LICENSE AGREEMENT
THIS License Agreement ("Agreement") is made as of February 20, 1996 (the
"Effective Date") by and between FTP Software, Inc., a Massachusetts corporation
("FTP"), and Network Computing Device, Inc., a California corporation, and NCD
Software Corporation, a California corporation and wholly-owned subsidiary of
Network Computing Devices, Inc. (collectively "NCD").
BACKGROUND
NCD has assigned certain rights in the Mariner Product Line to FTP pursuant
to a Asset Purchase Agreement between the parties. Under this Agreement, FTP
licenses certain rights in the Mariner Product Line back to NCD, and NCD
licenses to FTP certain rights in certain modules contained in the Mariner
product that are derived from its Z-mail product.
NOW, THEREFORE, in consideration of the mutual covenants and premises
herein contained, the parties hereto agree as follows:
I. DEFINITIONS
1.1 "AUTOPILOT PATENT APPLICATION" shall mean the patent application
number 08/401-183, entitled "Integrated Network Access User Interface
System and Method."
1.2 "AUTOPILOT PATENT RIGHTS" shall mean any shall mean any and all rights
in and to the AutoPilot Patent Application; any foreign counterparts
of such application; any patents issuing on the foregoing application;
any divisions, substitutions, re-examinations, and continuations
thereof; and all reissues, renewals and extensions thereof.
Continuations-in-part of the foregoing application and patents issuing
on such continuations-in-part, patents of addition, and all reissues,
renewals and extensions of such patents and patents of addition, shall
also be within the AutoPilot Patent Rights, to the extent the same
claim subject matter that was disclosed in the foregoing application
or any foreign counterparts thereof.
1.3 "BINARY CODE" shall mean that form of computer software suitable for
direct execution by a computer without intervening steps of assembly
or compilation.
1.4 "BINARY SOFTWARE" shall mean the Mariner Product in Binary Code form
only.
1.5 "MARINER PRODUCT" shall have the meaning set forth for Products in the
Asset Purchase Agreement among Network Computing Devices, Inc., NCD
Software Corporation and FTP Software, Inc. of even date herewith.
1.6 "SOURCE CODE" shall mean that form of computer software suitable to be
read and written by programmers and which must be converted to Binary
Software prior to execution by a computer.
1.7 "SOURCE SOFTWARE" shall mean the Source Code for the Mariner Product
as it exists on the Effective Date, including both the commercially
released version and work-in-process.
1.8 "TERMINALS" shall mean a hardware device that does not execute a user
accessible operating system and is lacking any practical use (except
for device configuration and diagnostic functions) unless connected to
a local or wide area network, excluding devices capable of running
application programs stored on customary removable media, rotating
storage, and the like.
1.9 "Z-MAIL MODULES" shall mean those modules that are part of NCD's Z-
mail product and identified in Schedule 2.1(a) of the Asset Purchase
Agreement.
II. GRANT
2.1 LICENSE TO FTP. NCD grants to FTP a worldwide, royalty-free, non-
exclusive, perpetual, irrevocable license, including the right to
sublicense, to use, display, copy, modify, import, export, sell and
distribute the Z-Mail Modules, and create derivative works based
thereon.
2.2 SOURCE CODE LICENSE TO NCD. FTP grants to NCD, a royalty-free, non-
exclusive, perpetual, non-transferable (except as set forth in Section
8.1 below), non-assignable (except as set forth in Section 8.1 below),
worldwide license to use, display and modify the Source Software, and
sell, distribute and sublicense derivative works thereof in Binary
Code format only; provided that NCD may only use such rights and
licenses in the following manner:
2.2.1 Subject to Section 8.1, NCD may use such rights and license
to develop derivative works of the Source Software and sell
and distribute such derivative works in binary form only,
and only if such software is bundled with a Terminal
manufactured by or for NCD, NCD's parent, or any entity
forty percent (40%) or more of which is owned by NCD
(collectively "NCD or Affiliate") under the brand name of
NCD or Affiliate or NCD's or Affiliate's customer, or any
other product as to which FTP consents, which consent shall
not be unreasonably withheld.
