Software License Agreement - Novell Inc. and Bitstream Inc.
CONFIDENTIAL NOVELL, INC
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NOVELL, INC.
SOFTWARE LICENSE AGREEMENT
This Software License Agreement ("Agreement"), having an Effective Date of
September 6, 1996, is agreed to by Novell, Inc., a Delaware corporation, with a
place of business at 1555 North Technology Way, Orerm, Utah 84057 ("Novell"),
and Bitstream Inc., a Delaware corporation, with a place of business at 215
First Street, Cambridge, Massachusetts 02142 (Licensee).
1. PREVIOUS AGREEMENT. Bitstream and Novell have executed that certain
Software License Agreement, dated February 23, 1996 (the "Existing
License"). The parties desire to amend and restate the Existing License in
its entirety. Upon its execution, this Agreement shall supersede and
replace the Existing License. Notwithstanding anything to the contrary in
the Existing License, all rights and obligations under tile Existing
License shall terminate and be replaced by file rights and obligations
under this Agreement.
2. PURPOSE. Novell has developed and is the owner of, or otherwise has
authority to license the Envoy technology. Novell and Licensee are
interested in satisfying the needs of their respective customers and in
increasing use and commercialization of the Envoy technology. Subject to
payment of royalties, Licensee will then be able to license customized
development tools for the Envoy technology and value added solutions
developed from the Envoy technology to Licensee's OEMs. Licensee will also
be able to bundle Novell's generally available Envoy Application Product
with Licensee's products as well as sell the Envoy Application Product on a
stand-alone basis. This Agreement describes the relative rights and
obligations of Novell and Licensee with respect to development, use, and
distribution of the Envoy Technology by Licensee.
3. BITSTREAM FONTS. As part of the consideration for this Agreement, Novell
and Licensee shall execute Amendment I to the Bitstream License Agreement
immediately upon execution of this Agreement, a copy of which amendment is
attached hereto as Exhibit A.
4. DEFINITIONS. Capitalized terms in this Agreement have the meanings stated
below or defined elsewhere in this Agreement. A reference to a particular
exhibit is to an exhibit to this Agreement and a reference to a particular
section is to a section of this Agreement unless stated otherwise.
a. Annual Royalty Period shall mean each sequential one year period from
the earlier of (i) the date of first customer ship of the Level 2 SDK,
or (ii) November 1, 1996.
b. Bundled Products means (i) the combination of the Envoy Application
Product and Licensee's hardware or software products that Licensee
will market and sell as a single product offering, and (ii) the
combination of the Envoy Application Product and the hardware or
software products of Licensee's OEMs that Licensee's OEM will market
and sell as a single product offering.
c. Binary Code shall mean Code that loads and executes without further
processing by a software compiler or linker or that results when
Source Code is processed by a software compiler.
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d. Code means computer programming code. Unless specifically stated
otherwise, Code shall include Binary Code, Source Code, and any
Maintenance Modifications to Code or Enhancements to Code in existence
from time to time.
e. Confidential Information. "Confidential Information" means the terms
of this agreement and any information and materials which are marked
or identified by Novell as confidential or proprietary, and any trade
secrets or know-how of Novell disclosed to Licensee under this
Agreement, but does not include information that has been publicly
known or available without breach of this Agreement or independently
developed without reference to Confidential Information.
f. Core Libraries means the compiled binary library file(s), supporting
dlls and header files that expose Envoy API functions through static
or latent bindings.
g. Derivative Works means a work that is based on one or more preexisting
works (such as a revision, enhancement, modification, translation,
abridgement, condensation, expansion, or any other form in which such
preexisting work may be recast, transformed, or adapted) and that, if
prepared without authorization of the copyright owner of such
preexisting work, would constitute copyright infringement under US
law.
h. End User means an entity who acquires a product for internal use. "End
User" does not include an entity which resells, sells, licenses,
rents or leases products to other parties in the regular course of
business.
i. Enhancement means changes, additions or new releases, other than
Maintenance Modifications, to Code and to related documentation that
improve functions, add new functions, or improve performance by
changes to system design or coding.
j. Envoy Application Product means Novell's Envoy product on all
platforms available (including Envoy 7 for Windows 95), including any
accompanying documentation and any updates, upgrades, and interim
releases that Novell makes generally available to the public during
the term of this Agreement. Envoy Application Product includes both
the Envoy Viewer and the Envoy Driver.
k. Envoy Driver means the printer driver that is designed to function
only with the standard system print calls, such as the Graphical
Driver Interface (GDI) in the MS Windows operating systems, to enable
applications to create Envoy Files on disk, save to a runtime
executable, spool the print process, and launch the Envoy Viewer.
1. Envoy Files means files in Envoy format usually identified with a .evy
extension.
m. Envoy Viewer means a viewer that allows a user to view and manipulate
Envoy Files and/or the runtime viewer that, when bound to an Envoy
File, creates an executable that enables the user to view Envoy Files.
