Software License And Development Agreement

SOFTWARE LICENSE AND DEVELOPMENT AGREEMENT



THIS SOFTWARE LICENSE AND DEVELOPMENT AGREEMENT is made as of this 27th day of February 27, 1998, by and between INTEL CORPORATION, a Delaware corporation with an office at 2111 NE 25th Avenue, Hillsboro, Oregon ("Intel") and 2WAY MEDIA, INC. ("LAUNCH"), a Delaware corporation with an office at 1632 Fifth Street, Santa Monica, CA 90401.





Intel is a manufacturer of microprocessors, software and systems. LAUNCH has certain expertise in music applications and related businesses. Intel and LAUNCH desire to work together to create a compelling music application using broadband broadcast distribution.



Intel and LAUNCH are entering into that certain Securities Purchase Agreement dated as of February 27, 1998, and related agreements including without limitation the Second Amended and Restated Investors Rights Agreement regarding the issuance and sale to Intel of shares of capital stock of LAUNCH (the "Equity Agreements").



NOW THEREFORE, based on the Recitals and terms and conditions herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:





SECTION 1. DEFINITIONS



1.1 "Project" means an interactive, personalized music channel delivered to the home and updated via broadcast broadband distribution. The client system will have a back-channel that need not be active the entire time the user is deriving value from the Project. Critical features of the Project include: [*] The Project shall include a trial deployment.



1.2 "Intel Software" means Intel-developed software as created by Intel for the Project and as delivered to LAUNCH as required by this Agreement together with all LAUNCH Improvements. Anticipated features of the Intel Software are set forth in Section 2.2 of this Agreement.



1.3 "LAUNCH Improvements" means improvements and bug fixes that LAUNCH may make to the Intel Software in the course of creating LAUNCH Derivatives or otherwise, which LAUNCH shall provide to Intel in source and object code form designated as LAUNCH Improvements.





[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY

WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH

RESPECT TO THE OMITTED PORTIONS. 1.4 "Derivative Work" means a work based upon one or more preexisting works, such as a translation, abridgment, condensation, modification, or any other form in which a work may be recast, transformed, or adapted.



1.5 "LAUNCH Derivatives" means any Derivative Works of the Intel Software created by LAUNCH (but not including LAUNCH Improvements).



1.6 "Licensed Products" means any product offered by LAUNCH that (i) is based on the Project, (ii) incorporates the Intel Software and (iii) adds significant functionality to the Intel Software.



1.7 "Dedicated Resources" shall mean [*] with [*] provided, however, that (i) Intel shall not be required to have [*], (ii) Intel shall have [*] and (iii) Intel [*] and change staff assigned to the Project at its sole discretion. Dedicated Resources shall also include all costs and expenses incurred by Intel in connection with furnishing such engineering resources.



SECTION 2. OBLIGATIONS OF THE PARTIES



2.1 PROJECT DEVELOPMENT. Subject to the terms and conditions of this Agreement, Intel and LAUNCH will cooperate with each other in good faith and use commercially reasonable efforts to complete the Project by [*]. Intel agrees that it will initially develop the Intel Software, and LAUNCH agrees that it will perform its obligations under this Agreement, in a manner to make the Project initially fully functional for satellite distribution. The parties further agree that the Project shall be architected and designed such that it can be adapted for other forms of broadcast broadband distribution including cable modems and DSL. The Project shall be deemed complete after a Trial conducted over a satellite system or on [*], whichever comes first.



2.2 INTEL SOFTWARE. Intel shall develop the Intel Software for the Project. Intel will make good faith efforts to design and architect the Intel Software's components to be independent of the distribution system chosen for the Project (i.e. it can be used for satellite or cable modem). The Intel Software shall include hardened technology components in the following functional areas:



(i) [*]



(ii) [*]



(iii) [*]



(iv) [*]



(v) [*]





[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY

WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH

RESPECT TO THE OMITTED PORTIONS.







The Intel Software shall be the sole and exclusive property of Intel subject only to license rights therein that Intel may grant to LAUNCH and any other third party. The Parties acknowledge that further agreement is required as to the depth of the feature sets in each of (i)-(v) above but intend that such features are capable of being developed by Intel within the scope of Intel's Dedicated Resources. The parties will cooperate and work together in good faith to further refine these features, but all final decisions with respect to the features of the Intel Software shall be made by Intel at its sole discretion.



