Software License And Binary Distribution Agreement

Exhibit 10.16





SOFTWARE LICENSE AND

BINARY DISTRIBUTION AGREEMENT













LUCENT TECHNOLOGIES INC.











ALTIGEN COMMUNICATIONS, INC.







Effective as of Sept. 23, 1998

--------

SOFTWARE LICENSE AND

BINARY DISTRIBUTION AGREEMENT



TABLE OF CONTENTS



1. RIGHT TO USE LICENSED SOFTWARE...................................... 1

1.1. Grant of Rights.................................................. 1

1.2. LICENSEE's Obligations........................................... 1

1.3. Furnishing of LICENSED SOFTWARE.................................. 1

1.4. Ownership........................................................ 1

1.5. U.S. Export Control.............................................. 1

1.6. Support.......................................................... 1

2. LUCENT SOURCE CODE.................................................. 1

2.1. Source Code Agreement............................................ 1

2.2. Grant-Back of LICENSEE MODIFICATIONS............................. 1

3. FEES AND PAYMENTS................................................ 1

3.1. Fees............................................................. 1

3.2. Payments......................................................... 1

3.3. Taxes............................................................ 1

4. DURATION AND TERMINATION............................................ 1

4.1. Duration......................................................... 1

4.2. Termination for Breach........................................... 1

4.3. Survival......................................................... 1

5. WARRANTY AND INDEMNIFICATION........................................ 5

5.1. Warranty......................................................... 5

5.2. Indemnification.................................................. 5

6. MISCELLANEOUS PROVISIONS............................................ 6

6.1. Agreement Prevails............................................... 6

6.2. Nothing Construed................................................ 6

6.3. Confidentiality.................................................. 6

6.4. Publicity........................................................ 7

6.5. Nonassignability................................................. 7

6.6. Patents.......................................................... 7

6.7. Addresses........................................................ 8

6.8. Integration...................................................... 9

6.9. Dispute Resolution............................................... 9



Definitions Appendix Software Schedule Exhibit A Exhibit B

SOFTWARE LICENSE AND

BINARY DISTRIBUTION AGREEMENT



Effective as of Sept. 23, 1998 ("Effective Date"), LUCENT TECHNOLOGIES INC., a Delaware corporation ("LUCENT"), having an office at 600 Mountain Avenue, Murray Hill, New Jersey 07974, and ALTIGEN COMMUNICATIONS, INC, a California corporation, ("LICENSEE")*, having an office at 45635 Northport Loop East, Fremont, CA 94538 agree as follows:



1. RIGHT TO USE LICENSED SOFTWARE



1.1. Grant of Rights



Subject to receipt by LUCENT of the fee(s) specified in the Software Schedule attached hereto and made a part of this Agreement, LUCENT grants to LICENSEE a personal, nontransferable and nonexclusive right to use, display, reproduce, market and sell, lease or otherwise distribute or transfer copies of LICENSED SOFTWARE as part of CUSTOMER SOFTWARE.



1.2. LICENSEE's Obligations



1.2.1. LICENSEE shall not modify, disassemble or reverse compile LICENSED



1.2.2. LICENSEE shall not sell, lease or otherwise distribute or transfer

LICENSED SOFTWARE as a standalone software program or as a

component or components of a software program the chief

marketability and functionality of which is the LICENSED SOFTWARE.



1.2.3. LICENSEE shall provide LUCENT with two (2) copies of each release

of CUSTOMER SOFTWARE, including related documentation and



1.2.4. LICENSEE shall obtain written, "break-the-seal" or other type of

agreement from LICENSEE's customers, before or at the time of

furnishing each copy of CUSTOMER SOFTWARE. LICENSEE may use its

standard end-user License Agreement, substantially in the form

attached hereto as Exhibit A, to satisfy its obligations under this

Section 1.2.4.



1.2.5. Each portion of CUSTOMER SOFTWARE shall include all copyright,

trademark and other notices appearing on or in LICENSED SOFTWARE.



1.3. Furnishing of LICENSED SOFTWARE





_____________ * Terms in capital letters which are defined in the Definitions Appendix shall

have the meanings specified therein.

Within a reasonable time after receipt by LUCENT of the fee(s) due on execution of this Agreement, as set forth in the attached Software Schedule, LUCENT shall furnish to LICENSEE the LICENSED SOFTWARE, together with the appropriate documentation and other information and materials relating to such LICENSED SOFTWARE, as set forth in such Software Schedule.



1.4. Ownership



No ownership interest in LICENSED SOFTWARE or other information or documentation provided under this Agreement is transferred to LICENSEE.



1.5. U.S. Export Control



LICENSEE acknowledges that any products, software, and technical information (including, but not limited to, services and training) provided under this Agreement are subject to U.S. export laws and regulations and any use or transfer of such products, software, and technical information must be authorized under those regulations. LICENSEE agrees that it will not use, distribute, transfer, or transmit the products, software, or technical information (even if incorporated into other products) except in compliance with U.S. export regulations. If requested by LUCENT, LICENSEE also agrees to sign written assurances and other export-related documents as may be required to comply with U.S. export regulations.



1.6. Support



1.6.1. During the ninety (90) day period following delivery of LICENSED

SOFTWARE to LICENSEE, LUCENT will use commercially reasonable

efforts to correct any Errors. For purposes of this Section 1.6,

"Error" means any instance where LICENSED SOFTWARE does not

substantially conform to its published specifications.



1.6.2. During the thirty (30) day period following delivery of LICENSED

SOFTWARE to LICENSEE, LUCENT will furnish consultative support to

LICENSEE to assist in the integration of LICENSED SOFTWARE with

LICENSEE's software. Such support shall not exceed forty (40) hours

of telephone consultation. LUCENT will furnish such telephone

support during regular business hours (8:00 a.m. to 5:00 p.m. U.S.

Eastern Time, excluding weekends and holidays). The telephone

number for such support will be furnished to LICENSEE.



1.6.3. LUCENT will provide support as set forth in this Section 1.6 at no

additional charge and only if LICENSEE has not previously executed

an elemedia PX3230S H.323 Protocol Stack Software Developer License

Agreement. If LICENSEE requests additional support, LUCENT will, at

its sole discretion, and for the first full year, and for a fee

specified in the Software Schedule, deliver to LICENSEE any and all

updates, error corrections, modifications, and improvements to

LICENSED SOFTWARE, which shall collectively be deemed LICENSED

SOFTWARE for the purposes of this Agreement, no later than when

such updates, error corrections, modifications, and improvements

are generally released to



2. LUCENT SOURCE CODE



2.1. Source Code Agreement



LUCENT agrees to make certain source code for the LICENSED SOFTWARE available to LICENSEE, along with related documentation and information, subject to the terms and conditions of the Limited Source Code License Agreement set forth in attached Exhibit B. LICENSEE agrees to accept and use such LUCENT source code software and related documentation and information solely in accordance with the terms and conditions set forth in Exhibit B.



2.2. Grant-Back of LICENSEE MODIFICATIONS



LICENSEE will deliver to LUCENT a copy of the RTP Protocol Stack source code materials for any and all LICENSEE MODIFICATIONS and for LICENSEE SOFTWARE. LICENSEE grants to LUCENT a worldwide, perpetual, royalty-free, non-exclusive, license to develop, port, modify, edit, format, translate, create derivative works based on or otherwise use, change and/or support and maintain modifications and, at LUCENT's discretion, to incorporate and distribute LICENSEE MODIFICATIONS and such modifications and extensions thereto into future releases of such LICENSED SOFTWARE or other LUCENT software products. LICENSEE grants to LUCENT and its subsidiaries a nonexclusive, world-wide, royalty-free, license to use, modify, reproduce, distribute, sublicense and prepare derivative works from LICENSEE MODIFICATIONS under any intellectual property rights owned or controlled by LICENSEE, including, but not limited to copyright, trade secret and patent rights. The patent license shall extend solely to LICENSEE MODIFICATIONS. The license shall extend also to any modifications and extensions of LICENSEE MODIFICATIONS to the extent that the claims of any LICENSEE patent infringed by such modifications or extensions are used by the original LICENSEE MODIFICATIONS furnished to LUCENT. This same license for LICENSEE MODIFICATIONS also extends from LICENSEE to third parties who are licensed to use LUCENT software products in which LICENSEE MODIFICATIONS, or any portion thereof, are embedded or contained.