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n. Envoy API Layer means the Envoy application programming interface
(API) to which programmers develop programs that communicate with the
Core Libraries to create, modify, save, or render Envoy Files.
o. Level 2 SDK means the software developer kit that identifies and
contains all the Envoy API calls to view an Envoy File as well as to
create an Envoy File using the Envoy Driver functions and includes
sample source code, and information that enables a developer to (i)
create customized Envoy Viewers for distribution with electronic
content, (ii) embed the Envoy Viewer technology into the developer's
applications, and (iii) embed the Envoy Driver technology for creating
Envoy Files into the developer's application.
p. Licensee Products means Licensee's software products that Licensee
makes available from time to time.
q. Maintenance Modification means any modification or revision to Code or
to documentation, other than an Enhancement, that corrects an error or
provides another incidental correction.
r. Minimum Guaranteed Payment shall mean the minimum royalty amounts set
forth in Section 12.e that Licensee will be required to pay Novell for
each Annual Royalty Period.
s. Novell Products means collectively Level 2 SDK and Envoy Application
Product.
t. OEM means any legal entity or person that receives from Licensee the
right to bundle the Novell Products with products of OEM and
distribute the Bundled Product to End-Users directly or through other
OEMs.
u. Payment Target shall mean an amount equal to [*]
for the corresponding Annual Royalty Period.
v. Revenues shall mean gross revenues derived from the Novell Products
(or Bundled Product if so specified), minus returns (and the related
uncollectible receivable), without deduction for costs of product,
rebates or collection or adjustments.
w. Source Code shall mean the human-readable form or the Code and related
system documentation, including all comments and any procedural
language.
5. SDK DISTRIBUTION.
a. DISTRIBUTION LICENSE GRANT. Subject to the terms and conditions of
this Agreement and payment of the royalties and fees identified in
Section 12, Novell hereby grants Licensee a world-wide,
non-transferable, exclusive (except as to any licenses Novell has
granted or may grant to Corel Corporation) license under copyright
during the term of this Agreement to reproduce and distribute to OEMs,
by any method or medium of distribution, either directly or through
distributors, copies of Level 2 SDKs.
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* Certain confidential information has been omitted and filed separately with
the Securities and Exchange Commission pursuant to a Request for Confidential
Treatment.
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The exclusivity of this license is expressly conditioned upon the
following requirements. Should Licensee fail to substantially achieve
the requirements set forth below, Novell may terminate the
exclusivity of this license grant upon 90 days written notice and
Licensee's license set forth in this Section 5 shall become a
non-exclusive license.
i. Licensee shall submit its formal marketing and launch program to
Novell for review and approval;
ii. On a quarterly basis, Licensee will review with Novell its
activities, goals, objectives and marketing plans for the next
calendar year quarter;
iii. Both parties will mutually agree upon Licensee's goals and
objectives in writing, which goals and objectives will be
established in such a manner that they can be quantitatively
reviewed and evaluated; and
iv. Licensee shall make all Minimum Guaranteed Payments as and when
due and payable.
b. OEM LICENSE. Licensee agrees to license each Level 2 SDK to its OEMs
by means of a written sublicense signed by both Licensee and OEM. The
license shall provide the same level of protection for Novell's
interests in the SDKs as Licensee seeks by agreement to provide for
its own software of similar nature. Notwithstanding the foregoing, the
licenses under which Licensee makes the SDKs available will provide a
level of protection which is customary for similar software in the
United States and will be provided to Novell for review and approval
prior to any distribution.
c. RESTRICTIONS. Licensee shall only distribute or sublicense Level 2
SDKs (including pre-release versions) that have been approved by
Novell as evidenced by a written letter from Novell signed by the
Project Manager stating that the SDK is approved for distribution.
Each Enhancement, update, or upgrade to the SDK's must be approved by
Novell. Novell's approval shall not be construed as an endorsement of
the product by Novell. Licensee shall not authorize OEMs to distribute
or sublicense the Level 2 SDK.
d. SUPPORT. Licensee shall provide all support to OEMs of the Level 2
SDK. Licensee shall not refer OEMs to Novell for support. Licensee
shall report to Novell in writing any bugs, coding errors, or any
general deficiency that takes away or limits the functionality of the
product as delivered. Novell will respond within five (5) working days
that it acknowledges receipt and will provide a written explanation of
its intended course of action within ten (10) working days of receipt
of the reported problem from Licensee.
e. OWNERSHIP. Novell shall own the Level 2 SDK and all modifications and
Derivative Works thereto. To the extent Licensee may own any
copyright, patent, or other interest in the above, Licensee agrees to
assign and hereby assigns to Novell, and Novell accepts, Licensee's
entire world-wide right, title and interest therein. Licensee shall
retain ownership of all value add tools Licensee bundles with the
Level 2 SDK.
f. DEVELOPMENT OF LEVEL 2 SDK. If Novell does not complete development of
the Level 2 SDK, then Licensee agrees to accept the Level 2 SDK as
currently available and complete development of the Level 2 SDK as
mutually agreed upon by the parties and in accordance with all
standards and formats associated with Envoy.
