ALLIANCE AGREEMENT
NO. 350-148
BETWEEN
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND
NETWORK COMPUTING DEVICES, INC.
ALLIANCE AGREEMENT
BETWEEN
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND
NETWORK COMPUTING DEVICES, INC.
TABLE OF CONTENTS
1. ALLIANCE MANAGERS 2
2. ALLIANCE AGREEMENT STRUCTURE 4
3. DEFINITIONS 4
4. PAYMENT 9
5. COPYRIGHTS 9
6. PATENTS AND INVENTIONS 13
7. TERM AND TERMINATION 15
8. CONFIDENTIALITY 17
9. MARKETING DISCRETION 17
10. INDEMNIFICATION 17
11. DISPUTE RESOLUTION 18
12. INSURANCE 18
13. GENERAL 19
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ALLIANCE AGREEMENT
Between
International Business Machines Corporation
and
Network Computing Devices, Inc.
BASE AGREEMENT
This Alliance Agreement ("Agreement"), effective on the date last signed below,
is agreed to by Network Computing Devices, Inc., a corporation of the State of
California, with offices located at 350 North Bernardo Avenue, Mountain View,
California 94043-4207 ("NCD") and International Business Machines Corporation, a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829 ("IBM").
RECITALS
A. Whereas IBM is a supplier of computing systems for information processing,
services and data communication applications.
B. Whereas NCD is a developer and manufacturer of computer display terminal
products and NCDware allowing interoperability across networks to gain
access to various applications.
C. Whereas this Alliance Agreement sets forth the terms and conditions by
which NCD and IBM believe that an alliance between them for the
development, manufacture, and support of an IBM network application
terminal ("thin client") product will be mutually advantageous.
NOW THEREFORE, NCD and IBM agree as follows:
1. ALLIANCE MANAGERS
1.1 ALLIANCE MANAGERS'S RESPONSIBILITIES:
The Alliance Managers will act as overall coordinators for the parties
under this Alliance Agreement. Contacts with a party regarding issues
relating to the terms of, or performance under, this Alliance
Agreement, shall be made first with the Alliance Manager for that
party. Either party may change the names and
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addressees set forth above upon notice to the other party in accordance with the
terms hereof.
1.2 NCD ALLIANCE MANAGER:
Lorraine Hariton
Network Computing Devices, Inc.
350 North Bernardo Avenue
Mountain View, CA 94043-4207
TELEPHONE: (415) 694-0650
TELEFAX: (415) 961-6289
1.3 IBM ALLIANCE MANAGER:
Dean Hegrenes
International Business Machines Corporation
3605 Highway 52 North
Rochester, MN 55901-7829
TELEPHONE: (507) 253-3530
TELEFAX: (507) 253-8684
1.4 AUTHORITY TO COMMIT EXPENDITURES
Each party understands and agrees that only certain persons are
authorized on behalf of the other party to make commitments requiring
the expenditure of money. With respect to IBM, only IBM procurement
employees are authorized to make such commitments, and will do so only
in writing. To obtain such commitment, NCD shall first contact the
IBM Alliance Manager, who will be responsible for obtaining the
written approval of the appropriate procurement employee. In the case
of NCD, only the Alliance Manager is authorized to make such
commitments, and will do so only in writing. The parties agree that
they will take no actions in reliance upon any commitments requiring
the expenditure of money, other than those explicitly described in
this Alliance Agreement, without the express written authorization of
the persons identified in this section as having the authorization to
make such commitments.
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2. ALLIANCE AGREEMENT STRUCTURE
The Alliance Agreement (hereinafter "Alliance Agreement" or "Agreement")
consists of this Base Agreement, which sets forth the basic terms and
conditions of the Alliance Agreement, its Appendices, and one or more
Articles, each of which may include attachments. Unless otherwise
specified, references in the Alliance Agreement to the Base Agreement shall
include any of its Appendices, and references to Articles shall include
their attachments.
The terms and conditions of this Base Agreement, including the definitions,
will apply to each Article, unless otherwise specified in the Article. An
Article may include additional terms and conditions that supersede terms
and conditions of this Base Agreement for the purpose of that Article only.
Except as otherwise specified in this Alliance Agreement, a reference to a
section of this Alliance Agreement shall incorporate all subsections
thereunder.
Each party shall perform its respective tasks and obligations as set forth
in this Base Agreement and in each Article.
3. DEFINITIONS
Capitalized terms in the Alliance Agreement have the following meanings.
Unless otherwise specified in an Article, the definitions listed below
apply to this Base Agreement and to all Articles.
"APPEARANCE DESIGN" is the appearance presented by an object, formed in
hardware or by software, that creates a visual impact or impression on an
observer. "Appearance Design" refers to the ornamental and not the
functional aspects of the object.
"CHANGE OF CONTROL" shall be deemed to have occurred if:
(a) any person or group (within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934 as in effect on the date hereof)
other than the party, or a Subsidiary of the party, shall become
the owner, directly or indirectly, beneficially or of record, of
voting securities representing in excess of fifty percent (50%)
of the total voting power of the party, or
(b) any person, or group of persons acting in concert, shall
otherwise directly or indirectly acquire control of the party.
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"CODE" shall mean computer programming code and shall include both Object
Code and Source Code.
"OBJECT CODE" shall mean Code, substantially or entirely in binary
form, which is intended to be directly executable by a computer after
suitable processing but without the intervening steps of compilation
or assembly.
"SOURCE CODE" shall mean Code, other than Object Code, and related
source code level system documentation, comments and procedural code,
such as job control language, which may be printed out or displayed in
human readable form.
"DELIVERABLES" shall mean Materials and other materials provided to or
prepared for IBM by NCD pursuant to this Alliance Agreement. Unless
otherwise provided in an Article, Deliverables shall also include, in
addition to any Code, Documentation, or materials specifically identified
as Deliverables, any other code and documentation not listed in anArticle,
but which implements or conforms to the description of Deliverables in
Articles.
"DERIVATIVE WORK" shall mean a work which is based upon one or more
preexisting works, such as a revision, enhancement, modification,
translation, abridgement, condensation, expansion, or any other form in
which such preexisting works may be recast, transformed, or adapted, and
which, if prepared without authorization of the owner of the copyright in
such preexisting work, would constitute a copyright infringement. For
purposes hereof, a Derivative Work shall also include any compilation that
incorporates such a preexisting work.
"DESIGN VERIFICATION TEST (DVT)" shall mean a test of Product and
Deliverables conducted in NCD's engineering organization which will
satisfy the requirements as defined in the Product Development Plan. This
test does a complete and final verification of Product function, quality,
performance, serviceability, conformance to IBM and industry standards and
compliance to the specifications and drawings.
"DEVELOPMENT ENVIRONMENT" shall mean any Code, Documentation, device,
programming, media, and other materials, including compilers, workbenches,
tools, and higher-level or proprietary languages, used by NCD or necessary
for the development, maintenance and implementation of Deliverables.
"DISTRIBUTORS" shall mean those entities generally utilized for the
distribution of a party's products including, by way of illustration and
not limitation, that party and/or its Subsidiaries and its and their
subsidiaries, dealers, distributors and agents.
"DOCUMENTATION" shall mean user manuals and other written works that relate
to particular Code and hardware design, including works useful for design
(for example,
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specifications, logic manuals, flow charts, and principles of operation),
and machine-readable text or graphic files subject to display or printout.
"ENHANCEMENT" shall mean a change or addition to a Deliverable to change or
improve its form, fit, function, or performance. Enhancements are in
addition to the Deliverables described in Article 1-Development and to any
changes or improvements performed within the scope of the Phase 1 and Phase
2 development tasks described in Article 1-Development.
"CUSTOM ENHANCEMENTS" shall mean any Enhancements (a) that are useful
only with or as part of an IBM Workstation Product, or (b) that the
parties agree in writing (pursuant to the terms set forth in an
Article) shall be developed or made by NCD for an IBM Workstation
Product.
"MAJOR ENHANCEMENTS" shall mean any Enhancements, other than Custom
Enhancements, that:
(a) provide substantial additional value and utility, and
(b) that result in works for which NCD charges its customers an
additional payment in the form of (i) an upgrade fee for
customers then currently using the applicable NCD product; or
(ii) a license fee for a customer acquiring the latest version of
the applicable NCD product containing such Enhancement.
"BASIC ENHANCEMENTS" shall mean any Enhancements that are not Major
Enhancements or Custom Enhancements.
"ENGINEERING VERIFICATION TEST" (EVT) shall mean a preliminary test of a
Product or Deliverable to verify function, quality, performance,
serviceability, conformance to IBM and industry standards, and compliance
with the functional specifications and drawings.
"IBM MATERIALS" shall mean Original Deliverables that are either (1)
specifically identified as IBM Materials in an Article, or (2) useful only
with or as part of an IBM Workstation Product.
"IBM WORKSTATION PRODUCT" shall mean any product, device, computer
programming code or other thing that interoperates with or utilizes for the
transfer of data, any one or more of the following: 3270 data stream, 5250
data stream, coax attachment, or twinax attachment. "IBM Workstation
Product" includes, but is not limited to, Product as defined herein.
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"INVENTION" shall mean any idea, design, Appearance Design, concept,
technique, invention, discovery, or improvement, whether or not patentable,
that is conceived or reduced to practice in either party's performance or
activities under this Alliance Agreement.
"JOINT INVENTION" is an Invention made by NCD Personnel and IBM Personnel
jointly, within the meaning of United States Code, chapter 35, section 116.
"LICENSED WORKS" shall mean Deliverables that are not IBM Materials.
"MAINTENANCE MODIFICATIONS" shall mean any modifications or revisions,
other than Enhancements, to Code or Documentation that correct any defects
or provide any incidental corrections in such Code or Documentation.
"MANUFACTURING VERIFICATION TEST" (MVT) shall mean a series of tests
conducted to verify the ability of the manufacturing process and related
procedures to consistently produce in a production environment and at the
required quality level of a Product in quantities representative of a
program's volumes.
"MATERIALS" shall mean Code, Documentation, and the Development
Environment.
"MORAL RIGHTS" shall mean any personal rights that an author may have under
applicable law which are separate and apart from the proprietary aspect of
copyright, including, but not limited to, rights to identification of
authorship, rights of approval on modifications or limitation on subsequent
modification, and rights to withdraw a work from distribution.
"ORIGINAL DELIVERABLES" shall mean Deliverables other than Preexisting
Materials.
"PERSONNEL" are a party's employees or subcontractors working under the
Alliance Agreement.
"PREEXISTING MATERIALS" shall mean any Materials that exist prior to the
effective date of this Alliance Agreement, or that have been or will be
licensed or otherwise acquired by NCD or developed by NCD outside the scope
of this Alliance Agreement.
"PRODUCT" shall mean a terminal comprised of electronic circuitry
components, subassemblies, and Code which allows an individual user to
connect to a computer server for the purpose of downloading, inputting,
receiving, and processing data from the server, and which operates using
NCD's NCDware Code or Derivative Works thereof.
"PRODUCT DEVELOPMENT PLAN" shall mean a plan for how the project will be
managed which will include, but not be limited to, major activities, labor,
schedules, and checkpoints.
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"PROTOTYPE UNIT" shall mean a product having the following minimum
characteristics.
* Partial function
* Limited error recovery
* Limited initialization tests
"RAISE" shall mean a test of a Product or Deliverable conducted in IBM's
engineering and system tests organization which will satisfy the
requirements as defined in the Product Development Plan. This test does a
complete and final verification of Product and Deliverable function,
quality, performance, serviceability, conformance to IBM and industry
standards and compliance with functional specifications and drawings.
"SUBSIDIARY" of a party means:
a) a corporation, company or other entity more than fifty percent
(50%) of whose outstanding shares or securities representing the right
to vote for the election of directors or other managing authority are
now or hereafter owned or controlled, directly or indirectly, by that
party, or
b) a corporation, company or other entity that does not have
outstanding shares or securities, as may be the case in a partnership,
joint venture or unincorporated association, if more than fifty
percent (50%) of the ownership interest representing the right to make
decisions for such corporation, company, or other entity is now or
hereafter owned or controlled, directly or indirectly by that party,
or
c) in the case of an "S" corporation under the Internal Revenue Code
of 1986, as amended, a Subsidiary shall include any entity controlled
directly or indirectly by an individual owning or holding fifty
percent (50%) or more of such "S" corporation's outstanding shares or
securities. .
