1
Exhibit 10.3
TECHNOLOGY AGREEMENT
This Agreement ("Technology Agreement") is made, entered into, and to be
effective as of the Closing Date (as defined below) by and between Silicon
Graphics, Inc., a Delaware corporation ("Seller") and Tera Computer Company, a
Washington corporation, ("Purchaser").
RECITALS
WHEREAS, Purchaser desires to purchase and acquire from Seller, and
Seller desires to sell, assign, license and transfer to Purchaser, certain
business, property, technology, assets and goodwill of the Business on the terms
and subject to the conditions of this Technology Agreement.
WHEREAS, as part of the foregoing, Seller and Purchaser have entered
into an Asset Purchase Agreement dated as of March 1, 2000 (the "Asset Purchase
Agreement Date");
WHEREAS the Parties desire to enter into this ancillary Technology
Agreement pursuant to which Seller will assign and license to the Purchaser
certain intellectual property specifically related to the Cray Products sold in
connection with the Business, and Purchaser will license back certain rights to
Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements, provisions and covenants contained in this Technology
Agreement, the Parties hereby agree as follows:
1. DEFINITIONS
1.1. The Parties to this Technology Agreement hereby incorporate by
reference the definition set forth in the Asset Purchase
Agreement.
1.2. "Affiliates" shall mean any corporation or other entity that is
directly or indirectly controlling, controlled by or under
common control with a Party. For the purpose of this definition,
"control" shall mean the direct or indirect ownership of more
than fifty percent (50%) of the capital stock of the subject
entity entitled to vote in the election of directors (or, in the
case of an entity that is not a corporation, interests entitled
to vote in the election of the corresponding managing
authority).
1.3. "Capture Period" means the period starting on the Asset Purchase
Agreement Date and ending one (1) year therefrom .
1.4. "Closing Date" means March 31, 2000.
1.5. "Cray Heritage MPP Products" ("CHMPP") means the T3D and T3E
computer systems as of the Closing Date, and a T3E derivative
product as specifically defined below (" T3Eplus"). "T3Eplus"
means a T3E computer system that has
2
been modified by (i) enabling adaptive routing; (ii) increasing
system frequency through clock speed enhancements to the EV4,
EV5 or XX00 Xxxxx processors and corresponding bus multiplier
changes; (iii) supporting through software warm reboot or
dynamic system reconfiguration; (iv) adding support for I/O
controller upgrades (i.e., support for industry standard I/O
cards); or (v) other minor repackaging or remanufacturing
changes of components (e.g., redesign of the clock chip to
ensure an on-going supply). CHMPP shall not include successor
products to the T3D or T3E other than a T3Eplus derivative
product expressly defined above. For example, CHMPP shall not
include a "T3F" or other distributed shared memory parallel
processor computer system derived from the CHMPP Non-Patent
Intellectual Property that incorporate performance enhancing
engineering changes extending the architecture of the T3D and
T3E such as by (a) use of a next generation processor (e.g.,
Alpha EV6 or later, or IA64), (b) reengineering and redesigning
of ASICs or system boards to increase performance and
functionality or (c) reengineering and redesigning the operating
system to increase performance or retarget applications.
1.6. "Cray Heritage Vector Products" ("CHVP") means the Cray 1, X-MP,
X-MP EL, XMS, Y-MP, YMP EL, IOS-E, IOS-F, Xxxx 0, X00, X00, X00,
XX0, XX0x and SV1ex.
1.7. "Cray Products" means CHMPP, CHVP, SV2 and Cray Software
products.
1.8. "Cray Software Products" means UNICOS and other software
products designated "assigned to Cray" on Schedules G and H.
1.9. "Documentation" means publications and documentation for the
Cray Products used in the Business.
1.10. "Front End Host Computer" means a general purpose computer that
is connected to a specialized back-end computing system and is
responsible for performing general-purpose computing and I/O
tasks for the specialized back-end computing system, including
but not limited to, handling all network and tape I/O,
hierarchical storage management, and compilation tasks for the
back-end computing system.
1.11. "Intellectual Property Right" shall mean (i) Patents; (ii)
copyrights in both published works and unpublished works,
registrations and applications therefor and associated moral
rights (collectively "Copyrights"); (iii) rights in mask works
(collectively "Maskworks"); (iv) Know-How; (v) Software; (vi)
trade secrets, confidential information, technical information,
data, plans, drawings, and blue prints (collectively "Trade
Secrets") whether arising under the laws of the United States or
any other state, country or jurisdiction; and (vii) common law,
state, federal, international and statutory rights in any
trademarks,
2
3
trademark registrations and applications, service marks, trade
names, corporate names and fictitious names (collectively
"Trademarks").
1.12. "Non-Patent Intellectual Property Rights" means Trade Secrets,
Know-How, Maskworks, and Copyrights.
1.13. "Patents" means all classes or types of patents, design patents,
utility patents, including, without limitation, originals,
divisions, continuations, continuations-in-part, extensions,
reexaminations, or reissues, patent applications and invention
disclosures for these classes or types of patent rights in all
countries of the world listed on Schedules A and B.
1.14. "Purchaser Capture Period Patents" means only those patents and
patent applications filed by Purchaser that have an earliest
effective filing date during the Capture Period and constitute
inventions arising from improvements to the Intellectual
Property Rights assigned or licensed herein.
