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EXHIBIT 10.1
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
CONFIDENTIAL TREATMENT REQUESTED
LICENSE AGREEMENT
This License Agreement (the "Agreement") is made and entered into as of the 27th
day of June, 1997 (the "Effective Date").
BY AND BETWEEN: NORTHERN TELECOM LIMITED,
a corporation incorporated under the laws of Canada, having an
office at 0000 Xxxxx Xxxx, Xxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0,
on behalf of itself and its Subsidiaries and Affiliates
("Nortel")
AND: APPLIED DIGITAL ACCESS, INC.,
a corporation incorporated under the laws of California and
having an office at 0000 Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx,
X.X.X. 00000
("Licensee")
WHEREAS Nortel designs (or causes to be designed), produces and markets DSS II
Products and is in possession of certain proprietary rights in the technology
related to such products (the "DSS II Technology"); and
WHEREAS Licensee wishes to use, design, produce, market, sublicense, distribute
and support DSS II Products and certain products or software programs based upon
DSS II Technology; and
WHEREAS Nortel and Licensee have entered into a Letter of Intent pursuant to
which Licensee has expressed an interest in purchasing certain assets and
obtaining licenses in respect of the DSS II Technology; and
WHEREAS Licensee wishes to buy, and Nortel wishes to sell certain portions of
the DSS II Business as set out in the Asset Purchase Agreement; and
WHEREAS Nortel is willing to grant licenses in respect of the DSS II Technology
subject to certain obligations, as set forth in this Agreement, and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged by each of Nortel and Licensee, and Licensee wishes to obtain such
rights and undertake such obligations.
NOW THEREFORE in consideration of the mutual promises set forth in this
Agreement and the Asset Purchase Agreement, and other good and valuable
consideration, the receipt
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and adequacy of which is hereby acknowledged by each of Nortel and Licensee, the
Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 As used in this Agreement:
(a) "Affiliate" means any corporation or company which Nortel or
Licensee effectively owns or controls, directly or indirectly,
other than a Subsidiary, through the ownership or control of
shares in such corporation or company;
(b) "Agreement" has the meaning specified in the preamble;
(c) "Asset Purchase Agreement" means the agreement between Nortel and
Licensee, executed on even date to this Agreement, concerning the
sale of the DSS II Business;
(d) "Confidential Information" means any proprietary, scientific,
technical, planning, business, marketing, product or financial
information (including DSS II Information), formulas, patterns,
compilations, programs, devices, methods, techniques, processes,
data, trade secrets or know-how ("Information") of one of the
Parties or its Subsidiaries or Affiliates which is designated as
confidential or similar designation at the time of disclosure or
that would be understood by the Party receiving such Information
at the time of disclosure, exercising reasonable business
judgment, to be confidential;
(e) "Contractor" means a third party (including any subcontractors of
such third-party) contracted by a Party or a by a Subsidiary or
Affiliate of a Party to support or develop or assist in supporting
or developing a Nortel Authorized Product or a Licensee Product;
(f) "Customers" means all DSS II Business' customers as of the
Effective Date, with the exception of the Excluded Customers;
(g) "Derivative Works" means: (i) for material subject to copyright,
integrated circuit topography, or mask work protection, any work
which is based upon the DSS II Software or the DSS II Information,
such as a revision, modification, translation, abridgment,
condensation, expansion, collection, compilation or any other form
in which such pre-existing works may be recast, transformed or
adapted, (ii) for patentable or patented materials, any
adaptation, subset, addition, improvement or combination of the
DSS II
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Software or the DSS II Information, and (iii) for material subject
to trade secret protection, any new material, information or data
relating to and derived from the DSS II Software or the DSS II
Information, including new material which may be protectable by
copyright, patent or other proprietary rights, and with respect to
each of the above, the preparation, use and/or distribution of
which, in the absence of this Agreement or other authorization
from the owner, would constitute infringement or misappropriation
under applicable law;
(h) "Distributor" means a third party which enters into a distribution
agreement with a Party, or a Subsidiary or Affiliate of a Party,
or another Distributor, to license or distribute Licensed Products
or Nortel Authorized Products, as the case may be;
(i) "DSS II Business" means the business unit of Nortel that designs,
develops, markets and licenses the DSS II Products;
(j) "DSS II Intellectual Property" means any Nortel invention, patent,
utility model, copyright, industrial design, mask work or
integrated circuit topography right, or any Nortel right of
whatsoever nature in processes, techniques, improvements,
modifications, computer software and data, Confidential
Information, trade secrets or know-how, or any intangible right or
privilege of a nature similar to any of the foregoing which is
incorporated in or infringed by the DSS II Software or the DSS II
Information;
(k) "DSS II Products" means the DSS II products (including DSS II
Software and DSS II Information) which are comprised of software
proprietary to BC TEL, Microtel Limited and Nortel;
(l) "DSS II Information" means all design documentation, customer
product documentation (including training and operations),
installation and maintenance documentation, marketing materials
developed for general use, test specifications, Nortel proprietary
utilities and tools, command files for software development and
testing, and everything currently used by Nortel as of the
Effective Date to develop, modify, enhance and support the DSS II
Products to the extent available in accordance with Articles 3 and
4 hereof;
(m) "DSS II Software" means all of the source code, object code and
machine code for the DSS II Products as of the Effective Date as
described in Schedule "A" attached hereto;
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(n) "Effective Date" means the date set out in the preamble of this
Agreement;
(o) "End User" means a third party or parties licensed to use a
Licensed Product or a Nortel Authorized Product;
(p) "Enhancement" means any minor extensions of the features and/or
capabilities which are contained in the Licensed Materials as they
exist as of the Effective Date of this Agreement;
(q) "Excluded Customers" means the customers (including subsidiaries
and affiliates thereof) listed in Schedule "C" attached hereto;
(r) "Joint Venture" means a cooperative business enterprise formed
between Nortel and one or more other autonomous entities to
address more effectively certain mutual business interests and
opportunities;
(s) "Licensed Materials" means the DSS II Software and DSS II
Information;
(t) "Licensed Products" means the DSS II Software in source or object
code form, the DSS II Information, and any Derivative Works of the
DSS II Software and the DSS II Information developed by or on
behalf of Licensee (including Modifications and Enhancements);
(u) "Manufacturing Licensee" means a third party entity which has
entered into an agreement with Nortel to manufacture, in modified
or unmodified form, Nortel products and directly or indirectly
through Distributors, to sublicense and distribute Nortel products
under the brand name of Nortel or the Manufacturing Licensee;
(v) "Modifications" means any minor changes such as, but not limited
to, bug fixes, to the features and/or capabilities of the Licensed
Materials as they exist as of the Effective Date of this
Agreement;
(w) "Network Bid" means any Nortel bid or sale (including bids or
sales under multiple invoices) in which Nortel contracts with a
third party to sell or license equipment which consists primarily
of Nortel manufactured and/or designed products, and, which may
include OEM products or other non-Nortel products or any
combination thereof, and which also includes Nortel Authorized
Products, provided that such Nortel Authorized Products are used
to provide network management services for the OEM products or
other non-Nortel products in the bid or sale, and further provided
that all of the equipment in the bid or sale can be reasonably
construed as representing either a new and/or significant
extension of a communications
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network. Such a network can consist of hardware and/or software
configured in a manner as defined by either the customer or
Nortel. A bid or sale in which Nortel Authorized Products are
considered the primary element of the transaction and/or is the
primary basis for the transaction will not be considered a Network
Bid;
(x) "Nortel Authorized Products" means the DSS II Software in source
or object code form, the DSS II Information, and any Derivative
Works of the DSS II Software and the DSS II Information developed
by or on behalf of Nortel Companies (including Modifications and
Enhancements);
(y) "Nortel Companies" means Northern Telecom Limited and its
Subsidiaries, Affiliates, Joint Ventures and Manufacturing
Licensees;
(z) "Nortel Company" means one of the Nortel Companies;
(aa) "Party" means Nortel or Licensee;
(bb) "Parties" means Nortel and Licensee;
(cc) "Purchase Price" has the meaning ascribed to that term in the
Asset Purchase Agreement;
(dd) "Sublicense Agreement" means an agreement containing terms and
conditions which are the same as, or substantially similar to, the
terms and conditions contained in Schedule B;
(ee) "Subsidiary" means a corporation or company in which a Party
hereto effectively owns or controls, and continues to own or
control, directly or indirectly, more than fifty percent (50%) of
the voting stock or shares.
