|
<PAGE>
.
.
.
Exhibit 10.18
<TABLE>
<S> <C>
COMPANY Name: B SQUARE CORPORATION
MS Agreement Number: ***
Effective Date: OCTOBER 1, 2006
Expiration Date: JUNE 30, 2007
COMPANY's MS ID Number: ***
Territory: UNITED STATES OF AMERICA, CANADA, CARIBBEAN
(EXCLUDING
CUBA) AND MEXICO
</TABLE>
MICROSOFT OEM DISTRIBUTION AGREEMENT FOR
SOFTWARE PRODUCTS FOR EMBEDDED SYSTEMS
MICROSOFT LICENSING, GP ("MS"), and the undersigned company
("COMPANY") agree to
be bound by the terms of this MICROSOFT OEM DISTRIBUTION
AGREEMENT FOR SOFTWARE
PRODUCTS FOR EMBEDDED SYSTEMS ("Agreement") effective as of the
date above
("Effective Date").
This Agreement consists of the following:
- this Signature Page
- Address Schedule
- General Terms and Conditions
- OEM Volume Royalty Program Schedule
- Use of MOO and ECE Schedule
- Virtual Warehouses Schedule
MICROSOFT LICENSING, GP B SQUARE CORPORATION
A general partnership organized under A company organized under
the laws of:
the laws of: State of Nevada, U.S.A Washington, USA
By: By:
---------------------------------
------------------------------------
(signature) (signature)
Name: Name: SCOTT MAHAN
-------------------------------
----------------------------------
(printed) (printed)
Title: Title: VICE PRESIDENT, FINANCE - CFO
------------------------------
---------------------------------
(printed) (printed)
Date: Date:
-------------------------------
----------------------------------
(printed) (printed)
CONFIDENTIAL
08/02/06 59528v9 Microsoft OEM Distribution Agreement for
Software Products for
Embedded Systems
*** CONFIDENTIAL TREATMENT REQUESTED
Form 2.8.56
Document Tracking Number: ***
<PAGE>
ADDRESS SCHEDULE
SHIPPING, BILLING, REBATES, SUPPORT
COMPANY'S VAT NUMBER:
<TABLE>
<S> <C>
COMPANY "SHIP TO" ADDRESS COMPANY BILLING ADDRESS
*** ***
B SQUARE CORPORATION B SQUARE CORPORATION
110 110th AVE NE 110 110th Ave NE
Suite 200 Suite 200
Bellevue, WA 98004 Bellevue, WA 98004
UNITED STATES UNITED STATES
Telephone: 425 519-5900 Telephone: 425 519-5900
Fax: 425 519-5999 Fax: 425 519-5999
E-mail: *** E-mail: ***
</TABLE>
COMPANY TECHNICAL SUPPORT NUMBER
***
PAYMENT
COMPANY shall include applicable MS invoice numbers and its VAT
number on all
Payments.
SEND PAYMENTS VIA WIRE TRANSFER ONLY TO:
Microsoft Licensing, GP
***
***
***
***
***
***
***
Or to such other address or account as MS may specify from time
to time.
CONFIDENTIAL
Microsoft OEM Distribution Agreement for Software Products for
Embedded Systems,
# *** dated October 1, 2006 between MS and B SQUARE
CORPORATION
*** CONFIDENTIAL TREATMENT REQUESTED
2
<PAGE>
MOO AND ECE COMPANY ADMINISTRATOR
COMPANY designates as its ECE and MOO COMPANY Administrator the
following
individuals.
***
B SQUARE CORPORATION
110 110th Ave. NE
Suite 200
Bellevue, WA 98004
UNITED STATES
Telephone: 425 519-5900
Fax: 425 519-5999
E-mail: ***
CONFIDENTIAL
Microsoft OEM Distribution Agreement for Software Products for
Embedded Systems,
# *** dated October 1, 2006 between MS and B SQUARE
CORPORATION
*** CONFIDENTIAL TREATMENT REQUESTED
3
<PAGE>
NOTICES
Except as provided above in this Address Schedule, any written
notices related
to this Agreement must be in the English language and addressed
to the contacts
and locations listed below. Each party may change the contact or
address below
by providing notice.
