STANDARD INBOUND LICENSE AGREEMENT
(Distribution of Third Party Products)
1. PREAMBLE. This Standard Inbound License Agreement ("Agreement") is agreed
to by the entity identified in the table below ("Company") and Novell,
Inc., a Delaware corporation with principal offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Novell").
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COMPANY NAME NetObjects, Inc.
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ADDRESS NetObjects, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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PHONE ▇▇▇.▇▇▇.▇▇▇▇
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JURISDICTION OF Delaware corporation
FORMATION AND C corporation
BUSINESS FORM
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FAX 650.582.0288
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URL ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
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2. PURPOSE. Company develops and markets a NetObjects Fusion software product
that enables users to create Web sites. Novell desires to make Company's
NetObjects Fusion solution available to its customers by distributing it
with Novell's NetWare for Small Business product offering. Company desires
to gain additional market recognition by having Company's NetObjects Fusion
product distributed by Novell. This Agreement sets forth the terms and
conditions under which Company will license the Licensed Work defined below
to Novell, including obligations of Company to meet certain technical
requirements to ensure the suitability of the Licensed Work for operation
with Novell products.
3. DEFINITIONS. The following terms shall have the definitions stated below:
a. BINARY CODE OR 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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b. CHANGE OF CONTROL - shall mean when, subsequent to the Effective Date,
(1) any person or group (within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934 as in effect on the date hereof) shall
come to own, directly or indirectly, beneficially or of record, voting
securities representing more than 50% of the total voting power of one
of the parties, (2) or one of the parties becomes a Subsidiary of some
third-party. Novell acknowledges that Company is a majority-owned
subsidiary of IBM.
c. CODE ERROR - a program function that is described in user
Documentation or the Agreement but is omitted from the Code, or a
program function or user Interface that does not operate or that gives
incorrect results when measured against its design specifications.
d. COMPARABLE PRODUCT - shall mean Company product that: (1) are marketed
under the same product name as the Licensed Works: and/or (2) have
functionality substantially similar to that of the Licensed Works but
are written for platforms other than those of Novell.
e. DOCUMENTATION - shall mean user manuals and other written Materials
that relate to, or are made available to facilitate, end use of
particular Code.
f. DOCUMENTATION ERROR - a failure of the Documentation to describe
accurately a program function contained in the Agreement; or, a
failure of the Documentation to meet the requirements of the
Agreement; or, a failure of the Documentation to enable reasonably
competent users to correctly operate the associated Code.
g. EFFECTIVE DATE - shall mean September 30, 1998.
h. ERROR - shall mean a Code Error and/or a Documentation Error.
i. FCS - shall mean the date that Novell makes the NetWare for Small
Business 4.2 product Generally Available.
j. GENERAL AVAILABILITY and GENERALLY AVAILABLE - shall mean, with
respect to a particular item, the date that the item is made available
to members of the general public.
k. HARMFUL CODE - shall mean any Code constructed with the ability to
damage, interfere with, or adversely affect computer programs, data
files, or hardware without the consent or intent of the computer user.
This definition is intended to mean Code in the
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nature of self-replacing and self-propagating programming instructions
commonly called "viruses," "trojan horses" and "worms."
l. INITIAL TERM - shall have the meaning set forth in Section 13.
m. LICENSED TRADEMARKS - shall mean the word marks listed on Exhibit B,
their associated design marks, and all other trademarks and trade
dress used by Company to identify and/or market the Licensed Works
and/or Comparable Products.
n. LICENSED WORKS - shall mean the materials identified as Licensed Works
on Exhibit A and associated Documentation.
o. NWSB - shall mean any versions and releases of Novell's NetWare for
Small Business product or any other Novell product offering, including
without limitation ports to other platforms, translations, and/or
localizations, whether such versions and releases are created,
marketed, distributed, and/or sold by Novell or third parties.
p. NEW VERSION - shall mean a new version or release of a product that is
designated by Novell as a change to the left of the decimal point
and/or in the tenths digit [(x).(x)x] of the version number. E.g.
Version 5.2 or 6.0 would be considered a New Version of the 5.1
version of a product, but the 5.11 version would not be considered a
New Version of the 5.1 version of a product.
q. SUBSIDIARY - shall mean a corporation, company, or other entity (1)
fifty percent (50%) or more of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, or (2) which does not have outstanding shares
or securities, as may be the case in a partnership, joint venture or
unincorporated association, but at least fifty percent (50%) of whose
ownership interest representing the right to make the decisions for
such corporation, company or other entity is, now or hereafter, owned
or controlled, directly or indirectly, by a party hereto. However,
such corporation, company, or other entity shall be deemed to be a
Subsidiary only so long as such ownership or control exists.
4. PROJECT MANAGERS. Each party's Project Manager (named in Exhibit D) shall
be responsible for managing that party's performance under the Agreement
and for all necessary coordination with the other party's Project Manager.
Each party's Project Manager will provide periodic progress reports to the
other party's Project Manager. In the
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event of disputes regarding this Agreement, the Project Managers have the
primary responsibility to resolve such disputes, up to and including the
dispute resolution procedures set forth in Section 14.
5. LICENSE GRANTS TO NOVELL
a. LICENSED WORKS. The Licensed Works source code is not licensed to
Novell under this Agreement. All licenses are limited to Binary code
only.
Company grants to Novell the following non-exclusive, worldwide and
irrevocable license in the Licensed Works:
i. To use, reproduce, and distribute the Licensed Works internally
within Novell, subject to the limitations of Section 8.
ii. To distribute externally, either directly or indirectly, copies
of those portions of the Licensed Works that are not Code (e.g.
Documentation).
iii. To distribute externally by sale, lease, rental or otherwise
transfer possession to end-users, either directly or indirectly,
copies in Binary Code form only of the Licensed Works.
