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7. Confidentiality

(a) xxxxx

(b) The licensoe shall only disclose the source code for Conversagent's Buddyscript software to a limited number of employees [or limited number of sub-contractors, pursuant to Section 7(c) below] on a strictly need to know basis, disclosure to each specific employee will require the prior written consent of Conversagent, which consent shall not be unreasonably withheld. Consent may be given by exchange of e-mails.

From the study of the above clauses of the 'License Agreement', it is seen that license is granted essentially for the use of the 'Smarterchild' software on the Conversagent server platform only, for the purpose of producing, hosting and distributing Interactive agent' applications. License fee to be paid monthly, is termed as royalty in Clause (4) of the agreement. The payment of royalty is based on the number of sessions for which the equipment ('Smarterchild' software on the Conversagent server platform) is utilized for the licensed purpose. As per Clause (6) of the agreement, Conversagent has to provide one qualified staff member to assist the licensee with the transfer of technical information provided, however, that such services shall not exceed an aggregate of 16 working hours and such technical assistance will be effected at the premises of Conversagent. Further Conversagent management personnel shall assist the applicant's management by makmg introduction to content providers currently featured in the Smarterchild application. The Conversagent is also duty-bound to provide the applicant e-mail support not exceedmg 4 hours per month. However, there is no separate fee being charged for these technical services which are covered by the definition of included services as per para 4 of Article 12 of the DTAA with USA notified vide Notification No. GSR 990(E) dt. 12th Dec, 1990 [(1991) 91 CTR (St) 6]. Para 3 of Article 12 defines the term 'royalties'. For the sake of facility the relevant clauses of Article 12 are extracted below: