties. In consideration of the
----------------------------------------
licenses and the Option granted to MBC herein and the other terms and
conditions hereof, MBC shall pay to InterTrust the following amounts, net
of any withholding tax:
(i) within two (2) weeks of the execution hereof, an initial
nonrefundable payment of [*] dollars (US$[*]);
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26
(ii) upon exercise of the Option as set forth in Section 5.1
hereof, a nonrefundable payment of [*] dollars (US$[*]), which
amount may be [*] as set forth in Section 7.1 (c);
(iii) upon the later of the first anniversary of the Effective
Date or InterTrust's delivery to MBC of the Systems Developer Kit 1.0
(as further described in Exhibit B hereto as such Exhibit may be
modified by InterTrust from time to time) a nonrefundable payment of
[*] dollars (US$[*]), which amount may be [*] as set forth in
Section [*];
(iv) on the first day of each calendar quarter in 1998,
commencing on January 1, 1998, a nonrefundable royalty payment of
[*] dollars (US$[*]), which shall be [*] due InterTrust as set forth
in Sections 7.1 (a)(v) and 7.1 (a)(vi) below, in accordance with
Section 7.1 (c) hereof (the [*]);
(v) based at least in part on the performance of Clearinghouse
Functions and related services:
(1) a royalty of [*] percent ([*]%) of the
Gross Commercial Value of each Content Transaction; and
(2) a royalty of [*] percent ([*]%) of all revenue and/or
other consideration received pursuant to this Agreement,
but not including Content Transactions as set forth in
Section 7.1(a)(v)(1) above; and
(vi) for all revenue or other consideration, if any, derived by
MBC in connection with the sale, distribution or other use of
Cooperative Applications and/or MBC Products:
a royalty of [*] percent ([*]%) of all such revenue and
consideration.
(b) Sublicense Portion. In consideration of the licenses and the
------------------
Option, MBC shall pay to InterTrust [*] percent ([*]%) of any
amounts or consideration received by MBC from a Person that receives a
sublicense under Section 5.3 hereof; provided that InterTrust shall be
-------- ----
entitled to receive no more than [*] dollars (US$[*]) in the
aggregate from MBC pursuant to this Section 7.1(b).
(c) Royalty [*] and [*]. Commencing on January 1, 1999,
-------------------
MBC shall be entitled to [*] of all aggregate royalties accrued under
Sections 7.1 (a)(v) and 7.2 (a)(vi) in a calendar quarter [*] the [*] until
such [*] equals a limit not exceeding [*] dollars ($[*]) in the [*].
In addition, the fees to be paid to InterTrust by MBC pursuant to Sections
7.1 (a)(ii) and 7.1 (a)(iii) shall be [*] by an amount equal to the
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27
[*] (as defined below) made directly to InterTrust on or before the day
that such fee becomes due; provided that the [*] to be [*] shall not
-------- ----
exceed [*] ($[*]) in the aggregate and any [*] shall occur on a one-time,
dollar for dollar basis [*] the fee then due. As used herein, "Sublicense
Payments" shall mean: (i) any license fees paid by an MBC sublicensee
pursuant to Section 5.3 hereof directly to InterTrust and accepted by
InterTrust (provided that such license fees shall not include any
recurring royalties, such as royalties of the kind specified in Sections
7.1 (a)(v) and 7.1 (a)(vi); and (ii) such amount of money (up to US$[*])
paid to InterTrust by Mitsubishi Electric in connection with the purchase
of InterTrust securities pursuant to a stock purchase agreement, provided
--------
that on or before expiration of the Option Period Mitsubishi Electric
----
becomes an MBC sublicensee or an InterTrust Prime Partner.
7.2 Other Fees. In addition to the fees specified above: (i) in partial
----------
consideration for the Option and other terms and conditions hereof, if MBC does
not exercise the Option within the Option Period and on or before March 31,
1998, MBC develops or is developing any technology that includes any portion of
the Special Advanced Technologies, before transferring such technology to any
Person, including such technology in any product or service, or otherwise
commercially exploiting such technology in any manner, MBC shall pay to
InterTrust the sum of [*] dollars ($[*]); and (ii) in partial consideration
for InterTrust's efforts hereunder, if MBC chooses to terminate this Agreement
as provided in Section 6.1(h) hereof, before such termination shall be
effective MBC shall pay to InterTrust a fee of [*] dollars (US$[*]).
7.3 Payment Procedure. Except as otherwise expressly provided in this
-----------------
Agreement, within [*] ([*]) days after the end of each calendar quarter, MBC
shall pay InterTrust all amounts due and/or payable pursuant to the licenses
granted hereunder, and received during such calendar quarter. All such payments
shall be made in U.S. dollars ($US) and by wire transfer to such account as
designated by InterTrust in writing. Concurrently with such royalty payment,
MBC shall provide to InterTrust a written royalty report, certified to be
accurate by an officer of MBC, specifying: (i) the revenues derived by MBC that
are subject to royalties during each calendar month of such quarter; (ii) the
basis for calculation of the amounts due and payable; and (iii) summaries of
business records employed by MBC to arrive at the information set forth in (i)
and (ii) immediately above. The manner of calculation of the amounts due and
payable to InterTrust hereunder shall be determined in accordance with
recognized and generally accepted U.S. accounting procedures and principles that
shall be consistently applied to all such payments.
7.4 Currency. Gross Commercial Value and all consideration to be paid to
--------
InterTrust by MBC pursuant to Sections 7.1 (a)(v), 7.1 (a)(vi) or 7.1 (b) in a
currency other than U.S. dollars shall be converted by MBC to U.S. dollars on a
quarterly basis (unless otherwise specified by InterTrust in its sole discretion
to be paid in an alternative currency) according to the official rate of
exchange for such currency, as published in the Wall Street Journal (Western
Edition) on its last publication day during each calendar quarter for which such
royalties are due. If the Wall Street Journal (Western Edition) ceases to
publish such official rate of
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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
28
exchange at any time during the term of this Agreement, the official rate of
exchange during any such period of cessation shall be such rate as published by
the Bank of America on the last working day of such calendar quarter for which
such royalties are due.
7.5 Taxes. MBC shall pay taxes, including but not limited to withholding
-----
taxes, imposed by the government of Japan or other jurisdictions outside of the
United States on all fees and royalties payable to InterTrust under this
Agreement. MBC shall be responsible for payment of all sales, use, value-added
and other taxes, duties and other charges that may fall due with respect to the
transfer to or licensing, reproduction or distribution by MBC of the Cooperative
Applications or the MBC Products, or with respect to MBC's activities in the
Clearinghouse Functions. InterTrust shall be responsible for payment of all
sales, use, value-added and other taxes that may be imposed by the United States
government on InterTrust with respect to the transfer to or licensing to MBC of
the InterTrust Technology hereunder or with respect to the payments received
hereunder.
7.6 Interest. MBC agrees that all sums owed or payable to InterTrust
--------
hereunder shall bear interest (compounded daily) at the rate of [*] ([*]%) per
month or [*] ([*]) points above the U.S. Prime Rate on an annualized basis as
published at the end of a calendar quarter for which such royalties are due,
whichever is higher, or such lower rate as may be the maximum rate permitted
under applicable U.S. law, from the date upon which payment of the same shall
first become due up to and including the date of payment thereof whether
before or after judgment, and that MBC shall be additionally liable for all
costs and expenses of collection, including, without limitation, reasonable
fees for attorneys and court costs. Notwithstanding the foregoing, such
specified rate of interest shall not excuse or in any way whatsoever be
construed as a waiver of MBC's express obligation to timely provide any and
all payments due to InterTrust hereunder.