2.2.2 NCD may embed the Source Software or derivative works
thereof in other software applications developed by NCD,
provided that:
(a) NCD shall not distribute any application in which more
than twenty-five percent (25%) of the Source Software
(as measured in lines of Source Code) or derivative
works of more than twenty-five percent (25%) of the
Source Software (as measured in lines of Source Code)
is embedded;
(b) the Source Software or derivatives thereof comprises
less than fifteen percent (15%) of the lines of Source
Code in any application in which it is embedded; and
(c) NCD shall not use components of the Source Software
that perform functionality covered by claims of the
AutoPilot Patent Application.
2.2.3 NCD may use the Source Software to create modified versions
of the Binary Software provided by FTP in the event such
Binary Software contains an error (as reasonably agreed by
the parties) and FTP, after written notification by NCD, is
unwilling to modify the Binary Code in a time frame
reasonably acceptable to NCD; provided that NCD shall
provide and assign the rights to all such modifications to
FTP as soon as reasonably practical after completion
thereof.
2.2.4 Any time after the first anniversary of the Effective Date,
and until the second anniversary of the Effective Date, NCD
may remove the restrictions set forth in Section 2.2.1,
2.2.2 and 2.2.3 above for a one time payment of two million
dollars ($2,000,000).
2.3 BINARY CODE. FTP grants to NCD a perpetual, non-exclusive, world-
wide, fully paid, license to use, publicly perform, publicly display,
copy, sell and distribute, the Binary Software; provided that NCD
shall be allowed to sell and distribute the Binary Software only if
the Binary Software is bundled with NCD software that has significant
added value. For the purposes of this Section 2.3 "significant added
value" shall mean software that has a list price of at least fifty
percent (50%) of the list price of the Mariner Product.
2.3.1 FTP and NCD will use commercially reasonable efforts to
reach agreement on specifications and a delivery schedule
for APIs for the Binary Software. In the event the parties
are unable to reach a reasonable agreement on the
specifications or delivery schedule with respect to any
item, FTP will hire an independent contractor to complete
such work at FTP's offices. Such independent contractor
shall promptly provide to NCD, at NCD's request, reports on
the status of the work, including but not limited to reports
on costs and expenses incurred to date, projections of costs
and expenses for future work and estimates of the percentage
of work completed. NCD, in NCD's sole
discretion, upon ten (10) days written notice to FTP may
decline to contribute its share of costs for such
contractor and FTP may then terminate the engagement of
the contractor or fund the development itself, in which
case NCD shall have no further obligation for costs
incurred after such ten (10) day period and FTP shall have
no further obligation to complete such work. NCD shall be
responsible for all costs and expenses related to such
work; provided that FTP will reimburse NCD for fifty
percent (50%) of such costs and expenses, up to a maximum
of twenty-five thousand dollars ($25,000). In the event
the parties reach agreement on the specifications and
delivery schedule and FTP advises NCD that it will be
unable to meet such specifications (unless it is
unfeasible to meet such specifications, or, if George
Cowsar and David Korn have not joined FTP (either as a
consultant or employee) or are not at FTP six (6) months
after the Effective Date, or will miss such delivery
schedule by more than thirty (30) days, FTP will hire an
independent contractor to complete such work and will be
responsible for reasonable costs and expenses.
2.3.2 FTP will use commercially reasonable efforts to deliver
updated Binary Code to NCD in accordance with the
specifications and delivery schedule agreed to by the
parties in 2.3.1 above. Upon delivery, such updates shall
become part of the Binary Software.