1.15. "Purchaser Products" means the Cray Products and Vector
Supercomputers distributed, licensed and/or sold by Purchaser.
1.16. "Seller Exclusive Issued Patents" means all Patents in all
countries of the world (other than design patents) assigned or
exclusively licensed to the Seller as of the Closing Date that
are not otherwise assigned or licensed to Purchaser in this
Technology Agreement.
1.17. "Seller Group" means Seller and it's Affiliates.
1.18. "Seller Products" means any hardware or software products, or
combinations thereof, distributed, licensed and/or sold by
Seller, excluding the Cray Products.
1.19 "Software" means a set of statements or instructions to be used
directly or indirectly in a computer in order to bring about a
certain result.
1.20. "Source" shall mean the latest commercially released or
internally accepted version of source code, and prior versions
to the extent reasonably available, corresponding to the
specifically identified intellectual property asset.
1.21 "SV2" means the (i) Vector Processor-based supercomputer system
under design by Seller as of the Closing Date, (ii) targeted for
the high performance technical computing market.
1.22. "Vector Processor" means an integrated circuit or collection of
integrated circuits configured to process instructions wherein
the instruction set exposes user registers with more than two
64-bit or greater elements and is designed,
3
4
marketed and optimized for performing vector-based computational
operations.
1.23 "Vector Supercomputer" means hardware, software and combinations
thereof for a scaleable Vector Processor based high performance
computer system.
2. TECHNOLOGY RIGHTS
2.1. Patents Assigned to Purchaser. Seller hereby sells, conveys,
assigns and transfers to Purchaser, and Purchaser hereby
accepts, all of Seller's right, title and interest in and to the
Patents listed in the Schedule A (Assigned Patents), together
with all ancillary rights thereto, including without limitation,
the right to xxx and recover damages for past, present and
future infringements and to fully and entirely stand in the
place of Seller in all matters related thereto. Upon Purchaser's
reasonable request, Seller agrees to take further action and to
execute such additional documents at Purchaser's expense as may
be necessary to perfect Purchaser's title in and to the Assigned
Patents.
2.1.1 Patent License to Seller in Assigned Patents. Purchaser
grants to Seller a non-exclusive, royalty-free,
fully-paid, perpetual, worldwide license, without the
right to grant sublicenses to others, to make, have
made, use, import, sell, practice any method of
manufacture, and otherwise dispose of Seller's Products
under the Assigned Patents listed on Schedule A and
Purchaser Capture Period Patents.
2.2. Patents Licensed to Purchaser. Seller hereby grants to the
Purchaser, a non-exclusive, royalty-free, fully-paid, worldwide
license, without the right to grant sublicenses to others, to
make, have made, use, import and sell Purchaser Products, and to
practice any method of manufacture in connection with the
Purchaser Products, under the Patents listed on Schedule B.
2.3. Non-Patent Intellectual Property Rights in CHVP Assigned to
Purchaser. Seller hereby sells, conveys, assigns and transfers
to Purchaser, and Purchaser hereby accepts, all of Seller's
right, title and interest in and to the Non-Patent Intellectual
Property Rights listed in the Schedule C, together with all
ancillary rights thereto, including without limitation, the
right to xxx and recover damages for past, present and future
infringements and to fully and entirely stand in the place of
Seller in all matters related thereto. Upon Purchaser's
reasonable request, Seller agrees to take further action and to
execute such additional documents at Purchaser's expense as may
be necessary to perfect Purchaser's title in and to the
Non-Patent Intellectual Property Rights listed on Schedule C.
2.3.1 Non-Patent Intellectual Property Rights in CHVP Licensed
to Seller. Purchaser grants to Seller a nonexclusive,
royalty-free, fully-paid, perpetual, worldwide license,
without the right to grant sublicenses to
4
5
others, to practice any method of manufacture and to
make, have made, use, import and sell Seller Products
under the Non-Patent Intellectual Property Rights listed
on Schedule C.
2.4. Non-Patent Intellectual Property Rights in CHMPP Licensed to
Purchaser. Seller hereby grants to the Purchaser, a
non-exclusive, royalty-free, fully-paid, worldwide license,
without the right to grant sublicenses to others, to make, have
made, use, import and sell Purchaser Products, under the
Non-Patent Intellectual Property Rights listed on Schedule D.
2.4.1 Exclusive Right to Manufacture the CHMPP. Seller further
grants to Purchaser the exclusive, royalty-free, fully
paid, worldwide right under the Non-Patent Intellectual
Property Rights listed on Schedule D to manufacture
CHMPP products.
2.5. Non-Patent Intellectual Property Rights in SV2 Assigned to
Purchaser. Seller hereby sells, conveys, assigns and transfers
to Purchaser, and Purchaser hereby accepts, all of Seller's
right, title and interest in and to the Non-Patent Intellectual
Property Rights listed in the Schedule E, together with all
ancillary rights thereto, including without limitation, the
right to xxx and recover damages for past, present and future
infringements and to fully and entirely stand in the place of
Seller in all matters related thereto. Upon Purchaser's
reasonable request, Seller agrees to take further action and to
execute such additional documents at Purchaser's expense as may
be necessary to perfect Purchaser's title in and to the
Non-Patent Intellectual Property Rights listed on Schedule E.