Any such corporation, company, or other entity shall be deemed to be a
Subsidiary only so long as such ownership or controls exists.
"THIRD PARTY MATERIALS" shall mean Preexisting Materials in which third
parties have rights.
"GENERAL AVAILABILITY (GA)" shall mean the date at which IBM first ships
production versions of Products developed pursuant to this Alliance
Agreement in commercial quantities to customers who have ordered such
Products through IBM's standard ordering processes. GA shall not be deemed
to have occurred upon IBM's shipment of Products to customers or other
third parties for use in development evaluation and testing and early
shipment programs.
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"INITIAL DESIGN FREEZE DATE" shall mean the agreed-upon date identified in
Article 1-Development in which the there shall be no additional
modifications to a the design of a particular Product prior to manufacture.
"BILLS OF MATERIAL" OR "B/M" shall mean a list of mechanical and/or
electrical parts, to the individual component level, needed to assemble a
Product or FRUs.
"FIELD REPLACEMENT UNIT" (FRU) shall mean an assembly that is replaced in
its entirety if one of its components fails.
"WORK AUTHORIZATIONS" (WAs) shall mean written or electronic purchase
orders or other electronic transactions that are expressly identified as an
authorization to perform work under Article 2-Manufacturing.
"TOOLING" shall mean all the required tools and/or equipment that are
unique to producing a Product.
"SIX SIGMA QUALITY LEVEL" shall mean a proven, statistical approach that
can achieve a zero defect process and a zero defect Product. It is a level
of product quality achievement equivalent to 3.4 defects per million parts
(PPM).
"STATISTICAL PROCESS CONTROL" (SPC) shall mean the use of certain
statistical techniques to analyse a manufacturing process in order to take
appropriate actions to achieve and maintain a statistically controlled
process and to improve the process capability of producing of parts with a
Six Sigma Quality Level.
4. PAYMENT
NCD will invoice IBM, and IBM will pay NCD, according to the terms set
forth in one or more Articles. All payments will be made in U.S. dollars.
NCD will be responsible for applicable taxes, expenses, and payments to
third parties that NCD owes unless specified otherwise in an Article.
5. COPYRIGHTS
5.1 GRANT OF LICENSE TO LICENSED WORKS
Subject to the conditions and limitations set forth in sections 5.1.1
and 5.1.2 of this Base Agreement, NCD grants IBM a worldwide,
copyright license to use, execute, reproduce, display, perform,
transfer, market, distribute, and to make Derivative Works of, the
Licensed Works (including audio and visual work
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BASE AGREEMENT-PAGE 9 OF 24
contained in or generated by such Licensed Works) for use in
conjunction with Products. NCD grants IBM the right to authorize
others to do any of the above, except that Derivative Works may be
prepared only by IBM, its Subsidiaries, and vendors and subcontractors
performing work for IBM and its Subsidiaries. Sublicenses to the
Licensed Works granted by IBM to third parties shall contain terms
consistent with IBM's standard practices for licensing or distributing
IBM's own goods and services.
IBM's license to Licensed Work that consists of Documentation shall be
fully paid up upon the effective date of this Alliance Agreement.
IBM's license to Licensed Work that consists of Code, other than Code
contained only in Development Environment, shall be subject to a
royalty as specified in Article 2 - Manufacturing, or in one or more
other Articles.
IBM's license rights granted in this section 5.1 shall be revocable by
NCD only if IBM terminates the Alliance Agreement without cause prior
to the date that IBM's minimum order quantity obligation takes effect
pursuant to section 4.3 of Article 2-Manufacturing. Otherwise, the
licenses granted hereunder shall be irrevocable notwithstanding
termination or expiration of the Alliance Agreement.
5.1.1 LICENSE TO IBM WORKSTATION PRODUCTS
IBM's license to transfer, market, distribute and sublicense
those Licensed Works that are Original Deliverables shall be
exclusive in the field of use with IBM Workstation Products.
The other rights granted in section 5.1 shall be
nonexclusive.
Without limiting other Materials that are considered
Preexisting Materials under the terms of this Alliance
Agreement, the parties specifically acknowledge that NCD's
existing 3270 local client is considered a Preexisting
Material.
5.1.2 LICENSE TO SOURCE CODE OF LICENSED WORKS
IBM's license to the Source Code of Licensed Works is for
IBM's internal use only. IBM shall not display, perform,
transfer, market, distribute or sublicense, and shall not
authorize others to make Derivative Works of, the Source
Code of Licensed Works, except that IBM may display,
perform, distribute, sublicense, and allow its vendors and
contractors to prepare Derivative Works of, the Source
Code solely for the purpose of allowing such vendors and
subcontractors to provide services for IBM relating to such
Source Code, including but not limited to development and
support of Code. Where IBM utilizes such subcontractors and
vendors, IBM shall
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have written agreements with such subcontractors and vendors
sufficient to require them to comply with the licensing
provisions herein and to treat the Source Code in accordance
with AECI No. M96-2424. IBM shall obtain NCD's approval
prior to allowing such Source Code to be used off IBM's
premises by such subcontractor or vendor, and NCD will not
unreasonably withhold such approval.
5.2 GRANT OF LICENSE TO DEVELOPMENT ENVIRONMENT
Except for Development Environment IBM provides NCD, within fifteen
(15) days after the effective date of any Article or attachment
thereto describing Deliverables having associated Development
Environment, NCD will deliver to IBM a written list of all such
Development Environment. NCD will deliver the listed Development
Environment that are not commercially available concurrent with
delivery of the associated Deliverables. NCD will update such written
list for all changes to such Development Environment and promptly
deliver updated Development Environment that are not commercially
available.
NCD grants IBM a nonexclusive, worldwide, copyright license to use,
execute, reproduce, display and perform, and to make or have made
Derivative Works of, all Development Environment (including audio or
visual works contained in or generated by such Development
Environment), except insofar as NCD's authority to grant such license
is restricted or limited by one or more third party agreements for
Third Party Materials contained within the Development Environment
and where NCD discloses to IBM such restrictions or limitations within
15 days after the effective date of this Alliance Agreement. If IBM
determines that any such disclosed agreements with third parties
significantly effect IBM's rights to use the Development Environment
for its intended purpose under this Alliance Agreement, IBM shall
notify NCD and NCD shall promptly and diligently take steps to
negotiate with such third parties for rights acceptable to IBM for the
use of such Third Party Materials in the Development Environment.
IBM's license rights granted in this section 5.2 shall be revocable by
NCD only if IBM terminates the Alliance Agreement without cause prior
to the date that IBM's minimum order quantity obligation takes effect
pursuant to section 4.3 of Article 2-Manufacturing. Otherwise, the
licenses granted hereunder shall be irrevocable notwithstanding
termination.
5.3 USE OF PREEXISTING MATERIALS IN DELIVERABLES
Unless IBM and NCD agree otherwise in writing with respect to certain
specified Preexisting Materials, NCD may include Preexisting Materials
in Deliverables only if such materials (1) are owned by NCD, or (2)
are licensable by NCD to IBM, its
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Distributors and their customers under the terms of this Alliance
Agreement with no additional restrictions or requirements. Within
fifteen (15) days after the effective date of any Article or
attachment thereto describing Deliverables that will contain Third
Party Materials, NCD shall deliver to IBM a written list of such Third
Party Materials and shall provide IBM with copies of all license
agreements relating to such Third Party Materials. All Preexisting
Materials in Deliverables are deemed Licensed Works.
5.4 REGISTRATION OF LICENSED WORKS
NCD is responsible for copyright registration, maintenance and
enforcement of all Licensed Works. NCD authorizes IBM to act as its
agent in the copyright registration of the Licensed Works. In the
event IBM uses such authority to register a copyright on behalf of
NCD, IBM will promptly notify NCD of such registration. This section
does not authorize IBM to act as NCD's agent for any other purpose.
5.5 RIGHTS IN IBM MATERIALS AND CUSTOM ENHANCEMENTS
All IBM Materials and Custom Enhancements shall be owned exclusively
by IBM and shall be deemed works made for hire. To the extent any IBM
Materials or Custom Enhancements may not, by operation of law, be
deemed works made for hire, NCD hereby assigns to IBM ownership of
copyright in such items. IBM shall have the right to obtain and hold
in its own name copyrights, registrations, and similar protection
which may be available in such IBM Materials and Custom Enhancements.
NCD agrees to give IBM or its designees all assistance required to
perfect such rights, including the execution of any necessary
documents.
5.6 CERTIFICATE OF ORIGINALITY
Within sixty (60) days after the effective date of any Article or
attachment thereto, and at such other times as IBM may reasonably
request, NCD shall deliver to IBM a Certificate of Originality with
respect to any Preexisting Materials to be included in the
Deliverables listed in such Article, substantially in the form set
forth in "Appendix A - Sample Certificate of Originality." Upon
delivery of Deliverables to IBM, NCD shall submit an additional
Certificate of Originality for such Deliverables.
5.7 MORAL RIGHTS
NCD shall obtain a written agreement to waive and not to assert any
Moral Rights, including any right to identification of authorship,
rights of approval on modifications or limitation on subsequent
modification, from any person or entity
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having Moral Rights with respect to any Deliverables hereunder. NCD
hereby waives and agrees not to assert any Moral Rights, including any
right to identification of authorship, rights of approval on
modifications or limitation on subsequent modification, NCD has or may
have in Deliverables.
5.8 TREATMENT OF THIRD PARTY MATERIALS
In rendering performance pursuant to this Alliance Agreement, NCD
shall comply at all times with all restrictions and covenants
applicable to Third Party Materials. NCD shall bear the
responsibility and expense of negotiating and obtaining any rights in
Third Party Materials necessary to fulfill its obligations under this
Alliance Agreement. Except as mutually agreed in writing by the
parties, NCD shall have sole responsibility for payment of all
royalties and other charges with respect to Third Party Materials,
including royalties, charges, and payments for the licenses granted in
section 5.1. If IBM is not satisfied that NCD has sufficient rights
with respect to any such Third Party Materials or that NCD has assumed
and discharged its responsibility for related royalties and other
charges, IBM may, at its election and without limiting its other
rights, suspend further action or payment or both upon notifying NCD
of the problem. Such suspension shall end when the problem is
remedied.
Nothing herein shall restrict IBM from dealing directly with any third
party with respect to such Third Party Materials or any other product
or service. Provided, however, that if IBM continues to distribute
the Third Party Materials after any third party claim for royalties or
other charges has been raised and such matter has not been resolved
within 30 days after IBM notifies NCD of such claim, IBM may either
(i) place any payment due NCD under this Article in escrow pending
resolution of said third party claim, or (ii) pay NCD all amounts due
hereunder, less deductions for (a) any royalty payments made by IBM to
such described third parties which are NCD's responsibility hereunder
but which NCD has not paid and (b) IBM's reasonable, documented
administrative costs in connection with making such royalty payments
which are otherwise NCD's responsibility.
5.9 CONFIRMATION
Promptly upon request by IBM, NCD agrees to confirm IBM's rights in
Deliverables identified by IBM by execution and delivery of a written
confirmation in such form as IBM may reasonably require.
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6. PATENTS AND INVENTIONS
6.1 PATENT LICENSE
NCD hereby grants to IBM and its Subsidiaries, sublicensees and
customers, direct and indirect, a royalty free, worldwide,
irrevocable, nonexclusive license under any patent or patent
applications owned or licensable by NCD during the term of this
Alliance Agreement to make, have made, use, have used, lease, sell,
and/or otherwise transfer Deliverables, including Derivative Works
thereof, and to practice or have practiced any process or method
involving the use of any Deliverable.
6.2 RIGHTS IN INVENTIONS
Each party shall own Inventions made by its own Personnel, except for
Joint Inventions and Inventions relating to Appearance Designs.
6.2.1 INVENTIONS SOLELY BY EITHER PARTY'S PERSONNEL
Each party will disclose in writing to the other at least
quarterly during the term of the Alliance Agreement each
Invention made solely by its Personnel together with an
explanation of why the disclosing party believes it to be an
Invention. NCD will identify all countries in which it will
seek patent protection for each Invention. NCD authorizes
IBM to act as its agent in obtaining patent protection for
the Invention in countries where NCD does not seek patent
protection, and IBM will promptly notify NCD in writing upon
the filing of any patent application. NCD grants to IBM an
irrevocable, nonexclusive, worldwide, paid-up license under
these Inventions and patents issuing on and patent
applications filed on these Inventions, to make, have made,
use, have used, sell, license or transfer items and to
practice and have practiced methods, all in conjunction with
Products.