<TABLE>
<S> <C>
COMPANY INFORMATION MS INFORMATION
*** Microsoft Licensing, GP
B SQUARE CORPORATION ***
110 110th Ave. NE ***
Suite 200 ***
Bellevue, WA 98004 ***
UNITED STATES ***
***
Telephone: 425 519-5900 ***
Fax: 425 519-5999
E-mail: ***
WITH A COPY TO:
</TABLE>
CONFIDENTIAL
Microsoft OEM Distribution Agreement for Software Products for
Embedded Systems,
# *** dated October 1, 2006 between MS and B SQUARE
CORPORATION
*** CONFIDENTIAL TREATMENT REQUESTED
4
<PAGE>
GENERAL TERMS AND CONDITIONS
1. DEFINITIONS.
"APM" or "Associated Product Materials" means documentation,
external software
media, and other materials related to the Licensed Product that
MS may designate
from time to time as redistributable parts of a Licensed
Product. APM does not
include COAs.
"ARA" or "Additional Rights Agreements" means the Microsoft OEM
Customer License
Agreement for Use of Third Party Brand Names and Trademarks and
the Microsoft
OEM Customer License Agreement for Field Upgrades.
"Authorized Replicator" or "AR" means an MS-authorized supplier
of APM and COAs.
"Benefits" are defined in Section 14(i).
"CLA" means the pre-printed, serialized OEM Customer License
Agreement for
Embedded Systems as made available by MS. For additional
information on the CLA,
COMPANY should contact its MS account manager.
"Claim" is defined in Section 8(a).
"COA" or "Certificate of Authenticity" means a non-removable
sticker designated
by MS as specific to the Licensed Product.
"COMPANY Parties" is defined in Section 14(i).
"CVC" means the customer value chain. The CVC is a customer
relationship
management system that tracks the progress of prospective
customers through a
structured sales lifecycle. COMPANY may access the CVC through
the following
URL: ***.
"Distributor ALPs" means the licensing terms and conditions for
a Licensed
Product on the Royalty Rate List.
"ECE" means the Mobile & Embedded Communications Extranet,
which is the Internet
site located at ***. MS may designate a successor URL from time
to time. The ECE
is made available to COMPANY as an informational resource.
"Embedded Application" means an industry- or task-specific
software program
and/or functionality with all of the following attributes:
(a) It provides the primary functionality of the Embedded
System.
(b) It is designed to meet the functionality requirements of the
specific
industry into which the Embedded System is marketed.
(c) It offers significant functionality in addition to the
Licensed Product
software.
"Embedded System" means OEM Customer's computing system or
device with an Image
that (i) is designed for and distributed with an Embedded
Application, and (ii)
is not marketed or useable as a general purpose personal
computing device (such
as a personal computer), a multi-function server or a
commercially viable
substitute for one of these systems.
"Force Majeure Event" means fire, disaster caused by forces of
nature, riot,
terrorist act, war, labor dispute, material changes in
applicable law or
regulation, or decree of any court.
"Image" means the binaries for the Licensed Product included on
an Embedded
System and the OEM Customer's binaries.
"Installer" means a third party entity approved by MS in writing
to perform
certain activities for an OEM Customer.
"Licensed Products" means the MS products identified as licensed
in the Product
Viewer Tool. Licensed Products are available from an AR or an MS
Affiliate for
redistribution to OEM Customers. Licensed Products include MS
software
(including Supplemental Code), COAs, and APM.
"Material Amount" means ***.
"MCCL" means Microsoft (China) Co. Limited, a company organized
under the laws
of the People's Republic of China and a wholly-owned subsidiary
of MSCORP.
"Minimum Requirements" means ***.
"MIOL" means Microsoft Ireland Operations Limited, a company
organized under the
laws of Ireland and an indirect, wholly-owned subsidiary of
MSCORP.
"Misappropriate" has the same meaning given in the Uniform Trade
Secrets Act.
"MOO" means MS OEM Online, the Internet site located at ***. MS
may designate a
successor URL from time to time. COMPANY will access and use MOO
in connection
with certain aspects of its performance under this
Agreement.
"MS Affiliate" means any entity that directly or indirectly
controls is
controlled by, or is under common control with MS, including
without limitation
MSCORP.
"MS Parties" means MS, Suppliers, and/or their respective
officers, employees,
and agents.