7.7 Audit. MBC shall maintain at its principal place of business during
-----
the term of this Agreement and for a period of five (5) years thereafter all
books, records, accounts, and technical materials regarding MBC's activities in
connection herewith sufficient to determine and confirm MBC's royalty
obligations and other material obligations hereunder. Upon InterTrust's
request, MBC will permit an auditor or agent of InterTrust's choice to examine
and audit, during a reasonable time (but no more than [*] every [*] ([*])
months), such books, records, accounts, documentation and materials, and take
extracts therefrom or make copies thereof for the purpose of verifying the
correctness of MBC's reported royalty statements and payments provided by MBC or
compliance with the license terms and other material obligations hereunder. MBC
shall pay any unpaid delinquent amounts within ten (10) days of InterTrust's
request and shall apply any overpayment toward future royalties due and payable
to InterTrust. To the extent such examination discloses an underpayment greater
than [*] percent ([*]%) of the sums paid to InterTrust by MBC during the
applicable period subject to such audit, and such underpayment is not due to
fraud or errors made by Persons other than MBC (except where such fraud or
errors should have been discovered by MBC in the exercise of reasonable
diligence), MBC shall fully reimburse InterTrust, promptly upon demand, for the
fees and disbursements due the auditor for such audit; provided that such prompt
-------- ----
payment shall not be in lieu of any other remedies or rights available to
InterTrust hereunder.
CONFIDENTIAL
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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
29
ARTICLE 8. PROPRIETARY INFORMATION AND OWNERSHIP.
8.1 InterTrust Ownership. MBC acknowledges and agrees that, as between
--------------------
InterTrust and MBC, InterTrust is the sole and exclusive owner of, and shall
retain and hereby reserves (and nothing herein shall alter InterTrust's
reservation of) all right title and interest in: (i) the InterTrust Technology,
enhancements and modifications thereto, and derivative works thereof created by
or for InterTrust, and all Intellectual Property Rights embodied therein; (ii)
all Intellectual Property Rights created, or embodied in any works (whether
tangible or intangible) created, independently by InterTrust in connection with
its performance of this Agreement, including participation in the Trading Model
Cooperative Project Plan or any Cooperative Application Project Plan; and (ii)
Modified Technology not owned by MBC pursuant to Section 8.2 hereof or other
modifications or derivative works created by or for MBC that fall outside the
scope of its licenses hereunder, and all Intellectual Property Rights embodied
therein (collectively, the "InterTrust Property"). No provision contained in
-------------------
this Agreement shall be construed to transfer to MBC or any other Person any
title or ownership interest in any InterTrust Property.
8.2 MBC Ownership. Subject to InterTrust's ownership rights under Section
-------------
8.1, as between MBC and InterTrust, MBC shall be the sole and exclusive owner of
the portions of the following created solely by MBC hereunder: (i) any MBC
Products; (ii) Modified Technology (except such Modified Technology that merely
reimplements the existing functionality of InterTrust Technology provided to
MBC, including, for example, porting or translation thereof); (iii) all
Intellectual Property Rights created, or embodied in any works (whether tangible
or intangible) created, independently by MBC in connection with its performance
of this Agreement, including participation in the Trading Model Cooperative
Project Plan and any Cooperative Application Project Plan to the extent
permitted under its licenses hereunder; and (iv) all tangible embodiments of the
Trading Model Cooperative Applications developed by either Party under this
Agreement.
8.3 Joint Ownership. The Parties may from time to time discuss and
---------------
mutually agree in writing upon the division of ownership rights appropriate for
a Cooperative Application as to be set forth in the applicable Cooperative
Application Project Plan in accordance with Section 3.2 hereof. Except as
otherwise set forth in a Cooperative Application Project Plan or otherwise
expressly provided herein, to the extent any Intellectual Property or tangible
embodiment thereof (the "Joint Intellectual Property") is deemed by applicable
---------------------------
law to be jointly created by the Parties under this Agreement, InterTrust and
MBC shall jointly own such Joint Intellectual Property and neither Party shall
be required to account to the other Party for profits from any exploitation
thereof.
8.4 MBC License. In consideration of the licenses granted, and other
-----------
consideration provided, by InterTrust to MBC under this Agreement, during the
term of this Agreement, MBC hereby grants to InterTrust, its Affiliates, and
their successors, assigns, and direct and indirect customers a royalty-free and
worldwide license under the Intellectual Property Rights of MBC
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30
and its Affiliates to make, have made, use, sell, offer for sale, import,
distribute and/or otherwise exploit any products or perform any services
relating to the InterTrust or DigiBox Technology, that would, but for such
license, infringe any Intellectual Property Rights of MBC or its Affiliates.
ARTICLE 9. CONFIDENTIALITY.
9.1 InterTrust Technical Information.
--------------------------------
(a) Classification of InterTrust Technology and Documents. InterTrust
-----------------------------------------------------
Technology (including Documentation) and other documents provided by
InterTrust to MBC hereunder shall be marked as one of the following: (i)
"Unclassified"; (ii) "Confidential"; or (iii) "Top Secret." MBC and its
employees shall exercise careful judgment when they are in possession of an
InterTrust document that has not been marked with one of the above-
described classifications. If any document provided by InterTrust to MBC
contains any technical information that is not marked as indicated above
and is not known with certainty to have been either publicly released by
InterTrust or otherwise classified as "Unclassified" by InterTrust, then
MBC, its employees and any other Person authorized to possess such
information shall treat the document as "Confidential," as provided under
Section 9.1 (b) hereof.
(b) Confidential Information. To the extent that MBC receives from
------------------------
InterTrust under this Agreement any InterTrust Technology or any other
information or technology that is marked "Confidential" when disclosed in
written form, or indicated as "Confidential" when disclosed orally
("Confidential Information"), MBC shall hold such Confidential Information
--------------------------
in strict confidence and in a manner that: (i) is sufficiently secure for
the character and content of the Confidential Information; and (ii) is not
less secure than procedures used by MBC to protect its comparably important
information and technology. MBC shall not, without InterTrust's prior
written consent, use, disclose, provide or otherwise make available any
Confidential Information to any Person, except to one or more of MBC's
permitted sublicensees as authorized under the terms and conditions of this
Agreement, and their employees. Each of such sublicensees and employees
shall have a reasonable need to know such Confidential Information, and
each shall operate under the same restrictions as MBC. Furthermore, in each
case of disclosure to an employee or authorized sublicensee, access to such
Confidential Information shall be allowed only to the extent necessary to
enable MBC or any such authorized sublicensee to exercise its license (or
sublicense) hereunder and/or as expressly allowed hereunder. MBC and any
such sublicensees, as the case may be, shall: (a) require their employees
having access to any portion of Confidential Information to strictly
maintain its confidentiality; and (b) ensure that each such employee shall
have executed with MBC and/or an authorized sublicensee (as applicable) a
written non-disclosure/non-use agreement in the form set forth on Exhibit E
hereto or as subsequently provided by InterTrust, or MBC's or such
sublicensee's applicable form agreement which shall effectively and
comparably bind such employee
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31
to the same scope as InterTrust's form agreement, and which MBC's or
sublicensee's form agreement shall be subject to InterTrust's reasonable
prior written approval. MBC shall notify InterTrust promptly in writing of
any unauthorized disclosure or other misuse or misappropriation of any
portions of the Confidential Information. MBC and any sublicensee (as
appropriate) shall be fully responsible for any breach of MBC's or
sublicensees' obligations under this Agreement by any person to whom such
Confidential Information has been disclosed. Any obligation of MBC with
respect to Confidential Information pursuant to this Section 9.1(b) shall
expire thirty-six (36) months after disclosure of such information by
InterTrust to MBC.
(c) Top Secret Information. In order to protect InterTrust's rights,
----------------------
the rights of InterTrust licensees, and the secure interoperability and
reputation of InterTrust implementations, MBC shall treat any InterTrust
Technology or other confidential information that is either marked "Top
Secret" when disclosed in written form, or indicated as "Top Secret" when
disclosed orally ("Top Secret Information") in a manner not less secure
----------------------
than MBC's most secret information and, in all events in a manner
sufficient to reasonably ensure the security of such Top Secret
Information, given such great sensitivity of such Top Secret Information.
MBC shall not use, disclose, provide or otherwise make available such Top
Secret Information to any Person, except to not more than [*]
individual employees of MBC, each of whom has a direct need to know such
information or be exposed to such Top Secret Information (as agreed in each
case by InterTrust) and then only to the extent necessary for MBC to
exercise its rights and perform its obligations under this Agreement, and
none of whom shall receive a disclosure of any such Top Secret Information
until: (i) such employee becomes bound by personally executing an
InterTrust Top Secrecy Agreement (in the form set forth in Exhibit E hereto
or as subsequently provided by InterTrust) covering such information and
exposure; and (ii) an original executed copy of such agreement is received
by InterTrust, with return receipt provided to MBC, which such receipt may
be provided by fax communication if so requested in writing.