6.2.2 JOINT INVENTIONS
Both parties will jointly own all Joint Inventions and
resulting patents. Either party may license others under
Joint Inventions and patent applications filed on, or
patents issuing from, them without consent from or
accounting to the other.
When both parties equally share the costs associated with
seeking patent protection, IBM will prepare the patent
application, unless agreed to otherwise. IBM will advise
NCD of the status of the application, and the
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parties will work together to complete such application. If
either party decides not to equally share the costs of
seeking or maintaining patent protection in a Joint
Invention, the other party may do so at its own expense.
The paying party will control the obtaining of, and
maintenance of, such patents. The non-paying party will
provide reasonable assistance and have required documents
signed at the request and expense of the paying party.
6.2.3 APPEARANCE DESIGNS
Unless agreed otherwise in writing, NCD assigns to IBM all
Inventions, and patents issuing on them, relating to an
Appearance Design of a Product. NCD will, at IBM's expense,
assist in the filing of patent applications on these
Inventions and have required documents signed.
6.2.4 NO OTHER PATENT LICENSES
Except as expressly granted in this Alliance Agreement,
neither party grants the other party any rights in any
patents or patent applications.
7. TERM AND TERMINATION
The initial term of this Alliance Agreement shall begin on the effective
date and end on December 31, 1998 (the "Initial Term"). Termination or
expiration of the Alliance Agreements shall terminate all Articles except
to the extent that an Article expressly states otherwise. This Base
Agreement will remain in effect for any Article or part thereof that
remains in effect after termination or expiration of the Alliance Agreement
until that Article fully expires or is terminated.
7.1 IBM'S RIGHT OF RENEWAL
IBM shall have the right to renew this Alliance Agreement through
December 31, 2000, by providing NCD with notice of renewal no later
than March 1, 1998. Except as otherwise specified in one or more
Articles or negotiated and agreed to in writing by the parties, all
terms and conditions of this Alliance Agreement, including
definitions, shall continue to apply throughout such renewal term.
7.2 IBM'S OBLIGATION TO RENEW CERTAIN ARTICLES
Any obligation of IBM to renew any Article of this Alliance Agreement
beyond the Initial Term shall be specified in the Article to which
such obligation applies.
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7.3 IBM'S RIGHT TO TERMINATE WITHOUT CAUSE
IBM shall have the right to terminate this Alliance Agreement without
cause at any time by providing NCD with sixty (60) days written
notice. IBM's obligations, upon termination, if any, may be included
in one or more Articles.
7.4 TERMINATION FOR CAUSE
Either party may terminate this Alliance Agreement for cause, without
any liability or obligation to compensate the other, in the event
that:
the other party materially breaches the Alliance Agreement, and
such breach is not cured within 60 days after the notice of
termination is received; or
the other party becomes insolvent, files or has filed against it
a petition in bankruptcy, or undergoes a reorganization pursuant
to a petition in bankruptcy filed with respect to it; or
the other party is dissolved or liquidated or has a petition for
dissolution or liquidation filed with respect to it; or
the other party ceases ongoing business operations; or
the other party enters into any voluntary or involuntary
receivership, or upon the appointment of a receiver by a court;
or
there is a Change of Control of the other party.
Termination for any of the above causes shall take effect immediately
upon notice from the terminating party, except that (1) termination
for breach shall be effective sixty (60) days after the notice of
termination describing the breach is received and shall not take
effect if the breach is cured prior to such effective date, and (2)
termination solely for involuntary bankruptcy shall take effect 60
days after the service of the involuntary bankruptcy petition is
filed, unless such petition is dismissed within this 60 day period, in
which case the termination shall not take effect. In all cases, the
cause for termination shall be stated in the notice.
7.5 SURVIVAL OF CERTAIN PROVISIONS AFTER TERMINATION
The following provisions of this Base Agreement shall survive beyond
expiration or termination of this Alliance Agreement: Section 5
(excluding 5.6), Section 6, Section 8, Section 9, Section 10, Section
11, Section 12 (to the extent specified
- --------------------------------------------------------------------------------
BASE AGREEMENT-PAGE 16 OF 24
therein), Section 13 (excluding 13.12), and all applicable definitions
of this Base Agreement, shall survive such expiration or termination.
In addition, terms in Articles may survive termination or expiration to
the extent specified in such Article.
8. CONFIDENTIALITY
The treatment of either party's confidential information will be governed
by AECI No. M96-2424 and all supplements thereto.
9. MARKETING DISCRETION
Except where marketing rights are expressly restricted in this Alliance
Agreement, the parties shall retain full freedom and flexibility concerning
the marketing of their products, including the decision whether to market
or discontinue marketing of products, and the decision of what level of
marketing effort to be undertaken. Neither party undertakes any obligation
to announce or market any products. Nothing in this Alliance Agreement
shall be construed as creating any obligation of "best efforts" or other
level of marketing effort.
10. INDEMNIFICATION
NCD, at its own expense, will settle or defend, and will pay any damages,
costs, attorneys' fees or fines as may be assessed by a court of competent
jurisdiction with respect to all proceedings, threats of proceedings, or
claims against IBM, its Distributors and their respective customers, for
the infringement or alleged infringement by Products or Deliverables
furnished under this Alliance Agreement or any part or use thereof, of
patents (including utility models and registered designs), mask work
rights, trade secrets, or copyrights in the following countries: the United
States of America, member states of the European Community, Japan, Canada,
and any other country where NCD, its Subsidiaries, Distributors or
affiliates, heretofore have furnished similar goods in substantial
quantities or have directly conducted their business with respect to NCD
products. IBM shall provide prompt notice to NCD of any such proceeding or
claim of which it becomes aware and at NCD's expense, shall provide
information and assistance that NCD may request in connection with the
defense and settlement of any such proceeding or claim.
NCD shall not have any liability hereunder for infringement or alleged
infringement resulting solely from (i) required compliance by NCD with
engineering drawings or manufacturing instructions or specifications
originating with or furnished by IBM (ii) alteration of Products or
Deliverables by persons other than NCD, or (iii) use of the
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BASE AGREEMENT-PAGE 17 OF 24
Products or Deliverables in combination with goods or services not provided
by NCD unless the Products or Deliverables contributorily infringe.
Each party will promptly notify the other in writing if it becomes aware of
any patent, copyright, trade secret, mask work right, or other right of a
third party which the Products or Deliverables furnished under this
Alliance Agreement may infringe or violate.
The indemnification provisions herein shall in no way limit or restrict
either party's right to indemnity, contribution, or other remedies
availables against the other as provided by statute or common law.
11. DISPUTE RESOLUTION
Each party will promptly notify the other party's Alliance Manager of any
dispute with the other party under or regarding this Alliance Agreement,
and will further promptly notify the other party's respective Article
Coordinator of any dispute with the other party under or regarding an
Article of this Alliance Agreement. The parties will negotiate in good
faith to resolve any dispute between them regarding this Alliance
Agreement. If the dispute cannot be settled by the Article Coordinators
and/or the Alliance Managers, both parties agree to engage their
executives in an attempt to resolve the matter before bringing action in a
court of law.
Except for actions brought to enforce the provisions involving intellectual
property rights and indemnification, no actions, regardless of form,
arising out of or in connection with performance or transactions covered by
this Alliance Agreement may be brought by either party more than two (2)
years after the cause of action has accrued. The running of this period is
not tolled during the time, if any, the parties are engaged in any effort
to resolve any dispute, unless the parties specifically agree in writing to
toll such period.
12. INSURANCE
NCD will maintain Commercial General Liability insurance at its own expense
with minimal coverage for two years following expiration or termination of
the Alliance Agreement in the amount of $1,000,000, with an aggregate
liability of $10,000,000 per event. This coverage includes:
(a) "Contractual Liability" NCD responsible for under the Alliance
Agreement, and
(b) "Products and Completed Operations."
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BASE AGREEMENT-PAGE 18 OF 24
NCD remains liable for any damages, including but not limited to damages in
amounts above the stated minimal coverage of this section.
The insurance will provide that the insurer notify IBM at least 30 days
before any non-renewal, cancellation or other material change in your
coverage. NCD will name IBM as an additional insured. NCD will provide
IBM with a certificate of insurance as proof of this minimal coverage on
request.
13. GENERAL
13.1 INDEPENDENT CONTRACTOR
IBM and NCD each represent and warrant to the other that its efforts
in relation to this Alliance Agreement shall be as an independent
contractor. Nothing contained in this Alliance Agreement shall
constitute the parties as entering upon a joint venture or
partnership, or shall constitute either party the agent for the other
party, or be construed as creating the relationship of employer and
employee, master and servant, or any similar relationship for any
purpose or any sense whatsoever. NCD and IBM and their employees
shall have no authority to bind or make commitments on behalf of the
other party for any purpose and shall not hold itself or themselves
out as having such authority. Each party shall have sole
responsibility for the supervision, daily direction and control,
payment of salary (including withholding of income taxes and social
security), worker's compensation benefits, and the like of its
personnel.
13.2 FREEDOM OF ACTIVITY
Except as explicitly stated in this Alliance Agreement with regard to
license or confidentiality restrictions, this Alliance Agreement shall
not prevent either party from entering into any agreement with any
third party or developing, manufacturing and/or selling any product or
service even if it competes with the other party's products or
services, or any product developed under this Alliance Agreement.
13.3 FORCE MAJEURE
Neither IBM nor NCD shall be in default or liable for any delay or
failure of compliance with this Alliance Agreement due to an act of
nature, public enemy, government action, or freight embargo beyond the
control of the defaulting party and the defaulting party shall provide
the nondefaulting party immediate notice of any such anticipated delay
or failure of compliance; provided, however, that any such act shall
not relieve the defaulting party's obligations hereunder and such
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BASE AGREEMENT-PAGE 19 OF 24
party hereby agrees to perform its obligations as soon as practicable
after the conditions causing such delay or failure have subsided.
13.4 LAWS
Each party shall, at it's own expense, comply with applicable
governmental laws, statutes, ordinances, administrative orders, rules
or regulations relating to its duties under this Alliance Agreement
and shall procure all licenses and pay all fees and other charges
required thereby.
To the extent applicable, each party will comply with Executive Order
11246 of the President of the United States on Equal Employment
Opportunity and the Occupational Safety and Health Act of 1970.
13.5 NOTICES
All notices to a party under this Alliance Agreement shall be
delivered to that party's Alliance Manager at the address stated in
this Base Agreement. All notices to a party under an Article shall be
delivered to that party's Article Coordinator at the address specified
in the Article.
All notices required or permitted to be given under this Alliance
Agreement or under an Article shall be in writing.
13.6 NO OTHER LICENSES
No licenses shall be implied by this Alliance Agreement other than
those specifically set forth herein.
13.7 PUBLICITY
Except as required by law, NCD will not, without IBM's prior approval,
with such approval not to be unreasonably withheld, issue press
releases or other publicity regarding the Alliance Agreement or the
parties relationship to it.
If the joint activities of the parties or general terms and conditions
of this Alliance Agreement are to be publicly announced by mutual
agreement by the parties, procedures and restrictions for disclosure
will be jointly agreed to in writing prior to any disclosure.
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BASE AGREEMENT-PAGE 20 OF 24
13.8 SEVERABILITY
If any provision of this Alliance Agreement is for any reason found to
be ineffective, unenforceable or illegal, such condition shall not
affect the validity or enforceability of any of the remaining portions
thereof. The parties shall negotiate in good faith to replace any
ineffective, unenforceable or illegal provision with an effective
replacement as soon as is practical.
13.9 SUBSIDIARIES
Except as explicitly stated otherwise in this Alliance Agreement, the
rights and licenses granted under this Alliance Agreement shall apply
to a party's Subsidiaries so long as such Subsidiaries agree to comply
fully with the obligations imposed on that party. Each party shall
remain fully responsible for actions and omissions of its Subsidiaries
relative to rights granted under this Section.
13.10 TAXES
Each party shall be responsible for the payment of any taxes and
duties imposed on such party arising out of its performance hereunder.
Without limiting the foregoing, the parties specifically agree that
IBM shall be responsible for all taxes and duties associated with its
distribution of Products to its customers.
13.11 TRADEMARK USAGE
Nothing in this Alliance Agreement shall imply the grant to a party of
a license to use any trademark or service mark of the other party.
Such a grant may only be made by explicit statement in this Alliance
Agreement.