2.5.1 Non-Patent Intellectual Property Rights in SV2 Licensed
to Seller. Purchaser grants to Seller a nonexclusive,
royalty-free, fully-paid, perpetual, worldwide license,
without the right to grant sublicenses to others, to
make, have made, use, import and sell Seller Products,
and to practice any method of manufacture, under the
Non-Patent Intellectual Property Rights listed on
Schedule E.
2.5.2 Non-Patent Intellectual Property Rights Licensed to
Purchaser. Seller hereby grants to the Purchaser, a
non-exclusive, royalty-free, fully-paid, worldwide
license, without the right to grant sublicenses to
others, to make, have made, use, import and sell
Purchaser Products, under the Non-Patent Intellectual
Property Rights listed on Schedule F.
2.5.3 Intellectual Property Rights in the SV2 Retained by
Seller. The Parties acknowledge that the SV2, in its
current stage of development, may include certain
Intellectual Property Rights owned by Seller that are
not being assigned, licensed or otherwise transferred to
Purchaser, including without limit, the components
listed in Schedule L. Except
5
6
for the specific rights granted to Purchaser herein, all
other Intellectual Property Rights in the SV2 are
expressly excluded.
2.6. Assignment of Software and Documentation to Purchaser. Seller
hereby sells, conveys, assigns and transfers to Purchaser, and
Purchaser hereby accepts, all of Seller's right, title and
interest in and to the Software and Documentation designated on
Schedules G and H as "Assign" to Purchaser, together with all
ancillary rights thereto, including without limitation, the
right to xxx and recover damages for past, present and future
infringements and to fully and entirely stand in the place of
Seller in all matters related thereto. Upon Purchaser's
reasonable request, Seller agrees to take further action and to
execute such additional documents at Purchaser's expense as may
be necessary to perfect Purchaser's title in and to the assigned
Intellectual Property Rights on Schedules G and H.
2.6.1 Modified Source Distribution License to Seller for
UNICOS. Purchaser hereby grants to the Seller a
non-exclusive, royalty-free, fully-paid, perpetual,
worldwide license, to the UNICOS Software designated on
Schedule H as "Assign" to Purchaser, to use, modify and
create derivative source and object code works from the
associated source code, including the right to
distribute the source or derivatives, or derived object
code to third parties solely as enhancements or
modifications of Seller Products.
2.6.2 "Republication" License to Seller. Purchaser hereby
grants to the Seller a non-exclusive, royalty-free,
fully-paid, perpetual, worldwide license, to the
Documentation designated on Schedule G as "Assign" to
Purchaser and "Republication" to SGI to reproduce,
recreate or republish the associated publications or
documentation (Republished Works) for use in connection
with the Seller Products, under the condition that no
improper use is made of the Trademarks listed on
Schedule K. To the extent that Seller provides service
and/or support for Purchaser Products, Purchaser grants
to the Seller a non-exclusive, royalty-free, fully-paid,
perpetual, worldwide license, to the Documentation
designated on Schedule G as "Assign" to Purchaser to
reproduce, recreate or republish the associated
publications or documentation (Republished Works) for
use in connection with the Purchaser Products.
2.6.3 "Source-Only" License to Seller. Purchaser hereby grants
to the Seller a non-exclusive, royalty-free, fully-paid,
worldwide license to use, modify, and create derivative
source and object code works from the associated source
code solely for internal use in connection with the
design, manufacture and distribution of Seller Products,
without the
6
7
right to grant sublicenses or distribute, under the
Software and Documentation designated on Schedule G as
"Assign" to Purchaser and "Source-Only" to SGI.
2.6.4 "Source-Binary Distribution" License to Seller.
Purchaser hereby grants to the Seller a non-exclusive,
royalty-free, fully-paid, worldwide license to use,
modify and create source and object code works from the
associated source code and distribute object code
derived from the source or its derivatives to third
parties, solely for Seller Products, without rights to
sublicense or distribute source code or source
derivatives to third parties other than source that is
licensed to customers solely for its use in connection
with the support or service of a Seller Product, under
the Software designated on Schedule G as "Assign" to
Purchaser and "Source-Binary Distribution" to SGI.
2.6.5 "Source Distribution" License to Seller. Purchaser
hereby grants to the Seller a non-exclusive,
royalty-free, fully-paid, worldwide license to use,
modify and create derivative source and object code
works from the associated source code, including the
right to distribute and sublicense the source or
derivatives, or derived object code to third parties,
under the Software designated on Schedule G as "Assign"
to Purchaser and "Source Distribution" to SGI.
2.7. "Binary-Only" License to Purchaser. Seller hereby grants to the
Purchaser five (5), royalty-free, non-exclusive, worldwide
licenses to use in binary form, without the right to grant
sublicenses or distribute, for internal use on Purchaser
Products, under the Software designated on Schedule G as
"Binary-Only" to Purchaser, if any, subject to Seller's standard
terms and conditions for such software and only for those
versions of the Software that is made commercially available by
Seller within one-year of the Closing Date.
2.8. "Source-Only" License to Purchaser. Seller hereby grants to the
Purchaser a non-exclusive, royalty-free, fully-paid, worldwide
license to use, modify, and create derivative source and object
code works from the associated source code solely for internal
use in connection with the design, manufacture and distribution
of Purchaser Products, without the right to grant sublicenses or
distribute, under the Software and Documentation designated on
Schedule G as "Source-Only" to Purchaser.