ARTICLE 2
GRANT OF RIGHTS
2.1 Nortel, to the extent of its legal right to do so, hereby grants to Licensee
(including its Subsidiaries and Affiliates, successors and assigns), subject
to the terms and conditions of this Agreement a perpetual, irrevocable,
worldwide, fully paid-up, transferable and assignable:
(a) exclusive license to:
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(i) use, copy, modify, have modified, and translate, directly
and indirectly, Licensed Products, including the right to
sublicense such rights to End Users at ADA's sole
discretion (provided that such sublicenses include usage
and confidentiality provisions at least as strict as those
imposed upon Licensee in this Agreement);
(ii) sublicense End Users (directly or indirectly), pursuant to
Sublicense Agreements, the right to use Licensed Products
in object code format only;
(iii) distribute (including through multiple layers of
distribution) Licensed Products; and
(iv) maintain, support and provide services, directly and
indirectly, in respect of Licensed Products;
(b) non-exclusive right under the DSS II Intellectual Property to the
extent necessary for Licensee and its sublicensees to exercise the
rights granted in 2.1(a).
The rights granted to Licensee in this section shall be non-exclusive with
respect to, (i) * and * and its existing and future sublicensees in * and *
only, (ii) the rights granted to * and * under the license to Prism Systems,
Inc. and under a source code escrow agreement, and, (iii) any rights granted by
Nortel (including its Subsidiaries, Affiliates, Manufacturing Licensees and
Joint Ventures) to existing Customers in accordance with its usual terms prior
to the Effective Date. Licensee is granted no rights in respect of the Licensed
Materials for *. Licensee acknowledges that * has exclusive rights in respect of
the Licensed Materials for *.
2.2 Nortel shall retain, and Licensee's licenses shall be subject to, only the
following rights:
(a) Nortel Companies shall have the right to license, distribute
(including through multiple layers of distribution) Nortel
Authorized Products, and provide services in respect of such
Nortel Authorized Products, to Excluded Customers. Licensee shall
have no right to license or distribute Licensed Products, or
provide services in respect of Licensed Products, to Excluded
Customers without the prior written consent of an officer of
Nortel at the senior vice president level or higher;
(b) Nortel Companies shall have the right to license and distribute
(including through multiple layers of distribution) Nortel
Authorized Products in Network Bids. Nortel Companies shall also
have the right to provide
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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services in respect of any Nortel Authorized Products licensed or
distributed pursuant to any such Network Bids. Nortel shall not
license or distribute Nortel Authorized Products on a stand-alone
basis with the exception of the Excluded Customers as defined in
this Agreement;
(c) For a period of * months following the Effective Date, Nortel
shall have the * to the DSS II Product * set out in Schedule E
(including subsidiaries and affiliates *), only upon *, a *.