13.12 TRANSFER OR ASSIGNMENT
Neither party may transfer, assign, or sell any right or obligation
under this Alliance Agreement, except as expressly provided herein,
without the prior written consent of the other, except IBM may assign
its obligations to an IBM Subsidiary upon written notice to NCD.
NCD may not subcontract any part of the work to be performed under
this Alliance Agreement without the prior written consent of IBM.
Purchase of services or components normally purchased by NCD, and use
of on-site contract Personnel, will not be construed as an assignment
or subcontract. The parties agree that IBM's written approval for the
subcontracting of any part of the work will not relieve NCD of the
responsibility for subcontractor performance. IBM will not
unreasonably withhold its consent.
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BASE AGREEMENT-PAGE 21 OF 24
Any act of derogation of the foregoing shall be null and void and may
be deemed a material breach of this Alliance Agreement.
13.13 WAIVER
The waiver of any term, condition, or provision of this Alliance
Agreement by either party must be in writing. No such waiver shall be
construed as a waiver of any other term, condition, or provision
except as provided in writing, nor as a waiver of any subsequent
breach of the same term, condition, or provision.
13.14 WARRANTIES
The following warranties are in addition to any other warranties
described in one or more Articles:
13.14.1 NO CONFLICT
Each party represents and warrants that it is under no
obligation or restriction, or will it assume any such
obligation or restriction, that does or would in any way
interfere or conflict with, or that does or would present a
conflict of interest concerning each party's performance
under this Alliance Agreement or would restrict any of the
rights and licenses granted to the other party herein.
13.14.2 NO INFRINGEMENT
NCD represents and warrants that no valid copyright, mask
work, or trade secret right of a third party would be
infringed by any Deliverables provided to IBM under this
Alliance Agreement. NCD represents and warrants that it has
the right and power to enter into and perform under this
Alliance Agreement and under the Articles.
13.14.3 INTERFERING CODE
NCD represents and warrants that the Deliverables do not
contain any Code that is intentionally constructed with the
purpose of damaging, interfering with or otherwise adversely
affecting Code, data files, or hardware without the consent
and intent of the computer user. NCD shall establish and
enforce commercially reasonable procedures, which shall be
reviewed with IBM at IBM's request, to prevent any such Code
from being incorporated by NCD's Personnel into
Deliverables and shall promptly notify IBM
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BASE AGREEMENT-PAGE 22 OF 24
of any knowledge or suspicion of NCD's that any such
materials have been incorporated in any Deliverables.
13.14.4 NO IMPLIED WARRANTIES
No warranties other than those expressly set forth in this
Alliance Agreement (including this Base Agreement and
Articles) shall be implied.
13.15 LIMITATION OF LIABILITY
Neither party shall be liable to the other for any consequential
damages, incidental damages, or special damages (including loss
profits, lost savings, loss of business, or interruption of business)
even if informed that they may occur. This limitation does not apply
to liabilities for indemnity to the extent such damages are included
in settlements and court awards.
13.16 GOVERNING LAW/FORUM
This Alliance Agreement and the performance of the parties thereunder
shall be construed in accordance with and governed by the substantive
laws of the United States of America and the State of Minnesota which
pertain to agreements executed in, and fully performed within, the
State of Minnesota. Any proceeding to enforce, or to resolve disputes
arising under or relating to this Alliance Agreement shall be brought
before a court of competent jurisdiction in the State of Minnesota,
including a Federal District Court sitting within the State. The
parties hereby expressly waive any right to a jury trial and agree
that any proceedings related to this Alliance Agreement shall be
tried by a judge without a jury, regardless of the type or form of the
action.
13.17 EXECUTION AND MODIFICATION
Execution of this Alliance Agreement shall be by signature of an
authorized representative of each party. This Alliance Agreement may
only be modified in a writing executed by authorized representatives
of both parties or their designees.
13.18 ENTIRE AGREEMENT
This Alliance Agreement along with AECI No. M96-2424 and its
supplements, set forth the entire agreement and understanding between
the parties as to their subject matter and merge all prior discussions
and agreements between the parties, whether oral or written, related
to the subject matter of the alliance.
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BASE AGREEMENT-PAGE 23 OF 24
Neither party relies on any promises, inducements, representations
made by the other or expectations of more business dealings except as
expressly provided in this Alliance Agreement. The Alliance Agreement
accurately states our business agreement.
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BASE AGREEMENT-PAGE 24 OF 24
IN WITNESS WHEREOF, each party has reviewed this Agreement and each party has
executed this Agreement by signature of its authorized representative.
NETWORK COMMUNICATION DEVICES, INC. INTERNATIONAL BUSINESS MACHINES
CORPORATION
Signature /s/ Lorraine Hariton Signature /s/ Bhawnesh C. Mathur
------------------------------- -------------------------
Printed Name Lorraine Hariton Printed Name Bhawnesh C. Mathur
---------------------------- ----------------------
Printed Title V.P. of Strategic Accounts Printed Title Dir. of
--------------------------- Procurement, IBM Server Group
-----------------------------
Date 6/27/96 Date June 27, 1996
------------------------------------ --------------------
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BASE AGREEMENT-PAGE 25 OF 24
IBM-NCD ALLIANCE AGREEMENT
NO. 350-148
ARTICLE 1
DEVELOPMENT
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
This Article 1, effective on the date last signed below, is agreed to by Network
Computing Devices Corporation ("NCD"), a corporation of the State of California,
with offices located at 350 North Bernardo Avenue, Mountain View, California
94043-4207 and International Business Machines Corporation ("IBM"), a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829.
RECITALS
A. NCD and IBM have entered into an alliance between them in the area of an
IBM network application terminal ("thin client") Product.
B. This Article describes, among other things, terms and conditions of
development and describes Deliverables.
1. ARTICLE COORDINATORS
1.1 NCD ARTICLE 1 COORDINATOR:
Philip R. Graham
350 North Bernardo Avenue
Mountain View, CA 94043-4207
TELEPHONE: (415) 919-2796
TELEFAX: (415) 961-6289
1.2 IBM ARTICLE 1 COORDINATOR:
Ordean F. Hegrenes
International Business Machines Corporation
3605 Highway 52 North
Rochester, MN 55901-7829
TELEPHONE: (507) 253-3530
TELEFAX: (507) 253-8684
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ARTICLE 1-PAGE 1 OF 13
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
1.3 DUTIES OF ARTICLE COORDINATORS
The Article Coordinators will act as overall coordinators for the
parties under this Article. Each party will advise the other in
writing of any change regarding its Article Coordinator.
2. GENERAL DESCRIPTION
This Article sets forth the terms and conditions under which the parties
will jointly develop a "thin client" terminal Product for IBM, which is
intended to be positioned as a network computer terminal and as a
replacement for existing non-programmable type terminals. This terminal
Product will contain graphical user interface ("GUI") capabilities,
download capabilities from various servers, including AS/400, S/390,
RS/6000, and PC servers, and shall utilize network computing technologies
such as web browsers, and JAVA applets.
The "thin client" terminal Products shall be composed of a logic unit with
microprocessor, memory, connectivity interface (Token Ring, Ethernet,
twinax, coax, serial, and others), power supply, and enclosures. There
will be multiple models of the "thin client" Product that will accomodate
differing using system and customer requirements. The unit would attach to
IBM PC Company selected keyboard models, mice, and standard displays of
VGA/XGA and better.
The IBM "thin client" terminal Product shall be based on existing and
enhanced versions of NCD's EXPLORA (WILDCAT) product, and will operate
using a modified version of NCD's NCDware Code, boot code loaded in
programmable devices, and certain other NCD software licensed to IBM. The
Product will remotely load the Code that provides functionality from the
server it is logically attached to. This software would provide a basis
for emulation of existing devices (e.g. 5250, 3270) as well as extend the
functionality with web browsers, [ ], and other Code.
The initial development of the Product shall be comprised of two phases.
The following is a general description of the Phase 1 and Phase 2 versions
of the Product and their contemplated availability dates:
PHASE 1 VERSION (LAN VERSION)
The Phase I Product will be comprised of the following function:
* WILDCAT product enhancement version of the EXPLORA NCD device
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ARTICLE 1-PAGE 2 OF 13
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
* [ ]
* [ ]
* [ ]
* [
]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [
]
* NCDware 4.1 or later version
* [ ]
* [ ]
* [ ]
* [
]
Although the [ ] application is not a Deliverable within
Phase 1 and Phase 2, compatibility shall be provided with the [
] application for the the Phase I, Phase II, and follow on
products.
It is intended that limited shipments of the Phase 1 version of
Products to IBM's customers for development evaluation and early ship
programs, and General Availability of the Phase 1 version of the
Product, will occur in the fourth calendar quarter of 1996.
PHASE 2 VERSION OF PRODUCT
The Phase 2 Product will be comprised of the Phase 1 Product, plus the
following functional additions to the Product family, including the
integration of the host programming support into the base operating
system (AS/400 specifically):
* [ ]
* [ ]
* [ ]
* [ ]
* [
]
* [ ]
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ARTICLE 1-PAGE 3 OF 13
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
* [
]
* [ ]
* [ ]
* [ ]
* [ ]
Although the [ ] application is not a Deliverable under
Phase 1 and Phase 2, compatibility shall be provided with the [
] application for the Phase I, Phase II, and follow on
Products.
It is intended that General Availability of the Phase 2 version of the
Product will occur in July of 1997.
3. NCD'S RESPONSIBILITIES
NCD shall perform the following tasks and provide IBM with the following
Deliverables as set forth below:
3.1 TASKS
In accordance with this Article, and with IBM's advice and joint
development, NCD will develop for IBM a cost and performance effective
Product for use in IBM's server system platform product lines (ie. AS
/ 400, RS/6000, S/390, and PC servers) in accordance with the Phase 1
and Phase 2 descriptions set forth above and other specifications set
forth in the Product Development Plan. Included but not necessarily
all inclusive, are the following tasks.
* Specific joint design, development and testing of the Product
* Assist IBM in ensuring that Product design will meet IBM
Corporate instructions and standards as identified and validated
by IBM.
* [ ]
* [
]
* Development activities necessary to ensure Bi-Directional
keyboard support.
* Provide support and assistance to IBM for IBM-conducted testing
* Conduct unit level Engineering Verification Testing and Design
Verification Testing and report test results.
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ARTICLE 1-PAGE 4 OF 13
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
* NCD shall give IBM the documentation and support necessary to
obtain necessary agency and government approvals.
* Provide Product Engineering support for Product
* [
]
* Conduct compatibility testing to ensure functionality is
maintained commensurate with changes to the supported network
computer functions.
* Provide support for token ring device driver.
* Provide L3 support for early shipment programs.
* Provide a local printer support and JAVA local print support.
* [ ]
* Provide consultation and design support (HW and SW) to IBM
* Setup of IBM-owned Sun systems with NCD Development Environment
* Education of IBM development personnel on NCDware internals,
tools, architecture, processes, procedures.
* [ ]
* [
]
* [
]
* Other tasks determined by the parties to be necessary for
development the Products specified herein according to the
schedules specified herein or in the Product Development Plan.
3.2 DELIVERABLES
NCD shall provide the following Deliverables to IBM:
3.2.1 CODE
The following Code shall be provided to IBM. Unless otherwise
specified, all Code provided shall be provided in Source Code and
Object Code forms:
* [
]
* [ ]
* [ ]
* [ ]
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ARTICLE 1-PAGE 5 OF 13
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
* [ ]
* [
]
* [
]
[ ]
Although NCD's implementation of [ ] is not considered to be a
Deliverable within the scope of Phase 1 and Phase 2 development
described above, NCD agrees that upon IBM's request it will make
good faith efforts to acquire appropriate license rights to allow
[ ] to be added as a Licensed Work under Phase 1 of
development solely for the purpose of supporting the [ ]
browser, provided IBM agrees to pay third-parties royalties
resulting from IBM's use of such [ ] software licensed by
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ARTICLE 1-PAGE 6 OF 13
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
NCD. Other than such third-party royalties that may be necessary,
NCD will not charge IBM any separate fee for providing [ ] in
support of the [ ] browser.
[ ]
NCD agrees that it will work in good faith with IBM to acquire
appropriate license rights to allow its implementation of the
[ ] to be added as a Licensed Work under Phase
1 of Development. NCD agrees to license the [ ] to IBM under
the licensing terms of this Alliance Agreement if such rights
exist or are obtained, provided that IBM shall be responsible for
third-parties royalties, if any, resulting from IBM's use of such
software licensed by NCD.