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6. ENVOY APPLICATION PRODUCT DISTRIBUTION.
a. LICENSE GRANT. Subject to the terms and conditions of this Agreement
and payment of the royalties and fees identified in Section 12, Novell
hereby grants to Licensee a non-exclusive, non-transferable license
under copyright during the term of this Agreement:
i. to reproduce and distribute externally to End Users, either
directly or through distributors, copies in Binary Code form only
of the Envoy Application Product bundled with Licensee Product
and as a stand-alone product; and
ii. to sublicense to Licensee's OEMs the right to reproduce and
distribute the Envoy Application Product bundled with OEM's
product.
b. END USER LICENSE. The End User's use of the Envoy Application Product
shall be governed by the Novell license agreements included with the
Envoy Application Product. Licensee and Licensee's OEMs shall not
modify the Envoy Application Product or the accompanying license
agreements.
c. SUPPORT. Licensee is responsible to provide support to End Users that
acquire the Envoy Application Product through Licensee or Licensee's
OEMs.
7. POINT OF SALE REPORTS. Licensee agrees to provide Novell, by no later than
the tenth (10th) day of each calendar month, a Point of Sale report for the
previous calendar month. "Point of Sale Report" means, for purposes of the
Agreement, a report provided by Licensee to Novell which is in a
Novell-specified format and which includes, among other things, (i) a list
of Novell Products sold, (ii) the regional designation required by Novell,
to the extent that Licensee and/or its OEMs can identify the regional
designation, (iii) Licensee's part numbers of the Novell Products sold, and
(iv) the amount of on-hand inventory of all Novell Products by product
number (including products listed in the POS Report and any other Novell
Products in inventory not otherwise included in the POS Report). The Point
of Sale Report may only be used by Novell to provide compensation to
Novell's sales force and to concentrate marketing activities to promote
greater sales.
8. RECORDS EXAMINATIONS. Licensee agrees to allow Novell to examine its
records to determine compliance or noncompliance with the Agreement. Any
examination will be at the expense of Novell and will be solely for the
purpose of ensuring compliance with the Agreement. Any examination will be
conducted by Novell, and will occur during regular business hours at
Licensee's offices and will not interfere unreasonably with Licensee's
business activities. Examinations will be made no more frequently than once
a year, and Novell will give Licensee ten (10) days or more prior written
notice of the date of the examination and the name of the Novell authorized
representative who will be conducting the examination. All information
obtained by the Novell authorized representative conducting the audit will
be maintained confidential by Novell. If such examination indicates that
Licensee is delinquent in assessing or paying royalties by more than 3% of
the amounts actually owed, Licensee shall pay all of Novell's expenses of
the examination.
9. AGREEMENTS WITH LICENSEES, END USERS, AND DISTRIBUTORS. Licensee will
require Licensee's distributors and Licensee's Licensees to enter into a
written agreement with Licensee prior to providing any Novell Product to
such distributor or Licensee. The agreement shall include provisions
consistent with the agreements Licensee uses with respect to the licensing
of its own
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hardware and software products. Furthermore, the agreement shall include
provisions consistent with the provisions of this Agreement and must be
materially no less protective of Novell's rights in the Novell Products
than are tile terms and conditions of this Agreement. Licensee agrees to
use commercially reasonable efforts to enforce its agreements with
Licensees and distributors to ensure compliance. Licensee shall use best
efforts to protect Novell's copyright, shall notify Novell of any breach of
a material obligation under an End User license agreement or an Licensee
agreement, and will use best efforts to cooperate with Novell in any legal
action to prevent or stop unauthorized use, reproduction or distribution of
the Novell Products.
10. RESTRICTIONS. Notwithstanding any licenses granted to Licensee herein,
Licensee shall not create, or allow others to create, a system print driver
or any technology duplicating or substantially duplicating the function of
the Envoy Driver. Furthermore, Licensee is not authorized to and shall not
modify the Envoy Driver or the Envoy Application Product. Licensee will
include and/or not alter Novell's or Novell's licenser's copyright, trade
secret, proprietary and/or other legal notices contained on or in copies of
the Novell Products.
11. TRADEMARKS. Licensee agrees to include the "Envoy" logo on all packaging
for the Novell Products and attribute ownership of the logo to Novell. All
use of the Envoy trademark and Envoy logo shall be in accordance with
Novell's then current trademark usage policies. Licensee is not authorized
to use any Novell trade names without the prior written consent of Novell.
Upon the expiration or termination of this Agreement, Licensee agrees to
cease all display, advertising and use of any and all Novell trade names
and trademarks. Licensee agrees not to alter, erase or overprint any notice
provided by Novell and not to attach any additional trademarks without the
prior written consent of Novell or affix any Novell trademarks to any
non-Novell product. Licensee recognizes Novell's ownership and title to the
trade names and trademarks and the goodwill attaching to the trade names
and trademarks. Licensee agrees that any goodwill which accrues because of
its use of the trade names and/or trademarks will become Novell's property.
Licensee agrees not to contest Novell's Marks or trade names, or make
application for registration of any Novell trademarks or trade names
without Novell's prior written consent. Licensee agrees not to use, employ
or attempt to register any trademarks or trade names which are confusingly
similar to Novell's trademarks or trade names. Prior to use, Licensee
agrees to submit a specimen or first article copy of all art, packaging and
advertising, including print advertisements, brochures, collateral, direct
mail, labels, data sheets, that makes use of any of the Novell trademarks
or trade name to Novell for approval.