Subject to the bundling requirements herein, distribution of the
Licensed Works as permitted above may be in combination with other
works.
b. SUBLICENSING. Novell shall have the right to sublicense, directly or
indirectly, the rights granted in Section 5.a(ii) and 5.a(iii) to
third parties ("Sublicensees") through multiple tiers, subject to the
limitations set forth in this Agreement.
c. INTELLECTUAL PROPERTY LICENSE. Each copyright license shall also
automatically include a grant by Company to Novell of a worldwide,
non-exclusive license under all of Company's inventions, discoveries,
patents, copyrights, trade secrets, inventor's certificates, utility
models (and similar forms of legal protection of any country) and
other proprietary rights, including those of third parties under which
Company has the right to grant licenses, necessary to exercise the
rights granted under this Agreement, regardless of when such
proprietary rights were first conceived, reduced to practice, created,
or perfected. Such license shall be limited in scope to the minimum
extent that is consistent with the grant of the copyright license.
Such patent license is also
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extended, at the minimum scope necessary to be consistent with the
grant of the copyright license to licensees and sublicensees of the
copyright license.
d. BUNDLING REQUIREMENT. Distribution of the Licensed Works shall be
solely as bundled with NWSB, except that Novell shall be free to
distribute updates, upgrades (that are made Generally Available to
customers free of charge), replacement copies, Error Corrections, and
fixes on a stand-alone basis, including electronic distribution.
e. Upon request, Novell shall provide Company with a list of countries in
which it intends to distribute the Licensed Works.
6. OWNERSHIP. Company shall retain all rights in and title to the Licensed
Works.
7. TRADEMARK LICENSE AND PRODUCT NAME.
a. LICENSE GRANT. Company grants Novell and its distributors, a
worldwide, non-exclusive, non-transferable and royalty-free license to
use the Licensed Trademarks on the Licensed Works and in connection
with the distribution and marketing of Licensed Works. Novell shall
have the right to use the Licensed Trademarks in proximity to
trademarks relating to Novell and third party products distributed or
marketed in conjunction with the Licensed Works. Novell shall have
the right to seek and obtain copyright protection, including
registrations, on packaging and marketing materials which may display
the Licensed Trademarks; notwithstanding the foregoing, in no event
shall this right be construed as transferring any interest of Company
in the Licensed Trademarks to Novell.
b. PROTECTION AND DEFENSE OF THE LICENSED TRADEMARKS. Novell and Company
will at all times use their commercially reasonable efforts to
preserve the value and validity of the Licensed Trademarks. Company
shall notify Novell of all claims that the Licensed Trademarks
conflict with the rights of third parties. Company hereby expressly
represents, to the best of its knowledge (without further research or
due diligence), that the existing Licensed Trademarks are valid and
are the exclusive property of Company within those jurisdictions in
which Company has registered or applied to register the Licensed
Trademarks. Nothing in this Agreement shall be construed to give
Novell any right, title, interest or responsibility in or for any
Licensed Trademarks, except as expressly provided herein. Any
trademark rights accruing through the use of the Licensed Trademarks
by Novell shall accrue to the benefit of Company alone; in the event
Novell uses Novell or third party
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marks in proximity to the License Trademarks, the good will accruing
from the use of such marks shall inure to the benefit of Novell and/or
its licensors. Novell shall cooperate with Company in registering
Novell as a registered user of the Licensed Trademarks whenever, in
Company's judgment, such registration is appropriate.
c. NEW NAME. In the event Novell has a reasonable and objectively
substantial business concern that Novell will not be able to freely
market and distribute the Licensed Works due to a conflict with third
parties over the use of the Licensed Marks, Novell shall notify
Company and Company shall resolve the conflict or provide a
replacement trademark within two weeks of Novell's notice. The
replacement trademark shall be deemed a "Licensed Trademark." If
Company cannot resolve the conflict or provide a suitable replacement
trademark in such time period, Novell shall be free to market and
distribute the Licensed Works under a name comprised of a Novell
trademark followed by a generic name. If Company later provides a
suitable replacement name, Novell will discontinue use of the generic
name and will use the new replacement name, Novell will discontinue
use of the generic name and will use the new replacement trademark as
soon as it is able to do so without incurring additional costs or
disruption of distribution. In the event that there is a dispute
between the parties as to whether the replacement trademark or generic
name should be used only in a particular jurisdiction versus
worldwide, then each party shall escalate the dispute to the senior
vice president level and the respective senior vice president level
and the respective senior vice presidents shall promptly meet and
resolve the dispute.
d. USAGE. Novell agrees not to use NETOBJECTS product names as
possessives and, subject to Section 7.c, to always include NetObjects
in the product name of the Licensed Works (i.e. NetObjects Fusion, not
simply Fusion). In addition, Novell agrees to attribute the Licensed
Marks in an industry acceptable manner.
8. CONSIDERATION. Unless otherwise stated in this Agreement, each party shall
bear its respective costs in performing hereunder.
a. LICENSE FEES AND OTHER PAYMENT SCHEDULE. The parties shall pay
license fees and other payments set forth in Exhibit G.
b. NO LICENSE FEES FOR CERTAIN USES. No royalty or other charge shall be
payable by Novell for any copies of Licensed Works that are returned
and/or unused copies (e.g., payments previously made on returned
copies may be taken as a credit against payments owed
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for further copies), or that are used, executed, reproduced,
displayed, performed and/or distributed:
i. For internal development, maintenance or support activities
pertaining to the License Works. (Internal use by Novell for
other purposes shall be royalty-bearing as set forth in Exhibit
G), or
ii. For sales demonstrations or customer evaluation, testing,
maintenance or support activities, or
iii. Provided free of charge (bundled with NWSB) to non-profit
organizations or educational institutions such as universities,
for uses not related to the internal administration and operation
of such institution, or
iv. For training or educational purposes that are directly related to
the sale and licensing of the Licensed Works, or
v. As back-up, archival, or escrow copies for customers, or
vi. For use by resellers (to the extent Novell authorizes royalty
free use of Novell products by resellers under its standard
reseller programs and only if bundled with NWSB in a
free-of-charge bundle; provided that program and subscription
fees for reseller programs shall not be considered a "charge" for
purposes of this subsection vi), or
vii. For promotional purposes and only if bundled with NWSB in a
free-of-charge bundle. The term "promotional purposes" shall not
be construed to include providing the Licensed Works to a
customer or third party in connection with a revenue-generating
transaction (e.g. Selling copies of a Novell product and offering
promotional copies of the Licensed Work in connection with the
sale of the Novell product.)