3.2.2 DEVELOPMENT ENVIRONMENT
NCD shall provide all Development Environment for other
Deliverables herein. NCD shall be responsible for providing all
equipment necessary for its performance under this Article. IBM
may loan or otherwise supply unique IBM equipment.
Determination of need will be evaluated on a case-by-case basis.
IBM will provide a loan of an AS/400 and necessary training
through a separate equipment loan agreement.
3.2.3 DOCUMENTATION
* NCD's Bill of Material (B/M) for Products to be supplied by
NCD.
* A complete list of NCD's approved suppliers for each
component of the Product.
* All NCD documentation source files for Products and
Deliverables, including user manuals, installation guides,
and system administrator manuals. (For use in IBM
publications).
* NCD development documentation files for Products and
Deliverables. (For development and support group education
and reference).
* Design documentation for Products (both hardare and
software).
* Educational materials in support of skills transfer classes.
* A source paper to be used as input to existing service and
customer documentation.
* Specifications for components, hardware, circuits, and
function used by NCD in its Product development.
* Other documentation deemed necessary by IBM or by NCD for
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ARTICLE 1-PAGE 7 OF 13
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
development of the Phase 1 and Phase 2 Products.
4. IBM'S RESPONSIBILITIES
IBM is responsible for the following tasks, in which NCD shall assist as
requested by IBM:
* [
]
* [ ]
* [ ]
* [ ]
* [ ]
* [
]
* [ ]
* [ ]
* [
]
* [
]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [ ]
* [
]
* [ ]
* [ ]
* [
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ARTICLE 1-PAGE 8 OF 13
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the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
]
* [
]
5. PRODUCT DEVELOPMENT PLAN AND DEVELOPMENT SCHEDULES
5.1 PRODUCT DEVELOPMENT PLAN
The parties shall use best efforts to mutually agree to and complete a
Product Development Plan covering Phases 1 and 2 of the Product
development within 30 days after execution of this Article. The
Product Development Plan shall include schedules designed to meet the
intended GA timelines described in the Phase 1 and Phase 2 overviews
in the General Description Section of this Article, however, actual
schedules will be mutually agreed to by the parties. The Product
Development Plan for Phase 1 Product shall be firm at that time to
allow meeting the initial hardware design freeze date and the limited
shipment and GA timelines. The Product Development Plan for Phase 2
shall contain the schedules and plans for completion of the key
checkpoints required to meet the Phase 2 General Availability plan
dates and shall be subject to further enhancement and modification.
Such Product Development Plan shall be an attachment to this Article
and shall be signed by the Article 1 Coordinators. The Product
Development Plan shall describe the details of the development tasks,
development schedules and milestones, function and content of
Deliverables, design verification testing, acceptance criteria for
Deliverables, and other items deemed appropriate for efficient
management of the development process. The parties shall comply with
the Product Development Plan.
5.2 INITIAL HARDWARE DESIGN FREEZE DATE
The initial hardare design freeze date for Phase 1 Product shall be
[ ]. The Article 1 Coordinators may change this date by
mutual agreement in writing. However, any change of more than 30 days
(forward or backward) in the initial hardware design freeze date
shall require the concurrence and signatures of the parties' Alliance
Managers.
6. ENHANCEMENTS
6.1 BASIC ENHANCEMENTS
Throughout the term of this Article, NCD shall offer to provide to IBM
at no
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ARTICLE 1-PAGE 9 OF 13
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
additional charge all Basic Enhancements. Such Basic Enhancements shall
be offered to IBM within a reasonable time period prior to the
availability of any such Basic Enhancements in NCD's own products
to allow IBM to incorporate and make available such Basic
Enhancements in its Products. Basic Enhancements accepted by IBM
shall be deemed Licensed Works.
6.2 MAJOR ENHANCEMENTS
Throughout the term of the Article, NCD shall offer to provide to IBM
Major Enhancements for a reasonable fee (which may incorporate NCD's
costs for third party royalties and other costs incurred by NCD) to be
determined in good faith by the parties, and mutually agreed upon in
writing, provided that such fees shall be no greater than the lowest
charges paid by other NCD customers for such Major Enhancements. Such
Major Enhancements shall be offered to IBM within a reasonable time
period prior to the availability of any such Major Enhancements in
NCD's own products to allow IBM to incorporate and make available such
Major Enhancements in its Products. Major Enhancements shall be
deemed Licensed Works.
6.3 CUSTOM ENHANCEMENTS
Throughout the term of this Article, NCD shall offer to provide to IBM
all Custom Enhancements for a reasonable fee to be determined in good
faith by the parties and mutually agreed upon in writing. IBM shall
own all Custom Enhancements.
6.4 CATEGORIZING ENHANCEMENTS
Prior to NCD's commencement of work on any Custom Enhancement, and
prior to delivering any Enhancement to IBM, the parties shall describe
the Enhancement in writing, and categorize the Enhancement as a Basic,
Major, or Custom Enhancement. If the Enhancement is categorized as a
Major or Custom Enhancement, the parties shall agree in writing to the
compensation to be paid for such Enhancement and the provisions for
ongoing maintenance and support of such Enhancements.
6.5 ENHANCEMENTS CREATED BY IBM
Prior to creating any Enhancements to Licensed Works during the term
of the Alliance Agreement, other than Custom Enhancements, IBM shall
describe the
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ARTICLE 1-PAGE 10 OF 13
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
planned Enhancement to NCD and give NCD a reasonable opportunity to
offer to provide such Enhancement to IBM under the terms set forth in
sections 6.1 and 6.2 above. In the event IBM determines not to
obtain the Enhancement from NCD, IBM shall negotiate in good faith
with NCD to grant NCD a license back to such Enhancements created
by IBM. Nothing in this section shall prevent IBM from also
requesting NCD to offer to provide Custom Enhancements, except that
IBM shall not be required to negotiate with NCD for the licensing
back of such Custom Enhancements.
7. WARRANTIES
NCD represents and warrants that Original Deliverables have been or shall
be prepared and/or procured by NCD with professional diligence and skill,
and will conform to the material specifications and requirements set forth
or incorporated in this Alliance Agreement.
NCD warrants that each Deliverable will perform in accordance with the
functional specifications defined in or incorporated into this Article.
These warranties will survive termination of the Alliance Agreement.
8. COMPENSATION
Upon this Alliance Agreement becoming effective, NCD will be paid a
non-recoverable expense in the amount of $[ ] per month, beginning
June 15, 1996, up to the time of General Availability of the Phase 1
Product. That NRE will be invoiced to IBM on a monthly basis beginning
July 15, 1996 covering the period dating back to the 15th of the previous
month. These monthly payments will continue until GA or until the
cumulative total of all such payments is of $[ ], whichever comes
first. IBM will pay the invoice within 30 days of receiving it. The
final payment will be prorated to the GA date. This NRE is to be used by
NCD in the agressive pursuit of the achievement of the milestones set for
the Product Development Plan and in recognition of their expenses
incurred in early production tooling and ramp-up requirements to meet the
IBM and NCD joint development schedules as defined in this Article.
Except for this NRE payment and except where expressly stated otherwise
in regard to Custom and Major Enhancements, there shall be no additional
separate compensation for the work performed pursuant to this Article.
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IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
9. PRODUCT DEVELOPMENT PLAN
9.1 SPECIFICATIONS
NCD and IBM Product specifications will be jointly defined and
reviewed by the Product teams covered by this Agreement. Since the
intent is to have common IBM / NCD design content on the base Product,
these specifications for the Product must be agreed on and monitored
closely as to implementation and tradeoffs made throughout the design.
Primary vehicle for making that happen is the weekly scheduled IBM /
NCD development team conference call, schedule tracking, and work item
tracking, managed by the Development Article coordinators. These work
item tracking project logs will serve as extensions and clarifications
to the Product specification as agreed to therein, and are available
for review by both parties.
9.2 DESIGN
The Products covered by this Alliance Agreement will be jointly
designed by NCD and IBM. NCD and/or IBM may subsequently request
design changes based on the results of usability testing, market
surveys, and Product Plan Reviews. Development Article coordinators
will jointly agree on the design changes based on the merits of the
design change for the Product as a whole and as related to each
platform.
9.3 UNIT TEST
NCD is responsible for performing unit testing. The mission of the
unit testing is to verify that the control unit of the Product
correctly implements the Product Specification and it's manufacturing
quality criteria. This testing will be performed during NCD's and
IBM's Engineering Verification Test (EVT) test phase.
9.4 IBM TESTING
NCD shall conform with the entry and exit criteria for IBM EVT, RAISE,
and MVT as defined in the EVT/RAISE Hardware System Test Process
(available from the IBM Development Article I coordinator).
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IBM-NCD ALLIANCE AGREEMENT
ARTICLE 1 DEVELOPMENT
9.5 INFORMATION PLAN
NCD will provide IBM Information Development with current
specifications and documents that could be used by IBM in generating
the IBM publications in support of the Product upon request that
provides enough overview, conceptual, reference, how-to, and other
detailed information to enable IBM information developers to extract
information from it and merge that information into existing IBM
Product manuals and on-line help information to support the Product.
Examples of types of information to be provided in the source paper
are:
a) description of overall service strategy
b) problem isolation procedures
c) reference code descriptions
IN WITNESS WHEREOF, each party has reviewed this Article and each party has
executed this Article by signature of its authorized representative.
NETWORK COMMUNICATION DEVICES, INC. INTERNATIONAL BUSINESS MACHINES
CORPORATION
Signature /s/ Lorraine Hariton Signature /s/ Bhawnesh C. Mathur
------------------------ ----------------------------
Printed Name Lorraine Hariton Printed Name Bhawnesh C. Mathur
--------------------- -------------------------
Printed Title V.P. of Strategic Accounts Printed Title Dir. of Procurement,
--------------------------- IBM Server Group
-------------------------------------
Date 6/27/96 Date June 27th, 1996
----------------------------- ---------------------------------
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ARTICLE 1-PAGE 13 OF 13
IBBM-NCD ALLIANCE AGREEMENT
NO. 350-148
ARTICLE 2
MANUFACTURING
This Article 2, effective on the date last signed below, is agreed to by Network
Computing Devices, Inc., ("NCD"), a corporation of the State of California,
with offices located at 350 North Bernardo Avenue, Mountain View, California
94043-4207 and International Business Machines Corporation ("IBM"), a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829.
RECITALS
A. NCD and IBM have entered into an alliance between them in the area of a
network application terminal ("thin client") product.
B. This Article describes, among other things, the terms and conditions under
which NCD will custom manufacture a thin client for IBM, including but not
limited to forecasting, ordering, quantity, and pricing, and shipping terms
and conditions.
1. ARTICLE COORDINATORS
1.1 NCD ARTICLE 2 COORDINATOR:
Randy Wagner
Manufacturing Project Manager
Network Computing Devices, Inc.
350 North Bernardo Avenue
Mountain View, CA 94043-4207
TELEPHONE: (415) 919-2756
TELEFAX: (415) 961-7774
1.2 IBM ARTICLE 2 COORDINATOR :
Michael Heaser
International Business Machines Corporation
3605 Highway 52 North
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IBM-NCD ALLIANCE AGREEMENT
ARTICLE 2 MANUFACTURING
Rochester, MN 55901-7829
TELEPHONE: (507) 253-8784
TELEFAX: (507) 253-3648
1.3 DUTIES OF ARTICLE COORDINATORS
The Article Coordinators will act as overall coordinators for the
parties under this Article. Each party will advise the other in
writing of any change regarding its Article Coordinator. All
communications between the parties regarding this Article shall be
conducted through the Article Coordinators.
2. PRODUCTS
NCD shall supply Products to IBM. Products to be supplied to IBM under
this Alliance Agreement may include NCD's existing EXPLORA products, as
well as Products developed under this Alliance Agreement which are
generally described in Development-Article 1, and shall be specified in
more detail in the Product Specification and Price List (PSPL) which shall
be an attachment to this Article. Product descriptions and specifications
may be changed from time to time by mutual agreement. NCD will supply such
Products according to the terms and conditions of this Article and the PSPL
attachment. No changes of any kind shall be made by NCD in the form, fit
or function of Products without IBM's prior written consent. However, if
either party determines that such changes are necessary for compliance with
government-imposed safety requirements, that party will promptly inform the
other, and the parties will promptly take the reasonable and necessary
steps to implement such changes.