12. ROYALTIES. Licensee shall pay Novell royalties at the royalty rates listed
below. Royalty payments shall be due to Novell in U.S. funds no later than
thirty (30) days after the end of each calendar quarter for all Novell
Products distributed during such quarter. Each royalty payment shall be
accompanied by a statement showing the basis on which such payment was
calculated. Payments which are more than thirty (30) days overdue shall be
subject to a late payment charge of one percent (1%) per month or any part
thereof, accrued monthly, commencing on the original date due; provided
however, that if the amount of such late payment charge exceeds the maximum
allowed by law, such charge will be automatically reduced to the maximum
legal amount.
a. LEVEL 2 SDK. Licensee will pay Novell a royalty of [*] on Revenues
received on account of or derived from any and all copies distributed
of the Level 2 SDK. Once aggregate royalties
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* Certain confidential information has been omitted and filed separately with
the Securities and Exchange Commission pursuant to a Request for Confidential
Treatment.
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paid to Novell under Sections 12.a, 12.b, 12.c, and 12.d equal the
Payment Target for that Annual Royalty Period, Licensee's royalty
percentage shall be reduced to [*] of Revenues for the duration of
that Annual Royalty Period. Upon the commencement of the next Annual
Royalty Period, Licensee's royalty percentage shall once again be [*].
b. PRODUCTS BASED ON OR DERIVED FROM THE LEVEL 2 SDK.
Licensee will pay Novell a royalty of [*] on Revenues received on
account of or derived from products based on or derived from the
Level 2 SDK. Once aggregate royalties paid to Novell under Sections
12.a, 12.b, 12.c, and 12.d equal the Payment Target for that Annual
Royalty Period, Licensee's royalty percentage shall be reduced to
[*] of Revenues for the duration of that Annual Royalty Period. Upon
the commencement of the next Annual Royalty Period, Licensee's
royalty percentage shall once again be [*].
c. STAND-ALONE ENVOY APPLICATION PRODUCT.
[*] per copy for all copies of the Envoy Application Product
created.
d. BUNDLED AND OEM ENVOY APPLICATION PRODUCT.
Licensee will pay Novell a royalty of [*] on Revenues received on
account of or derived from any and all copies of the OEM and bundled
Envoy Application Product. Once aggregate royalties paid to Novell
under Sections 12.a, 12.b, 12.c, and 12.d equal the Payment Target
for that Annual Royalty Period, Licensee's royalty percentage shall
be reduced to [*] of Revenues for the duration of that Annual
Royalty Period. Upon the commencement of the next Annual Royalty
Period, Licensee's royalty percentage shall once again be [*]. In
addition, Novell agrees to consider periodic requests for quotation
for pricing relief with respect to specific accounts.
e. MINIMUM GUARANTEED PAYMENT. Licensee shall pay Novell minimum, annual,
aggregate royalties for the Envoy Application Product and the Level 2
SDK as specified below. If the aggregate royalties owed to Novell
pursuant to Sections 12.a, 12.b, 12.c, and 12.d during each Annual
Royalty Period of this Agreement amount to less than the Minimum
Guaranteed Payment, Licensee agrees to pay Novell the difference
within thirty (30) days of the end of each Annual Royalty Period.
MINIMUM GUARANTEED PAYMENT
First Annual Royalty Period [*]
Second Annual Royalty Period [*]
Third Annual Royalty Period [*]
Fourth Annual Royalty Period [*]
Fifth Annual Royalty Period [*]
Each subsequent Annual Royalty Period: [*] increase over previous year's Minimum
Guaranteed Payment
13. OWNERSHIP. No title to or ownership of the Novell Products acquired under
the Agreement or proprietary technology in hardware acquired under the
Agreement is transferred to Licensee. Notwithstanding any provision of the
Agreement to the contrary, Novell, or the licensor through which Novell
obtained the rights to distribute the Novell Products, owns and retains all
title and
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* Certain confidential information has been omitted and filed separately with
the Securities and Exchange Commission pursuant to a Request for Confidential
Treatment.
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ownership of all intellectual property rights in the Novell Products,
including all software, firmware, software master diskettes, copies of
software, master diskettes, documentation and related materials which are
acquired, produced or shipped by Novell under the Agreement, and all
modifications to and derivative works from software acquired under the
Agreement made by Licensee, Novell or any third party. Novell does not
transfer any portion of such title and ownership, or any of the associated
goodwill, to Licensee, and the Agreement should not be construed to grant
Licensee any right or license, whether by implication, estoppel or
otherwise, except as expressly provided. Licensee agrees to be bound by and
observe the proprietary nature of the Novell Products acquired under the
Agreement. Licensee agrees to take appropriate action by instruction or
agreement with its employees. agents, contractors and sublicensees who are
permitted access to the Novell Products to fulfill Licensee's obligations
under the Agreement. Except as set forth in the Agreement, or as may be
permitted in writing by Novell. Licensee agrees not to provide Novell
Products or any part or copies thereof to any third party without the prior
written consent of Novell.