Notwithstanding the foregoing, MBC and MBC employees described above shall
make no physical embodiments (for example, any reproduction or copy,
including descriptive notes) whatsoever of Top Secret Information, without
the prior express written authorization from InterTrust's Chairman of
Board, President or any other InterTrust Officer designated in a written
communication to MBC signed by InterTrust's Chairman of the Board (the
"Designated Officers"), nor shall MBC or such MBC employees disclose any
-------------------
Top Secret Information to any Person, except as described in this Section
9.1 (c). If MBC becomes aware that any Top Secret Information has been
disclosed or treated other than as set forth in this Section 9.1 (c),
and/or as specified in a Top Secrecy Agreement, MBC shall immediately
inform InterTrust of such occurrence and take immediate steps to correct
such compromise. MBC shall maintain a log of the employees accessing and
location of all originals and other tangible embodiments of all Top Secret
Information. MBC shall be fully responsible for any breach by any MBC
employee of this Agreement related to the unauthorized use or disclosure of
Top Secret Information.
CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
32
9.2 MBC Technical Information. To the extent that InterTrust receives MBC
-------------------------
confidential information that is either marked "confidential" when disclosed in
written form or indicated as "confidential" when disclosed orally, under this
Agreement, InterTrust shall hold said MBC confidential information in confidence
in a manner that is sufficiently secure for the character and content of the
information and under no circumstances shall such confidential information be
held in a manner that is less secure than procedures used by InterTrust in
connection with its comparably important information. Except as to the
disclosure by MBC to InterTrust of the Modified Technology or such disclosures
inherent in the Certification Testing of MBC Products, Cooperative Applications
and/or any associated services pursuant hereto, and only to the extent expressly
specified by InterTrust Specifications, MBC shall not disclose or otherwise
provide or make available any confidential information of MBC which is directly
related to InterTrust Technology and InterTrust's business activities, without
first acquiring written approval from a Designated Officer of InterTrust.
InterTrust shall not disclose, otherwise provide or make available any MBC
confidential information it has received in any form to any Person who is not
bound by an applicable confidentiality agreement and has a reasonable need to
know such information. InterTrust agrees to notify MBC promptly in writing of
any unauthorized disclosure of MBC confidential information provided to
InterTrust which may come to the attention of an InterTrust officer. InterTrust
shall be fully responsible for any breach of InterTrust's obligations under this
Agreement by InterTrust or its employees, consultants, directors, principals, or
Affiliates. Any obligation of InterTrust to keep MBC information in confidence
shall expire thirty-six (36) months after disclosure of such information by MBC
to InterTrust.
9.3 Exceptions. Notwithstanding the provisions of Sections 9.1 (a), 9.1
----------
(b) and 9.2 above, and except as to "Top Secret" information as provided in
Section 9.1 (c), the confidentiality restrictions herein shall not apply to
Confidential Information that the recipient thereof can demonstrate: (i) is or
becomes generally known to the public through no breach of any of these
obligations, as of the date such information becomes so known; (ii) is or shall
have been independently developed by such recipient's employees who had no
access to such information; or (iii) is or shall have been rightfully received,
with no obligation of confidentiality or non-use, by such recipient from any
Person (other than as a result of another Person's breach of an obligation of
confidentiality to InterTrust), as of the date such information is so received.
9.4 Confidentiality of Agreement and Publicity. Except as otherwise
------------------------------------------
provided in Sections 6.1(h) and 9.3 hereof or as required by law or in
connection with a dispute between the Parties regarding the terms hereof,
neither Party hereto shall at any time, without the prior written consent of the
other Party, disclose the specific details of the terms and conditions of this
Agreement to any Person, other than Affiliates, employees, directors, investors
holding approximately one percent (1%) or more of the outstanding equity shares
and having no reasonably anticipated conflict of interest with the disclosing
party, potential investors who may purchase approximately one percent (1%) or
more of the outstanding equity shares, and/or financial institutions,
professional advisors and/or other consultants having a reasonable need to know
and covered by a confidentiality agreement sufficient in scope to protect the
Parties' rights and interests hereunder. Notwithstanding the foregoing
provisions of this Section 9.4: (i) either
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33
Party may publicly discuss or otherwise disclose that an agreement exists
between the Parties to develop electronic commerce industry standards and the
Trading Model Cooperative Application, but may provide no further material
details as to the specific activities or commitments of the other Party without
the prior written consent of the other Party; and (ii) either Party may make
such disclosures to the extent permitted under this Section 9.4 in order to
comply with its obligations or enforce its rights under this Agreement.
9.5 Confidentiality of Payments, Audit and Certification Testing. All
------------------------------------------------------------
information received during an audit or pursuant to a Certification Program as
provided herein, and all information concerning Certification Testing (including
any results thereof), and any and all payment information received by either
Party pursuant to this Agreement, and/or pursuant to any Certification Testing,
shall be treated as confidential information pursuant to Section 9.4 hereof.
Notwithstanding the foregoing, information concerning whether a MBC Product,
Cooperative Application or an associated services being disseminated or used in
commerce is Compliant with InterTrust Specifications shall not be treated as
confidential information under any provision of this Agreement.
9.6 Survival of the NDA. Subject to the provisions of this Article 9, the
-------------------
Non-Disclosure/Non-Use Agreement between InterTrust and MBC dated February 7,
1996, shall terminate upon the execution of this Agreement, except with respect
to any terms thereof that survive termination, including confidentiality and
non-use obligations relating to information disclosed by InterTrust to MBC prior
to the Effective Date.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES.
10.1 Representations and Warranties of Both Parties. Each Party hereto
----------------------------------------------
represents and warrants to the other Party that as of the Effective Date:
(a) such Party is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction in which it is
organized, with full corporate power and authority to carry on its business
as it is now being conducted;
(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by such Party. No other corporate or shareholder action or other
proceeding on the part of such Party or its shareholders is necessary to
authorize this Agreement and the consummation of the transactions
contemplated hereby;
(c) this Agreement constitutes a valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms, except
that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium, or similar laws now or hereafter in effect
relating to creditors' rights; and
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34
(d) neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby will violate
any provision of the charter or organizational documents of such Party.
10.2 Representations and Warranties of InterTrust. In addition to Section
--------------------------------------------
10.1 above, InterTrust represents and warrants to MBC that as of the Effective
Date:
(a) InterTrust owns or has the right to grant the licenses hereunder
with respect to the InterTrust Technology and the Licensed Rights; and
(b) to its knowledge, neither the InterTrust Technology nor the
Licensed Rights infringe any Person's U.S. copyright or trade secret right,
PROVIDED THAT InterTrust MAKES NO WARRANTY WITH RESPECT TO THE INFRINGEMENT
-------- ----
OF ANY TRADEMARK OR PATENT RIGHTS.
10.3 Limitation. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT TO THE
----------
CONTRARY: (i) THE INTERTRUST TECHNOLOGY REQUIREMENTS ARE PROVIDED "AS IS"
WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE AND NONINFRINGEMENT; AND (ii) THE ENTIRE RISK AS TO THE QUALITY,
ACCURACY, INFRINGEMENT AND PERFORMANCE OF THE INTERTRUST TECHNOLOGY REQUIREMENTS
IS WITH MBC. INTERTRUST DOES NOT WARRANT THAT INTERTRUST TECHNOLOGY OR THE
INTERTRUST TECHNOLOGY REQUIREMENTS WILL MEET MBC'S REQUIREMENTS OR THOSE OF ANY
THIRD PARTY AND, IN PARTICULAR, INTERTRUST DOES NOT WARRANT THAT THE INTERTRUST
TECHNOLOGY REQUIREMENTS WILL BE ERROR FREE OR WILL OPERATE WITHOUT INTERRUPTION.
CONFIDENTIAL
35
ARTICLE 11. INDEMNIFICATION AND REMEDIES.