c. PRICING CHANGE. If Company or its licensees make the Licensed Works
(other than updates, error corrections, and fixes) Generally Available
free of charge, all licenses to Novell under this Agreement shall
immediately convert to royalty-free licenses and Novell's obligation
to pay royalties for copies sold after such time shall also terminate.
d. INVOICES AND LICENSE REPORTS. Within forty-five (45) days after end
of each Novell fiscal quarter, Novell will provide Company with
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payment and a license report indicating all royalties payable for that
quarter and the basis for calculation of such royalties in a form
reasonably determined by Novell. If no license activity occurred
during the quarter, Novell will submit a report indicating no
activity. Novell will send all license reports and payments to
Company at the Company accounting address designated in Exhibit D,
which address may be changed by providing written notice to Novell.
e. TAX CONSEQUENCES. All license fees are exclusive of all applicable
taxes. The party making payment ("Payer") shall be responsible for
all sales, use, excise, value added and/or equivalent taxes arising
out of the payment and shall either include such taxes with the
payment or shall provide the other party, in advance, with a valid
exemption certificate or other documentation to successfully claim
exemption from the tax. Payer shall not be responsible for: (a)
taxes based upon the other party's net income, capital, or gross
receipts, or (b) any withholding taxes imposed if such withholding tax
is allowed as a credit against U.S. income taxes of Payer such as a
withholding tax on a royalty payment where such withholding is
required by law. In the event Payer is required to withhold taxes,
Payer agrees to furnish to the other party all required receipts and
documentation substantiating such payment. If Novell is required by
law to remit any tax or duty on behalf, or for the account, of other
party agrees to reimburse Novell within thirty (30) days after Novell
notifies other party in writing of such remittance.
f. AUDIT. The parties will maintain complete and accurate accounting
records, in accordance with generally accepted accounting practices,
to support and document amounts due and will retain such records for
three (3) years after payment is made. A party will, upon written
request of the other party, provide audit access to such records to a
mutually acceptable independent accounting firm that is chosen and
compensated by the other party. Such access will be granted only
during normal business hours and no more frequently than once in each
calendar year. The audit will not interfere with the audited party's
normal business activity. The accounting firm will be required to
hold all information received during the audit in confidence and will
be authorized to report to the other party only the amount of payments
actually due under the Agreement for the period examined. The costs
for such audit shall be paid for (i) by Company if the Discrepancy is
less than 5%; (ii) equally by both Company and Novell if the
Discrepancy is 5-10%; or (iii) by Novell if the Discrepancy is more
than 10%. "Discrepancy" for the purposes of this provision shall mean
the
8
difference between what was reported or paid to Company and the actual
royalty due to Company.
9. DELIVERY AND ACCEPTANCE. Company shall deliver the Licensed Works at each
milestone in accordance with the schedule of Milestones in Exhibit C. The
Licensed Works and Documentation shall be on a CD in a form designated by
Novell. The Licensed Works must meet the Product Requirements as defined
in Exhibit C.
10. DEVELOPMENT REQUIREMENTS. Company shall develop the Licensed Works in
compliance with this Section.
a. PRODUCT REQUIREMENTS. The Licensed Works shall meet the Product
Requirements in Exhibit C and the Localization Requirements in Exhibit
F.
b. UPDATE. Within thirty (30) days of General Availability of Code
implementing enhancements or new features in a Comparable Product.
Company shall deliver Code to Novell that implements the same
enhancements and new features in the Licensed Works.
c. HARMFUL CODE. Company agrees to implement reasonable procedures
adequate to prevent any Code provided to Novell hereunder from being
contaminated with Harmful Code. If Company learns or suspects that
any Code provided to Novell under this Agreement contains any Harmful
Code, Company will immediately notify Novell and make reasonable
efforts to remove the Harmful Code. The remedies provided by this
section are in addition to any other remedies Novell may have.
11. ENGINEERING AND END USER SUPPORT.
a. ENGINEERING SUPPORT. These engineering support obligations are
independent of the maintenance and end user support obligations of
Section 11.b, and do not modify the obligations of that Section in any
way.
i. Engineering Support. The Engineering Managers in Exhibit D shall
be the sole points of communication on all engineering support
issues.
b. MAINTENANCE AND END USER SUPPORT.
i. Company shall provide maintenance and support for the Licensed
Works according to the terms and conditions of Exhibit E hereto.
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ii. Within thirty (30) days of General Availability of Code
correcting an Error in a Comparable Product, Company shall
deliver Code to Novell that corrects the same Error in the
Licensed Works. This requirement shall not be construed as
modifying or limiting Company's obligations under Exhibit E.
12. PRODUCT PACKAGING & END USER LICENSE. Novell will determine the packaging
for the Licensed Works at its sole discretion. Company will embed the
following in the master copy of the Licensed Works provided to Novell: (i)
Company's standard terms and conditions under which the end user will
license or evaluate the Licensed Work (with Company as the licensor) in
electronic form (the "▇▇▇▇"), and (ii) the end user Documentation in
electronic form. Novell will reproduce the Licensed Works without
modification as delivered to Novell, including the ▇▇▇▇. Novell will have
no obligation to insert or include any additional license agreement other
than the hard copy ▇▇▇▇, any brochure, or other materials with the Licensed
Work. Company shall be responsible for producing and delivering all hard
copy EULAs to the shipping address designated by Novell. The form
(excluding content) of the ▇▇▇▇ is subject to Novell's reasonable approval.