All rights not explicitly granted herein shall remain solely and
exclusively in Novell. To the extent such rights are not deemed, as a
matter of law, to be the sole and exclusive property of Novell, Licensee
hereby assigns and Novell hereby receives all right, title, and interest
therein, and agrees to execute at Novell's request subsequent decimation as
further evidence of this assignment.
Upon request, Licensee shall promptly complete Novell's then current form
of Intellectual Property Rights Questionnaire ("IPRQ") for any Code or
documentation developed by or for Licensee in which ownership is held by
Novell. Licensee represents and warrants that the information contained in
any such IPRQ is accurate and complete.
14. SUPPORT. Novell shall have no support obligations to Licensee except as
expressly identified in this Agreement. Licensee shall provide support to
End Users and OEMs who acquire Novell Products by or through Licensee.
Licensee agrees that end user support is a condition of its continued
authorization by Novell. Although Novell has granted Licensee a worldwide
license to market and sell the Novell Products under the terms of this
Agreement, Licensee agrees that it will not market and sell the Novell
Products in areas where it does not have the ability to support the Novell
Products.
15. PRODUCT MANAGEMENT COUNCIL.
a. FORMATION. Novell and Licensee will form an Envoy Product Management
Council (the "Council"). The parties may add additional members to the
Council as mutually agreed. The purpose of the Council will be to
provide Licensee an opportunity to guide and direct the future
direction of the Envoy SDK and the Envoy Application Product by making
proposals to Novell. The Council will endeavor to; (i) collectively
establish a base level of compatibility amongst all parties, (ii)
establish and prioritize specific development efforts, (iii) formalize
the product management process to represent the interests of each
party, (iv) establish a means by which to measure and gauge the
progress of the product development, and (v) to establish a formal
means of communication between all parties. Notwithstanding the
foregoing, no proposals of the Council will be initiated without
Novell's prior written consent. All work performed by or for Licensee
with respect to the Envoy technology shall be done pursuant to a
separate development agreement which will grant development licenses
and allocate the rights
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of the respective parties. Among other things, such development
agreement will include provisions to the effect that all work derived
from Novell's intellectual or other proprietary property shall be
owned by Novell. This Agreement shall in no way grant any license
rights to Licensee in relation to the Council work proposed by the
Council or work created by the Council.
b. PRODUCT DEVELOPMENT. During title term of this Agreement, Licensee
will assume the funding of the development efforts agreed to by Novell
and the Council. Such funding will amount to Licensee's provision of
development services equivalent during the first year of this
Agreement to a minimum of approximately [*], where
"approximately" means [*]. Each subsequent year, the
Council will meet prior to the next fiscal year to establish an
appropriate development budget for that year. It is Licensee's
intention to contract these development activities to Tumbleweed
Software Corporation after obtaining appropriate license rights from
Novell. However, Licensee reserves the right to develop with another
vendor, including its own development team, if it so chooses.
c. FIRST DELIVERABLE. The first development deliverable to be funded by
Licensee will be the completed Level 2 SDK. Licensee will contract
such development to Tumbleweed as a work for hire to be owned by
Novell.
16. TERM, TERMINATION, RETURN OF TECHNOLOGY.
a. TERM. This Agreement shall terminate at the end of the fifth Annual
Royalty Period, unless terminated earlier by either party in
accordance with the provisions of this Section. Such term shall
automatically renew for successive one year periods unless terminated
in accordance with this Section.
b. TERMINATION FOR CONVENIENCE. Either party may terminate this Agreement
at any time, with or without cause, after the end of the fifth Annual
Royalty Period by providing the other party with 90 days prior written
notice.
c. EARLY TERMINATION. Either party may terminate the Agreement at any
time upon the other party's failure to cure a material breach of this
Agreement following thirty (30) days prior written notice of the
breach. In addition, Novell (or its permitted assignee of this
Agreement) may terminate this Agreement by providing written notice to
Licensee at any time upon occurrence of any one or more of the
following:
i. Licensee fails to pay Minimum Guaranteed Payments as and when due
and payable.
ii. Upon one year prior written notice given after Novell
discontinues the Envoy Application Product.
iii. Upon one year prior written notice given after Novell sells the
Envoy Application Product.
iv. Licensee develops, markets or sells, or materially assists in the
development, marketing or sale of, a software product that
directly competes with the Envoy Application Product, Envoy
Driver, or Level 2 SDK in the geographic areas in which such are
marketed (a "Competitive Product"); including without limitation
providing material consulting
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* Certain confidential information has been omitted and filed separately with
the Securities and Exchange Commission pursuant to a Request for Confidential
Treatment.