2.9. "Source-Binary Distribution" License to Purchaser. Seller hereby
grants to the Purchaser a non-exclusive, royalty-free,
fully-paid, worldwide license to use, modify and create source
and object code works from the associated source code and
distribute object code derived from the source or its
derivatives to third parties, solely for Purchaser Products,
without rights to sublicense or
7
8
distribute source code or source derivatives to third parties
other than source that is licensed to customers solely for its
use in connection with the support or service of a Purchaser
Product, under the Software designated on Schedule G as
"Source-Binary Distribution" to Purchaser.
2.10. "Source Distribution" License to Purchaser. Seller hereby grants
to the Purchaser a non-exclusive, royalty-free, fully-paid,
worldwide license to use, modify and create derivative source
and object code works from the associated source code, including
the right to distribute and sublicense the source or
derivatives, or derived object code to third parties, under the
Software designated on Schedule G as "Source Distribution" to
Purchaser.
2.11. "Republication" License to Purchaser. Seller hereby grants to
the Purchaser a non-exclusive, royalty-free, fully-paid,
worldwide license, to the Documentation designated on Schedule G
as "Republication" to Purchaser to reproduce, recreate or
republish the associated publications or documentation
(Republished Works) for Purchaser Products, provided that
Purchaser may not use Seller's trademarks without the written
approval from Seller, which approval shall not be unreasonably
withheld.
2.12. "Source-Only" License under IRIX to Purchaser. Seller hereby
grants to the Purchaser a non-exclusive, royalty-free,
fully-paid, worldwide license to use, modify, and create
derivative source and object code works from the associated
source code solely for internal development of the SV2, without
the right to grant sublicenses or distribute, under the Software
and Documentation designated on Schedule I as "Source-Only" to
Purchaser.
2.13. "Source-Binary" Development License to Purchaser under IRIX.
Seller hereby grants to the Purchaser a non-exclusive,
royalty-free, fully-paid, worldwide license to use and modify,
without rights to sublicense or distribute to third parties, to
create derivative source and object code works from the Software
designated on Schedule I as "SV2 IRIX Source-Binary
Distribution" to Purchaser, solely for the SV2, provided that
all licenses granted to the Software on Schedule I under the
heading "Specially-Protected IRIX Source" shall terminate
immediately if (i) the Purchaser transfers, whether by sale,
assignment, merger, operation of law or otherwise any of its
rights under this Technology Agreement or (ii) upon a Purchaser
Change of Control. As used in sections 2.13 and 2.14, "Purchaser
Change of Control" shall mean more than thirty percent (30%) of
the outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority)
of Purchaser becomes owned or controlled, directly or
indirectly, by any person (as such term is used in section 13(d)
and section 14(d)(2) of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the
8
9
Closing Date) or related persons constituting a group (as such
term is used in Rule 13d-5 under the Exchange Act).
2.14. "Source-Binary Distribution" License to Purchaser under IRIX.
Seller hereby grants to the Purchaser a non-exclusive, worldwide
license to distribute the derivative works licensed under
Section 2.13 in object code form solely for use on the SV2,
subject to a license fee paid by Purchaser to Seller of five
thousand dollars ($5,000.00) for each such license granted and
without rights to sublicense or distribute source code or source
derivatives to third parties other than source that is licensed
to customers solely for its use in connection with the support
or service of an SV2, under the Software designated on Schedule
I as "SV2 IRIX Source-Binary Distribution" to Purchaser,
provided that all licenses granted to the Software on Schedule I
under the heading "Specially-Protected IRIX Source" shall
terminate immediately if (i) the Purchaser transfers, whether by
sale, assignment, merger, operation of law or otherwise any of
its rights under this Technology Agreement or (ii) upon a
Purchaser Change of Control.
2.15. Assignment of Rights in Third Party Licenses and Contracts to
Purchaser. To the extent permitted by the underlying contracts
and licenses, and subject to all of the rights, conditions and
obligations contained therein, Seller assigns and transfers to
Purchaser, and Purchaser hereby accepts, all of Seller's rights
and obligations under the contracts and licenses designated on
Schedule J. Upon Purchaser's reasonable request, Seller agrees
to take further action and to execute such additional documents
at Purchaser's expense as may be necessary to perfect
Purchaser's title in and to the assigned Intellectual Property
Rights designated on Schedule J.
2.16. Trademarks Assigned to Purchaser. Seller hereby sells, conveys,
assigns and transfers to Purchaser, and Purchaser hereby
accepts, any and all of Seller's right, title and interest in
and to the Trademarks designated on Schedule K ("Assigned
Trademarks"), together with the goodwill of the Business
connected with the use of and symbolized by the Trademarks,
including without limitation, the right to xxx and recover
damages for past, present and future infringements and to fully
and entirely stand in the place of Seller in all matters related
thereto. Upon Purchaser's reasonable request, Seller agrees to
take further action and to execute such additional documents at
Purchaser's expense as may be necessary to perfect Purchaser's
title in and to the Assigned Trademarks.
2.17. Right to Retain Information. Seller shall have the right to
retain copies of all materials included in and associated with
the Intellectual Property Rights assigned to Purchaser in this
Section 2.