3. FEES AND PAYMENTS



3.1. Fees



For the rights granted under this Agreement, LICENSEE shall pay to LUCENT, in the manner specified in Section 3.2, the fee(s) set forth in the Software Schedule. All such fees are in United States dollars.



3.2. Payments



Promptly upon execution of this Agreement by both parties, LICENSEE shall pay to LUCENT all fees, if any, specified in the Software Schedule as due upon execution of this Agreement.



3.3. Taxes

LICENSEE shall pay any tax, duty, levy, customs fee, or similar charge ("taxes"), including interest and penalties thereon, however designated, imposed as a result of the operation or existence of this Agreement, including taxes which LICENSEE is required to withhold or deduct from payments to LUCENT, except (i) net income taxes imposed upon LUCENT by any governmental entity within the United States (the fifty (50) states and the District of Columbia), and (ii) net income taxes imposed upon LUCENT by jurisdictions outside the United States which are allowable as a credit against the United States Federal income tax of LUCENT or any of its SUBSIDIARIES. In order for the exception in (ii) to be effective, LICENSEE must furnish to LUCENT evidence sufficient to satisfy the United States taxing authorities that such taxes have been paid. Such evidence must be furnished to LUCENT within thirty (30) days of issuance by the local taxing authority.



4. DURATION AND TERMINATION



4.1. Duration



The term of this Agreement shall commence on the Effective Date and, unless terminated earlier in accordance with Section 4.2, shall continue for a period of four (4) years. This Agreement shall automatically renew for consecutive one (1) year terms, unless earlier terminated pursuant to Section 4.2. In addition, LICENSEE has the right to terminate this agreement without notice and without cause. LUCENT has the right to terminate this agreement if the LICENSEE fails to fulfill one or more obligations under this agreement (see Section 4.2). Upon any termination, LICENSEE shall immediately discontinue use of and return or destroy all copies of LICENSED SOFTWARE in its possession. LICENSEE shall certify such destruction in writing to LUCENT within thirty (30) days. In the event of termination LUCENT shall have no obligation to refund any amounts paid it pursuant to Section 3.1. Agreements entered into by LICENSEE with its customers under Section 1.2.4. prior to the date of termination of this Agreement shall remain in effect for the term of such agreements with LICENSEE's customers.



4.2. Termination for Breach



If LICENSEE fails to fulfill one or more of its obligations under this Agreement, LUCENT may, upon its election and in addition to any other remedies that it may have, at any time terminate all the rights granted by it hereunder by not less than two (2) months' written notice to LICENSEE specifying any such breach, unless within the period of such notice all breaches specified therein shall have been remedied. Upon such termination LICENSEE shall immediately discontinue use of and return or destroy all copies of LICENSED SOFTWARE and immediately discontinue distribution and use of and destroy all copies of CUSTOMER SOFTWARE in its possession. LICENSEE shall certify such destruction in writing to LUCENT within thirty (30) days. In the event of termination LUCENT shall have no obligation to refund any amounts paid it pursuant to Section 3.1. Agreements entered into by LICENSEE with its customers under Section 1.2.4. prior to the date of termination of this Agreement shall remain in effect for the term of such agreements with LICENSEE's customers.



4.3. Survival

The obligations of LICENSEE under Sections 1.5., 5. and 6.3. shall survive and continue after expiration or termination of this Agreement.



5. WARRANTY AND INDEMNIFICATION



5.1. Warranty



SUBJECT TO SECTION 5.2.1., LUCENT AND OTHER DEVELOPERS MAKE NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESSLY OR IMPLIEDLY. BY WAY OF EXAMPLE BUT NOT OF LIMITATION, LUCENT AND OTHER DEVELOPERS MAKE NO REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES EXCEPT AS PART OF INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.2.1.