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services, owning, managing, operating, materially participating
in, controlling, or being connected as a majority stockholder,
partner, or other similiar relationship with any business,
individual or entity that creates, develops or markets a
Competitive Product. Competitive Product shall not be construed
to include complementary products that do not take away from
sales of the Envoy Application Product or Envoy Driver themselves
and shall not apply to a passive investment in another company or
entity.
v. In the event Licensee undergoes a Change of Control. For purposes
of this Section 16.c, "Change of Control" shall mean when (i)
substantially all of Licensee's assets are acquired, or (ii) any
person or group (within the meaning of Rule 13d-5 under the
Securities Exchange Act as in effect on the date hereof) shall
come to own, directly or indirectly, beneficially or of record,
voting securities representing more than 50% of the total voting
power of Licensee, or (iii) Licensee becomes a Subsidiary of some
third-party. Licensee shall be considered a Subsidiary of a third
party if(i) fifty percent (50%) of Licensee's outstanding shares
or securities (representing the right to vote for the election of
directors or other managing authority) is owned or controlled,
directly or indirectly, by another company, person, group or
entity, or (ii) if Licensee does not have outstanding shares or
securities, fifty percent (50%) of Licensee's ownership interest
representing the right to make the decisions for Licensee is
owned or controlled, directly or indirectly, by another company,
person, group or entity.
d. OTHER TERMINATION. Should the Novell Products, or the operation
thereof, become, or in Novell's option be likely to become, the
subject of infringement of any U.S. trademark, U.S. copyright or U.S.
patent, Licensee agrees to permit Novell, at its option and expense,
either to procure for Licensee the right to continue using the Novell
Products, or to replace or modify them so that they become
non-infringing, or to terminate this Agreement.
e. EFFECT OF TERMINATION. Licensee will discontinue its distribution and
use of the Novell Products following termination once its then current
inventory has been exhausted; provided, however, that if this
Agreement is terminated due to a breach by Licensee, Licensee will
cease distribution of the Novell Products immediately. No Minimum
Guaranteed Payments will be required after notice of termination of
this Agreement is given in accordance with Section 16.c.ii or Section
16.c.iii.
f. RETURN OF TECHNOLOGY. Within 30 business days after termination of
this Agreement, Licensee shall either deliver to Novell or destroy all
copies of the Novell Products (except as otherwise stated herein) and
any other materials provided by Novell to Licensee hereunder.
Notwithstanding the foregoing, and provided Licensee fulfills its
obligations specified in this Agreement, Licensee may continue to use
and retain copies of the Novell Products to the extent, but only to
the extent, necessary to support and maintain the Novell Products
rightfully distributed by Licensee prior to termination of this
Agreement. Notwithstanding the termination of this Agreement, all End
User sublicenses which have been properly granted by Licensee pursuant
to this Agreement prior to its termination shall survive.
g. BUY OUT OPPORTUNITY. In the event Novell discontinues or sells the
Envoy technology, Novell shall offer to sell the Envoy technology to
Licensee as follows. Novell will provide to Licensee's CFO and
President, in accordance with the notice provisions of this Agreement,
a
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written proposal of the terms and conditions for purchase of the
Envoy technology by Licensee ("Proposal"). Licensee will have ten
(10) business days to accept the Proposal in writing or to provide
Novell with a counter offer, after which time Novell shall either
accept or reject Licensee's counter offer within ten (10) business
days. During this period, Novell shall not actively engage in
negotiations with third parties regarding the sale of the Envoy
Technology. If Licensee has not accepted the Proposal as specified
within ten (10) business days, then the Proposal shall be revoked and
Novell shall be free to offer the Envoy technology to other parties.
However, if Novell offers to sell, or engages in discussions to sell,
the Envoy technology to other parties on terms materially different
than the Proposal made to Licensee, then Novell will continue to
engage Licensee in negotiations regarding the potential purchase of
the Envoy technology by Licensee to the extent Licensee's interest in
doing so continues, and Novell will evaluate in good faith any
counter-offers made by Licensee. The parties acknowledge that Novell
shall have no obligation whatsoever to give preferential treatment to
Licensee's offer to purchase the Envoy technology after
non-acceptance by Licensee of the original Proposal, and that Novell
shall be free to sell the Envoy Technology to whichever potential
buyer best meets Novell"s interests and needs, as determined by
Novell.
h. TRANSITION OPTION. In the event Novell sells the Envoy technology and
assigns this Agreement to the buyer thereof, either Novell or the
buyer may, at its option, waive the Minimum Guaranteed Payments that
Licensee would otherwise be required to make and the exclusive license
with respect to the Level 2 SDK granted to Licensee pursuant to this
Agreement shall become non-exclusive. The foregoing option may only be
exercised within 90 days of the closing date of the sale of the Envoy
technology.
17. WARRANTIES.
Performance. Novell warrants only to Licensee that the Envoy Application
Product will substantially conform to the specifications in the published
documentation for such product in effect when the Envoy Application Product
is provided to Licensee. If Licensee finds what Licensee believes to be
errors or a failure of the Envoy Application Product to meet specifications
which significantly affect performance, and promptly provides Novell with a
written report, Novell will use reasonable efforts to correct, any such
errors or failures. This is Licensee's sole and exclusive remedy for any
express or implied warranties hereunder. Novell's warranty and obligation
shall extend for a period of six months from the date Novell first delivers
the Envoy Application Product to Licensee. Novell's warranty and obligation
is solely for Licensee's benefit. Licensee has no authority to extend this
warranty to any other person or entity.
NOVELL MAKES NO OTHER WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED,
INCLUDING ANY WARRANTY THAT THE NOVELL PRODUCTS ARE FREE OF ERRORS. EXCEPT
AS SPECIFICALLY PROVIDED IN THIS SECTION, NOVELL AND ITS LICENSORS DO NOT
MAKE, AND HEREBY DISCLAIM, ANY EXPRESS OR IMPLIED WARRANTIES INCLUDING, BUT
NOT LIMITED TO, THE WARRANTIES OF DESIGN, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR ARISING FROM COURSE OF DEALING, USAGE OR TRADE
PRACTICE.