The parties shall use their best efforts to negotiate and complete the
initial PSPL within 30 days after the Initial Design Freeze Date as
specified in Article 1-Development. The PSPL shall be amended when the
Product specifications and/or the Product prices are changed pursuant to
this Alliance Agreement.
3. QUALITY
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IBM-NCD ALLIANCE AGREEMENT
ARTICLE 2 MANUFACTURING
NCD will ensure that all work performed pursuant to this Article is
performed in a professional and competent manner consistent with the
highest industry standards and safety practices, and with IBM's
specifications, drawings, standards, directions and procedures.
NCD will ensure that a total management quality system such as the Malcolm
Baldridge National Quality Award Criteria, ISO 9000, or equivalent national
standard, is maintained for all aspects of the key processes related to
performance of work under this Article. NCD will strive to implement and
maintain a Product defect level at or below a Six Sigma level. NCD will
monitor the steps in all Product-related processes to identify deviations
and potential improvements. NCD will employ Statistical Process Control
(SPC) techniques to ensure that the quality requirements are consistently
met by all Product-related processes. Upon request by IBM, NCD will
provide IBM written reports and/or numerical data files containing quality
information related to the Product manufacturing process. IBM will
determine the structure of such reports.
Upon reasonable notice during NCD's normal business hours, IBM will have
the right to review NCD's quality plans and initiatives, assembly methods,
manufacturing processes, and production facilities on or off NCD's premises
in order to assess their adequacy.
4. PRICING AND QUANTITIES
NCD shall make the Product available to IBM at the price determined as set
forth below. NCD warrants that pricing of Products does not include taxes
and that NCD will not include any sales taxes on any Products purchased by
IBM. Upon request, IBM will provide NCD with a valid Reseller's Exemption
Certificate for each taxing jurisdiction for which NCD will ship Products.
4.1 INITIAL PRICE FOR PRODUCTS
The initial price of the Products shall be determined no later than 30
days after the hardware design freeze date specified in Article
1-Development, and shall be specified in the PSPL. The initial prices
of Products shall be determined by adding the B/M cost to a markup
amount ("Markup"). The B/M cost shall be determined by actual cost of
the components that make up the B/M, including the cost of assembly,
test, and delivery of the finished card assembly to NCD or the NCD-
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ARTICLE 2-PAGE 3 OF 15
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 2 MANUFACTURING
designated assembly point. Upon IBM's written request to do so,
NCD will utilize a second source for the manufacture of Products,
however the B/M cost will be adjusted to reflect any incremental costs
associated with obtaining such second source.
The Markup during the Initial Term of this Alliance Agreement shall be
as follows:
Cumulative Total Products Ordered Markup
--------------------------------- ------
[ ] $[ ]
[ ] $[ ]
[ ] $[ ]
[ ] $[ ]
[ ] $[ ]
[ ] $[ ]
For purposes of determining the Markup, the cumulative total products
ordered according to the above table shall include all Products
ordered by IBM during the Initial Term.
In addition to the price as determined above, NCD may charge IBM for
reimbursement of any import duty actually incurred by NCD resulting
from the shipment of IBM-ordered Products to any IBM-designated
location outside of the United States, provided however, that
regardless of the country from which NCD ships the Products, the
amount charged shall be no greater than the amount of duties that NCD
would have incurred for shipment of the Products from the United
States to the same IBM-designated location on the same date, and
provided further that NCD may make this charge only to the extent NCD
has notified IBM in writing of any such import duty charge prior to
IBM's placement of the order to which it applies. Such charge shall
be reflected as part of the piece price for Products ordered, and
shall be reflected on the same invoice. This shall be IBM's sole
obligation for any import duties associated with the shipment of
Products.
4.2 QUARTERLY PRICE REVIEWS AND ADJUSTMENTS
No less frequently than quarterly after the determination of the
initial prices for Products, the Manufacturing Article Coordinators
shall meet and review B/M
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costs and adjust the Product prices to reflect any changes in such
costs. IBM will bear the risk of such cost fluctuations in B/M, and
the Product prices shall be adjusted for the full amount of such
increase or reduction. However, if IBM can demonstrate that a lower
cost for one or more components of the B/M is available to NCD, the
Product prices for Products containing such component(s) shall be
determined using that lower cost, unless NCD can demonstrate to IBM
after a reasonable inquiry that the component cannot be obtained from
a supplier offering competitive lead times and comparable quality.
The new prices for Products shall take effect on a schedule mutually
agreed by the parties, taking into consideration the lead times of the
components on which such price changes are based and NCD's current
inventory of, and contractual commitments to purchase, such components
based on IBM's forecasts , but in no case shall the price adjustment
take effect later than 90 days after the determination is made. In the
event of a significant price change occuring between quarterly
reviews, the parties shall discuss in good faith an accelerated change
in Product prices to reflect the change.
4.3 MINIMUM ORDER QUANTITY
There shall be a minimum order quantity of [ ] Products during
the Initial Term of the Alliance Agreement which shall apply only if no
notice of termination of the Alliance Agreement has been provided
prior to (a) March 30, 1997, or (b) General Availability (GA) of
Products, whichever is earlier. If this minimum order quantity is
triggered and IBM has failed to order [ ] Products by the
expiration of the Initial Term through no fault of NCD, then IBM shall
pay NCD a cancellation charge of $[ ] for each unit of the [ ]
minimum order quantity not ordered. This cancellation charge shall be
NCD's full and exclusive remedy in the event IBM has failed to order
[ ] Products during the Initial Term. All IBM orders of Products
(whether NCD's existing EXPLORA products or enhanced or derivative
versions thererof) during the Initial Term shall be applied against
this minimum order quantity, including those units ordered prior to
the trigger date described above. Unless the parties agree in
writing to a different payment schedule for such cancellation charge,
NCD shall invoice IBM for the full cancellation charge no later than
30 days after the Initial Term, and IBM shall remit payment on NCD's
invoice no later than 60 days after expiration of the Initial Term.
IBM's obligations in this section shall cease upon IBM's termination
of the
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Alliance Agreement for cause. If IBM terminates this Alliance
Agreement without cause after the minimum order quantity obligation
has been triggered, then the full cancellation charge of $[ ] for each
unit of the [ ] minimum order quantity not ordered by IBM as of
the date such termination without cause is effective shall become due
and owing by IBM. If IBM terminates for cause, no such payment shall
be due. NCD shall invoice IBM for such payment no later than 30 days
after the effective date of the termination, and IBM shall pay the
invoice no later than 60 days after receiving it.
5. INVOICING AND PAYMENT
NCD will invoice IBM upon shipment of Product to IBM's facilities. Unless
otherwise specified in writing by the parties, IBM shall make payment on
undisputed invoices within 30 days from receipt of the invoice provided
such invoices have been transmitted electronically in accordance with the
parties' Electronic Data Interchange (EDI) Agreement. For undisputed
invoices delivered through non-electronic means, IBM shall pay such
invoices within 45 days of receipt of the invoice. In the event payment is
not received within such period, NCD will notify IBM and IBM will make
prompt payment of the amount due. IBM will notify NCD of any dispute
regarding an invoice no later than the date payment of the invoice would
otherwise be due. IBM's repeated and substantial failure to pay undisputed
invoices when due may be treated by NCD as a material breach.
6. WORK AUTHORIZATION LOGISTICS
NCD will deliver Products as specified in WAs. The agreed to lead time for
IBM to issue WAs prior to delivery shall be 30 days. NCD agrees to
cooperate and use best efforts for cases where IBM requests a shorter
lead-time. If NCD requires an additional charge to cover added cost for
fulfilling IBM's orders on a shorter lead time, NCD shall inform IBM of
such charge in writing before NCD accepts such an order. Any increase in
the agreed to lead-time must have IBM's prior written approval. The parties
specifically contemplate that a longer lead time may be necessary for the
ramp up of volumes for initial availability of the Products, and agree to
negotiate a schedule for such ramp up volumes.
IBM shall provide a 12 month rolling estimated forecast, updated on a
monthly basis, for
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ARTICLE 2 MANUFACTURING
any quantities of Product that may be required. The first three months of
a given forecast shall be binding only to the extent that each of the first
three months of the forecast may vary from the previous month's forecast by
no more than the following amounts:
Month 1: +/- [ ]%
Month 2: +/- [ ]%
Month 3: +/- [ ]%
For example, if a forecast is issued on January 1 showing requirements for
[ ] units each month in March, April, and May, IBM may order from [ ] to
[ ] units on February 1 for delivery on March 1. The forecast for April
may be adjusted to [ ] units, and the May forecast may be adjusted to
[ ] units. This process and the applicable percentages of allowable
variance will continue to roll each month with the forecast. There will be
no premiums or penalties for Products ordered within these parameters.
The remaining portion of any given forecast (beyond 3 months) shall be
completely preliminary and non-binding.
Upon termination of this Article, NCD shall cease production of all
Products ordered. If IBM terminates without cause, IBM shall be responsible
for paying NCD for all finished Products which have been ordered by IBM
through WAs issued prior to the date the notice of termination is provided
and which have actually been produced by NCD. In addition, the parties
will negotiate in good faith IBM's reimbursement to NCD for the cost of any
components and work-in-process associated with IBM's binding portion of the
latest forecast that NCD or its supplier cannot utilize. All such Products,
components, and work-in-process paid for by IBM are the sole property of
IBM, and upon termination the disposition of all such IBM property shall be
in accordance with IBM's written instructions.
7. DELIVERY LOGISTICS
7.1 DELIVERY POINT
All references to delivery as it applies to this Article shall mean
delivery to IBM locations that may be specified by IBM in a WA or
separate document.
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ARTICLE 2 MANUFACTURING
The delivery point shall be F.O.B. IBM Location.
7.2 ON -TIME DELIVERY
Products must be delivered on the dates specified in WAs. If NCD will
be late in meeting a scheduled delivery date by more than one
business day, NCD shall promptly notify IBM of NCD's revised delivery
date and IBM may, at its option, without limitation (i) cancel
Products not delivered without charge, (ii) buy elsewhere, or make,
and charge NCD any cost differential, subject to IBM's duty to
reasonably mitigate its damages, and (iii) charge NCD for any premium
shipping and handling costs incurred as a result of the late delivery,
subject to IBM's duty to reasonably mitigate its damages. NCD shall
not deliver Products to IBM more than 2 days earlier than the
designated shipment date without IBM's prior written approval. NCD's
repeated or substantial failure to meet its scheduled delivery dates
may be treated by IBM as a material breach of the Alliance Agreement.
In any case in which NCD is unable to timely deliver Products ordered
by IBM, such orders shall be credited to IBM's minimum order quantity
requirement as specified in section 4.3.
8. TOOLING
NCD shall be responsible for acquiring and maintaining production-level
Tooling required to perform its obligations under this Article. In the
event that retooling is required after NCD has acquired such
production-level tooling solely due to an IBM mechanical design change,
then IBM will be responsible for providing the new Tooling, and will own
such new Tooling. NCD shall be responsible for acquiring any replacement
Tooling when such replacement Tooling is necessary at the Tooling's end of
life. In the event NCD ceases manufacturing Products for IBM for any
reason other than IBM's termination without cause, IBM shall have the right
to immediately purchase Tooling owned by NCD at the Tooling's fair market
value based on its usage to date. In the event any such Tooling is in the
possession of a third-party, NCD shall ensure that there are agreements in
place with such third parties which allow such third parties to utilize
such tooling to continue supplying IBM with Products or Product components
pending completion of the sale. This obligation shall survive termination
of the Alliance Agreement.
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IBM-NCD ALLIANCE AGREEMENT
ARTICLE 2 MANUFACTURING
9. PACKAGING FOR SHIPMENT TO IBM
In packaging Products for shipment, NCD will take the necessary precautions
to ensure maximum protection of Product from damage due to rough handling
and any other hazard which might occur in transit.
In addition, NCD will package all Products to conform with IBM's document
no. GA 21-9261-10 titled "Packaging and Handling - Supplier and Interplant
Requirements," which shall be an attachment to this Article.
10. ELECTRONIC DATA INTERCHANGE
NCD and IBM shall handle manufacturing transactions in accordance with the
IBM Electronic Data Interchange (EDI) Agreement, which shall be an
attachment to this Article. NCD will implement all required EDI
capabilities no later than initial GA of the Products.