2.3.3 During the 1996 calendar year, FTP will provide to NCD all
bug fixes, error corrections, and enhancements developed by
FTP, which FTP, in its sole discretion makes generally
available to its other customers, which will become part of
the Binary Software upon delivery, provided that FTP will in
its sole discretion either:
a) Remove all segments of code that FTP does not have the
right to license to NCD; provided that nothing shall
obligate FTP to acquire such license for NCD; or
b) License to NCD a product that contains some or all
third party technology licensed by FTP, at a reasonable
price to be determined by FTP in its sole discretion. If
NCD chooses not to obtain such a license, FTP shall provide
an update as set forth in 2.3.3(b) above.
2.3.4 During the 1996 calendar year, FTP will provide level three
technical support (as standardly provided by FTP to its
other OEM customers) to NCD for the Binary Software,
however, NCD shall be solely responsible for providing
customer support to its customers (at the level normally
provided by FTP's OEM customers).
2.3.5 NCD shall have no right to reverse assemble or decompile the
Binary Software or updates thereto.
2.3.6 FTP will offer technical support (at least at the level
described in 2.3.4 above) and upgrades to NCD after 1996 at
FTP's then current rates for so long as NCD purchases
technical support without interruption.
2.4 AUTOPILOT PATENT RIGHTS
2.4.1 After the first anniversary of the Effective Date, FTP will
grant to NCD a worldwide, fully-paid, royalty free,
perpetual, irrevocable, non-exclusive license, with no right
to sublicense, under the AutoPilot Patent Rights to use,
make, have made, import, sell and distribute, products that
are covered by a claim set forth in the AutoPilot Patent
Application.
2.4.2 NCD agrees that it will not develop, distribute or sell any
software that is covered by a claim of the AutoPilot Patent
Application before the first anniversary of the Effective
Date, other than as permitted by the license granted under
Section 2.3 above.
2.4.3 If FTP enters into an agreement with a third party, in which
FTP licenses the third party under the AutoPilot Patent
Rights, and where NCD has played a significant role in
bringing the third party business opportunity to FTP's
attention, then NCD shall be entitled to a fee equal to five
percent (5%) of FTP's net revenues from such transaction.
III. CONSIDERATION.
3.1 SOURCE LICENSE. In consideration of the rights and licenses granted
to NCD in Section 2.2 above, NCD shall pay to FTP a license fee of one
and one half million dollars ($1,500,000) on the Effective Date.
3.2 BINARY LICENSE. In consideration of the rights and licenses granted
to NCD in Section 2.3 above, NCD shall pay to FTP a license fee of one
million dollars ($1,000,000) on the Effective Date.
IV. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION.
4.1 NCD. NCD represents and warrants that: (i) the Z-Mail Modules do not
infringe the copyright or trade secrets of any third party; (ii) to
the best knowledge of NCD, the Z-Mail Modules do not infringe any
third party patent or trademark; (iii) NCD has the right and authority
to enter into this Agreement and grant the rights and licenses
hereunder; (iv) NCD has not granted, and neither will grant in the
future, any rights in the Z-Mail Modules that are inconsistent with
the rights and licenses granted to FTP herein; and (v) NCD will not
assert against FTP's use, manufacture or sale of products derived from
the Z-mail modules any rights in any patent or patent application, the
claims of which would cover the Z-Mail Modules and hereby licenses FTP
the non-exclusive right under such patents to make, have made, use,
import, export, distribute and sell such products but without any
express, implied or statutory warranty of non-infringement.
4.2 FTP. FTP represents and warrants that: (i) software and code provided
by FTP to NCD pursuant to this Agreement, including but not limited to
updates, bug fixes, error corrections, and enhancements, do not
infringe the copyright or trade secrets of any third party, except to
the extent that such infringement arises out of or results from
software or code provided by NCD to FTP pursuant to this Agreement or
the Asset Purchase Agreement; (ii) to the best knowledge of FTP,
software and code provided by FTP to NCD pursuant to this Agreement,
including but not limited to updates, bug fixes, error corrections,
and enhancements, do not infringe any third party patent or trademark,
except to the extent that such infringement arises out of or results
from software or code provided by NCD to FTP pursuant to this
Agreement or the Asset Purchase Agreement or specifications provided
by NCD; (iii) it has the right and authority to enter into this
Agreement and grant the rights and licenses hereunder; and (iv) FTP
has not granted, and neither will grant in the future, any rights in
the Source Software or Binary Software that are inconsistent with the
rights and licenses granted to NCD herein.