"MSCORP" means Microsoft Corporation, a company organized under
the laws of the
State of Washington, U.S.A.
"MSLI" means Microsoft Licensing, GP, a general partnership in
which MSCORP is a
general partner.
"OEM ALPs" means licensing terms and conditions for the Licensed
Product on the
"Additional Licensing Provisions" affixed to the Runtime License
Envelope.
Courtesy copies of the ALPs are available on the ECE.
"OEM Customer" means an original equipment manufacturer of one
or more Embedded
Systems that has signed a current CLA.
"OEM Volume Royalty Program" has the meaning specified in the
OEM Volume Royalty
Program Schedule.
"Payments" is defined in Section 14(i).
"Prior Agreement" is defined in Section 13(c).
"Product Viewer Tool" means the Product Viewer in MOO. It is a
search tool that
allows users to search for MS part numbers, and bills of
materials for Licensed
Products.
"Recovery Image" means a copy of the Image as originally
installed on the
Embedded System. A Recovery Image is used to reinstall the
Image.
"Reporting Guidelines" means the Sales-Out and Royalty Reporting
Guidelines
posted on the ECE. These guidelines provide for electronic
submission to MS of
sales-out information as reasonably requested by MS.
"Resource Guide" means the Microsoft Embedded Distributor
Resource Guide posted
on the ECE. It contains information about general licensing,
operations, and
Licensed Product ordering. It does not contain licensing terms.
MS reserves the
right to modify the Resource Guide with 60 days notice.
CONFIDENTIAL
Microsoft OEM Distribution Agreement for Software Products for
Embedded Systems,
# *** dated October 1, 2006 between MS and B SQUARE
CORPORATION
*** CONFIDENTIAL TREATMENT REQUESTED
5
<PAGE>
"Royalty Rate List" means the list of royalty-bearing Licensed
Products and
royalty rates. This list also contains Distributor ALPs and
other information.
"Runtime License" means a license to distribute a single Image
on an Embedded
System.
"Runtime License Envelope" means the envelope that contains the
ALPs for the
Licensed Product. A Runtime License Envelope may contain
COAs.
"Successor Agreement" is defined is Section 13(b).
"Supplemental Code" means any additional or replacement code for
any portion of
a Licensed Product MS may provide to COMPANY from time to time.
If there are any
additional or different license terms and conditions that apply
to that the
Supplemental Code, then MS will provide a notice with that
code.
"Suppliers" means MSCORP and other licensors or suppliers of
Licensed Product or
portions thereof.
"Territory" means the specific countries or regions of the world
on the
Signature Page.
"Trade Secret" has the same meaning given in the Uniform Trade
Secrets Act.
"Update Image" means an Image that consists of an updated
version of the
Licensed Product binaries such as Supplemental Code and an
updated version of
the OEM Customer binaries. An Update Image may include the
previously
distributed version of the Licensed Product binaries or the OEM
Customer
binaries, but not both.
"VAT Number" is defined in Section 3(f)(i).
"Virtual Warehouse" means an offsite warehouse for Licensed
Products established
by COMPANY in accordance with the Virtual Warehouse
Schedule.
2. LICENSE GRANT AND LIMITATIONS.
(a) License Grant. MS grants to COMPANY a non-exclusive, limited
license to
distribute Licensed Products solely:
(i) into or within the Territory, and
(ii) to OEM Customers, Installers, and Virtual Warehouses.
(b) Ordering.
(i) COMPANY shall only accept orders from OEM Customers or on
behalf of OEM
Customers from:
- Installers, and
- third party procurement companies.
(ii) COMPANY shall verify via the MOO tool that all orders are
from parties
that have current OEM Customer status.
(iii) COMPANY shall ship Licensed Product solely within the
Territory.
Additional countries may be added to the Territory only after
COMPANY's MS
regional channel manager approves the addition and it is added
to MOO.
(iv) COMPANY shall not execute a CLA. COMPANY is not permitted
to act as an
OEM Customer.
(v) DESIGN RESTRICTIONS ON HIGH RISK ACTIVITIES. The Licensed
Products are
not fault-tolerant and are not designed, manufactured or
intended for any use
requiring fail-safe performance in which the failure of a
Licensed Product could
lead to death, serious personal injury, or severe physical or
environmental
damage ("High Risk Activities"). This includes the operation of
aircraft or
nuclear facilities. COMPANY agrees not to use, or license the
use of, the
Licensed Product in connection with any High Risk
Activities.