11. DEMONSTRATION AND DEVELOPMENT VERSIONS OF PRODUCTS
During the Initial Term of this Alliance Agreement, NCD shall provide IBM,
at no charge, up to [ ] Products for demonstration and development
purposes. Such demonstration and development Products may be requested from
time to time by IBM in the quantities and versions (whether Base Products
or Added Feature Products) that IBM chooses, so long as the cumulative
total of such Products requested by IBM does not exceed [ ]. NCD shall
inform IBM in writing when the total development and demonstration
allotment has been exhausted. This development and demonstration allotment
shall not be counted against IBM's minimum order quantity.
12. NCD'S REPRESENTATIONS/WARRANTIES
12.1 REPRESENTATIONS AND WARRANTIES
In addition to the representations and warranties set forth in the
Base Agreement,
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NCD represents and warrants: (i) NCD's performance of this Article
will not violate the terms of any license, contract, note or other
obligations to which NCD is a party, or any statute, law, regulation
or ordinance to which NCD is subject, including without limitation,
all health, safety and environmental statutes, laws, regulations and
ordinances; (ii) no claim, lien or action is pending or threatened
against NCD or its suppliers, Subsidiaries, affiliates, or parent
company that would interfere with IBM's, its Subsidiaries',
Distributors', or customers' use of Products; (iii) the Products do
not infringe any patent, trademark, copyright or other intellectual
property rights of a third party in the geographic territories
specified in section 10 ("Indemnification") of the Base Agreement, and
NCD is not aware of any such infringement in any other areas; (iv)
none of the Products contain nor are any of the Products manufactured
using ozone depleting substances including, without limitation,
chlorofluorocarbons, halons, methyl chloroform and carbon
tetrachloride; (v) each of the Products is safe for its intended use,
and (vi) all Products provided to IBM under this Agreement are new and
do not contain anything used or reconditioned.
The warranties in this section 12.1 shall survive termination of the
Alliance Agreement.
12.2 PRODUCT WARRANTY
NCD warrants that all Products provided to IBM are free from defects
in design (except for designs provided by IBM), material, workmanship,
and will conform to all Product specifications and quality
requirements.
NCD shall, at NCD's option, repair or replace Products that do not
conform to this warranty, and that are returned to NCD by IBM or IBM's
customer within the earlier of : (a) 1 year after the date of purchase
as indicated by documented proof of the customer's purchase date
submitted to NCD by IBM, IBM's Distributor, or the customer, or (b) 1
year plus 120 days after the date of NCD's shipment of the Product to
IBM. Such repair or replacement shall be made and shipped back by NCD
within 7 business days after NCD receives the nonconforming Product.
Repair or replacement shall be at no charge to IBM or the customer.
Unless a different return shipment destination is specified, NCD shall
ship the repaired Product, or the replacement Product, to the IBM
location or the customer location from which the non-conforming
Product was shipped to NCD. The customer or
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IBM-NCD ALLIANCE AGREEMENT
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IBM shall be responsible for shipping the product to NCD, and NCD
shall be responsible for shipping back the repaired or replacement
Product. NCD shall specify whether the Product it returns has been
repaired or is a replacement Product.
Prior to initial GA of the Products, IBM and NCD shall negotiate in
good faith regarding any additional administrative or logistical
details associated with fulfilling warranty obligations. In addition,
IBM and NCD may agree to extend the warranty period for an additional
two years beyond the warranty period described in the preceding
paragraph for a mutually agreed-upon charge.
13. IBM'S RIGHT TO UTILIZE OTHER MANUFACTURING SOURCES
If IBM markets Products during the Initial Term of this Alliance Agreement,
IBM shall utilize NCD for the supply of at least [ ]% of the volume of
Products, provided:
1. NCD has not breached this Article, or any other part of the
Alliance Agreement, and;
2. IBM reasonably determines that NCD has consistently shipped
Products that conform to all Product specifications in a timely
manner according to IBM's forecasts and WAs, and;
3. IBM reasonably determines that the Product supplied by NCD is
competitive regarding price (excluding Markup), performance,
quality, function, features and technology.
14. IBM'S RENEWAL OBLIGATION/RIGHTIBM'S
14.1 IBM'S OBLIGATION TO RENEW
In the event IBM continues to market Products after expiration of the
Initial Term of the Alliance Agreement and the conditions listed below
have been satisfied, this Article shall remain in effect for an
additional two years unless terminated earlier
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pursuant to the Base Agreement. The initial Markup for Products
supplied to IBM by NCD during the renewal term shall be calculated
based on the cumulative total Products ordered by IBM during the term
of the Alliance Agreement.
IBM shall utilize NCD for the supply of at least [ ] units
of its volume of Products, whichever is less, during the first year of
such renewal term, and for the supply of at least [ ] units
of its volume of Products, whichever is less, for the second year of
the renewal term, provided:
1. NCD has not breached this Article, or any other part of the
Alliance Agreement, and;
2. IBM reasonably determines that NCD has consistently shipped
Products that conform to all Product specifications in a timely
manner according to IBM's forecasts and WAs, and;
3. IBM reasonably determines that the Product supplied by NCD is
competitive regarding price (excluding Markup), performance,
quality, function, features and technology.
14.2 IBM'S RIGHT TO RENEW
If IBM chooses to renew the Alliance Agreement for an additional two
years (through December 31, 2000) under the terms of the Base
Agreement, then during the renewal term the provisions of section
14.1 of this Article shall apply.
14.3 NO MINIMUM ORDER QUANTITY DURING RENEWAL TERM
There shall be no minimum order quantity required of IBM during the
renewal term.
15. ROYALTIES FOR PRODUCTS NOT SUPPLIED BY NCD
For each Product that is supplied to IBM by a party other than NCD prior to
December 31, 2000, IBM shall pay to NCD a royalty of [ ]
($[ ]). This royalty shall not
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apply to the extent the supply of Products by a third party is necessary
due to NCD's failure to meet delivery schedules, NCD's failure to meet
quality obligations, or due to events described in the Force Majeure
section of this Alliance Agreement. Nor shall this royalty apply to IBM's
acquisition or manufacture of up to [ ] Products (1) for IBM's own
internal use, or (2) for limited shipments by IBM for the purpose of early
testing, development-level evaluation and similar early-ship programs prior
to the General Availability of such Products.
No later than 30 days after the end of each calendar quarter in which such
Products have been supplied to IBM by a third party, IBM shall submit a
statement to NCD showing the number of units of Products supplied by third
parties. NCD shall submit an invoice to IBM for the royalty as set forth
in this section, and IBM shall pay the invoice in accordance with section 5
of this Article.
After December 31, 2000, IBM's license to Licensed Work that consists of
Code delivered by NCD pursuant to Phase 1 and Phase 2 of Development as
described in Article 1-Development shall be fully paid up as of that date.
This shall not include Code contained within Major Enhancement or Custom
Enhancements for which NCD and IBM have agreed to a different payment
arrangement. Nothing herein shall require IBM to pay royalties to NCD on
IBM products or offerings other than the Products. The royalty obligations
under this section shall cease upon IBM's termination of the Alliance
Agreement with cause, but shall continue until December 31, 2000 in the
event IBM terminates the Alliance Agreement without cause prior to that
date.
16. MOST FAVORED CUSTOMER
The prices provided by NCD to IBM under this Agreement should not exceed
those offered to other customers purchasing similar products or services in
like or lesser quantities under similar terms and conditions. If NCD
offers prices to other customers which are lower than those offered to IBM
in like or lesser quantities under similar terms and conditions during the
same time period, then those prices shall become available to IBM at the
time of their availability to that other customer. IBM and NCD shall
maintain the confidentiality of prices provided to IBM.
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ARTICLE 2-PAGE 13 OF 15
[ ] Confidential Treatment Requested. Omitted Portions Filed Separately with
the Securities and Exchange Commission.
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 2 DEVELOPMENT
IN WITNESS WHEREOF, each party has reviewed this Article and each party has
executed this Article by signature of its authorized representative.
NETWORK COMMUNICATION DEVICES, INC. INTERNATIONAL BUSINESS MACHINES
CORPORATION
Signature /s/ Lorraine Hariton Signature /s/ Bhawnesh C. Mathur
-------------------------------- -----------------------
Printed Name Lorraine Hariton Printed Name Bhawnesh C. Mathur
----------------------------- --------------------
Printed Title V.P. of Strategic Accounts Printed Title Dir. of
---------------------------- Procurement, IBM Server Group
---------------------------------
Date 6/27/96 Date June 27, 1996
------------------------------------- ----------------------------
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ARTICLE 2-PAGE 14 of 15
Attachment 2 to Article 2 of
IBM -- NCD Alliance Agreement
ELECTRONIC DATA INTERCHANGE/ELECTRONIC FUNDS TRANSFER TRADING PARTNER
AGREEMENT
- ------------------------------------------------------------------------------
This EDI Agreement is an Attachment to Article 2 of the Alliance Agreement
between IBM and NCD.
NCD and International Business Machines Corporation (IBM) intend to create
legally binding purchase and sale obligations by the electronic transmission
of business documents (Documents) and agree that the following terms and
conditions apply to such transmissions:
1. TRANSMISSION - Each party may electronically transmit and receive
Documents through the assistance of a network in accordance with mutually
agreed upon standards. Each party, at its own expense, shall provide and
maintain the equipment, software, services, including network charges, and
testing necessary to effectively and reliably transmit and receive documents.
2. RECEIPT - A Document is received when it arrives at the receiving party's
mailbox. Upon receipt of any Document, the receiving party shall promptly
send an acknowledgment which will conclusively establish receipt of a
Document. If any Document is received in an unintelligible or garbled form,
the receiving party shall promptly notify the originating party (if
identifiable from the received Document) in a reasonable manner. In the
absence of such a notice, the originating party's records of the contents of
such Document shall prevail.
3. SIGNATURE AND ENFORCEABILITY - Each party shall adopt as its signature an
electronic identification consisting of symbol(s) or code(s) (User ID) that
shall be affixed to or contained in each Document. Each party will maintain
security procedures to prevent unauthorized use or disclosure of either
party's User ID.
Any Document containing, or to which there is affixed, a User ID shall be
considered: (a) a "writing" or "in writing"; (b) to have been "signed"; (c)
an "original" when printed from electronic files or records established and
maintained in the normal course of business; and (d) admissible to the same
extent and under the same conditions as other business records originated and
maintained in documentary form.
4. THIRD PARTY SERVICE PROVIDERS - Documents will be transmitted
electronically to each party either directly or through any third party
service provider (Provider) with which either party may contact. Either party
may modify its election to use, not use or change a Provider upon 60 days'
prior written notice. Each party shall be responsible for the costs of any
Provider with which it contracts. Each party shall be liable for the acts or
omissions of its Provider while transmitting, receiving, storing or handling
Documents, or performing related activities for such party.
5. TRANSACTION TERMS - Unless specifically superseded in other written
agreements between the parties, the terms and conditions of the Base
Agreement will be incorporated and will apply to all Documents.
6. ELECTRONIC FUNDS TRANSFER - By completing this Section 6, you hereby
authorize IBM to initiate electronic credit entries to the account listed
below. You agree that such transactions will be governed by the National
Automated Clearing House Association rules. This authority is to remain in
effect until IBM has received written notification of termination in such
time and such manner as to afford IBM a reasonable opportunity to act on it.
Account Party (if different)
NCD
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Address 350 North Bernardo Ave
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- ----------------------------------------------------------------------------
City, State, Zip Mt. View, Ca 94043
- ----------------------------------------------------------------------------
Financial Institution
- ----------------------------------------------------------------------------
Contact Name/Title
- ----------------------------------------------------------------------------
Contact Phone Number
- ----------------------------------------------------------------------------
Address
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
City, State, Zip
- ----------------------------------------------------------------------------
Account Number (max 17)
- ----------------------------------------------------------------------------
Bank Routing/Transit Code (max 9)
- ----------------------------------------------------------------------------
7. LIMITATION OF REMEDIES - In addition to the limitation of liability
described in the Base Agreement, the following limitations apply to this EDI
Attachment. Neither party shall be liable to the other for any special,
incidental, exemplary, or consequential damages arising from or as a result
of: (1) any delay, omission, or error in the electronic transmission or
receipt of any Documents; or (2) any delay, omission, or error of an
electronic credit entry by IBM, even if the other party has been advised of
the possibility of such damages. In addition, neither party shall be liable
for any damages claimed by the other party based on any third party claim, in
no event will either party be liable for any damages caused by the other
party's failure to maintain security procedures to prevent the unauthorized
use or disclosure of its User ID.
8. TERMINATION - This Agreement shall apply as long as Article 2,
Manufacturing, is in effect, unless terminated by mutual agreement of the
parties.