Nortel shall only be entitled * in the event that Nortel, in its
reasonable judgment, determines * would materially adversely
affect * or result in a * or * to Nortel, and further provided
that * is based solely upon * and is not based upon a * provided
that * was willing * with such * on * which would be considered
reasonable having regard to standard industry practice. Except in
accordance with a * under this provision, Nortel shall not * this
provision. Licensee acknowledges that Nortel has *, or will be *
an * and its subsidiaries and affiliates *. In the event that *
with * is not * prior to the Effective Date, Nortel shall have the
right * after the Effective Date. Such * shall be in a * to the *
between * prior to the Effective Date;
(d) Nortel Companies shall have the right to license, distribute
(including through multiple layers of distribution) and provide
services in respect of Nortel products (other than Nortel
Authorized Products) which incorporate insignificant portions of
the Licensed Materials;
(e) Nortel Companies shall have the right to use, modify, have
modified, license and distribute (including through multiple
layers of distribution) and provide services in respect of the
Licensed Materials provided that any such use is in a Nortel
product that is not competitive or in competition with the
Licensed Products; and
(f) Nortel Companies shall have the right to use, modify, have
modified, license and distribute (including through multiple
layers of distribution) and provide services in respect of the
Licensed Materials provided that such use is for a purpose or
purposes other than for providing network management software or
services.
Nortel shall have the right to use, modify, have modified the Licensed Materials
as may be necessary for Nortel to exercise its rights under the exceptions
described above. Nortel shall not license, sublicense, use or provide services
or support in respect of the Licensed Materials other than as set forth in this
Section 2.2, except pursuant to a license obtained from Licensee or by other
written agreement between the Parties.
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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2.3 In the event that Licensee does not wish to license, distribute or provide
services in respect of Licensed Products to a given customer, Nortel and
Licensee shall negotiate in good faith the terms and conditions under which
Nortel may license, distribute and/or provide services in respect of Licensed
Products to any such customer. Such terms and conditions shall include a
reasonable royalty to be paid to Licensee for such Licensed Products. In the
event that Nortel licenses, distributes or provides services in respect of
Licensed Products to such a customer, Nortel shall have the right to modify such
Licensed Products as necessary to meet such customer's requirements. The
provisions of this Section 2.3 shall not in any way restrict Nortel's right to
license, distribute or provide support in respect of Nortel Authorized Products
pursuant to Network Bids as provided in Section 2.2(b).
2.4.1 Licensee may provide Licensed Products and Licensed Materials (including
Modifications and Enhancements) to Contractors to assist in the development or
support of Licensed Products. Prior to, or at the time of providing the Licensed
Materials or Licensed Products to a Contractor, Licensee shall enter into a
written agreement with the Contractor which requires that:
(a) the Contractor use the Licensed Materials and Licensed Products
exclusively for the benefit of Licensee;
(b) the Contractor incur the same obligations with respect to the use
of Licensed Materials and Licensed Products as those incurred by
Licensee under this Agreement; and
(c) all copies of the Licensed Materials and Licensed Products
provided to or made by the Contractor be returned to Licensee or
destroyed, including all copies stored in computer memories or
storage media, upon completion of its work for Licensee.
2.4.2 Nortel may provide the Licensed Materials and Nortel Authorized Products
(including Modifications and Enhancements) to Contractors to assist in the
development or support of Nortel Authorized Products. Prior to, or at the time
of providing the Licensed Materials or Nortel Authorized Products to a
Contractor, Nortel shall enter into a written agreement with the Contractor
which requires that:
(a) the Contractor use the Licensed Materials and Nortel Authorized
Products exclusively for the benefit of Nortel;
(b) the Contractor incur the same obligations with respect to the use
of Licensed Materials and Nortel Authorized Products as those
incurred by Nortel under this Agreement; and
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(c) all copies of the Licensed Materials and Nortel Authorized
Products provided to or made by the Contractor be returned to
Nortel or destroyed, including all copies stored in computer
memories or storage media, upon completion of its work for Nortel.
2.5 The aforesaid rights shall include the right to communicate to End Users
such portions of the DSS II Information as are reasonably needed by such End
Users to use the Licensed Products or Nortel Authorized Products, provided,
however, that, to the extent that Confidential Information of either Party is
being communicated, the recipients of such Confidential Information shall be
advised by the disclosing Party in writing at the time, or before such
communication, that Confidential Information is being communicated and further
provided that such recipients undertake, in writing, to keep such Confidential
Information confidential and not to use such Confidential Information except as
expressly permitted.