(c) ARs and Available Products.
(i) COMPANY will obtain COAs and APM from an AR (or MS Party). A
list of
ARs is available on the ECE. MS may update this list.
(ii) COMPANY shall order and acquire from an AR (or MS
Affiliate) only
Licensed Products listed on the Product Viewer Tool.
(iii) If MS has removed a Licensed Product from the Product
Viewer Tool,
COMPANY may only continue to distribute the Licensed Product
until the earlier
of:
(A) The final shipment date from COMPANY to its OEM Customers
that is
set by MS; and
(B) Termination or expiration of this Agreement.
(iv) COMPANY may order Recovery Images and Update Images (on
behalf of an
OEM Customer) that are based on Licensed Products listed on the
Product Viewer
Tool. Recovery Images and Update Images may only be distributed
to OEM
Customers, or Installers on behalf of an of an OEM Customer.
(d) Packaging Intact.
(i) COMPANY shall distribute the Licensed Product in the
unopened
form/packaging as received from the AR and/or MS Party.
(ii) COMPANY shall not modify or remove any part of the contents
or
packaging of the Licensed Product.
(e) Inventory Control. COMPANY shall maintain a level of
security sufficient to
prevent loss or unauthorized distribution of Licensed Product
(including COAs
and APM).
(f) No Conflicts. COMPANY shall not provide to OEM Customer any
non-MS
information that conflicts with or supersedes or purports to
supersede the CLA,
any ARAs or the OEM ALPs.
(g) Product-Specific Terms. COMPANY shall comply with the
Distributor ALPs.
(h) Potential OEM Customers. COMPANY shall perform the following
steps for each
potential OEM Customer. COMPANY shall:
(i) Ensure that it uses the most current CLA and ARA forms.
(ii) Before any potential OEM Customer signs a CLA, ensure that
the company
is within the Territory.
(iii) Notify each potential OEM Customer that only an authorized
signatory
of the prospective OEM Customer may execute the CLA or ARA.
(iv) Provide the potential OEM Customer a courtesy copy of the
applicable
OEM ALPs before the OEM Customer first licenses any Licensed
Product.
(v) Verify that:
(A) The information provided by the potential OEM Customer
is
complete and correct;
(B) No changes or alterations have been made to the CLA or ARA;
and
(C) Each such agreement has been properly completed and executed
by
an authorized representative of the potential OEM Customer.
(i) New OEM Customers. COMPANY shall perform the following steps
for each new
OEM Customer. COMPANY shall:
(i) If the OEM Customer requests ARAs, comply with the
instructions
described in the Resource Guide.
CONFIDENTIAL
Microsoft OEM Distribution Agreement for Software Products for
Embedded Systems,
# *** dated October 1, 2006 between MS and B SQUARE
CORPORATION
*** CONFIDENTIAL TREATMENT REQUESTED
6
<PAGE>
(ii) Provide Recovery Images and Update Images to OEM Customers
as received
from an AR and in accordance with the Resource Guide.
(iii) Provide Supplemental Code on external media as received
from an AR
and any related OEM ALPs for OEM Customer only in the manner set
forth in the
applicable Supplemental Code letter from MS.
(iv) On a weekly basis, express mail to MS both OEM
Customer-signed
originals of any CLAs and ARAs returned to COMPANY during the
previous week.
(j) Interim Shipments. MS agrees that between the time COMPANY
obtains the OEM
Customer's signature on the CLA and the date MS
countersigns:
(i) COMPANY may distribute Licensed Products to the OEM
Customer, and
(ii) ***.
(k) OEM Customer Notices. COMPANY shall instruct each OEM
Customer that:
(i) DESIGN RESTRICTIONS ON HIGH RISK ACTIVITIES. The Licensed
Products are
not fault-tolerant and are not designed, manufactured or
intended for any use
requiring fail-safe performance in which the failure of a
Licensed Product could
lead to death, serious personal injury, or severe physical or
environmental
damage ("High Risk Activities"). This includes the operation of
aircraft or
nuclear facilities. OEM Customer agrees not to use, or license
the use of, the
Licensed Product in connection with any High Risk
Activities.