11.1 Indemnification.
---------------
(a) InterTrust Indemnification. InterTrust shall indemnify and
--------------------------
hold MBC and its employees, officers and directors (the "MBC Parties")
-----------
harmless from any and all liability, judgments, costs, damages, claims,
suits, actions, proceedings, expenses and/or other losses, including
reasonable attorneys' fees (collectively, "Claims") or portions thereof, to
------
the extent awarded by a court of competent jurisdiction or pursuant to a
settlement as provided hereunder, resulting from controversies or
litigation asserted by any Person against the MBC Parties arising directly
or indirectly from: (i) InterTrust's breach of any of its obligations under
this Agreement, or its representations and warranties set forth in Article
10; and (ii) MBC's use of InterTrust Trademarks pursuant hereto; provided,
--------
however, that, with respect to InterTrust's representations under Section
------- ----
10.2 (b) hereof, this indemnity does not extend to any Claim relating to:
(1) any Modified Technology or other modifications thereto made by MBC or
any Person or combinations of the InterTrust Technology with any product,
technology or service of MBC or of any Person; or (2) the use of any
InterTrust Technology in any manner inconsistent with InterTrust
Specifications or Documentation (collectively, the "Indemnification
---------------
Exclusions").
----------
(b) MBC Indemnification. MBC shall indemnify and hold InterTrust, its
-------------------
employees, officers and directors (the "InterTrust Parties") harmless from
------------------
any and all Claims or portions thereof to the extent awarded by a court of
competent jurisdiction or pursuant to a settlement as provided hereunder,
resulting from controversies or litigation asserted by any Person against
the InterTrust Parties arising directly or indirectly from: (i) MBC's or
any of its sublicensees' breach of any of any obligations, representations
or warranties hereunder; (ii) InterTrust's use of MBC Trademarks pursuant
hereto; (iii) the design, manufacture, use, distribution and/or disposition
of Modified Technology, Cooperative Applications or MBC Products, or
performance of any service associated therewith, that would not have
otherwise arisen out of MBC's use of the InterTrust Technology alone,
except to the extent MBC is indemnified by InterTrust under Section 11.1
(a) hereof; (iv) any Claim relating to the Indemnification Exclusions; and
(v) any exercise by MBC or any of its sublicensees of the licenses
hereunder that would not have otherwise arisen out of MBC's use of the
InterTrust Technology alone, except to the extent MBC is indemnified by
InterTrust under Section 11.1 (a) hereof.
(c) Third Party Claims. In case any Claim is brought by a third
------------------
party for which Claim indemnification is provided hereunder: (i) the
indemnified Party shall provide prompt written notice thereof to the Party
obligated to indemnify such Claim; and (ii) the indemnifying Party shall,
upon the demand and at the option of the indemnified Party, assume the
defense thereof (at the expense of the indemnifying Party) within thirty
(30) days or at least ten (10) days prior to the time a response is due in
such case, whichever occurs first, or, alternatively upon the demand and at
the option of the indemnified Party, pay to such Party all reasonable costs
and expenses, including
CONFIDENTIAL
36
reasonable attorneys' fees, incurred by such Party in defending itself. The
Parties shall cooperate reasonably with each other in the defense of any
Claim, including making available (under seal if desired, and if allowed)
all records reasonably necessary to the defense of such Claim, and the
indemnified Party shall have the right to join and participate actively in
the indemnifying Party's defense of the Claim. Notwithstanding the
foregoing (and any other section of this Agreement), it is understood and
acknowledged that InterTrust need not under any circumstance provide Top
Secret Information related to the security capabilities of InterTrust
Technology to any Person. Each Party shall be entitled to reasonable
approval of the settlement of any Claim to be entered into by the other
Party. Without limiting the foregoing, if as a result of such defense or
settlement, an injunction is entered or threatened or an agreement is
reached prohibiting MBC from using any portion of the InterTrust
Technology, as MBC's sole remedy for such prohibition of such continued
use, InterTrust may at InterTrust's sole option either: (a) [*] for MBC to
[*] and [*] in accordance with the terms hereof such portion (at MBC's
expense, should MBC desire to so continue to [*] such portion); (b) [*] or
[*] of the [*] or Licensed Rights, as the case may be, so as to make it
[*]; or (3) if options (a) and (b) are not [*] in InterTrust's
determination, [*] the licenses granted hereunder as to such portion. In
addition, as to any such portion, InterTrust may, at any time after such
Claim is brought or threatened, notify MBC that InterTrust is electing one
of the options (a), (b) or (c) as to such portion to be effective
immediately or at such time specified by InterTrust subject in (a) to MBC's
agreement.
11.2 Cumulative Remedies. Except as expressly provided herein to the
-------------------
contrary, no remedy made available to a Party by any of the provisions of this
Agreement is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
11.3 Equitable Remedies. Each Party agrees that it may be impossible or
------------------
inadequate to measure and calculate a Party's damages from any breach of the
covenants set forth in Sections 4.2, 5.4, 5.5, 6.1(b), 6.1(h), 6.2, 6.3, 6.4,
6.5, 7.7, 12.3 and 14.7 and Articles 8 and 9 hereof. Accordingly, each Party
agrees that if it or any of such Party's employees, licensees, divisions or
Affiliates or agents thereof breach or threaten a breach or anticipatory
repudiation of any of such provisions, in addition to any other right or remedy
available, the other Party shall be entitled: (i) to obtain an injunction
against the breaching Party and such Party's employees, licensees, divisions,
Affiliates, and/or agents thereof, from a court of competent jurisdiction
restraining such breach or threatened breach; and (ii) to specific performance
of any such provision of this Agreement. In addition, MBC agrees that, in the
event MBC breaches any of its obligations under Section 6.1(h), InterTrust shall
be entitled, in addition to any other remedies available at law or in equity, to
extend the [*] for an additional twenty-four (24) month period (measured from
the later of the date such breach is admitted by MBC or established by a final
judgment pursuant to
CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
37
which all appeal rights have been exhausted), and MBC hereby irrevocably agrees
to an award of specific performance of such provision in InterTrust's favor.
11.4 EXCLUSION OF DAMAGES. EXCEPT AS SET FORTH IN THE IMMEDIATELY
--------------------
FOLLOWING SENTENCE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, ITS
AFFILIATES, DIVISIONS, CUSTOMERS, EMPLOYEES, OR ANY OTHER PERSONS, FOR ANY LOST
PROFITS, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, ARISING OUT OF THE
BREACH OF THIS AGREEMENT OTHER THAN UNDER SECTION 6.1(h) AND ARTICLES 8 AND 9.
NOTWITHSTANDING THE IMMEDIATELY PRECEDING SENTENCE, A PARTY SHALL BE LIABLE TO
THE OTHER PARTY FOR ALL DAMAGES, INCLUDING LOST PROFITS, INCIDENTAL, INDIRECT,
OR CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED BY THE OTHER PARTY IN THE
FOLLOWING CIRCUMSTANCES: (i) THE MISAPPROPRIATION OF TRADE SECRETS OF THE
DAMAGED PARTY BY THE LIABLE PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES,
CONSULTANTS OR AGENTS; (ii) THE GROSS NEGLIGENCE OF THE LIABLE PARTY, ITS
DIRECTORS, OFFICERS, EMPLOYEES, CONSULTANTS OR AGENTS; (iii) THE WILLFUL
MISCONDUCT OR MATERIAL BREACH OF THIS AGREEMENT IN BAD FAITH BY THE LIABLE
PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, CONSULTANTS OR AGENTS; OR (iv) THE
BREACH OF SECTION 6.1(h) AND ARTICLES 8 OR 9 HEREOF. IN ANY DISPUTE AS TO
DAMAGES, THE LIABLE PARTY SHALL BE REQUIRED TO PROVE THE ABSENCE OF MATERIAL
NEGLIGENCE, WILLFUL MISCONDUCT AND/OR INTENTIONAL MATERIAL BREACH OF THIS
AGREEMENT IN BAD FAITH, AS THE CASE MAY BE, REFERRED TO IN THE IMMEDIATELY
PRECEDING SENTENCE.
ARTICLE 12. TERM AND TERMINATION.
12.1 Agreement. This Agreement shall commence on the Effective Date and
---------
shall continue for a period of [*] years therefrom unless and until terminated
earlier pursuant to Section 12.2 below. At the end of such [*] year term, this
Agreement shall [*] renew for [*] year [*] a Party notifies the other in
writing of its intent not to renew this Agreement prior to sixty (60) days
before the beginning of the [*] year period.