2.6 Licensee shall have no right to use the Licensed Materials or DSS II
Intellectual Property other than as set forth in this Agreement. Nothing herein
shall limit Nortel's right to grant licenses for activities other than those for
which the Licensee is granted an exclusive license hereunder. For greater
certainty, the exclusive rights granted hereunder shall not prejudice Nortel's
patent cross licenses or any other rights granted prior to the Effective Date.
Nothing in this Agreement shall preclude Nortel from independently developing
software with functionality which is the same as or similar to that in the
Licensed Materials or the Licensed Products, provided that none of the Licensed
Materials or Licensed Products are directly incorporated into such software.
2.7 Licensee grants to Nortel Companies a perpetual, non-exclusive,
royalty-free, worldwide right to make, use, copy, modify, license, distribute
(including through multiple layers of distribution) and provide support in
respect of all Modifications and Enhancements which Licensee may develop or have
developed during the term of this Agreement in connection with the Licensed
Materials. Nortel grants to Licensee and its Subsidiaries and Affiliates a
perpetual, non-exclusive, royalty-free, worldwide right to make, use, copy,
modify, license, distribute (including through multiple layers of distribution),
and provide support in respect of all Modifications and Enhancements which
Nortel may develop or have developed during the term of this Agreement in
connection with the Licensed Materials. All Enhancements and Modifications shall
be provided on an "AS IS" basis without any representations, warranties or
conditions.
2.8 Within thirty (30) days of the end of each calendar quarter, each of Nortel
and Licensee shall provide the other with a copy of all Modifications and
Enhancements developed during such preceding quarter together with all
applicable documentation, or, if applicable, written notice that no new
Modifications and Enhancements have been developed during such preceding
quarter.
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2.9 The parties may, from time to time, upon mutual agreement, amend Schedule C
to add additional entities. Nortel in its sole discretion, upon notice to
Licensee, may delete an entity or entities from Schedule C.
ARTICLE 3
THIRD PARTY SOFTWARE
3.1 Licensee acknowledges that the Licensed Materials contain certain
third-party software as further described in Schedule "D". Licensee further
acknowledges that Nortel does not have the right to grant sublicenses to such
third-party software. Licensee shall, prior to use of the Licensed Materials in
any manner, obtain the necessary licenses from the vendors of such third-party
software.
ARTICLE 4
PROVISION OF LICENSED MATERIALS
4.1 Nortel shall, to the extent of its legal right to do so, promptly provide to
Licensee the Licensed Materials. Nortel shall only be obliged to provide
Licensed Materials available to it or its Subsidiaries without any third-party
restrictions on transfer, and shall not be obligated to develop or produce,
except as expressly set forth herein, any new or unavailable Licensed Materials.
4.2 Nortel shall supply the Licensed Materials as soon as reasonably possible
after: (a) execution of this Agreement, and (b) receipt from Licensee of the
initial payment as set forth in the Asset Purchase Agreement. Nortel shall
substantially complete such supply within thirty (30) days thereafter.
4.3 Licensed Materials provided hereunder shall be deemed delivered upon
delivery to the common carrier chosen by Nortel, at the relevant facility of
Nortel or upon sending by Nortel if such Licensed Materials are delivered by
electronic means.
4.4 That portion of the Licensed Materials provided by Nortel to Licensee
pursuant to any prior licenses, confidentiality or non-disclosure agreements
shall be considered provided pursuant solely to this Agreement and subject only
to the terms and conditions hereof.
ARTICLE 5
TECHNICAL ASSISTANCE OBLIGATIONS
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5.1 Licensee shall perform all technical assistance or support obligations for
Customers of the DSS II Business as of the Effective Date. Failure of Licensee
to perform all such technical assistance or support obligations shall constitute
a material breach of this Agreement.
5.2 Licensee shall offer to license any of its Licensed Products and to provide
services (including technical support and assistance) in respect of such
Licensed Products to all Customers of the DSS II Business as of the Effective
Date. Failure of Licensee to offer such Licensed Products or services to any
such Customers shall constitute a material breach of this Agreement.