18. LIMITATION OF LIABILITY.
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Notwithstanding any other provision of this Agreement, Novell's liability
for damages will be limited to the aggregate paid by Licensee to Novell
under this Agreement. IN NO EVENT WILL NOVELL OR ITS LICENSORS BE LIABLE
FOR ANY INDIRECT, INCIDENTAL, SPECIAL PUNITIVE, OR CONSEQUENTIAL DAMAGES,
LOST REVENUES OR PROFITS, DATA, OR USE, INCURRED BY EITHER PARTY OR ANY
THIRD PARTY HOWEVER CAUSED, NO MATTER WHAT THEORY OF LIABILITY, EVEN IF
LICENSEE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
19. INDEMNIFICATION BY NOVELL.
a. Novell agrees to indemnify, defend and hold Licensee harmless from any
and all damages, liabilities, costs and expenses incurred by Licensee
as a result of any claim, judgment or adjudication against Licensee
which provides that the Novell Products, trade names or the trademarks
appropriately used by Licensee in connection with marketing the Novell
Products infringe any U.S., EEC, Middle East, Japan, Korea, or Taiwan
trademark, copyright or patent of any third party, provided: (i)
Licensee promptly notifies Novell in writing of the claim; and (ii)
Licensee agrees that Novell will have the sole control of the defense
of any action and all negotiations for settlement and compromise.
b. Novell shall have no liability for any claim based upon (a) use of
other than a current unaltered version of the Novell Products, (b)
use, operation or combination of the Novell Products with non-Novell
programs, data, equipment or if such infringement would have been
avoided but for such use, operation or combination, (c) Licensee's or
its agent's activities after Novell bas notified Licensee that Novell
believes such activities may result in such infringement, or (d)
Licensee's use of any trademark or logo other than those authorized by
Novell.
c. Should the Novell Products, or the operation of the Novell Products,
become, or in Novell's opinion be likely to become, the subject of
infringement of any trademark, copyright or patent, Licensee agrees to
permit Novell, at its option and expense, either to procure for
Licensee the right to continue using the Novell Products, to replace
or modify them so that they become non-infringing, or to terminate
this Agreement upon notice to Licensee.
d. NOVELL'S AGGREGATE INDEMNIFICATION TO LICENSEE SHALL BE LIMITED TO THE
AGGREGATE SUM PAID BY LICENSEE TO NOVELL UNDER THIS AGREEMENT. THE
ABOVE STATES THE ENTIRE LIABILITY OF NOVELL WITH RESPECT TO
INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS OR ANY OTHER FORM OF
INTELLECTUAL PROPERTY BY NOVELL PRODUCTS SUPPLIED BY NOVELL UNDER THIS
AGREEMENT. NOVELL SHALL NOT BE LIABLE FOR ANY CLAIM BY LICENSEE BASED
ON ANY THIRD PARTY CLAIM, EXCEPT AS STATED IN THIS SECTION 19 OF THIS
AGREEMENT.
20. INDEMNIFICATION BY LICENSEE.
Licensee agrees to indemnify, defend and hold Novell harmless from any and
all damages, liabilities, costs and expenses incurred by Novell as a result
of any claim, judgment or adjudication
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against Licensee arising out of Licensee's distribution of the Novell
Products, except to the extent that such claims arise from intellectual
property infringement by the Novell Products.
21. GENERAL PROVISIONS.
a. Force Majeure. If either party is prevented from performing any
portion of this Agreement by causes beyond its control (excluding
payment), including labor disputes, civil commotion, war, governmental
regulations or controls, casualty, or acts of God, the defaulting
party will be excused from performance for the period of the delay and
for a reasonable time following the delay.
b. Jurisdiction. This Agreement will in all respects be governed by and
interpreted in accordance with the laws of the State of California as
applied to transactions taking place in California between California
residents. Any action or proceeding brought by either party against
the other arising out of or related to this Agreement may be brought
in a state or federal court of competent jurisdiction located within
Santa Clara County, California, and Novell and Licensee each consents
to the personal jurisdiction of those courts.
c. Waiver. No waiver of any right or remedy on one occasion by either
party will be deemed a waiver of that right or remedy on any other
occasion.
d. Entire Agreement; Amendments. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject
matter of this Agreement and merges all prior discussions. Neither
party will be bound by any conditions, definitions, warranties,
understandings, or representations with respect to the subject matter
other than as expressly provided in this Agreement, or as duly set
forth on or subsequent to the Effective Date in writing and signed by
a proper and duly authorized representative of the party to be bound
thereby. No provision appearing on any form originated by either party
will be applicable unless the provision is expressly accepted in
writing by the other party.
e. Assignment. Neither party may assign its rights or delegate its duties
under this Agreement, in whole or in part, without the other's prior
written consent. Any attempted assignment without written consent will
be void. Notwithstanding, Novell may, without further consent from
Licensee, assign its rights and delegate its duties under this
Agreement in the event of a sale or spin-off of Novell's product line
that includes the Envoy Products.