- ----------------------------------------------------------------------------
The parties acknowledge that they have read this Agreement, understand it and
agree to be bound by its terms.
By International Business Machines By Network Computing Devices, Inc.
Corporation
/s/ Bhauvesh C. Mathar /s/ Lorraine Hart
-------------------------------- --------------------------------
Authorized Signature Authorized Signature
Name Bhauvesh C. Mathar Name Lorraine Hart
Title Director of Server Title VP Strategic
Procurement
Date June 27, 1996 Date 6/27/96
Address 3605 Highway 52 North Address 350 North Bernardo
Rochester, MN 55901 Mt View, Ca 94043
Revision JUNE 1994
IBM-NCD ALLIANCE AGREEMENT
NO. 350-148
ARTICLE 3
PRODUCT SUPPORT AND MAINTENANCE
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE
This Article 3, effective on the date last signed below, is agreed to by Network
Computing Devices Corporation ("NCD"), a corporation of the State of California,
with offices located at 350 North Bernardo Avenue, Mountain View, California
94043-4207 and International Business Machines Corporation ("IBM"), a
corporation of the State of New York, with offices at 3605 Highway 52 North,
Rochester, Minnesota 55901-7829.
RECITALS
A. NCD and IBM have entered into an alliance between them in the area of an
IBM network application terminal ("thin client") Product.
B. This Article describes , among other things, the terms and conditions
related to product support and maintenance for the Product.
1. ARTICLE COORDINATORS
1.1 NCD ARTICLE 3 COORDINATOR
Barry Davis
Network Computing Devices, Inc.
350 North Bernardo Avenue
Mountain View, CA 94043-4207
TELEPHONE: (415) 919-2747
TELEFAX: (415) 961-7774
1.2 IBM ARTICLE 3 COORDINATOR
Chuck Pavesich
International Business Machines Corporation
3605 Highway 52 North
Rochester, MN 55901-7829
TELEPHONE: (507) 253-7648
TELEFAX: (507) 253-4901
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ARTICLE 3-PAGE 1 OF 6
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE
1.3 DUTIES OF ARTICLE COORDINATORS
The Article Coordinators will act as overall coordinators for the
parties under this Article. Each party will advise the other in
writing of any change regarding its Article Coordinator.
2. LEVEL 3 SUPPORT RESPONSIBILITIES
In addition to the Product warranties found elsewhere in this Alliance
Agreement, NCD shall provide Level 3 support for Deliverables and Products.
Level 3 support is the support IBM provides its customers after the first
two levels of support, Levels 1 and 2, have been exhausted. This support
will involve the determination of whether there is a defect (patent or
latent), error or other problem ("Defects") with the Product or
Deliverables. These will include both problems actually reported by IBM's
customers ("APARs"), as well as problems discovered internally by IBM and
reported to NCD ("PTRs").
Level 3 support shall be conducted so that IBM is the single point of
contact for customer-reported problems. Unless requested by IBM in
particular situations, NCD will have no direct contact with the customer,
and will receive support requests only through IBM support representatives
after reasonable efforts to resolve the problem using IBM resources have
been exhausted.
The IBM support representatives will determine which Defects appear to be
related to Deliverables provided under this Alliance Agreement and, after
exhausting IBM internal resources, will contact NCD for further diagnosis
and correction if the Defect appears to be related to such Deliverables,
including Code as well as Firmware. Upon notification of a Defect
identified by IBM, NCD will be responsible for isolating and correcting all
reported or discovered Defects with the Deliverables, and providing
responses and corrections to IBM in accordance with the parameters set
forth below:
SEVERITY LEVEL 1 DEFECT REPORTS
Severity Level 1 (SL1) is for reported Defects that result in an
emergency condition that can cause critical impact to a customer or to
an IBM delivery schedule. Defect reports classified by IBM as SL1
require immediate and
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ARTICLE 3-PAGE 2 OF 6
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE
sustained work until the problem is solved. NCD shall work with IBM
around the clock to provide a correction for the SL1 Defect, and shall
use its best efforts to complete the correction within 24 hours of the
earlier of NCD discovering the SL1 Defect or being informed of the
possible SL1 Defect, unless the parties agree that a different time
schedule is appropriate in light of the circumstances of the Defect
report.
SEVERITY LEVEL 2 DEFECT REPORTS
Severity Level 2 (SL2) is for reported Defects that significantly
affects an IBM schedule or that make the performance or continued
performance of any feature or function difficult and that cannot
easily be circumvented or avoided on a temporary basis by the end user
("Severity Level 2 Defect" or "SL2 Defect"). NCD shall use its best
efforts to provide corrections within 7 days of the earlier of NCD
discovering the SL2 Defect or being informed of the possible SL2
Defect, unless the parties agree that a different time schedule is
appropriate in light of the circumstances of the Defect report.
SEVERITY LEVEL 3 DEFECT REPORTS
Severity Level 3 (SL3) is for reported Defects that are not critical
in that performance can be continued without difficulty or loss of
data by circumvention or avoidance by the end user ("Severity Level 3
Defect" or "SL3 Defect"). NCD shall use its best efforts to provide
corrections within 14 days of the earlier of NCD discovering the SL3
Defect or being informed of the possible SL3 Defect, unless the
parties agree that a different time schedule is appropriate in light
of the circumstances of the Defect report.
SEVERITY LEVEL 4 DEFECT REPORTS
Severity Level 4 (SL4) is for reported Defects that are minor which
can easily be avoided or circumvented by the end user ("Severity Level
4 Defect" or "SL4 Defect"). NCD shall use best efforts to provide
corrections within 21 days of the earlier of NCD discovering the SL4
Defect or being informed of the possible SL4 Defect, unless the
parties agree that a different time schedule is appropriate in light
of the circumstances of the Defect report.
Repeated and substantial failure by NCD to provide corrections according to
the deadlines set forth above may be considered by IBM to be a material
breach of the Alliance
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ARTICLE 3-PAGE 3 OF 6
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE
Agreement.
In the event the parties determine that a correction cannot be completed
within the time deadlines set forth above, the parties will mutually agree
to a time frame in which such correction will be completed.
IBM shall be responsible for providing NCD all available Defect
information, including reproduction of Defect symptoms and conditions if
available and feasible.
Once a correction is determined and developed for the Defect, NCD will
ensure that the correction is tested, and that there is no other
additional Defects that are created as a result of the implementation of
the correction. NCD will also ensure that the implementation of this
correction is included in all other Product and Derivative Works on the
current and subsequent releases to prevent recurrence.
NCD shall provide IBM with defect support contacts and phone numbers that
are available 24 hours per day, 7 days per week for Severity Level 1 Defect
reports. IBM will utilize this 24/7 coverage as necessary for problems
that IBM classifies as critical (Severity Level 1 Defects). IBM contact
with NCD for less severe problems (Severity Level 2, 3, and 4 Defects) will
be NCD's normal business hours (8 a.m. to 5 p.m.).
If IBM desires NCD to provide direct customer support for any of it's
segments, this may be negotiated for a separate fee.
NCD is responsible for its own expenses in diagnosing and fixing the
Defects reported to NCD.
3. EDUCATION REQUIREMENTS
During the term of this Alliance Agreement, NCD shall provide education
classes to IBM Personnel in IBM Level 2 and Level 3 support centers
sufficient to provide such Personnel with competence in providing customer
service and support for the Products and Deliverables. Such instruction
shall include one class in the United States, one class in IBM's Europe-
Middle East-Africa sales geography (EMEA), and one class in IBM's
Asia-Pacific geography (AP). Such classes shall be conducted at upon
schedules requested by IBM and agreed to by NCD. Class content shall be
mutually agreed to by NCD and IBM. NCD shall be responsible for payment
for instructor time and all expenses for class materials and preparation
for such classes. IBM will reimburse NCD for
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ARTICLE 3-PAGE 4 OF 6
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE
reasonable travel and lodging expenses incurred by NCD Personnel in
teaching such classes in accordance with IBM's standard travel expense
guidelines to be supplied to NCD by IBM. IBM may request additional
classroom instruction during the term of the Alliance Agreement, but NCD
shall be paid on a reasonable fee basis, and reimbursed for all reasonable
expenses for conducting such classes.
4. MAINTENANCE MODIFICATIONS
Throughout the term of this Article, NCD shall offer to provide to IBM at
no additional charge all Maintenance Modifications. Such Maintenance
Modifications shall be offered to IBM within a reasonable time period prior
to the availability of any such Maintenance Modifications in NCD's own
products to allow IBM to incorporate and make available such Maintenance
Modifications in its Products. Maintenance Modifications developed and
offered by NCD and accepted by IBM shall be deemed Licensed Works.
In the event IBM creates Maintenance Modifications to the Licensed Works
during the term of this Article, IBM shall offer such Maintenance
Modifications to NCD upon, or within a reasonably prompt time period after,
the availability of such Maintenance Modification in IBM's Products. IBM
grants NCD a worldwide, paid up copyright license to use, execute,
reproduce, display, perform, transfer, market, distribute, and to make
Derivative Works of, such Maintenance Modifications offered by IBM and
accepted by NCD.
5. ADDITIONAL IMPLEMENTATION DETAILS
Detailed procedures for implementing the hardware and software service and
support described by this Article, including but not limited to procedures
for on-site and remote Defect determination, testing of Defect corrections,
and delivery of Defect corrections, shall be discussed by the parties prior
to GA, and any such implementation details agreed to shall be considered
attachments to this Article. The parties recognize that their may be a
separate set of detailed procedures for each IBM product division utilizing
NCD for support and maintenance of the Products and Deliverables.
6. TERM AND TERMINATION
Unless otherwise agreed by the parties, NCD's obligations under this
Article shall cease at the earlier of: (1) one year after IBM ceases
marketing all Products, or (2) termination of the Alliance Agreement. If
IBM desires NCD to provide product support and maintenance under this
Article beyond such date, the parties will negotiate in good faith
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ARTICLE 3-PAGE 5 OF 6
IBM-NCD ALLIANCE AGREEMENT
ARTICLE 3 PRODUCT SUPPORT AND MAINTENANCE
for a fee for such services that is based on NCD's expenditure of time and
materials in providing such services.
IN WITNESS WHEREOF, each party has reviewed this Article and each party has
executed this Article by signature of its authorized representative.
NETWORK COMMUNICATION DEVICES, INC. INTERNATIONAL BUSINESS MACHINES
CORPORATION
Signature /s/ Lorraine hariton Signature /s/ Bhawnesh C. Mathur
-------------------------------- ------------------------
Printed Name Lorraine Hariton Printed Name Bhawnesh C. Mathur
----------------------------- ---------------------
Printed Title V.P. of Strategic Accounts Printed Title Dir. of Procurement,
---------------------------- IBM Server Group
----------------------------------
Date 6/27/96 Date June 27, 1996
------------------------------------- -----------------------------
- --------------------------------------------------------------------------------
ARTICLE 3-PAGE 6 of 6
EXHIBIT INDEX
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed herewith:
Exhibit 2.2 Asset Purchase Agreement dated June 3, 1996 by and
among the Registrant NCD Software Corporation and
NetManage, Inc.
Exhibits
Exhibit A Certain Definitions
Exhibit B-1 Assignment and Assumption Contract
Exhibit B-2 Assignment and Assumption Contract
Exhibit C NCD Disclosure Schedule(1)
Schedules
Schedule 1.1 Assets(1)
Schedule 1.1(6) Assumed Customer and Other Contracts(1)
Schedule 1.3(6) Assumed Liabilities
Schedule 1.5 Purchase Price Allocation(1)
Exhibit 10.42 Alliance Agreement dated June 27, 1996 by and between the
Registrant and International Business Machines
Corporation.(2)
Attachments
Attachment 1 to Article 2 - Packaging and Handling
Supplies and Interplant Requirements
Attachment 2 to Article 2 - Electrical
Data Interchange/Electronic Funds Transfer Trading
Partner Agreement
*Exhibit 11.1 Statement Regarding Computation of Shares Used in Per Share
Earnings Computations.
*Exhibit 27 Financial Data Schedule.
(1) Exhibit not filed herewith is identified in this agreement.
The Company will furnish supplementally any omitted exhibit to
the Commission upon request.
(2) Confidential treatment has been requested as to a portion of this
exhibit. Confidential portions have been omitted and filed
separately with the Securities and Exchange Commission.
(b) The Company filed no reports on Form 8-K during the three-month period
ended June 30, 1996.
- ---------------
* Previously Filed