5.2. Indemnification



5.2.1. LUCENT represents that it has sufficient right, title, and interest

in the LICENSED SOFTWARE in the unmodified form provided to

LICENSEE hereunder to enter into this Agreement and to grant the

licenses granted hereunder. LUCENT agrees to defend, at its

expense, any suit against LICENSEE based upon a claim that LUCENT

does not have sufficient right, title, and interest in the LICENSED

SOFTWARE to make this Agreement and to grant the licenses granted

hereunder, or that the LICENSED SOFTWARE infringes a United States

trademark or copyright (insofar as such infringement relates to the

documentation for or the code of the LICENSED SOFTWARE ), and to

pay any settlement, or any damages finally awarded after appeal

(including costs and attorney fees, if any, awarded as part of the

final judgment) in any such suit. Regardless of the number of third

party suits, the total liability of LUCENT shall not exceed the sum

of all payments actually made by LICENSEE to LUCENT under this



5.2.2. LUCENT's obligations under Section 5.2.1. shall not be effective

unless (i) LUCENT is notified in writing of any notice of claim or

of threatened or actual suit and (ii) LUCENT is given full control

of the defense and/or settlement, together with full cooperation by

LICENSEE at LUCENT's expense, including the provision of all

relevant information available to LICENSEE, with respect to such

defense and/or settlement of the same.



5.2.3. Following written notification of a claim of a threatened or actual

suit, LUCENT may at its own expense and in addition to LUCENT's

obligations in Section 5.2.1. (i) procure for LICENSEE the right to

continue to market, use, and have others use the alleged infringing

LICENSED SOFTWARE; or (ii) make it non-infringing; or (iii)

terminate the license for such LICENSED SOFTWARE and refund all the

fees (subject to five year straight line depreciation) received

from LICENSEE for such LICENSED SOFTWARE. If LUCENT elects to

replace or modify such LICENSED

SOFTWARE, such replacement shall meet substantially the

specifications for such LICENSED SOFTWARE.



5.2.4. LUCENT shall have no liability for any claim alleging patent

infringement whatsoever; or for copyright infringement based on

LICENSEE's or an end user's (i) continued use after notification of

infringement of other than the then current release of the LICENSED

SOFTWARE received from LUCENT if such claim would have been avoided

by use of the then current release so long as that release was made

available to LICENSEE and end users without additional charge, (ii)

use of LICENSED SOFTWARE other than in the unmodified form provided

to LICENSEE hereunder and in accordance with the rights granted

under this Agreement, or (ii) combination of LICENSED SOFTWARE with

LICENSEE MODIFICATIONS or any other software or product not

delivered by LUCENT hereunder.



6. MISCELLANEOUS PROVISIONS



6.1. Agreement Prevails



This Agreement shall prevail notwithstanding any conflicting terms or legends which may appear on or in LICENSED SOFTWARE or any other items furnished by LUCENT to LICENSEE under this Agreement.



6.2. Nothing Construed



Nothing contained herein shall be construed as:



(i) conferring by implication, estoppel or otherwise, any license or right

to use any name, trade name, trademark, service mark, symbol or any

other identification or any abbreviation, contraction or simulation

thereof; or



(ii) an obligation upon LUCENT or any of its SUBSIDIARIES to furnish any

person, including LICENSEE, any assistance of any kind whatsoever

except as set forth in Section 1.6., or any information or

documentation other than items to be furnished pursuant to Section

1.3.



6.3. Confidentiality



6.3.1. Any information in written or other tangible form furnished by

LUCENT to LICENSEE or by LICENSEE to LUCENT pursuant to this

Agreement and identified as proprietary to the disclosing party

shall remain the property of the disclosing party. Unless otherwise

agreed in writing, such information: (i) shall be treated in

confidence and used only for the purposes of performing obligations

or exercising rights granted under this Agreement; (ii) shall not

be reproduced or copied in whole or in part, except as necessary

for use as authorized in this Agreement; and (iii) shall, together

with any copies thereof, be returned, be destroyed, or if recorded

on an erasable storage medium, be erased when no longer needed or

this Agreement terminates, whichever occurs first.

6.3.2. LICENSEE's and LUCENT's obligations under this Section 6.3. shall

not apply to any information that:



(i) is or becomes available without restriction to the general

public by acts not attributable to the receiving party or

its employees,



(ii) was rightfully in the receiving party's possession without

limitation on disclosure before disclosure hereunder to the

receiving party, or



(iii) which is independently developed by the receiving party or

is rightfully disclosed to the receiving party by a third

party without restrictions on disclosure.