12.2 Events of Termination. This Agreement, the licenses granted
---------------------
hereunder, and/or the Trading Model Cooperative Project Plan and all Cooperative
Application Project Plans shall be subject to termination upon the occurrence of
any of the following events and such other provisions hereof expressly so
stating (each, an "Event of Termination"):
--------------------
(a) Expiration of this Agreement;
(b) If either Party, or, as relevant, any of its permitted
sublicensees, materially defaults on any of its material obligations under
this Agreement, the non-defaulting Party shall have the right, exercisable
in its sole discretion, to initiate a
CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
38
termination procedure under this Agreement by written notice (sent in
accordance with the provisions of Section 14.5 hereof) describing with
reasonable specificity the nature of the default and requesting that such
default be cured, wherein such termination notice shall automatically
result in termination unless: (i) within [*] calendar days of receiving
such written notice of such default (the "Cure Period"), the defaulting
-----------
Party (or such sublicensee) remedies the default; or (ii) in the case of a
default that cannot with due diligence be cured within the Cure Period, the
defaulting Party or such sublicensee institutes, by the date upon which one
half of the Cure Period shall have expired, steps necessary to remedy the
default and thereafter employs best efforts to diligently prosecute the
same to completion. Notwithstanding the foregoing, the Cure Period
associated with MBC's breach of its payment obligations in accordance with
Sections 7.1 and 7.2 shall be [*] business days. Notwithstanding any of the
foregoing, InterTrust shall have the right both to immediately terminate
this Agreement and to obtain injunctive relief in the event of any: (a)
unauthorized disclosure of Top Secret Information or intentional, material
unauthorized use of the InterTrust Technology or the Licensed Rights;
and/or (b) willful, material unauthorized disclosure of Confidential
Information, except as expressly provided for by this Agreement.
(c) By a Party, effective immediately upon written notice to the
other Party, in the event of: (i) the filing by the other Party of a
petition in bankruptcy or insolvency; (ii) the appointment of a receiver
for all or substantially all of its property relevant to the business
activities under this Agreement; (iii) the making by the other Party of any
assignment or attempted assignment for the benefit of creditors for all or
substantially all of its properties relevant to its business activities
under this Agreement; or (iv) the institution of any proceedings for the
liquidation or winding up of the other Party's business or for the
termination of its corporate charter, if any such proceeding is not
dismissed within one hundred and twenty (120) days of institution;
(d) Upon written notice to MBC, InterTrust may immediately terminate
this Agreement in its sole discretion in the event: (i) MBC fails to make
the payment as provided in Section 7.1 (a)(i) hereof ; (ii) MBC fails to
properly exercise the option during the Option Period in accordance with
Section 5.1; (iii) MBC does not develop the Trading Model Cooperative
Application or an MBC Product implementing the Trading Model within [*]
months from the date InterTrust first delivers any InterTrust Technology
Requirements to MBC; (iv) MBC fails to terminate any sublicense pursuant to
which the sublicensee thereunder materially defaults its obligations under
this Agreement for a period of [*] days after the date of written notice
thereof from InterTrust or MBC, whichever is earlier; (v) MBC breaches any
of its obligations under Section 6.1(h); or (vi) MBC fails to perform one
or more of its material obligations under this Agreement on two or more
occasions over a [*] year period. Upon thirty (30) days prior written
notice to MBC, InterTrust may terminate this Agreement in its sole
discretion if MBC notifies InterTrust, as provided in Section 6.1(h), that
it plans to develop or employ a product or service within the Special
Advanced Technologies employing Independently Developed Technology, or if
it fails to so notify InterTrust as provided hereunder.
CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
39
(e) A Party to a Trading Model Cooperative Project Plan or a
Cooperative Application Project Plan shall have the right to terminate such
plan if the other Party thereto materially breaches any of its material
obligations thereunder.
12.3 Effect of Termination. Upon termination hereof: (i) all licenses
---------------------
granted hereunder, all sublicenses granted by MBC pursuant to Section 5.3, and
all cooperative development efforts then being conducted pursuant to the Trading
Model Cooperative Project Plan and any Cooperative Application Project Plan
shall automatically terminate; (ii) InterTrust shall have the right to retain
all sums already paid by MBC (and all MBC sublicensees) hereunder, and MBC (and
all MBC sublicensees) shall pay to InterTrust all sums accrued but unpaid within
thirty (30) days thereafter; and (iii) MBC (and all MBC sublicensees) shall
immediately discontinue its use of InterTrust Technology and/or Modified
Technology, and discontinue any service associated therewith (including
termination of distribution of Cooperative Applications and MBC Products
incorporating or using InterTrust Technology and/or Modified Technology);
provided, however, that all licenses properly granted to end-users pursuant to
- -------- ------- ----
the then-existing Customer Agreements shall continue in full force and effect in
accordance with the terms thereof (provided that such licenses shall in no event
provide any rights with respect to Clearinghouse Functions). Each Party shall
deliver to the other Party within ten (10) days from the date of termination of
this Agreement all copies of all materials protected as Confidential Information
or Top Secret Information under this Agreement. Return of Confidential
Information shall be by commercially secure means as reasonably specified by the
receiving Party. Return of Top Secret Information shall be made, at InterTrust's
option as designated by a Designated Officer by written authorization to MBC:
(a) by physical and secure pickup at MBC's offices by an InterTrust officer; (b)
by physical and secure delivery to InterTrust's offices in Japan (upon
establishment of such offices); and (c) as otherwise may be determined by
InterTrust as commercially reasonable. Such delivery shall be during normal
business hours and in each instance to the hands of an InterTrust officer who
audits and countersigns such delivery. Each Party shall return within said ten
(10) days to the other Party all copies of all confidential materials of such
other Party, including all physical embodiments of Confidential Information in
the possession or control of the other Party, its sublicensees, their employees,
consultants, or other agents. Within one (1) month after the termination of this
Agreement, each Party will certify in writing to the other Party that, to the
best of its knowledge, all such materials and tangible embodiments have been
delivered to the other Party.
12.4 Survival. The respective rights and obligations of InterTrust and
--------
MBC under the provisions of Sections 4.2(ii), 5.5, 6.1(h), 6.5, 7.2, 7.7 (but
only for a period of four years), 8.1, 8.2, 8.3, 12.3, this Section 12.4, and
Articles 9, 11, 13 and 14 hereof shall survive expiration or termination of this
Agreement.
ARTICLE 13. EXPORT.
13.1 Compliance with Law and Export Controls. The Parties shall at all
---------------------------------------
times comply with all applicable U.S., Japanese and foreign federal, state, and
local laws, rules and regulations relating to the execution, delivery and
performance of this Agreement and to the
CONFIDENTIAL
40
InterTrust Technology Requirements and Modified Technology. Additionally, MBC
acknowledges that one or more aspects of the InterTrust Technology Requirements,
and/or Documentation and Assistance with respect thereto, is likely to be
subject to the export control laws, regulations and requirements of the United
States and other jurisdictions. InterTrust shall use reasonable efforts at
InterTrust's expense, and MBC shall at InterTrust's request reasonably assist
InterTrust at MBC's expense, to obtain any license or other approval that may be
required for InterTrust's initial export of the InterTrust Technology
Requirements and/or Documentation or information relating thereto from the
United States to Japan and MBC understands and agrees that certain modifications
to InterTrust Technology Requirements and/or Documentation may be required by
U.S. law and/or regulatory process and agrees to the implementation of such
modification by InterTrust, as necessary. In the event that InterTrust is unable
to comply with its obligations hereunder due to an inability to obtain any such
license or other approval, such inability to obtain approval shall be considered
a force majeure event under Section 14.12. MBC shall, at MBC's expense (subject
to InterTrust's right of approval), comply with all applicable laws (including
applicable U.S. export control laws and regulations) and obtain all necessary
governmental consents and approvals to: (i) further distribute the MBC Products
and Cooperative Applications (as well as other technology as expressly permitted
hereunder) that contain any part of the InterTrust Technology Requirements or
Modified Technology in accordance herewith; and (ii) further export and re-
export the InterTrust Technology Requirements and/or Modified Technology. MBC
shall: (a) promptly deliver, as available, to InterTrust documentation
confirming to InterTrust's reasonable satisfaction MBC's compliance with MBC's
responsibilities under this Section 13.1; and (b) obtain such consents and
approvals from appropriate governmental entities as InterTrust's counsel may
reasonably determine to be necessary (as relates to InterTrust Technology
Requirements or Modified Technology) for such further distribution, exportation
or re-exportation.