4.3 INDEMNIFICATION BY NCD. NCD agrees to defend, indemnify, and hold FTP
harmless against any loss, liability, and expense (including
reasonable attorneys' fees) arising from any breach of the
representations and warranties set forth in Section 4.1 above. FTP
agrees to provide NCD with (i) prompt written notice of such claim or
action, (ii) control and authority over the defense or settlement of
such claim or action, and (iii) proper and full information and
reasonable assistance to defend and/or settle any such claim or
action.
4.4 INDEMNIFICATION BY FTP. FTP agrees to defend, indemnify, and hold NCD
harmless against any loss, liability, and expense (including
reasonable attorneys' fees arising from any breach of the
representations and warranties set forth in Section 4.2 above. NCD
agrees to provide FTP with (i) prompt written notice of such claim or
action, (ii) control and authority over the defense or settlement of
such claim or action, and (iii) proper and full information and
reasonable assistance to defend and/or settle any such claim or
action.
4.5 DISCLAIMER. EXCEPT AS SET FORTH IN THIS AGREEMENT, THE SOURCE CODE,
BINARY CODE AND Z-MAIL MODULES ARE PROVIDED "AS-IS". NEITHER PARTY
MAKES ANY REPRESENTATIONS OR WARRANTIES OTHER THAN THOSE EXPRESSLY
STATED IN THIS AGREEMENT, AND SPECIFICALLY, OTHER THAN AS SET FORTH IN
THIS SECTION 4, DISCLAIMS THE EXPRESS, STATUTORY OR IMPLIED WARRANTIES
OF
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.
V. CONFIDENTIAL INFORMATION
5.1 GENERAL. The parties may, from time to time, in connection with this
Agreement, disclose to each other Confidential Information.
"Confidential Information" shall mean any information disclosed in
writing by a party to this Agreement to any of the other parties to
this Agreement, and marked by the disclosing party with the legend
"CONFIDENTIAL" or other similar legend sufficient to identify such
information as confidential proprietary information of the disclosing
party. Neither party shall use any Confidential Information of the
other party except as expressly authorized under this Agreement, and
each party will use best efforts to prevent the disclosure of the
other party's Confidential Information to third parties; provided that
the parties may disclose Confidential Information, with similar
protections in place, to the extent reasonably necessary to exploit
the rights and license granted to such party hereunder (including the
rights to grant and authorize sublicenses); and provided further that
the recipient party's obligations under this Article V shall not apply
to Confidential Information that:
5.1.1 is disclosed orally; provided, however, that the recipient
party's obligations under this Article V shall apply to
information disclosed orally if such information is
confirmed in writing as "CONFIDENTIAL" by the disclosing
party within thirty (30) days after disclosure thereof;
5.1.2 is in the recipient party's possession at the time of
disclosure thereof;
5.1.3 is or later becomes part of the public domain through no
fault of the recipient party;
5.1.4 is received from a third party having no obligations of
confidentiality to the disclosing party;
5.1.5 is developed independently by the recipient party without
reliance upon or use of the disclosing party's Confidential
Information; or
5.1.6 is required by law or regulation to be disclosed; provided,
however, that the party subject to such disclosure
requirement has provided written notice to the other party
promptly to enable such other party to seek a protective
order or otherwise prevent disclosure of such Confidential
Information.