(ii) OEM Customer may only distribute Licensed Products
(including COAs and
APM):
(A) As part of the OEM Customer's Embedded Systems;
(B) That were obtained by the OEM Customer directly from an
MS-authorized distributor; and
(C) In accordance with the CLA, the OEM ALPs, and the ARAs.
(iii) OEM Customer may only reproduce and distribute Update
Images,
Supplemental Code, and Recovery Images in accordance with the
CLA.
(l) IP Notices.
COMPANY shall not remove or obscure any copyright, trademark or
patent notices
that appear on the Licensed Product as delivered to COMPANY.
(m) Logos.
(i) MSCORP may designate one or more logos for use with the
Licensed
Product. Use of these logos is optional. To obtain more
information regarding
licensing and use of logos, COMPANY should contact its MS
account manager.
(ii) Use or display of any logo of MS or MSCORP shall be limited
to the
terms of a separate logo license from MSCORP. Logo licenses and
published
standard guidelines are posted at ***, if and as available from
MSCORP.
(n) Unauthorized Distribution. Upon notice from MS, COMPANY
shall promptly
discontinue distribution of Licensed Product to an OEM Customer
or to a
potential OEM Customer. COMPANY shall cooperate with MS in
investigating
instances of unauthorized distribution of Licensed Products.
COMPANY shall make
commercially reasonable efforts to retrieve any Licensed
Products previously
distributed to such OEM Customer or potential OEM Customer.
(o) No Reverse Engineering.
(i) COMPANY shall not reverse engineer, decompile, or
disassemble the
Licensed Product, except and only to the extent applicable law
expressly permits
such actions.
(p) No Representations for MS.
COMPANY shall not make any representation or warranty (express
or implied) to
OEM Customers, or any other third party, on behalf of MS.
COMPANY shall defend,
indemnify, and hold MS and its Suppliers harmless from any claim
or damages and
reasonable attorneys' fees arising out of any warranty or
representation by
COMPANY.
(q) This Agreement does not give COMPANY title to any Licensed
Product,
packaging, papers, materials, or other property of MS related to
a Licensed
Product.
(i) MS retains title to all APM and COAs (and related materials)
from the
time that the Licensed Product is acquired by COMPANY until
COMPANY distributes
the Licensed Products to or for the OEM Customer.
(ii) In no circumstances will any receiver or trustee of COMPANY
be
entitled to sell or distribute any Licensed Product obtained by
COMPANY pursuant
to the Agreement.
(r) Unless otherwise provided in writing from MS, COMPANY may
not deliver COAs
or APM to any other company that has an effective Microsoft OEM
Distribution
Agreement for Software Products for Embedded Systems.
(s) COMPANY agrees that it has received and reviewed a courtesy
copy of the
Minimum Requirements (if applicable in the Territory). COMPANY
further agrees to
achieve compliance with the Minimum Requirements (if any) within
*** days of the
Effective Date and to maintain such compliance after that.
3. REPORTS AND PAYMENTS.
(a) Royalty Rate List.
(i) At least *** days prior to the first day of each month, MS
will post
the Royalty Rate List for the upcoming month on the ECE.
(ii) MS may modify the Royalty Rate List upon notice to COMPANY.
Submission
of Licensed Product orders to ARs or distribution of Licensed
Product after the
effective date of any modifications to the Royalty Rate List
shall constitute
COMPANY's acceptance of such modifications. New royalty rates
will be effective
on the date specified on the Royalty Rate List or, if no date is
specified, upon
notice of the change.
(iii) If COMPANY elects to participate in the OEM Volume Royalty
Program,
COMPANY shall comply with the terms and conditions in the OEM
Volume Royalty
Program Schedule.
(iv) MS may offer a performance rebate program ("Rebate
Program") to
encourage its distributors to promote and expand sales of
Licensed Products.
COMPANY may qualify to participate in the Rebate Program and
earn rebates for
achieving defined objectives as outlined on ECE. Company should
contact its MS
account manager with any questions about the Rebate Program.
(b) Sales-Out Reports.
(i) Within *** days after the end of each calendar month COMPANY
shall
submit a sales-out report as described in the Reporting
Guidelines. COMPANY
shall provide its final report within *** days after this
Agreement terminates
or expires.