13.2 Failure to Obtain Export Approval. In the event MBC exercises its
---------------------------------
Option and, thereafter, InterTrust has not yet received and further fails to
obtain approval from relevant authorities ("Export Approval") to export SDK 1.0
---------------
to MBC within six (6) months after InterTrust's first commercial shipment of its
FCS SDK 1.0 product to a Person not subject to such Export Approval (the
"Conversion Date"), MBC shall receive a warrant (the "Warrant") to receive that
- ---------------- -------
number of shares of InterTrust stock (the "Warrant Shares") determined by the
--------------
following mathematical formula:
Number of Shares = License Fee/ Price Per Share
Where "License Fee" is equal to the license fee paid to InterTrust pursuant to
Section 7.1(a)(i) hereof and,
"Price Per Share" = Valuation/Outstanding Shares
Where "Valuation" is a number that is the greater of: (a) $US100,000,000; and
(b) one half (1/2) of the then-current value of InterTrust as determined in good
faith by InterTrust's Board of Directors as of the Conversion Date, and
"Outstanding Shares" is equal to the total number of InterTrust shares issued
and outstanding as of the Conversion Date. The Warrant Shares shall
CONFIDENTIAL
41
be shares of InterTrust common stock and/or preferred stock as determined by
InterTrust's Board of Directors in good faith.
The Warrant shall be a written agreement with InterTrust containing terms and
provisions as reasonably established by InterTrust in view of, among other
things, the class of InterTrust stock to which such Warrant Shares belong and
InterTrust's extant agreements. Such Warrant shall not be convertable by MBC for
six (6) months after the Conversion Date and at any time during such six (6)
month period the Warrant shall terminate if InterTrust obtains Export Approval
and, notwithstanding any termination hereof, delivers or offers to deliver SDK
1.0 to MBC on the terms provided herein. If at any time subsequent to the
Conversion of such Warrant InterTrust obtains Export Approval and makes such SDK
1.0 available to MBC, and MBC accepts delivery of such SDK 1.0, InterTrust shall
have the right, exercisable in its discretion, to reacquire all such shares from
MBC by tendering to MBC such reasonable amount of interest on the sums then
tendered by MBC to InterTrust pursuant to Section 7.1(a) hereof as determined by
InterTrust's Board of Directors in good faith and as shall be set forth in the
Warrant Agreement.
ARTICLE 14. MISCELLANEOUS.
14.1 Governing Law. This Agreement, any and all actions arising out of or
-------------
in any manner affecting the interpretation of this Agreement or the Stock
Purchase Agreement, and any actions between the Parties involving the InterTrust
Technology, and any InterTrust Property and any Confidential or Top Secret
Information ("Party Disputes") shall be governed solely by, and construed solely
--------------
in accordance with, the laws of the United States of America and the
Commonwealth of Virginia, excluding that body of law relating to conflict of
laws. The Parties hereby acknowledge and agree that the Convention on Contracts
for the International Sale of Goods shall not apply to this Agreement.
14.2 Venue and Jurisdiction. In connection with any litigation between the
----------------------
Parties involving a Party Dispute, each Party hereby unconditionally and
irrevocably consents to the jurisdiction and venue in the Courts of the
Commonwealth of Virginia and in the U.S. Federal District Court, located in the
City of Alexandria, Virginia (or any direct successor thereto) as relevant, and
irrevocably: (i) waives any objection whatsoever (including any objection with
respect to venue) that any Party may now or hereafter have to the jurisdiction
or venue of said courts; and (ii) consents to the service of process of said
courts in any matter relating to this Agreement by the mailing of process by
registered or certified mail, postage prepaid, at the addresses specified in
this Agreement. If necessary, MBC shall appoint a registered agent in the State
of Virginia for acceptance of service of process and/or other notices provided
for under this Agreement and shall notify InterTrust of the identity of such
registered agent within thirty (30) days after the Effective Date.
14.3 Amendment or Modification. This Agreement may not be amended,
-------------------------
modified or supplemented by the Parties in any manner, except by an instrument
in writing signed by the President or Chairman of InterTrust and a duly
authorized officer of MBC.
CONFIDENTIAL
42
14.4 No Assignment. Except as expressly provided in Section 5.3, this
-------------
Agreement is personal to MBC and no rights or obligations of MBC hereunder shall
be delegated, assigned or transferred to any Person (whether expressly, by
implication, or by operation of law including any merger or sale of assets or
business) without the prior written consent of InterTrust, in its sole
discretion. Any such purported transfer, assignment or delegation by MBC without
the appropriate prior written approval shall be null and void ab initio and of
-- ------
no force or effect. InterTrust shall have the right to delegate, assign or
transfer this Agreement and/or its rights or obligations hereunder to any
Person, but only in the event that such Person undertakes to assume InterTrust's
outstanding obligations.
14.5 Notices. Any notice or other communication to be given hereunder shall
-------
be in writing and shall be (as elected by the Party giving such notice): (i)
personally delivered; (ii) transmitted by postage prepaid registered or
certified airmail, return receipt requested; or (iii) by facsimile with a
confirmation copy deposited prepaid with an internationally recognized express
courier service. Unless otherwise provided herein, all notices shall be deemed
to have been duly given on: (a) the date of receipt (or if delivery is refused,
the date of such refusal) if delivered personally or by express courier; or (b)
ten (10) days after the date of posting if transmitted by mail. Notwithstanding
the foregoing, communication of Confidential Information or Top Secret
Information shall be governed by practices adequate to appropriately protect
such information regarding Top Secret Information or as may be specified herein
or in the future by InterTrust. Either Party may change its address for purposes
hereof on not less than three (3) days prior notice to the other Party. Notice
hereunder shall be directed:
If to MBC, to:
3-1 Marunouchi 2-Chome,
Chiyoda-ku,
TOKYO 100-86, Japan
Attn: Norio Okaido
General Manager, Multimedia Business Department
Fax: 81-3-3210-9144
If to InterTrust, to:
460 Oakmead Parkway
Sunnyvale, California 94086
Attn: Edmund J. Fish, Esq.
Vice President and General Counsel
Fax: (408) 222-6144
CONFIDENTIAL
43
with a copy to:
Weil, Gotshal & Manges LLP
2882 Sand Hill Road, Suite 280
Menlo Park, California 94025
Attn: Patrick P. Nguyen, Esq.
Fax: (415) 854-3713
14.6 Waiver. Any of the provisions of this Agreement may be waived by the
------
Party entitled to the benefit thereof. Neither Party shall be deemed, by any act
or omission, to have waived any of its rights or remedies hereunder unless such
waiver is in writing and signed by, in the case of InterTrust, InterTrust's
President or Chairman, and in the case of MBC, MBC's authorized officer, and
then only to the extent specifically set forth in such writing. A waiver with
reference to one event shall not be construed as continuing or as a bar to or
waiver of any right or remedy as to a subsequent event.
14.7 No Third Party Beneficiaries. Nothing express or implied in this
----------------------------
Agreement is intended to confer, nor shall anything herein confer, upon any
Customer or any Person other than the Parties and the respective successors or
permitted assigns of the Parties, any rights, remedies, obligations or
liabilities whatsoever. Notwithstanding the foregoing, to the extent permitted
by law, MBC grants InterTrust the right to enforce against any of MBC's
sublicenses the terms of the applicable sublicenses or agreements between MBC
and its sublicensees for the purpose of asserting MBC's rights in order to
protect and enforce InterTrust's rights to InterTrust Property and any other
InterTrust rights under this Agreement.
14.8 No Agency. Nothing herein contained shall be construed to constitute
---------
the Parties hereto as partners or joint venturers or the agent of another Party
in any sense of those terms whatsoever. Neither Party assumes any liability of
the other Party nor shall have any authority to enter into any binding
obligation on behalf of the other Party.