Company shall bear all production and insertion costs related to including
the ▇▇▇▇ in NWSB.
13. TERM AND TERMINATION. This Agreement shall be effective upon the Effective
Date and shall remain in force for a period of one (1) year from FCS (the
"Initial Term"), unless otherwise terminated as provided in this Section
13. After the Initial Term, this Agreement shall automatically renew for
consecutive one (1) year periods, unless terminated as provided in this
Section 13.
a. TERMINATION WITHOUT CAUSE. After the Initial Term, Novell may
terminate this Agreement without cause upon not less than 90 days
written notice to Company. After the first renewal year (i.e. Initial
Term plus one year), Company may terminate this Agreement without
cause upon not less than 90 days written notice to Novell.
b. TERMINATION FOR CAUSE. Either party may terminate this Agreement for
the substantial breach by the other party of a material term. The
terminating party shall first give the other party written notice of
the alleged breach and a reasonable period of at least thirty (30)
days in which to cure the alleged breach. If a cure is not achieved
during the cure period, then the parties shall enter into the dispute
resolution procedures specified in Section 14. In the event of
unsuccessful completion of such dispute resolution procedures, the
parties shall submit to mandatory mediation with a mutually agreed
upon mediator, such mediation to be completed within thirty (30)
10
days and to be held in Salt Lake City, Utah. Termination of the
Agreement shall occur upon the expiration of the cure period and the
subsequent unsuccessful completion of the dispute resolution
procedures specified in Section 14 and mandatory mediation as required
by this Section. Neither party shall be precluded from seeking
temporary equitable remedies.
c. EFFECT OF TERMINATION. Upon termination, the licenses granted to
Novell pursuant to this Agreement shall terminate with respect only to
any New Version of NWSB that is made Generally Available after the
effective date of termination. Except as stated in this Section 13.c,
termination of this Agreement shall not affect any licenses granted to
Novell, provided that all licenses shall terminate upon Novell's
discontinuance of all versions of NWSB released prior to such New
Version.
14. DISPUTE RESOLUTION PROCEDURES. The parties agree to negotiate in good
faith to resolve all contract disputes arising out of or related to this
Agreement in accordance with this Section 14. Primary responsibility for
instigating resolution of any contract dispute arising out of or related to
this Agreement shall reside in the parties' Project Managers or their
designees; the parties do not hereby give their Project Mangers authority
to bind the parties, but agree that binding resolutions can only be entered
by duly authorized representatives, and that this Agreement does not
appoint the Project Mangers as such. The party instigating dispute
resolution procedures shall be referred to below as the "Complaining
Party," and the other party shall be referred to below as the "Responding
Party." Any physical meetings between the parties shall be held at the
offices of the Responding Party, or another mutually agreed upon location,
all travel and expenses to be born by the Complaining Party. The "Dispute
Resolution Period" shall commence on expiration of the cure period.
a. During the first ten (10) days of the Dispute Resolution Period, the
Project Manager of the Complaining Party shall initiate one (1) or
more meetings (by teleconference or other mutually agreeable
arrangement) with the Project Manager of the Responding Party at which
the parties shall attempt to reach a mutually agreeable resolution of
the contract dispute. In the event the Project Manager of the
Complaining Party fails to initiate discussions, the dispute shall be
deemed resolved without prejudice. In the event the Project Manager
of the Complaining Party fails to initiate discussions, the dispute
shall be deemed resolved without prejudice. In the event the Project
Manger of the Responding party
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refuses to be reasonably available for such efforts, the dispute
resolution procedures shall be deemed unsuccessfully completed.
b. During the second ten (10) days of the Dispute Resolution Period, the
Project Manager of the Complaining Party shall initiate one (1) or
more meetings (by teleconference or other mutually agreeable
arrangement) between representatives at the next level of management
above that of the Project Mangers of Company and Novell at which the
parties shall attempt to reach a mutually agreeable resolution of the
contract dispute. In the event the project Manager of the Complaining
Party fails to initiate such meetings or the Complaining Party
representative fails to participate, the dispute shall be deemed
resolved without prejudice. In the event the Responding Party fails
to identify its representative or to make its representative
reasonably available for such meetings, the dispute resolution
procedures shall be deemed unsuccessfully completed.
c. During the third ten (10) days of the Dispute Resolution Period, if
negotiations have failed to resolve any such contract dispute to the
satisfaction of both parties, then each party shall nominate one
officer of a rank that is the next level of management above its
representative designated in Section 14.b. The Project Manager of the
Complaining Party shall initiate the meeting between the meeting
between these representatives. These representatives shall attempt in
good faith to resolve the contract dispute. In the event the Project
Manager of the Complaining Party fails to initiate such meetings or
the Responding Party representative fails to participate, the dispute
shall be deemed resolved without prejudice. In the event the
Responding Party fails to identify its representative or to make its
representative reasonably available for such meetings, the dispute
resolution procedures shall be deemed unsuccessfully completed.
15. GENERAL TERMS.
a. ASSIGNMENT. Neither party shall transfer or assign any right or
obligation set forth in this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably
withheld.
b. CHANGE OF CONTROL OR ACQUISITION. If a Change of Control to Company
occurs, Novell shall have the right upon written notice to terminate
this Agreement immediately and have returned any or all Confidential
Information then in the possession of Company.
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c. CHANGES. This Agreement may be modified only by a writing that is
executed by authorized representatives of both parties.
d. CONFIDENTIALITY AND INFORMATION EXCHANGE. It is the intention of
Company and Novell to transfer and/or exchange information, including
confidential information, as may be necessary. Such information may
be disclosed in oral, visual, or written form (including magnetic,
optical, or other media).
i. The party receiving confidential information under the Agreement
("Recipient") shall make use of the confidential information only
for the purposes of the Agreement. Nothing in this Agreement
shall be construed to limit either party's right to independently
develop or acquire products without use of the other party's
confidential information. Further, either party shall be free to
use the residuals resulting from access to or work with the other
party's confidential information, provided that such party
otherwise complies with the non-disclosure provisions hereof.