If COMPANY fails to submit a sales-out report, COMPANY may
receive daily
notices from MS to correct the problem. MS may
CONFIDENTIAL
Microsoft OEM Distribution Agreement for Software Products for
Embedded Systems,
# *** dated October 1, 2006 between MS and B SQUARE
CORPORATION
*** CONFIDENTIAL TREATMENT REQUESTED
7
<PAGE>
invoice COMPANY based on Licensed Product shipment reports
submitted to MS by
the ARs.
(ii) COMPANY shall ensure that all reports under this
Agreement:
(A) are accurate and complete,
(B) are in compliance with the requirements in the Reporting
Guidelines, and
(C) are in compliance with any Minimum Requirements applicable
in the
Territory.
(iii) COMPANY shall take all steps needed to ensure that it
complies with
all applicable local and national data protection laws when
collecting and
providing data to MS.
(c) Monthly Payments. For each calendar month, COMPANY shall
remit payment to MS
via wire transfer, as specified in the Payment section of the
Address Schedule.
(d) Late Payments.
(i) If COMPANY does not meet MS payment terms, MS may, without
limiting its
remedies, do any of the following:
(A) require the AR to suspend all pending COMPANY orders; or
(B) terminate this Agreement.
(ii) If COMPANY fails to pay any royalty or other payment due
under this
Agreement by the applicable due date, then MS may apply a late
charge on the
past due amount. To the extent permitted by applicable law, the
late charge will
be assessed at an annual rate equal to ***%. The late charge
will accrue monthly
(before and after any judgment) from the due date through the
date of actual
payment (both dates inclusive). Late charges will be applied and
without
prejudice to any other right or remedy available to MS.
(e) Currency.
All payments must be in U.S. dollars and amounts owed will not
be satisfied by a
tender or any recovery pursuant to any judgment that is
expressed in or
converted by MS to any currency other than U.S. dollars.
(f) Taxes.
(i) If COMPANY is required to withhold taxes on payments to MS,
then
COMPANY may deduct such taxes from the amount owed, and pay them
to the
appropriate taxing authority. COMPANY agrees to deliver to MS
(within *** days
of such payment) an official receipt for any such taxes withheld
or other
documents necessary to enable MS to claim potential foreign tax
credits. If MS
is defined as MSLI or MCCL, a foreign tax authority is a
non-U.S. authority. If
MS is defined as MIOL, a foreign tax authority is a non-Irish
authority. If
COMPANY is located in a jurisdiction that uses the Value Added
Tax or sales tax
number ("VAT Number") for tax identification purpose, COMPANY's
VAT Number shall
be provided in the Address Schedule.
(ii) Tax Certificate. If COMPANY conducts business in the U.S.A.
and
qualifies for a state resale tax exempt certificate, then
COMPANY shall provide
MS with a copy of its U.S.A. state resale tax exempt
certificate, if applicable,
with this Agreement when it is returned for signature by MS.
(g) Royalty Payments. For each unit of Licensed Product
distributed by COMPANY,
COMPANY agrees to pay MS the royalty rate in the Royalty Rate
List in effect
during the month in which Licensed Product is shipped by
COMPANY. COMPANY shall
pay royalties within *** days after the end of each calendar
month in which
Licensed Product was shipped. COMPANY shall pay royalties within
*** days after
the termination or expiration date of this Agreement for all
Licensed Product
distributed in the final full or partial month, as well as all
inventory not
returned to MS, including inventory remaining in Virtual
Warehouses.
(h) Credit Review. MS reserves the right to review COMPANY's
financial
condition, payment history, and overall credit worthiness during
the term of
this Agreement. By signing this Agreement COMPANY authorizes MS
to access any
credit bureaus or agencies to inquire about COMPANY's financial
condition. Upon
request, COMPANY shall provide its current audited financial
statements. After
review of COMPANY's financial condition, payment history and
overall credit
worthiness, MS may require any of the following payment
assurances:
(i) An initial payment equal to the estimated Licensed Product
royalties
for the first calendar quarter of the Agreement (or the quarter
following the
review). COMPANY may not recoup any of that payment against
royalties due to MS
or apply it against payments to any AR. If COMPANY has complied
with all
material terms of this Agreement when it expires, MS will refund
the initial
payment amount (net of amounts due MS) within *** days of
COMPANY's final
royalty report and payment for Licensed Products distributed
during the term of
this Agreement.