9
10
2.18. No Other Rights To the extent that any of the Intellectual
Property Rights covered or identified in this Technology
Agreement are not expressly assigned or licensed, all such
Intellectual Property Rights shall remain with the Seller. No
other rights are granted hereunder, by implication, estoppel,
statute or otherwise, except as expressly provided herein.
Except as expressly provided in this Section 2, nothing in the
licenses granted hereunder or otherwise contained in this
Technology Agreement shall expressly or by implication, estoppel
or otherwise give either party any right to license the other
Party's Intellectual Property to third parties. No license or
immunity is granted by either Party hereto directly or by
implication, estoppel or otherwise to any third parties
acquiring products from either Party for the combination of such
products with other items or for the use of such combination.
2.19 Residuals. Notwithstanding anything herein to the contrary,
either party may use Residuals for any purpose, including use in
the development, manufacture, promotion, sale and maintenance of
its products and services; provided that this right to Residuals
does not represent a license under any Intellectual Property
Rights of the disclosing party. The term "Residuals" means
information of a general nature, such as general knowledge,
ideas, concepts, know-how, professional skills, work experience
or techniques, that is retained in the unaided memories of
either party's employees who have had access to the other
party's information prior to execution of this Agreement. An
employee's memory is unaided if the employee has not
intentionally memorized the Information for the purpose of
retaining and subsequently using or disclosing it.
2.20. Duty to Maintain Patents and Non-Patent Intellectual Property.
In the event that the Purchaser decides not to file a Patent
application or to abandon the prosecution of any such Patent
application or not to maintain any granted Patent that is
assigned to the Purchaser under this Technology Agreement,
Purchaser will (i) notify the Seller within a reasonable time to
permit the Seller to continue such prosecution or maintain such
Patent (at the Seller's expense), and (ii) assign to the Seller
the right, title and interest in and to such Patents. Purchaser
shall take all commercially reasonably actions necessary to
maintain the validity and enforceability of the Non-Patent
Intellectual Property Rights assigned to it herein.
2.21. No Foundry Rights. Purchaser understands and acknowledges that
the licenses granted to it by Seller under Section 2 are
intended to cover only the Purchaser Products and are not
intended to cover foundry activities that Purchaser may
undertake on behalf of third parties.
2.22. Third Party Rights. Purchaser understands that some of the
Intellectual Property Rights and materials assigned or licensed
to Purchaser hereunder may
10
11
contain third party intellectual property. Purchaser agrees
that: (i) Seller's obligations and Purchaser's licenses under
this Section 2 are subject in all cases to any restrictions,
limitations or obligations contained in agreements entered into
between Seller and third parties, (ii) Purchaser shall be solely
responsible for obtaining such licenses or consents, provided,
however, that upon request by Purchaser, Seller shall cooperate
with Purchaser in obtaining such licenses or consents, as
appropriate, (iii) Purchaser agrees that in the event any third
party licenses or consents are required, Purchaser will obtain
such third party licenses or will not use such third party
intellectual property or Seller Intellectual Property Rights
into which such third party intellectual property is integrated,
and (iv) Purchaser will undertake all efforts necessary to
protect Seller's rights and meet Seller's obligations under
agreements with third parties to the extent such rights and
obligations are affected by this Technology Agreement.
2.23. Confidentiality Agreement with Former Employees of Seller. All
offers of employment made to, and employment agreements made
with, former employees of Seller shall include the provisions
set forth in Schedule M.
3. COVENANT NOT TO XXX
3.1. Seller's Covenant Not to Xxx. Seller hereby covenants and agrees
with Purchaser that Seller will not bring suit or otherwise
assert a patent claim against Purchaser or its customers before
any court or administrative agency in any country of the world
under the Seller Exclusive Issued Patents in connection with the
sale of Cray Products to the extent the Cray Products existing
as of the Closing Date infringed such claim of Seller Exclusive
Issued Patents. This covenant shall run with the title of the
Seller Exclusive Issued Patents and shall bind any assignee or
other person to whom the Seller may convey an interest in the
Seller Exclusive Issued Patents.
3.2. Purchaser's Covenant Not to Xxx. Purchaser hereby covenants and
agrees with Seller Group that Purchaser will not bring suit or
otherwise assert any claim against the Seller or its customers
before any court or administrative agency in any country of the
world under the Intellectual Property Rights assigned or
licensed to Purchaser in this Technology Agreement to the extent
such Intellectual Property Rights are incorporated, in whole or
in part, into Seller's hardware or software products
commercially available or under development prior to the Closing
Date. This covenant shall run with the title of the Intellectual
Property Rights assigned or licensed to Purchaser herein and
shall bind any assignee or other person to whom the Purchaser
may convey an interest in such Intellectual Property Rights.
4. DISCLAIMER
11
12
4.1. No Implications. Nothing contained in this Technology Agreement
shall be construed as:
4.1.1. A representation or warranty by either of the Parties to
this Technology Agreement as to the validity,
enforceability or scope of any class or type of
Intellectual Property Rights assigned or licensed
herein;
4.1.2. A warranty or representation that anything made, used
sold or otherwise disposed of under any assignment or
license set forth in this Technology Agreement is or
will be free from infringement of any third party
Intellectual Property Rights other than those which are
assigned or licensed hereunder;
4.1.3. Except as explicitly set forth in Section 8, an
agreement to bring or prosecute or any grant of a right
to bring or prosecute actions or suits against third
parties for infringement;
4.1.4. Requiring either Party to obtain the right to license
for the other Party, third party technology contained in
any know-how, software or other materials licensed,
assigned or provided hereunder. The Parties agree that
the receiving Party shall be solely responsible for
obtaining any necessary third party licenses;
4.1.5. Except as expressly set forth herein, requiring Seller
to furnish, locate, compile or disclose technical
information relating to the Intellectual Property Rights
assigned or licensed to Purchaser herein;.