ARTICLE 6
ESCROW
6.1 Licensee shall be entitled to place the Licensed Materials and Licensed
Products in escrow with an escrow agent for the benefit of End Users.
6.2 In the event that Licensee:
(i) becomes insolvent or files an assignment in bankruptcy or fails to
have dismissed any petition seeking to have it declared bankrupt
within thirty (30) days after the filing thereof, or
(ii) after using its best efforts to support Licensed Products, ceases
all support of Licensed Products,
Licensee shall be entitled to grant an End User, pursuant to an escrow
agreement, the right to have access to the Licensed Materials and Licensed
Products in source code form, solely for internal use to support Licensed
Products sublicensed to such End User.
ARTICLE 7
CONFIDENTIALITY
7.1 Any Confidential Information (including "DSS II Information") provided by
one Party to another hereunder shall remain the property of the disclosing
Party, and the receiving Party shall be authorized to use such information or
materials only within the scope of the rights and licenses granted herein.
7.2 Any Confidential Information received by a Party shall be retained in
confidence and shall be used, disclosed, and copied solely for the purposes of,
and in accordance with, this Agreement. The receiving Party shall use the same
degree of care as it uses to protect
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its own confidential information of a similar nature, but no less than
reasonable care, to prevent the unauthorized use, disclosure or copying of the
Confidential Information.
7.3 Neither Party shall be bound by obligations set forth in this Agreement, or
any part thereof, restricting the disclosure, use or copying of Confidential
Information, if such Confidential Information:
(a) was known by the receiving Party prior to disclosure without
obligation of confidence;
(b) was lawfully in the public domain prior to its disclosure, or
becomes publicly available other than through a breach of this
Agreement;
(c) was disclosed to the receiving Party by a third party provided
such third party, or any other party from whom such third party
received such information, is not in breach of any confidentiality
obligation in respect of such information;
(d) is independently developed by the receiving Party, as evidenced by
its business records; or
(e) is disclosed when such disclosure is compelled pursuant to legal,
judicial, or administrative proceeding, or otherwise required by
.5 The specific terms and conditions of this Agreement shall be
held in confidence by both Parties and only disclosed as may be
agreed by both Parties, which agreement shall not be unreasonably
withheld by either Party.
7.4 All technical and other information provided or made available to a
Party prior to the execution of this Agreement which would have been covered by
the definition of Confidential Information had it been delivered pursuant to
this Agreement shall be deemed to be Confidential Information and to be subject
to the provisions of this Agreement.
7.5 The specific terms and conditions of this Agreement shall be held in
confidence by both Parties and only disclosed as may be agreed by both Parties,
which agreement shall not be unreasonably withheld by either Party.
ARTICLE 8
REPRESENTATIONS
8.1 Nortel makes no representations and gives no warranties or conditions in
respect of the Licensed Materials or Licensed Products except as set out in this
Agreement.
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8.2 Nortel represents and warrants that it has the authority to enter into this
Agreement and has obtained all rights and waivers necessary to grant the rights
granted hereunder. Nortel represents and warrants that the Licensed Materials
(except those portions excluded under Article 3) do not infringe any third-party
patent, copyright, Trade secret or other intellectual property right when used
in accordance with this Agreement.
8.3 Nortel represents and warrants that there are no existing, or to Nortel's
knowledge, threatened legal proceedings against Nortel in respect of its
ownership or rights in the Licensed Materials.
8.4 Nortel represents and warrants that no substantial or significant portions
of the Licensed Materials have been incorporated into other Nortel products
after August 15, 1996.
8.5 Nothing contained in this Agreement shall be construed as:
(a) requiring Nortel to file any patent application, to secure any
patent or to maintain any patent in force;
(b) constituting a warranty, condition or representation by Nortel as
to the validity or scope of any patent licensed hereunder;
(c) conferring any right to use, in advertising, publicity or
otherwise, any name, trade-name or trademark, or any contraction,
abbreviation or simulation thereof, except as expressly provided
in writing by Nortel; or
(d) conferring by implication, estoppel or otherwise upon Licensee any
license or other right under any intellectual property, except the
licenses and rights expressly granted hereunder.