The term "residuals" means general information in non-tangible
form which may be retained by persons who have had access to the
confidential information. The foregoing residuals rights shall
not be deemed to grant either party a license, by implication,
estoppel or otherwise, under the other party's patents or
copyrights.
ii. The Recipient shall protect the disclosed confidential
information by using the same degree of care, but no less than a
reasonable degree of care, to prevent the unauthorized use,
dissemination, or publication of the confidential information as
the Recipient uses to protect its own confidential information of
a like nature.
iii. The Recipient's duty to hold confidential information in
confidence expires five (5) years, or in the case of source code
fifteen (15) years, after its receipt. The expiration of the
duty of confidentiality shall not modify other restrictions on
the Recipient including, or example, any restrictions on
distribution of source code arising out of a granted copyright
license.
iv. The Recipient's obligations shall only extend to confidential
information that is marked as confidential at the time of
disclosure or that is unmarked (e.g., orally disclosed) but is
treated as confidential at the time of disclosure.
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v. This Agreement imposes no obligation upon Recipient with respect
to information that: (a) was in Recipient's possession before
receipt from the disclosing party ("Discloser"); (b) is or
becomes a matter of public knowledge through no fault of
Recipient; (c) is rightfully received by the Recipient from a
third party without a duty of confidentiality; on the third
party; (e) is independently developed by the Recipient without
thereby violating the Discloser's patent or copyright; (f) is
disclosed under operation of law after all reasonable means have
been afforded to the Discloser to protect the information; or,
(g) is disclosed by the Recipient with Discloser's prior written
approval.
e. CONSTRUCTION. The headings in this Agreement are provided for
reference only and shall not be used as a guide to interpretation.
When used in this Agreement, the singular includes the plural and the
plural includes the singular, and gender related pronouns include the
feminine, masculine and neuter.
f. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between the parties as to its specific subject matter
and merges all prior discussions between them with regard to such
specific subject matter. Neither of the parties shall be bound by any
conditions, definitions, warranties, understandings, agreements, or
representations, whether written or oral, with respect to such
specific subject matter other than as expressly provided in the
Agreement or as duly set forth on or subsequent to its effective date,
in a written document that is signed by a duly authorized
representative of each party. However, the parties acknowledge that
they do not intend, at the present time, to merge any independent
written agreements existing between them and executed prior to the
execution of this Agreement, and such independent agreements shall not
be considered merged into this Agreement except as specifically set
forth in this Agreement.
g. EXPORT OF TECHNICAL DATA. Each Party agrees to comply with U.S.
export laws and regulations when exporting any materials or any items
licensed or developed under this Agreement or any portion thereof, or
any system containing such materials or items or portion thereof, or
any technical data or other Confidential Information, or any direct
product of any of the foregoing (collectively, "Program") from the
U.S. or re-exporting (as defined in Section 734.2(b) of the Export
Administration Regulations, as amended ("Regulations")) a Program from
one foreign country to another. It is the exporting party's
responsibility to comply with the U.S. Government
14
requirements as they may be amended from time to time. Without
limiting the generality of the foregoing: (i) regardless of any
disclosure made by the exporting party to the other party of an
ultimate designation of a Program, the exporting party shall not
export or transfer, whether directly or indirectly, a Program, to
anyone outside the U.S. (including further export if the exporting
party took delivery of the Program outside the U.S.) without first
complying strictly and fully with all export controls that may be
imposed on the Program by the U.S. Government or any country or
organization of nations within whose jurisdiction the exporting party
operates or does business; and (ii) absent any required prior
authorization from the Bureau of Export Administration, U.S.
Department of Commerce, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, the exporting party will not export or re-export the Program to
any country in Country Groups D:1 or E:2 as defined in the supplement
No. 1 to Section 740 of the Regulations, or such other countries as
come under restriction (including embargo) by action of the U.S.
Government, or to nationals from or residing in the foregoing
countries, without first obtaining permission from the appropriate
U.S. Government authorities. Each party will reasonably cooperate
with the other party in obtaining export licenses or approvals.
h. WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is set forth in a writing that refers to the
provisions so waived and is executed by an authorized representative
of the party waiving its rights. No failure or delay by either party
in exercising any right, power or remedy will operate as a waiver of
any such right, power or remedy.
i. FORCE MAJEURE. Neither party shall be liable in damages or have the
right to cancel or terminate this Agreement for any delay or default
in performance if such delay or default is caused by unforeseen
conditions or conditions beyond the control of the delaying or
defaulting party, including but not limited to acts of God, government
restrictions, continuing domestic or international problems such as
wars or insurrections, strikes, fires, floods, work stoppages and
embargoes. Either party shall have the right to terminate this
Agreement upon sixty (60) days prior written notice if the delay or
default of the other party due to any of the above-mentioned causes
continues for a period of six (6) months. Each party shall give the
other party prompt written notice of any such condition likely to
cause any delay or default.
15
j. FREEDOM OF ACTION. This Agreement shall not prevent either party from
(i) entering into any agreement similar to this Agreement with any
corporation or other entity in any industry or any non-profit body
such as a university or a government, (ii) developing, manufacturing
and/or selling any product or service that can compete with the other
party's products or services in the marketplace, or (iii) developing
for its products features that are the same as or similar to features
of products of the other party. The foregoing shall not be deemed to
grant either party any license, by implication, estoppel or otherwise,
under the other party's patents, copyrights, trade secrets or other
intellectual property rights.
k. INTELLECTUAL PROPERTY INDEMNITY.
i. Company shall defend or settle any claim made or suit or
proceeding brought against Novell and its subsidiaries or
affiliates under its control, and their directors, officers,
employees, and agents, against any and all losses, judgments,
awards, and costs (including reasonable legal fees and expenses)
arising out of or related to any claim that the Licensed
Trademarks or Licensed Works infringe or violate the copyright,
trademark, trade name, trade secret, or patent rights of any
third party. Company will defend at its sole expense all suits
or proceedings arising out of the claims described above,
provided that Novell gives Company prompt notice and control of
any claim of which it learns. No settlement that prevents Novell
from continuing to use Licensed Works will be made without
Novell's prior written consent unless Company procures for Novell
the right to continue using the Licensed Works, or replaces or
modifies the Licensed Works so that it becomes non-infringing.