(ii) A third party guarantee, performance bond, letter of
credit,
prepayment of royalties, or other security.
(iii) Periodic updated financial statements.
(iv) Written assurances of due performance.
Until the deposit amount and/or payment assurances is/are
received and
acceptable to MS, MS may suspend COMPANY's license rights or
require ARs to
refuse to fill COMPANY's orders.
(i) Error. If COMPANY discovers an over-reporting error, COMPANY
shall report
the error to MS in writing within *** calendar months after the
end of the
calendar month in which the Licensed Product was
distributed.
(j) Order Limits. MS may require ARs to refuse or limit orders
placed by COMPANY
in quantities greater than COMPANY will be able to make timely
payment for or
distribute. MS will give COMPANY written notice if it takes this
action.
(k) AR Charges. Royalties exclude any charges by the AR for COAs
or APM.
Royalties also exclude any taxes, duties, fees, excises or
tariffs imposed on
any of COMPANY's activities in connection with this Agreement.
COMPANY shall pay
any such charges, taxes, duties, fees, excises or tariffs.
(l) Additional Royalty. If COMPANY distributes any Licensed
Product in violation
of the terms of this Agreement or COMPANY is unable to account
for missing
Licensed Product, then MS, without limiting its remedies, may
demand and COMPANY
agrees to pay, an additional royalty equal to ***% of the
royalty for those
Licensed Products. COMPANY shall pay such additional royalty
within *** days of
MS' invoice date. The parties acknowledge that distribution in
violation of the
terms of this Agreement would result in damages to MS that are
impractical and
difficult to ascertain. The parties also acknowledge that the
additional royalty
represents a reasonable and genuine estimate of the loss that
will be suffered
by MS.
(m) CVC Leads. COMPANY shall enter data into the CVC as
described on the ECE.
***
(n) Damaged Materials. For COAs and APM damaged irreparably
during the ordinary
course of COMPANY's business, COMPANY shall:
(i) Maintain a log of each damaged or destroyed COA. For each
such COA, the
log must include the date damaged or destroyed,
CONFIDENTIAL
Microsoft OEM Distribution Agreement for Software Products for
Embedded Systems,
# *** dated October 1, 2006 between MS and B SQUARE
CORPORATION
*** CONFIDENTIAL TREATMENT REQUESTED
8
<PAGE>
Licensed Product name, COA number and cause of damage or
destruction.
(ii) Return each damaged COA to the AR and/or MS Affiliate from
which the
COA was acquired.
(o) Materials in Transit. COMPANY is responsible for any loss or
damage to COAs
and APM in transit between AR and COMPANY.
4. NO WARRANTIES. NO LIABILITY FOR LATE DELIVERY.
(A) EACH LICENSED PRODUCT IS LICENSED "AS-IS." THE OEM CUSTOMER
AND ITS END
USERS BEARS THE RISK OF USING IT. MS GIVES NO EXPRESS
WARRANTIES, GUARANTEES OR
CONDITIONS. TO THE EXTENT PERMITTED UNDER APPLICABLE LAWS, MS
EXCLUDES THE
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND
NON-INFRINGEMENT.
(b) Neither MS nor its Suppliers shall have any liability for
failure to deliver
any Licensed Product by any particular date.
5. LICENSED PRODUCT DISCONTINUANCE AND RETURNS
(a) If MS or its Suppliers determine that a Licensed Product
should not be
distributed in a market, COMPANY shall immediately stop
distributing upon
written notice.
(b) Replacement Units. No royalty shall accrue to MS for
Licensed Product
shipped to replace units defective in media or reproduction.
COMPANY must
distribute such replacement copies directly to OEM Customers at
no charge,
except for the reasonable costs COMPANY incurs for materials,
shipping, and
handling.
(c) COMPANY shall defend, indemnify, and hold MS and its
Suppliers harmless from
and against all damages, costs and expenses, including
reasonable attorneys'
fees, incurred due to COMPANY's continued distribution of
Licensed Product after
MS has notified COMPANY to stop distributing the Licensed
Product.
(d) Returns. COMPANY shall manage any returns of Licensed
Product in ac
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