4.1.6. Conferring by implication, estoppel or otherwise, upon
either Party licensed hereunder, any license or other
right under any Intellectual Property Rights except the
assignments, licenses and rights expressly granted
hereunder regardless of whether such Intellectual
Property Rights are dominant or subordinate to the
rights granted hereunder;
4.1.7. Assuming any obligation to provide support, updates,
revisions, errors, bug fixes or other service in
connection with any of the assignments or licenses
expressed;
4.1.8. A warranty or representation that Seller has the right
to assign, sublicense or otherwise transfer, in whole or
in part, any of the contracts or licenses listed on
Schedule J;
4.1.9. A warranty or representation as to the commercial or
technical viability of any of the Cray Products; or
12
13
4.1.10. A warranty or representation as to the commercial
availability of any component, sub-component or
assemblies required to manufacture and sell the Cray
Products.
4.2. No Warranties. EACH PARTY HEREBY DISCLAIMS ANY EXPRESS OR
IMPLIED WARRANTIES WITH RESPECT TO THE INTELLECTUAL PROPERTY
RIGHTS OR RELATED MATERIALS ASSIGNED OR LICENSED HEREUNDER,
INCLUDING WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY,
NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. UNLESS
SPECIFICALLY PROVIDED ALL ASSIGNMENTS AND LICENSES ARE "AS IS,
WHERE IS."
5. CONFIDENTIALITY
5.1. Obligation. Purchaser and Seller each acknowledges that by
reason of its relationship with the other Party, it has and will
have access to certain information and materials that is
confidential and of substantial value to the other Party
("Confidential Information"), which value would be impaired if
such information were disclosed to third parties. Each Party
agrees that, except as specifically authorized hereunder, it
will not use in any way for its own account or the account of
any third party, nor disclose to any third party, any such
Confidential Information, and will take every reasonable
precaution to protect the confidentiality of such information
which shall in no event be less than the industry standard and
shall include: entering into non-disclosure agreements with
third parties prior to disclosing any Confidential Information
that the other Party grants permission to disclose, entering
into employment agreements with all employees requiring
employees to protect Confidential Information, providing to
employees access to Confidential Information on a need to know
basis only, where appropriate based on the nature of the
Confidential Information, password protect servers that contain
Confidential Information, restricting access to Confidential
Information by third parties (including contractors) unless they
have a need to know and they have entered into appropriate
non-disclosure agreement. Upon request by a Party, the other
Party will advise the requesting Party whether or not it
considers any particular information or materials to be
Confidential Information.
5.2. Transfer of Information. Purchaser acknowledges that (i) all
technical information, know-how, software, or other materials
(excluding non-technical business materials) transferred by
Purchaser from Seller are listed on Schedules to this Technology
Agreement and will be transferred to Purchaser as agreed to by
the Parties, and (ii) Purchaser will not have access to the
Seller's servers as of the Closing Date or as mutually agreed.
Purchaser agrees to promptly return or destroy all copies of any
unauthorized Seller Confidential
13
14
Information in its possession or control. Seller agrees to
cooperate with Purchaser in identifying Seller Confidential
Information in the possession or control of Purchaser. Purchaser
agrees that Seller, during the period up to three hundred and
sixty (360) days after the Closing Date, shall have the right to
audit Purchaser's servers, files, and premises to ensure
compliance with this Section 5. In the event Seller discovers
material unauthorized use of Seller Confidential Information,
Purchaser shall pay the cost of the audit and shall use its best
efforts to correct such unauthorized use including without
limitation, obtaining a license to use such information,
destroying or returning such information, and ceasing to license
or distribute products or materials that contain such
information.
5.3. Exceptions. The foregoing restrictions will not apply to
information that (i) has become publicly known through no
wrongful act of the receiving Party; (ii) has been rightfully
received from a third party authorized to make such disclosure
without restriction; (iii) has been independently developed by
the receiving Party after the Closing Date of this Technology
Agreement; (iv) has been approved for release by written
authorization of the disclosing Party, or (v) is required by law
or regulation to be disclosed; provided, however, that the
receiving Party has provided written notice to the disclosing
Party promptly to enable disclosing Party to seek a protective
order or otherwise prevent disclosure of Confidential
Information.
5.4. Term. The obligations of each Party pursuant to this Section 5
with respect to Confidential Information shall continue in full
force and effect for a period of ten (10) years after the
Closing Date of this Technology Agreement; provided that if the
disclosing Party requests an additional ten (10) year period for
maintaining the confidentiality of any specified Confidential
Information, the obligations under this Section 5 shall continue
with respect to such Confidential Information for an additional
ten (10) years.
5.5. Injunctive Relief. Each Party acknowledges that any breach of
any of its obligations under this Section 5 may cause
irreparable harm and significant injury to the disclosing Party
to an extent that may be extremely difficult to measure.