Novell will have the right to participate in the defense of any
claim involving the use of Licensed Works, provided that Company
will not be responsible for indemnifying Novell for the cost of
Novell's attorney's fees should Novell elect to participate in
such defense.
ii. Company shall have no liability for any claim based upon
combination of Licensed Works with non-Company software or
hardware if such infringement would have been avoided but for
such. The foregoing limitation with respect to hardware shall
not apply if the Licensed Works are merely being executed on
industry standard hardware and software in accordance with the
manner in which Company intends its Licensed Works to be
operated. Company shall have no
16
liability for any claim based upon a modified version of the
Licensed Work where the alleged infringement would not have
occurred but for the modifications to the Licensed Works not
performed by Company or its agent.
iii. If the Licensed Works, in whole or in part, are or in Company's
option may become, the subject of any claim, suit or proceeding
for infringement of, or it is judicially determined that the
Licensed Works, in whole or in part, infringe any third party's
intellectual property right, or if the Licensed Work's use is
enjoined, then Company may, at its option and expense, and using
reasonable efforts to act as soon as possible: (1) procure for
Novell the right to continue use of the Licensed Works; (2)
replace or modify the Licensed Works so as not to infringe such
third party's intellectual property right while conforming, as
closely as possible, to the specifications agreed upon by the
parties, (3) if the parties mutually agree, Novell may undertake
to replace or modify the Licensed Works so as not to infringe
such third party's intellectual property right and such work
shall be reimbursed by Company at a mutually agreeable fee
structure.
iv. This Section 15.k shall represent the entire and exclusive
obligation of Company to Novell regarding any claim that the
Licensed Works infringe the intellectual property rights of a
third party.
l. INDEPENDENT CONTRACTORS. Each party is and shall remain an
independent contractor with respect to all performance under this
Agreement. No employee of either party shall be considered an
employee or agent of the other party for any purpose. Each party
assumes sole responsibility for the supervision, daily direction and
control, payment of salary (including withholding of income taxes and
social security), worker's compensation, disability benefits and the
like of its employees. Nothing in this Agreement shall be construed
to prevent either party from delegating performance under this
Agreement to independent contractors who have entered into written
agreements consistent with and at least as restrictive as the
provisions contained in this Agreement. However, the contracting
party shall remain primarily responsible for the performance of its
subcontractors and their compliance with such provisions, and hereby
waives any defense alleging that it has no liability as a result of a
claim of breach by any such permitted subcontractors.
17
m. LAWS. The validity, construction, and performance of this Agreement
will be governed by the substantive laws of the State of Utah without
regard to any choice of law provisions. The parties agree that any
dispute relating to this Agreement shall be subject to any court of
competent jurisdiction after satisfaction of any condition precedent
stated in this Agreement. The prevailing party in any action to
enforce the terms of this Agreement entered into hereunder shall be
entitled to recover its costs and expenses, including reasonable
attorney's fees, incurred in connection therewith, in addition to any
other relief to which such party is entitled. Each party shall, at
its own expense, comply with any governmental law, statute, ordinance,
administrative order, rule or regulation relating to its duties,
obligations or performance under this Agreement.
n. LIMITATION OF LIABILITIES. THE REMEDIES PROVIDES IN THIS AGREEMENT
ARE THE SOLE AND EXCLUSIVE REMEDIES OF THE PARTIES. NEITHER PARTY
SHALL IN ANY EVENT BE LIABLE TO THE OTHER, OR TO ANY LICENSEE,
SUBLICENSEE, OR CUSTOMER OF THE OTHER UNDER THIS AGREEMENT FOR LOSS OF
PROFITS, LOSS OF BUSINESS, LOSS OF USE OR OF DATA, OR FOR INTERRUPTION
OF BUSINESS. NEITHER PARTY SHALL IN ANY EVENT BE LIABLE FOR INDIRECT,
SPECIAL, RELIANCE, INCIDENTAL, COVER, OR CONSEQUENTIAL LOSS OR DAMAGE
OF ANY KIND ARISING UNDER THIS AGREEMENT, WHETHER IN A CONTRACT, TORT
OR OTHER ACTION FOR OR ARISING OUT OF ALLEGED BREACH OF WARRANTY,
ALLEGED BREACH OF CONTRACT, DELAY, NEGLIGENCE, STRICT LIABILITY OR
OTHERWISE. Except as to the obligations set forth in Section 15.k, in
no event shall either party be liable under this Agreement to the
other, its successors and assigns for any damages exceeding total
payments paid or due by both parties under this Agreement.
o. NOTICES. All notices to a party under this Agreement shall be
delivered to that party's Project Manager at the address stated in
Exhibit D. All notices required or permitted to be given under this
Agreement shall be in writing. A notice shall be validly given upon
the earlier of confirmed receipt by the recipient or fourteen (14)
days after deposit, postage prepaid, with the US Postal Service as
first class mail. Notices may be delivered by telefax, overnight
service or courier and shall be validly given upon confirmed receipt.
18
p. REPRESENTATIONS AND WARRANTIES.
i. Ownership. Company warrants to Novell that Company has a valid
right to modify, distribute, and sublicense the Licensed Works.