6.4. Publicity



6.4.1. LICENSEE agrees that it will not, without the prior written

permission of LUCENT,:



6.4.1.1. use in advertising, publicity, packaging, labeling or

otherwise any trade name, trademark, trade device,

service mark, symbol or any other identification or any

abbreviation, contraction or simulation thereof owned by

LUCENT or any of its SUBSIDIARIES or used by LUCENT or

any of its SUBSIDIARIES to identify any of its or their

products or services; or



6.4.1.2. represent, directly or indirectly, that any product or

service of LICENSEE is a product or service of LUCENT or

any of its SUBSIDIARIES or is made in accordance with or

utilizes any information or documentation of LUCENT or

any of its SUBSIDIARIES.



6.5. Nonassignability



The parties hereto have entered into this Agreement in contemplation of personal performance by LICENSEE and intend that the rights granted to LICENSEE hereunder not extend to other entities without LUCENT's express written consent. Accordingly, neither this Agreement nor any of LICENSEE's rights hereunder shall be assignable or transferable (in insolvency proceedings or otherwise) without such consent. Such consent shall not be unreasonably withheld.



6.6. Patents



6.6.1 The grant of rights specified in Section 1.1. includes, and the

fees payable under Section 3.1. are in part for, a grant by LUCENT

to LICENSEE, SUBLICENSEES and end users of CUSTOMER SOFTWARE of the

right to use LICENSED SOFTWARE which right to use includes immunity

from suit for infringement of those patents, if any, which LUCENT

has the right to license and to the extent that LUCENT has that

right as of the Effective

Date of this Agreement and which, but for this grant of immunity,

(a) are infringed by the furnishing or use of LICENSED SOFTWARE in

the form furnished by LICENSEE, or patents (b)are necessarily and

unavoidably infringed by the execution of the LICENSED SOFTWARE as

furnished by LICENSEE to license as of the Effective Date of this

Agreement. If the last of any such patents expires during the term

of this Agreement, and if LICENSEE so requests, then LUCENT agrees

to reconsider, if appropriate, the fees payable subsequent to the

expiration of the last of any such patents. Such grant of immunity

from suit shall not extend (i) to any LICENSEE CUSTOMER or

SUBLICENSEE modifications of the LICENSED SOFTWARE as furnished by

LICENSEE to the extent that the claims of any patent are infringed

by such modifications or (ii) to the use of LICENSED SOFTWARE with

other software or hardware products.



6.6.2 Except for the immunities granted under Section 6.6.1, it is

recognized that third parties may have patents or other

intellectual property rights that might be infringed by LICENSEE's

exercise of the rights granted under Section 1.1. of this

Agreement, and LUCENT makes no representations or warranties with

respect thereto. It shall be LICENSEE's sole responsibility to

determine the existence and applicability of patents and other

intellectual property rights of third parties and to secure any

necessary license with respect thereto.



6.6.3 Nothing contained herein shall be construed as conferring by

implication, estoppel or otherwise any license or right under any

existing or later issued patent directed to the combination of

LICENSED SOFTWARE with any other software or hardware program.



6.6.4 The immunities granted pursuant to Section 6.6.1 shall be effective

only for so long as LICENSEE is in compliance with its obligations

under this Agreement.



6.7. Addresses



6.7.1. Any notice or other communication hereunder shall be sufficiently

given to LICENSEE when sent by certified mail addressed to Shirley

Sun (or, if no address is otherwise specified, to LICENSEE's office

above specified), or to LUCENT when sent by certified mail

addressed to Senior Contract Administrator, Lucent Technologies

Inc., 150 Allen Road, Post Office Box 1995, Liberty Corner, New

Jersey 07938. Changes in such addresses may be specified by written



6.7.2. Payments by LICENSEE shall be made to LUCENT at Nations Bank,

Lucent Technologies Intellectual Property, P.O. Box 2770078,

Atlanta, Georgia 30384-7087. Alternatively, payments to LUCENT may

be made by bank wire transfers to LUCENT's account: Lucent

Technologies Intellectual Property, Account No. 3750657331, at

Nations Bank, Routing

No. 111000012, 6000 Felwood Road, College Park, Georgia 30349. Changes

in such address or account may be specified by written notice.



6.8. Integration



This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges all prior discussions between them. Neither of the parties shall be bound by any warranties, understandings or representations with respect to such subject matter ...