f. Notice. Unless otherwise agreed to by the parties, all notices
required under this Agreement (except those relating to product
pricing, changes, and upgrades) must be (A) registered mail or
certified mail, return receipt requested, (B) overnight mail, or (C)
personal delivery addressed and sent to the address first above
written and to the attention of the party executing this Agreement or
that person's successor. Notices will be effective on the earlier of
receipt or three business days after dispatch. Either party may change
its address for receipt of notice by notifying the other party.
g. Severability. If any provision of this Agreement is declared to be
invalid, Novell and Licensee agree that the invalidity will not affect
the validity of the remaining provisions of this
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Agreement and further agree to substitute for the invalid provision a
valid provision which most closely approximates the intent and
economic effect of the invalid provision.
h. Independent Contractors. Each party acknowledges that both parties to
this Agreement are independent contractors and that neither party will
represent itself as an agent or legal representative of the other.
i. Cumulative Remedies. The remedies under this Agreement will be
cumulative and not alternative and the election of one remedy for
breach will not preclude pursuit of other remedies.
j. Attorneys' Fees. If any dispute arises between the parties with
respect to the matters covered by this Agreement which leads to a
proceeding to resolve the dispute, the prevailing party in the
proceeding will be entitled to receive its reasonable attorneys' fees,
expert witness fees, and out-of-pocket costs incurred in connection
with the proceeding, in addition to any other relief it may be
awarded.
k. Publicity. This Agreement is confidential and neither party will issue
press releases or engage in other types of publicity of any nature
dealing with commercial and legal details of this Agreement or its
subject matter without the other's prior written approval, which will
not be unreasonably withheld.
l. Compliance with Laws. Licensee will comply, at its own expense, with
all statutes, regulations, rules, ordinances, and orders of any
governmental body, department or agency which apply to or result from
Licensee's obligations under this Agreement. Licensee agrees to not
export Envoy Products directly or indirectly, separately or as part of
a system, without first obtaining proper authority to do so from the
appropriate governmental agencies or entities, as may be required by
law. In particular, Licensee, absent any required prior authorization
from the Office of Export Licensing, U.S. Department of Commerce, 14th
and Constitution Avenue, Washington, D.C. 20230, will not export or
reexport (as defined in Section 779 of the Export Administration
Regulations, as amended ("Regulations")) the Envoy Products, any
technical data or other confidential information, or direct product of
any of the foregoing, to Afghanistan, Iraq, Iran, Syria, the People's
Republic of China, Yugoslavia (Serbia and Montenegro), or any Group Q,
S, W, Y, or Z country specified in Supplement No. 1 to Section 770 of
the Regulations.
m. Survival. Sections 12, 13, 14 and 16-21 of this Agreement shall
survive expiration or termination of this Agreement and will remain in
effect.
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NOVELL, INC. BITSTREAM INC.
By: /s/ Robert A. Krauss By: /s/ C. Ray Boelig
-------------------------------- ----------------------------
Name: Robert A. Krauss Name: C. Ray Boelig
------------------------------ --------------------------
Title: Acting Vice President - ATD Title: President & CEO
----------------------------- -------------------------
Date: September 6, 1996 Date: September 6, 1996
------------------------------ --------------------------
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EXHIBIT A
AMENDMENT
********
AMENDMENT 1
TO
BITSTREAM LICENSE AGREEMENT
This Amendment amends that certain Bitstream License Agreement, dated June 30,
1995 (the "Agreement"), by and among Bitstream Inc. ("Bitstream") and Novell,
Inc. ("Novell"). This Amendment is effective when executed by authorized
representatives of both parties. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto in the Agreement.
The parties agree to amend the Agreement as follows:
1. In addition to the Licensed Products set forth in Exhibit A-2 of this
Agreement, Exhibit A-2 is amended to provide to Novell a total of
twenty (20) Outline fonts in both TrueType and Type One format for the
PC and Macintosh. Licensee's distribution of the font products with
its own products shall be royalty-free.
2. Notwithstanding anything to the contrary in the Agreement, all
licenses granted by the Agreement or by this Amendment shall extend to
all divisions of Novell at no further charge.
3. The three (3) year term specified in Schedule 2-B is deleted and
replaced with a term of five (5) years from August 1, 1996.
4. Section 3 of Schedule 2-B is deleted in its entirety. Licensee will
have access to and Bitstream will provide at no additional charge all
updates and upgrades to the Licensed Products.
4. The phrase "three years from the effective date" in line 3 of Section
8.1 is deleted and replaced with "five (5) years from August 1, 1996".
Except as otherwise set forth herein, all terms and conditions of the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Agreement as of the date executed by all parties below.
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NOVELL, INC. BITSTREAM INC.
By: /s/ Robert A. Krauss By: /s/ C. Ray Boelig
-------------------------------- ----------------------------
Name: Robert A. Krauss Name: C. Ray Boelig
------------------------------ --------------------------
Title: Acting Vice President - ATD Title: President & CEO
----------------------------- -------------------------
Date: September 6, 1996 Date: September 6, 1996
------------------------------ --------------------------
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