5.2 SECURITY. NCD agrees to use the Source Software under carefully
controlled conditions for the purposes set forth in this Agreement,
and to inform all employees who are given access to the Source
Software by NCD that such materials are confidential trade secrets of
FTP and are licensed to NCD as such. NCD shall restrict
access to the Source Software to those employees and Contractors of
NCD who have agreed to be bound by a confidentiality obligation
which incorporates the protections and restrictions substantially as
set forth herein, and who have a need to know in order to carry out
the purposes of this Agreement. NCD will either store the Source
Software in a locked room or otherwise restrict access to such
materials to persons specifically authorized by NCD and having a
specific need to access such Source Software to perform their
assigned tasks, provided that such safeguards shall in no event be
less than reasonable or less than the industry standard. NCD agrees
to make a reasonable effort to log access to the Source Software.
Upon request by FTP, NCD shall provide FTP with the names of all
individuals who have accessed such materials, and shall take all
actions reasonably required to recover any such materials in the
event of loss or misappropriation, or to otherwise prevent their
unauthorized disclosure or use. NCD shall be fully responsible for
the conduct of all its employees, Contractors, agents and
representatives who may in any way breach this Agreement.
5.3 INJUNCTIVE RELIEF. Each party acknowledges that any breach of any of
its obligations under this Article V is likely to cause or threaten
irreparable harm to the other party, and, accordingly, each party
agrees that in such event the non-breaching party shall be entitled to
seek equitable relief to protect its interests, including but not
limited to, preliminary and permanent injunctive relief, as well as
money damages.
VI. TERM.
6.1 TERM. This Agreement shall commence on the Effective Date and
remain in effect in perpetuity unless terminated under Section 6.2
below.
6.2 TERMINATION. FTP may terminate this Agreement in full or in part
upon: (A) thirty (30) days notice in the event of any material default
in, or material breach of, any of the terms and conditions of Sections
2.2, 2.3 or 2.4 of this Agreement by NCD if such breach is not cured
within such thirty (30) day period; (B) the commencement of a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to NCD of its debts under any bankruptcy,
insolvency, corporation or other similar law now or hereafter in
effect, that authorizes the reorganization or liquidation of NCD or
its debt or the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property; (C) NCD's consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it; or
(D) NCD's making a general assignment for the benefit of creditors; or
either party's becoming insolvent; or either party taking any
corporate action to authorize any of the foregoing.
6.3 SURVIVAL. Sections 2.1, 4, 5, 6, 7 and 8 shall survive any
termination of this Agreement. Termination of NCD's rights shall not
affect the rights of NCD's end user sublicenses rightfully sublicensed
during the term hereof.
VII. LIMITATION ON LIABILITY
UNDER NO CIRCUMSTANCES, OTHER THAN AS PROVIDED FOR IN SECTIONS 4.3, 4.4 AND
5 ABOVE, SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOST DATA, LOST
PROFITS, BUSINESS INTERRUPTION OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (EVEN IF THAT PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), INCLUDING WITHOUT LIMITATION, LOSS
OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS. NOTWITHSTANDING THE
FOREGOING, THE MAXIMUM LIABILITY OF EITHER PARTY TO THE OTHER FOR DAMAGES, OTHER
THAN UNDER SECTIONS 4.3, 4.4 AND 5, FOR ANY AND ALL OTHER CAUSES WHATSOEVER,
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL
BE LIMITED TO NET PURCHASE PRICE SET FORTH IN THE ASSET PURCHASE AGREEMENT.
VIII. GENERAL
8.1 ASSIGNMENT AND SUBLICENSING. NCD's licenses with respect to the
Source Software and Binary Software granted under Sections 2.2 and 2.3
above may not be assigned or sublicensed to a third party except in
connection with a merger, acquisition, sale of substantially all
assets related to a product line, or other such similar transaction,
provided that any such assignment during the first year after the
Effective Date shall be subject to FTP's consent which shall not be
unreasonably withheld. This Section 8.1 shall not limit NCD's sale or
sublicense of NCD applications that contain less than five percent
(5%) of the Source Software.