14.9 Recovery of Costs and Expenses. If any Party to this Agreement
------------------------------
brings an action against the other Party to enforce its rights under this
Agreement, the prevailing Party shall be entitled to recover its costs and
expenses, including without limitation, reasonable attorneys' fees and costs
incurred in connection with such action, including any appeal of such action.
14.10 Severability. If the application of any provision or provisions of
------------
this Agreement to any particular facts or circumstances shall be held to be
invalid or unenforceable by any court of competent jurisdiction, then: (i) the
validity and enforceability of such provision or provisions as applied to any
other particular facts or circumstances and the validity of other provisions of
this Agreement shall not in any way be affected or impaired thereby; and (ii)
such provision or provisions shall be reformed without further action by the
Parties hereto and only to the extent necessary to make such provision or
provisions valid and enforceable when applied to such particular facts and
circumstances.
CONFIDENTIAL
44
14.11 Counterparts; Facsimiles. This Agreement may be executed in any
------------------------
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute one and the
same instrument. Each Party shall receive a duplicate original of the
counterpart copy or copies executed by it. For purposes hereof, a facsimile copy
of this Agreement, including the signature pages hereto, shall be deemed to be
an original. Notwithstanding the foregoing, the Parties shall deliver original
execution copies of this Agreement to one another as soon as practicable
following execution thereof.
14.12 Force Majeure. If, by reason of labor dispute, strike, inability to
-------------
obtain labor or materials, fire or other action of the elements, accident,
administrative or governmental restriction or appropriation or other causes,
whether like or unlike the foregoing, beyond the reasonable control of a Party
hereto, such Party is unable to perform in whole or in part its obligations set
forth in this Agreement, then such Party shall be relieved of those obligations
to the extent it is so unable to perform, and such inability to perform, so
caused, shall not make such Party liable to the other Party. Notwithstanding the
foregoing, in the event any such cause delays either Party's performance of any
of its material obligations under this Agreement, the other Party may suspend
its performance under this Agreement for the period such delay continues. Except
in the case of application of this Section 14.12 due to the provisions of
Article 13 hereof, this Agreement may be terminated by notice by the Party not
seeking excuse from performance, if such event shall prevent performance for
longer than one hundred and twenty (120) days. The Party subject to an event of
force majeure shall use good faith efforts to comply as closely as possible with
the provisions of this Agreement and to avoid the effects of such event to the
extent possible.
14.13 English Translation. Any documents, materials, notices, products,
-------------------
royalty reports, agreements (including sublicense agreements), copies of
promotional materials or other information required to be provided to InterTrust
or for InterTrust's review and/or approval hereunder shall be provided in the
English language. Any and all translation costs in this regard shall be borne by
MBC.
14.14 Entire Agreement. This Agreement represents the entire agreement of
----------------
the Parties with respect to the subject matter hereof and supersedes all prior
and/or contemporaneous agreements and understandings, written or oral between
the Parties with respect to the subject matter hereof (except as set forth in
Section 9.6 hereof) including, without limitation, the MOU except such
provisions therein that survive in accordance with the terms thereof.
CONFIDENTIAL
45
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date first written above by the undersigned duly authorized.
INTERTRUST TECHNOLOGIES MITSUBISHI CORPORATION
CORPORATION
By:____________________________ By:____________________________
Name:__________________________ Name:__________________________
Title:_________________________ Title:_________________________
CONFIDENTIAL
46
EXHIBIT C
TO THE TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
TRADEMARKS
----------
INTERTRUST Trademarks
---------------------
InterTrust
The InterTrust Logo
InterTrust Commerce Architecture
InterTrust Commerce Node
InterTrustworthy
DigiBox
NetTrust
Virtual Process Control
Electronic Value Chain Management
MBC Trademarks
--------------
(Diamond Mark) Mitsubishi Corporation
CONFIDENTIAL
EXHIBIT D
TO THE TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
TRADING MODEL COOPERATIVE PROJECT PLAN
--------------------------------------
As a general matter, the Trading Model Cooperative Project Plan will: (i) set
forth terms and conditions (such as development milestones, cost estimates,
development fees, etc.) for the development of the Trading Model Cooperative
Application; and (ii) outline and embody a staged approach for the entire
development process, from project planning through quality and acceptance
testing of generated code.
It is contemplated that Trading Model Cooperative Project Plan will incorporate,
as agreed to by the Parties, the following terms:
. a schedule for completion of various targets and stages (as further
set forth below) for development of the Trading Model Cooperative
Application;
. a definition of the tasks for which each participating Party shall be
responsible with respect to the Trading Model Cooperative Application
project;
. acceptance testing procedures and criteria for determining that the
Trading Model Cooperative Application conforms to the specifications
therefor and to InterTrust Specifications;
. an estimate of the costs for the Trading Model project, a development
plan containing budgets and milestones and a specification of a
formula for calculating any consideration that the MBC may pay to
InterTrust, including any development fees consistent with Section 3.3
hereof; and
. provisions concerning ownership of Intellectual Property Rights and
other rights relating to the Trading Model Cooperative Application, if
terms and conditions related to such rights differ in any way from
this Agreement.
Furthermore, it is contemplated that the Trading Model Cooperative Project Plan
will comprise the development stages as set forth below:
. description of the Trading Model project and formulation of the
desired behavior of the Trading Model Cooperative Application(s) from
users' perspectives including preconditions, results and a textual
description of the system's behavior (the "Use Cases"), and creating a
---------
document that describes such Use Cases;
. creation of a requirements document (the "Requirements Document")
---------------------
based on the Use Cases, that precisely defines the criteria that the
Trading Model Cooperative Application must or may meet when completed,
including staged criteria reflecting
CONFIDENTIAL
commercial releases of the Trading Model Cooperative Application over
a period of time;
. development of object, functional, and process models that reflect an
architecture for the Trading Model Cooperative Application that
addresses the detailed Requirements, in particular for first stage
releases (the "Object Models");
-------------
. formulation of a design, reflective of the Object Models with
sufficient detail to serve as a coding specification (the "Design
------
Models");
------
. creation of a test plan for the Design Models (the "Test Plan");
---------
. production of code that implements the Design Models (the "Application
-----------
Code") and the Test Plan (the "Test Code"); and
---- ---------
. validation of the Application Code through the use of the Test Code;
. design for real world beta test of first stage implementation
including thorough bug and security evaluation;
. process for multiple party pilot operation of the first stage release
implementation including comprehensive users' feedback and bug
assessments and formal implementation critique; and
. stepped commercial release of first stage model.
CONFIDENTIAL
EXHIBIT E
TO THE TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
FORM OF INTERTRUST CONFIDENTIALITY AGREEMENTS
---------------------------------------------
InterTrust Top Secrecy Agreement
--------------------------------
InterTrust Non-Disclosure/Non-Use Agreement
-------------------------------------------
CONFIDENTIAL
EXHIBIT F
TO THE TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
SPECIAL ADVANCED TECHNOLOGIES
-----------------------------
"Special Advanced Technologies" means technology, systems and/or applications
-----------------------------
that enable at least one of the following rights management and/or distributed
event management advanced capabilities: (i) Dynamic Rules and Controls; (ii)
Independent Rules and Controls; (iii) Chain of Handling and Control; (iv) Rights
Operating System; (v) Traveling Objects; and (vi) Event Nodes. Without limiting
in any way the generality of the terms defined on this Exhibit F, the concepts
represented therein are further clarified in InterTrust Intellectual Property
(for example, [*], titled [*]), other InterTrust patent applications, and
documents and information that InterTrust may provide under this Agreement.
The foregoing capitalized terms are defined below. All capitalized terms not
defined on this Exhibit F, shall have the meaning set forth in the Agreement.
"Chain of Handling and Control" means technology that at least in part allows
-----------------------------
or enables the persistence of all or any portion of Dynamic Rules and Controls
as such Dynamic Rules and Controls are provided for use to one or more sequences
of Persons.
"Dynamic Rules and Controls" means technology that, at least in part, supports
--------------------------
the use of control structures to: (i) Manage (for example, govern access to or
other use of) Content in accordance with Rules and Controls associated with such
Content; and (ii) accept the (a) modification and/or replacement of at least a
portion of any such Rules and Controls, and/or (b) addition of Rules and
Controls, all in a manner consistent with pre-existing Rules and Controls.