2.3 INTEL DEDICATED RESOURCES. Intel shall use commercially reasonable efforts to commit the Dedicated Resources to the development of the Intel Software and the completion of the Project. Intel shall have no obligation under this Agreement to provide any goods or services or otherwise contribute resources to the Project and the development of the Intel Software beyond the Dedicated Resources. If Intel's development of the Intel Software and completion of the Project requires less than the Dedicated Resources, Intel's obligations in regard to the Dedicated Resources shall terminate upon completion of the Project and (i) Intel shall have no further obligation in regard to the Dedicated Resources and (ii) LAUNCH shall not be entitled to any credit and/or offset of any kind in regard to any consideration given by it to Intel hereunder or otherwise. If development of the Intel Software for the Project, or completion of the Project, requires Intel to commit resources beyond the Dedicated Resources, the parties shall enter into good faith negotiations to determine whether Intel shall receive additional compensation and if so the amount and nature of such consideration. Notwithstanding the foregoing, the parties reiterate that Intel shall have no obligation under this Agreement to provide any goods or services or otherwise contributes resources to the Project and the development of the Intel Software beyond the Dedicated Resources.



2.4 LAUNCH COMMITMENTS. LAUNCH shall use commercially reasonable efforts and dedicate the resources necessary to develop, obtain all license and other rights necessary to complete the Project in a commercially reasonable way, and pay for at its sole expense the following elements of, the Project:



(i) [*]



(ii) [*]



(iii) [*]



(iv) [*]



(v) [*]



(vi) [*]



(vii) [*]



(viii) [*]



Technology and intellectual property owned, licensed, sub-licensed, or developed independently by LAUNCH and incorporated into the Project or Licensed Products (collectively, the "LAUNCH Technology") shall be the property of LAUNCH subject only to license rights that



[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY

WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH

RESPECT TO THE OMITTED PORTIONS.





LAUNCH may grant therein to Intel or other third parties. Technology developed by LAUNCH with the assistance of Intel shall be owned by LAUNCH.



2.5 JOINT WORK. Intel and LAUNCH shall jointly work on developing [*] All technology, inventions and related intellectual property created as a result of this joint work ("Joint Work Technology") shall be the property of Intel unless independently developed by LAUNCH and LAUNCH can demonstrate with appropriate documentation that it independently developed the technology, invention or related intellectual property. LAUNCH shall, at Intel's request, perform all actions and execute all documents necessary to establish the Joint Work Technology as Intel's sole and exclusive property. Technology, inventions and intellectual property independently developed by LAUNCH shall be the property of LAUNCH and shall be included in the definition of "LAUNCH Technology" as that term is defined herein.



2.6 TRIAL. The parties shall conduct a trial ("Trial") to test the success of the Project. LAUNCH and Intel will work together to determine the first distribution channel for the Trial and perform the necessary integration of the transport stack specific to such bandwidth provider. The parties will cooperate and work together in good faith to further define the Trial.



2.7 CONSIDERATION AND CLOSING. The parties agree that the net value of Intel's contribution to this Project will be [*]. Upon execution of this Agreement at closing, LAUNCH shall pay Intel US$500,000 by issuing to and delivering to Intel 327,797 shares of Series D Preferred Stock of LAUNCH (the "LAUNCH Shares"). Closing shall take place on February 26, 1998, or such other time, and at such place, as the parties shall agree. LAUNCH represents and warrants to Intel that the issuance and delivery of the LAUNCH Shares to Intel (i) is duly authorized and approved by LAUNCH's Board of Directors and, if necessary, LAUNCH's shareholders, (ii) is in full compliance with any and all applicable state and federal securities laws, and (iii) all necessary corporate, government, administrative and other actions or approvals necessary to effectuate the issuance and delivery of the LAUNCH Shares to Intel and perfect Intel's ownership of the LAUNCH Shares have been duly completed and obtained and (iv) upon delivery of the LAUNCH Shares Intel shall be the sole and exclusive owner of the LAUNCH Shares designated as such on LAUNCH's shareholder register. LAUNCH further agrees to indemnify, defend and hold Intel harmless from and against any and all claims, causes of action, damages, losses, costs (including reasonable attorney fees), liabilities and expenses arising from any action or claim brought or threatened against LAUNCH or Intel relating to the issuance and delivery of the LAUNCH Shares. In addition, all representations and warranties made by LAUNCH in the Equity Agreements are incorporated by reference herein and the LAUNCH Shares shall be entitled to the rights and subject t ...