8.2 PATENT MARKING. NCD agrees to mark permanently and legibly all
products and associated documentation used or sold by NCD that are
covered by the AutoPilot Patent Rights, with such patent notice as may
be permitted or required under Title 35, United States Code.
8.3 COMPLETE AGREEMENT. This Agreement, the exhibits attached hereto, and
the Asset Purchase Agreement, constitute the entire understanding and
only agreement between the parties with respect to the subject matter
hereof and supersedes any and all prior negotiations, representations,
agreements, and understandings, written or oral, that the parties may
have reached with respect to the subject matter hereof. No agreements
altering or supplementing the terms hereof may be made except by means
of a written document signed by the duly authorized representatives of
each of the parties hereto.
8.4 FORCE MAJEURE. In the event either party hereto is prevented from or
delayed in the performance of any of its obligations hereunder by
reason of acts of God, war, strikes, riots, storms, fires, or any
other cause whatsoever beyond the reasonable control of
the party, the party so prevented or delayed shall be excused from
the performance of any such obligation to the extent and during the
period of such prevention or delay.
8.5 NOTICES. Any payment, notice or other communication this Agreement
requires or permits either party to give must be in writing to the
appropriate address given below, or to such other address as one party
designates by written notice to the other party. The parties deem
payment, notice or other communication to have been properly given and
to be effective (a) on the date of delivery if delivered in person;
(b) on the fourth day after mailing if mailed by first-class mail,
postage paid; (c) on the second day after delivery to an overnight
courier service such as Federal Express, if sent by such a service; or
(d) upon confirmed transmission by facsimile. The parties' addresses
are as follows:
To NCD:
Network Computing Device, Inc.
350 N. Bernado Avenue
Mountain View, CA 94043
Fax: (415) 961-7711
Attn: General Counsel
Copy to: Dennis C. Sullivan, Esq.
Gray, Cary, Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, CA 94301
Fax: (415) 327-3699
To FTP:
FTP Software, Inc.
100 Brickstone Square, 5th Floor
Andover, MA 01810
Fax: (508) 659-6162
Attn: General Counsel
8.6 GOVERNING LAW. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of California,
without regard for any choice or conflict of laws rule or principle
that would result in application of the domestic substantive law of
any other jurisdiction, except that, with respect to matters of law
concerning the internal corporate affairs of any party to this
Agreement, the law of the jurisdiction of formation of such party
shall govern; and provided further that all questions with respect to
validity of any patents or patent applications shall be determined in
accordance with the laws of the respective country in which such
patents or patent applications shall have been granted or filed, as
applicable.
8.7 NO WAIVER. A waiver, express or implied, by either party of any right
under this Agreement or of any failure to perform or breach hereof by
the other party hereto shall not constitute or be deemed to be a
waiver of any other right hereunder or of any other failure to perform
or breach hereof by such other party, whether of a similar or
dissimilar nature thereto.
8.8 HEADINGS. Headings included herein are for convenience only, do not
form a part of this Agreement and shall not be used in any way to
construe or interpret this Agreement.
8.9 SEVERABILITY. If any provision of this Agreement shall be found by a
court of competent jurisdiction to be void, invalid or unenforceable,
the same shall be reformed to comply with applicable law or stricken
if not so reformable, so as not to affect the validity or
enforceability of the remainder of this Agreement, provided that the
reformation complies with the intent of the parties.
8.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement.
Network Computing Devices, Inc. ("NCD") FTP Software, Inc. ("FTP")
By: /s/ JACK BRADLEY By: /S/ DOUGLAS F. FLOOD
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Name: JACK BRADLEY Name: DOUGLAS F. FLOOD
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Title: CHIEF EXECUTIVE OFFICER Title: SENIOR VICE PRESIDENT
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NCD Software Corporation
By: /s/ JACK BRADLEY
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Name: JACK BRADLEY
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Title: CHIEF EXECUTIVE OFFICER
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