Accordingly, the receiving Party agrees that the disclosing
Party will have, in addition to any other rights or remedies
available to it at law or in equity, the right to seek
injunctive relief to enjoin any breach of this Section 5.
6. TERM AND TERMINATION
6.1. Term. This Technology Agreement and the rights and licenses
granted hereunder shall become effective on the Closing Date and
shall continue in effect, unless terminated as provided below,
until the latter of: (i) expiration,
14
15
revocation, invalidation or abandonment of the last Patent
licensed hereunder, or (ii) the Parties cease to use the
Non-Patent Intellectual Property Rights.
6.2. Termination
6.2.1. Termination for Bankruptcy. Either Party may terminate
this Technology Agreement effective immediately and
without liability upon written notice to the other Party
if any one of the following events occurs:
(a) the other Party files a voluntary petition in
bankruptcy or otherwise seeks protection under
any law for the protection of debtors;
(b) A proceeding is instituted against the other
Party under any provision of any bankruptcy laws
that is not dismissed within ninety (90) days;
(c) Any adjudication that the other Party is
bankrupt or insolvent;
(d) A court assumes jurisdiction of all or a
substantial portion of the assets of the other
Party under a reorganization law;
(e) A trustee or receiver is appointed by a court
for all or a substantial portion of the assets
of the other Party;
(f) The other Party becomes insolvent, ceases or
suspends business;
(g) The other Party makes an assignment of the
majority of its assets for the benefit of its
creditor; or
(h) The other Party admits in writing its inability
to pay its debts as they become due.
6.2.2. Termination for Breach. If either Party materially
breaches any material term or condition ("Material
Breach") of this Technology Agreement or the Asset
Purchase Agreement ("Breaching Party"), than the Other
Party may terminate this Technology Agreement if (i) the
Other Party gives written notice to the Breaching Party
describing the nature of the Material Breach; and (ii)
the Breaching Party does not cure the Material Breach
within forty-five (45) days of receipt of the notice of
the Material Breach, unless the default reasonably
requires more than forty-five (45) days to correct and
the Breaching Party has begun substantial corrective
actions to remedy the default and is
15
16
diligently pursuing such actions, in which event, the
Breaching Party shall have so much time as is reasonably
necessary to cure such default.
6.3. Effect of Termination. In the event of termination pursuant to
Section 6.2 above, (i) the Party terminating the Technology
Agreement pursuant to Section 6.2 above shall retain all
licenses and rights granted to it under this Technology
Agreement for the term of the Technology Agreement, and all
licenses granted to the other Party shall terminate subject to
any sublicenses previously granted, and (ii) the following
sections shall survive any termination or expiration of the
Technology Agreement: Sections 2.1, 2.1.1, 2.3, 2.3.1, 2.5,
2.5.1, 2.5.3, 2.6, 2.6.1, 2.6.2, 2.15, 2.16, 2.17, 2.18, 2.19,
2.20, 2.21, 2.22, 2.23, 3, 4, 5, 6, 7, 8, and 9.
7. ASSIGNMENT AND CHANGE OF CONTROL
7.1. Purchaser. Assignment, sale, sublicense or transfer by Purchaser
of any rights and/or obligations of this Technology Agreement
are governed by Section 16.3 of the Asset Purchase Agreement.
Any purported assignment, sale, sublicense or transfer, except
as explicitly permitted therein, shall be deemed a breach of
this Technology Agreement and shall be null and void. This
Technology Agreement shall be binding upon and inure to the
benefit of the Parties and their permitted successors and
assigns.
7.2 Seller. The Seller may sublicense, assign or transfer this
Technology Agreement and any right or obligation under it,
provided that if it assigns or transfers the licenses in
Sections 2.1.1, 2.3.1 and 2.5.1 of this Technology Agreement to
NEC Corporation, Hitachi, Ltd. Fujitsu Limited, or any other
manufacture of Vector Supercomputers (hereinafter "Buyer
Competitors") during a period of three years from the Closing
Date ("Restrictive Period"), the licenses in Sections 2.1.1,
2.3.1 and 2.5.1 shall be limited to Seller Products, or
combinations thereof, designed and/or manufactured by or on
behalf of Seller as of any such assignment or transfer, or
follow-on Seller Products or products in Seller's future product
development plan (i.e., Road Map). In addition, if any of the
Buyer Competitors merges or consolidates with Seller, or owns or
controls, directly or indirectly, more than fifty percent (50%)
of the outstanding shares or securities representing the right
to vote for the election of directors or other managing
authority during the Restricted Period, then the licenses in
Sections 2.1.1, 2.3.1 and 2.5.1 shall be limited to Seller
Products, or combinations thereof, designed and/or manufactured
by or on behalf of Seller as of such merger, consolidation or
change of control, or follow-on Seller Products or products in
Seller's future product development plan. Nothing in this
section shall restrict Seller from selling any Seller Products
to any person or party on an end-user basis in the ordinary
course of business.
16
17
8. INFRINGEMENT ACTIONS
8.1. Cooperation in Infringement Actions. Each Party agrees, at the
other's expense, to make available at reasonable times and under
appropriate conditions all relevant personnel, records, papers,
information, samples, specimens and other similar materials in
its possession that are reasonably necessary to allow Seller or
Purchaser to litigate or settle such suit, including without
limitation, becoming party to the suit.