Company further warrants that, to the best of its knowledge
(without further research or due diligence), the Licensed Works
do not infringe any person's patent, copyright, trademark, trade
name or trade secret rights, that Company has the right to grant
to Novell all rights to Licensed Works granted herein without
violating any rights of any third party, and that to Company's
knowledge there is currently no actual or threatened suit by any
third party based on an alleged violation of these rights by
Company.
ii. Performance. Company warrants to Novell (and not to End Users),
for a period of 90 days from the date of their respective initial
delivery, that the initial delivery of the Licensed Works and
each upgrade commencing on the last Milestone in Exhibit C will
perform without Error. Novell's sole and exclusive remedy for
breach of the foregoing warranty shall be for Company to use
commercially reasonable efforts to fix non-conformities promptly
and redeliver a corrected copy to Novell. Company further
warrants to Novell, for a period of 90 days from the date of
their respective initial delivery, that all media containing
Licensed Works and related materials delivered to Novell will be
free from physical defects in materials and workmanship.
Novell's sole and exclusive remedy for breach of the foregoing
warranty shall be for Company to ____ the Licensed Works.
iii. Year 2000. Upon execution of this Agreement, Company will inform
Novell in writing of its year 2000 policies and of the level of
compliance of the Licensed Works with the Year 2000 warranty
below. Company warrants the Licensed Works are Year 2000
compliant in that (i) they accurately process, address, store,
and calculate date data from, into, and beyond the years 1999,
2000 and 2001, including leap year calculations, and (ii) all of
their date-related functionality and data fields identify century
and millennium, and (iii) they are able accurately to perform
calculations that involve a four-digit year field. This warranty
begins when Novell accepts the Licensed Works as meeting the
relevant Product Requirements and ends the first date after
January 1, 2001, that the Licensed Works operate without a breach
19
of this warranty for a consecutive six month period. If Company
breaches this warranty, in addition to any other remedies
available to Novell and at no additional cost to Novell, Company
will promptly assign senior engineering staff to work full-time
remedying the breach until the Licensed Works comply with this
warranty. This warranty shall survive termination of this
Agreement.
iv. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY WARRANTIES OR REPRESENTATIVE OF ANY KIND, EXPRESS OR
IMPLIED, WITH RESPECT TO DELIVERABLES, LICENSED WORKS, MATERIALS,
INVENTIONS, INFORMATION OR ANY OTHER WORK OR OTHERWISE UNDER THIS
AGREEMENT, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL SUCH
WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES
OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE.
q. SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, illegal or unenforceable, the
remaining provisions shall remain in full force and effect and shall
be interpreted, to the extent possible, to achieve the purpose of this
Agreement as originally expressed. The parties further agree to
substitute for the invalid provision a valid provision which most
closely approximates the intent and economic effect of the invalid
provision.
r. SUBSIDIARIES. All rights and licenses granted to Novell in this
Agreement shall apply to Novell's Subsidiaries. Company agrees that
it may not seek to enforce any obligation of Novell (or its
Subsidiaries) through a legal action brought against a Subsidiary
except to the extent that such action seeks injunctive relief against
that particular Subsidiary. Novell hereby guarantees the performance
of its Subsidiaries under this Agreement, and shall be jointly and
severally liable for its Subsidies' acts and omissions.
s. SURVIVAL OF TERMS. In the event of a termination of this Agreement,
all obligations of confidentiality (including those specified in
Section 15.d), the terms of Section 15.k (Intellectual Property
Indemnity), Section 15.n (Limitation Of Liabilities), and Section 15.p
(Representations And Warranties), and other provisions which by
20
their nature survive termination, shall continue in effect in
accordance with their terms.
t. VOLUME OBLIGATIONS. Except as explicitly stated in this Agreement,
neither party shall have an obligation (i) to offer any product or
service to any third party by way of sale, license or otherwise, or
(ii) to use any minimum level of effort in the promotion, marketing,
licensing or sales of any products or services, including products or
services to the other party, or (iii) to purchase or license any
minimum amount of products or services from the other party.
u. RESERVATION OF RIGHTS. Except as explicitly stated in this Agreement,
neither party grants any rights, in whole or in part, other than as
expressly granted therein. Each party reserves to itself all rights
not explicitly granted to the other in this Agreement.
16. SIGNATURES.
IN WITNESS WHEREOF, each party has executed this Agreement by signature of
its authorized representative, and this Agreement shall become effective as of
the Effective Date.
NOVELL, INC. NETOBJECTS, INC.
Signature: Signature:
---------------------- ------------------------
Name: Name:
--------------------------- -----------------------------
Title: Title:
-------------------------- ----------------------------
Date: Date:
--------------------------- -----------------------------
21
EXHIBIT A
Licensed Works and Other Deliverables
1. LICENSED WORKS.
a. NetObjects Fusion 3.01 (single user version only) and all upgrades,
updates, enhancements, maintenance modifications and new versions if
and when created during the term of this Agreement. Licensed Works
also include all localized versions Company is required to Deliver
pursuant to Exhibit F.
EXHIBIT B
Licensed Trademarks
1. TRADEMARKS.
NetObjects Fusion (including stylized versions).
EXHIBIT C
Product Requirements and Milestones
1. MILESTONES.
-------------------------------------------------------------------------------
DELIVERY SCHEDULE
-------------------------------------------------------------------------------
MILESTONE MILESTONE DATE DESCRIPTION
-------------------------------------------------------------------------------
One Effective Date FCS quality Master CD of the
Licensed Work and documentation
for English, Portuguese,
French, Italian, German,
Spanish
-------------------------------------------------------------------------------
Two November 7, 1998 FCS quality Master CD of the
Licensed Work and documentation
for Chinese and simplified
Chinese
-------------------------------------------------------------------------------
Three February 15, 1999 FCS qualify Master CD of the
Licensed Work and documentation
for Korean
-------------------------------------------------------------------------------
2. REQUIREMENTS. Each delivery of the Licensed Works must meet the following
requirements:
a. General Requirements.
i. The Licensed Works must meet the requirements of, and provide
functionality consistent with the purposes of, this Agreement.
ii. The Licensed Works must meet industry standards of quality and
performance.
iii. The Licensed Works must have functionality at least as great as
and fully compatible with all versions of Comparable Products.
iv. The documentation for the Licensed Works must be provided to
Novell in PDF format. Documentation provided to the user in
electronic form on the media containing the Licensed Works must
contain installation instructions.
v. Any promotional messages displayed or conveyed by means of the
Licensed Works to Novell's customers must have been previously
approved by Novell in writing.