"Event Nodes" means distributed and fully or partially interoperable
-----------
electronic nodes, each of which employs Rules and Controls to Manage events
based at least in part upon plural nodal activity relating to Content.
"Independent Rules and Controls" means technology enabling the independent and
------------------------------
separate provision of Rules and Controls, whether or not said Rules and Controls
are, for example, delivered in the same cryptographic container, or at the same
time, as related Content.
"Rights Operating System" means one or more general purpose computer control
-----------------------
programs that, independently or in combination with a host operating system,
contributes to rights-related interoperability among plural nodes and enables
application of Dynamic Rules and Controls and/or Independent Rules and Controls.
"Traveling Objects" means technology supporting the use and/or re-use of
-----------------
Content subject to persistent Rules and Controls which Manage Content, so that,
when such Content is passed from one user to another such Content does not
require a specific authorization by a remote
CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
authority in each instance to enable a first use by a new user when such Content
is passed to such new user.
CONFIDENTIAL
EXHIBIT G
TO THE TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
CHINESE WALL PROCEDURES
-----------------------
The "Chinese Wall@ to be implemented to separate the [*], and other employees
and/or consultants of MBC that have access to InterTrust Technology or
information, is intended to ensure that the [*] project is an [*] development
effort not employing any Chinese Wall Information, including insuring that no
sensitive or confidential InterTrust Technology or Modified Technology is
advertently or inadvertently shared with, disclosed to and/or learned by any
individual working on or directing the Active Key Technology project at MBC. The
Chinese Wall shall, at a minimum, have the following procedural attributes,
serving the purposes indicated:
(1) Group Composition and Lists. The purpose of group composition lists is to
---------------------------
keep the Parties and the persons within specific groups informed as to who
should have access to information and who should not have such access. MBC shall
keep accurate lists of:
(a) all MBC employees and/or consultants that have access to, work on, have
responsibility for, or are privy to, information concerning MBC's Active Key
Technology, or are otherwise members of MBC's Active Key Group;
(b) all MBC employees and/or consultants that have access to, work on, have
responsibility for, or are privy to (1) information concerning (A)
InterTrust Technology, (B) the Trading Model Cooperative Project, (C) any
other Cooperative Application, (D) Modified Technology and/or (E) any MBC
designs or plans concerning use (or incorporation) of InterTrust Technology
with MBC products, Cooperative Applications and/or related services, or (2)
information provided by InterTrust to MBC (including InterTrust Confidential
Information and InterTrust Top Secret Information (the "InterTrust
----------
Technology Group:); and
----------------
(c) any MBC employee that is a member of both the Active Key Group and the
InterTrust Technology Group; provided that (1) MBC employees and/or
-------------
consultants that are members of both the Active Key Group and the InterTrust
Technology Group shall be strictly limited to senior MBC executives or
members of MBC's Board of Directors that have a direct need to know business
information relating to both groups, and (2) no such person that is a member
of both the Active Key Group and the InterTrust Technology Group shall have
any active role in the planning, direction or development of the Active Key
Technology other than high level approval of such Group's general direction
and efforts.
MBC shall provide copies of such lists to InterTrust and shall immediately
update such lists whenever a change in the composition of a relevant group
occurs and, within ten (10) business days thereafter, provide InterTrust with a
copy of such updated list(s);
(2) Information Security and Handling. The purpose of information security is to
---------------------------------
ensure that no relevant Confidential or Top Secret Information is transferred
between the Active Key Group
CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
and InterTrust Technology Group. The information security procedures shall
comprise, at a minimum, the following:
(a) a member of the InterTrust Technology Group shall not discuss or
disclose to persons outside of such group (especially to any member of the
Active Key Group) any information concerning the activities of the
InterTrust Technology Group including, but not limited to technical and
business activities, as well as any confidential information of such group
or of InterTrust (whether or not such information includes information about
InterTrust Technology or information disclosed by InterTrust to MBC) until
the InterTrust Technology Group's business development activities reasonably
require the involvement of other MBC employees for the purpose of marketing,
sales, and technical support for public beta and product releases of an MBC
product, and then only to the extent necessary to directly support such
activities for such product and upon thirty (30) days prior written
notification to InterTrust; provided, however, that the InterTrust
-------- ------- ----
Technology Group may disclose, to the extent reasonably required for the
purposes set forth below, such information to its own accounting, budget
management, legal, or other internal administrative department solely for
the purpose of obtaining necessary administrative or nontechnical consultant
services from such departments.
(b) except to the extent expressly and reasonably in support of the
provisions of Section 2(a) immediately above, no documents (or summaries or
material portions thereof) shall be disseminated or disclosed to any person
outside of the InterTrust Technology Group;
(c) except for such MBC employees described in Section (1)(c) above, during
the [*] no person who is or has at any time has been part of the InterTrust
Technology Group shall be or become part of the Active Key Group, and
thereafter, any such person may not, under any circumstances, use any
InterTrust Confidential Information or Top Secret Information for the
benefit of the Active Key Group; and
(d) any InterTrust Group information no longer in active use must be
shredded or otherwise securely disposed of.
(3) Computer/Network Security. The purpose of Computer/Network security is to
-------------------------
impede potential information flow between the InterTrust Technology Group and
the Active Key Group by limiting access to electronic information. The
Computer/Network Security procedures shall comprise, at a minimum, the
following:
(a) no portable storage media (such as floppy disks, Mo, etc.) shall be
passed between members of the InterTrust and Active Key groups whether or
not such media is thought to contain confidential information of either
group;
(b) no member of the Active Key Group, or any MBC or third party technical
personnel, shall have access to the InterTrust Technology Group=s network
resources, including file storage, printing, communications, and other host
or server resources;
CONFIDENTIAL
- ---------- * CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c) any server resources of the InterTrust Technology Group must be
protected against unauthorized access, at a minimum through the use of
individual user passwords; and
(d) no InterTrust Top Secret Information shall be stored on a server (unless
such server is used solely in connection with the InterTrust Technologies
Group), or other storage media shared by persons not in the InterTrust
Technology Group, and no such InterTrust Top Secret Information shall be
included in any e-mail and other electronic communications between members
of the InterTrust Technology Group passing through any host or server to
which any member of the Active Key Group has any access rights. With respect
to Chinese Wall Information other than Top Secret Information, all e-mail
and other electronic communication between members of the InterTrust
Technology Group containing any such information shall not pass through any
host or server to which any member of the defined Key Group has any access
rights which enables users to access information as an administrator.
(4) Physical Security. The purpose of physical security is to impede potential
-----------------
information flow between the InterTrust Technology Group and Active Key Groups
by physical separation. The physical security procedures shall comprise, at a
minimum, the following:
(a) no offices or work space may be shared by members of the InterTrust
Technology Group and Active Key Group;
(b) any InterTrust Technology Group area (including areas containing files
of such Group) shall have locks and such other appropriate security barriers
sufficient to ensure that only authorized persons may enter or obtain access
to such areas or information contained therein. No Active Key Group member
shall be authorized to enter such InterTrust Technology Group areas; and
(c) maintenance of a written log shall be kept of persons other than
InterTrust Technology Group members who enter any InterTrust Technology
Group work area.
(5) Written Procedures and Education. Written procedures and education are
--------------------------------
intended to aid compliance with information procedures by making sure that
employees (including member of the InterTrust Technology Group or the Active Key
Group) are aware of the procedures they are expected to follow. MBC shall ensure
that relevant employees are informed of the Chinese Wall procedures by, at a
minimum:
(a) memorializing the definition of Chinese Wall Information and the Chinese
Wall procedures in a memorandum (the "Chinese Wall Memo") and distributing
-----------------
the Chinese Wall Memo to each of the persons listed in Section 1 hereof
(including new members of the groups, as added; and
(b) conducting one or more meetings promptly following the Effective Date
(and with new employees during an orientation meeting) to explain the
Chinese Wall procedures to all affected personnel;
CONFIDENTIAL
(c) periodically advise relevant employees of information considered to be
Chinese Wall Information and of the necessity of following the Chinese Wall
procedures; and
(d) posting the requirements of the Chinese Wall procedures in appropriate,
prominent locations within the InterTrust Technology Group area to remind
Group employees of their Chinese Wall obligations.
CONFIDENTIAL