9. GENERAL
9.1. Ownership of Technology. The Parties agree that the technical
materials and Intellectual Property Rights assigned or licensed
to Purchaser are limited to those expressly provided for
hereunder. All other technology, materials and information
(excluding non-technical business materials) under Seller's
control shall be owned exclusively by Seller, and Purchaser
shall have no rights or interest in such technology, materials
and information unless expressly provided in this Technology
Agreement. Purchaser shall not remove any tangible materials
embodying such Intellectual Property Rights or information from
Seller's premises other than those explicitly listed on the
Schedules attached to this Technology Agreement. Except for the
express licenses granted to Seller under the Intellectual
Property Rights assigned to Purchaser hereunder, all rights
thereto shall be owned exclusively by Purchaser and Seller shall
have no rights or interest in such assigned Intellectual
Property Rights.
9.2. Delivery of Assigned Technology or Purchaser Licensed
Technology. All transfers of technology shall be conducted per
the Transition Services Agreement. The Parties expressly agree
that all such technology is provided on an "as is, where is"
basis, and each Party shall have no obligation to locate,
assemble, compile, deliver or otherwise assist the other Party
in the transfer of such technology, provided that Seller agrees
to cooperate with Purchaser's efforts.
9.3. Confidentiality of Technology Agreement. Each Party agrees that
the terms and conditions of this Technology Agreement shall be
treated as confidential information and that neither Party will
disclose the terms or conditions to any third party without the
prior written consent of the other Party, provided, however,
that each Party may disclose the terms and conditions of this
Technology Agreement, to the extent necessary:
(a) as required by any court or other governmental body;
(b) as otherwise required by law;
17
18
(c) to legal counsel of the Parties, accountants, and other
professional advisors;
(d) in confidence, to banks, investors and other financing
sources and their advisors;
(e) in connection with the enforcement of this Technology
Agreement; or
(f) in confidence, in connection with an actual or
prospective merger or acquisition or similar
transaction.
With respect to disclosure required by a court order, the
disclosing Party shall provide prior notification of such
impending disclosure to the non-disclosing Party. All reasonable
efforts to preserve the confidentiality of the terms of this
Technology Agreement shall be expended by the disclosing Party
in complying with such an order, including obtaining a
protective order to the extent reasonably possible. The Parties
shall cooperate in preparing and releasing an announcement or
other form of publicity, if any, relating to this Technology
Agreement.
9.4. Export Controls. Each Party understands and acknowledges that
certain technology licensed or assigned hereunder is subject to
regulation by agencies of the U.S. government, including the
U.S. Department of Commerce, which prohibit export or diversion
of certain products and technology to certain countries. Each
Party warrants that it will comply in all respects with the
export restrictions applicable to any materials or technology
provided hereunder and will otherwise comply with the Export
Administration Regulations or other United States laws and
regulations in effect from time to time.
9.5 Entire Agreement. This Technology Agreement including the
Schedules and any schedules thereto, together with the Asset
Purchase Agreement constitute the entire understanding of the
Parties hereto with respect to the subject matter hereof,
superseding all negotiations, prior discussions and prior
agreements and understandings relating to such subject matter.
If there is any conflict or inconsistency between any
definitions, terms, or conditions of the Asset Purchase
Agreement (or any interpretation thereof) and any term or
condition of this Technology Agreement, this Technology
Agreement shall prevail and the Asset Purchase Agreement will be
deemed modified and/or interpreted to conform to this Technology
Agreement. If there is any conflict or inconsistency between any
definitions, terms, or conditions of the Technology Agreement
(or any interpretation thereof) and any of the items on the
Schedules to the Technology Agreement, the Schedules to the
Technology Agreement shall prevail and the Technology Agreement
will be deemed
18
19
modified and/or interpreted to conform to the Schedules to the
Technology Agreement.
9.6 Expenses. All costs incurred in the interpretation, execution,
delivery and implementation of this Technology Agreement and
with the consummation of the transactions contemplated herein
shall be paid by the Party incurring the expense.
9.7 Severability. The provisions of this Technology Agreement shall
be deemed separable. Therefore, if any part of this Technology
Agreement is rendered void, invalid or unenforceable, such
rendering shall not affect the validity or enforceability of the
remainder of this Technology Agreement.
9.8 No Waiver. Any failure by either Party to enforce at any time
any terms and conditions of this Technology Agreement shall not
be considered a waiver of the other Party's rights to enforce
each and every term and condition of this Agreement.
9.9 Unavoidable Delay. Neither Party shall be considered in default
or be liable to the other Party for any delay in performance or
non-performance caused by circumstances beyond the reasonable
control of such Party, including but not limited to acts of God,
explosion, fire, flood, war, whether declared or not, accident,
labor strike or labor disturbances, inability to procure
supplies from third party vendors, sabotage, order or decrees of
any court, or action of government authority.
9.10. Choice of Law. This Technology Agreement shall be governed by
and interpreted under the substantive laws of the State of
California.
9.11 Resolution of Disputes. Disputes involving this Technology
Agreement shall be resolved in accordance with the procedure set
forth in paragraph 29 of the Asset Purchase Agreement.
IN WITNESS WHEREOF, the Parties hereto have duly executed this
Technology Agreement effective as of the date set forth above.
Seller Purchaser
By: By:
--------------------------------- ---------------------------------
Name: Name:
Title: Title:
19