3. PRODUCT GROUP REQUIREMENTS. The Licensed Works must include, at a minimum,
the following clients: ▇▇▇▇▇, ▇▇▇▇▇, Windows NT 4.x.
EXHIBIT D
Project and Engineering Managers, Company Accounting Address
-------------------------------------------------------------------------------
Company Project Manager Novell Project Manager
-------------------------------------------------------------------------------
Name ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------------------------------------------------
Title Business Development Product Manager
-------------------------------------------------------------------------------
Address ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------------------------
Phone (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------
Fax (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------
E-mail Address ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ ▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Company Engineering Manager Novell Engineering Manager
-------------------------------------------------------------------------------
Name ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------------------------
Title Product Manager Product Engineer Manager
-------------------------------------------------------------------------------
Address ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------------------------
Phone (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------
Fax (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------
E-mail Address ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Company Accounting Contact Novell Accounting Contact
-------------------------------------------------------------------------------
Name ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Novell, Inc.
-------------------------------------------------------------------------------
Title Controller Technology Licensing
-------------------------------------------------------------------------------
Address ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇/▇ ▇▇-▇▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
-------------------------------------------------------------------------------
Phone (▇▇▇) ▇▇▇-▇▇▇▇ N/A
-------------------------------------------------------------------------------
Fax (▇▇▇) ▇▇▇-▇▇▇▇ N/A
-------------------------------------------------------------------------------
E-mail Address ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ N/A
-------------------------------------------------------------------------------
EXHIBIT E
SUPPORT REQUIREMENTS
1. Company shall provide support to Novell Customers regarding the use of
Licensed Works according to current Company technical support policies for
end-user purchasers of copies of the Licensed Works, provided however that
Novell Customers will not be entitled to any free phone support that may or
may not be made available to retail end-user purchasers of copies of the
Licensed Works. Novell acknowledges that Company may charge Novell
customers a fee for this support. Under no circumstances shall Company be
under any obligation to provide support for NWSB to Novell customers.
Novell agrees to provide a telephone number and other appropriate contact
information regarding technical support for NWSB to the appropriate Company
technical support personnel for the purposes of providing such information
to Novell or Company customers who inquire about technical support for
NWSB. Company reserves the right to change their policies towards
technical support for end-user purchasers of copies of the Licensed Works
at any time, provided that Company treats Novell's customers of the
Licensed Work at least as favorably as other retail customers of the
Licensed Work. This Section 1 shall survive termination of the Agreement
to the extend that Company continues to offer customer support for the
Licensed Work after termination.
2. As a mandatory part of the hard copy ▇▇▇▇, Company shall display a
conspicuous and clear message that Company will provide all support for the
Licensed Works. Such message will also provide the user with worldwide
telephone numbers that the user can call to obtain support. Such message
will also list the URLs which users can contact to obtain support
information.
EXHIBIT F
LOCALIZATION REQUIREMENTS
(Company Performs Enablement and Translation)
Company is responsible for all aspects of localization under the Agreement. The
Licensed Works shall be localized into the following target languages (check all
that apply):
-------------------------------------------------------------
Chinese X Japanese
-------------------------------------------------------------
Chinese X Korean X
(Simplified)
-------------------------------------------------------------
English X Brazilian X
Portuguese
-------------------------------------------------------------
French X Russian
-------------------------------------------------------------
Germany X Spanish X
-------------------------------------------------------------
Italian X
-------------------------------------------------------------
EXHIBIT G
LICENSE FEES ANY PAYMENT SCHEDULE
1. PER COPY ROYALTY. Subject to the terms of this Agreement and specifically
Section 8.b, Novell shall pay Company $[***].00 per each NWSB sold that
includes the Licensed Work (referred to as a "Copy for purposes of this
Exhibit G).
INTERNAL USE BY NOVELL. For Novell's internal use of the Licensed Work for
purposes other than the royalty-free purposes specified in Section 8.b,
Novell shall pay Company $[***].00 for each copy of the Licensed Works.
2. MINIMUM ROYALTY. Novell agrees to pay Company a minimum royalty of Five
Hundred Thousand Dollars ($500,000) during the Initial Term of the
Agreement ("Minimum Royalty"). The Minimum Royalty will be paid quarterly
in four (4) equal installments of $125,000, beginning with the first full
quarter after FCS. No Minimum Royalty shall be owed during any renewal
terms.
No Minimum Royalty shall be owed during the Initial Term if Novell is not
reasonably able to distribute or continue distribution of the Licensed Work
due to (i) Company's material breach of this Agreement, or (ii) an
allegation or claim that the Licensed Work violates the intellectual or
other proprietary rights of a third party. If there is a dispute regarding
whether (i) Novell is reasonably able to distribute or continue
distribution, or (ii) whether the interference with distribution is
material, then the Project Managers shall have the primary responsibility
to resolve such dispute, up to and including the dispute resolution
procedures set forth in Section 14.
3. QUARTERLY RECONCILIATION OF MINIMUM ROYALTY. Novell shall be entitled to
accumulate the quarterly royalty payments and offset them against future
quarterly Minimum Royalty amounts. (e.g. If actual royalties due to
Company in Q1 are $300,000 and in Q2 are $50,000, then Novell would not be
required to pay the $125,000 Minimum Royalty installment for Q2.)
4. NATURE OF DISTRIBUTION. This Agreement only grants to Novell a license to
distribute the Licensed Works, and does not transfer any right, title or
interest to any such Licensed Works to Novell's customers. Novell will
have the right to sell Licensed Works to customers only to the extent that
such products consist of non-software items. Use of the terms "sell,"
"license," "purchase," "license fees" and "price" and similar terms will be
interpreted in accordance with the foregoing.
*** Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule
406.