8.6 NORTEL DISCLAIMS ALL WARRANTIES, CONDITIONS AND REPRESENTATIONS, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES AND CONDITIONS OF
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
8.7 LICENSEE'S SOLE REMEDY FOR BREACH OF THE REPRESENTATIONS, WARRANTIES AND
CONDITIONS CONTAINED IN THIS ARTICLE SHALL BE LIMITED TO THE INDEMNITY SET OUT
IN ARTICLE 9.
ARTICLE 9
INDEMNIFICATION
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9.1 Nortel shall indemnify, defend and hold Licensee harmless from any and all
claims, liabilities, damages, settlements, losses, expenses or costs (including
counsel fees) arising out of any breach of the representations, warranties or
conditions described in Article 8, and any infringement or alleged infringement
in any Licensed Materials. Licensee shall give Nortel prompt notice of, and
reasonable authority to defend or settle, any such claim and shall give, at
Nortel's expense, reasonable information and assistance. Nortel agrees not to
take any action which is inconsistent with this agreement in the conduct or
settlement of any action.
9.2 Nortel shall have no liability to Licensee in the event infringement of any
third-party patent, copyright, trade secret or other intellectual property right
arises from (a) portions of the Licensed Materials developed by Licensee (or any
of its Subsidiaries or Affiliates) for Nortel under the Master Agreement between
Northern Telecom Limited and ADA Canada, Inc. (this exclusion shall not,
however, include work done by employees of Licensee operating under the direct
management, direction and control of Nortel outside the scope of the Master
Agreement), (b) modification by Licensee of the Licensed Materials, or (c) the
combination of Licensed Materials with equipment or software not authorized or
provided by Nortel or otherwise approved by Nortel in the specifications or
documentation.
9.3 In no event shall Nortel's cumulative liability under this Article exceed *.
Each of Nortel's representations, warranties and conditions in Article 8, and
Nortel's obligation to indemnify Licensee pursuant to this Article 9, shall
expire * after the Effective Date of this Agreement. Licensee may receive
indemnification as provided herein provided that on or before such expiry date,
Licensee has delivered to Nortel written notice of a claim relating to such
representations, warranties, conditions or indemnification.
9.4 Subject to Sections 9.1 through 9.3, Licensee shall indemnify, defend and
hold Nortel harmless from any and all claims, liabilities, damages, settlements,
losses, expenses or costs (including counsel fees) arising out of any
infringement or alleged infringement by any Licensed Materials or Licensed
Products for which Nortel is not obliged to provide indemnification to Licensee.
Nortel shall give Licensee prompt notice of, and authority to defend or settle,
any such claim and shall give, at Licensee's expense, reasonable information and
assistance. Licensee agrees not to take any action inconsistent with this
Agreement in the conduct or settlement of any action.
9.5 Licensee shall indemnify, defend and hold Nortel harmless from any and all
claims, liabilities, damages, settlements, losses, expenses or costs (including
counsel fees) arising out of any malfunction, defect or error in any Licensed
Materials or any Licensed Products or in any service provided by Licensee in
respect of any Licensed Materials or Licensee Product. Nortel shall give
Licensee prompt notice of, and authority to defend or settle, any such claim and
shall give, at Licensee's expense, reasonable information and
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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assistance. Licensee agrees not to take any action inconsistent with this
Agreement in the conduct or settlement of any action.
9.6 In the event that the acts of a third party infringe or might infringe
intellectual property rights in the Licensed Materials, which infringement does
or might affect any Licensee Product (an "Infringement"), Licensee may, after
notice to Nortel of its intention, institute and prosecute any action or
proceeding with respect to the Infringement at the cost of Licensee. Licensee
shall be entitled to any and all proceeds as a result of such enforcement to the
extent that such proceeds relate to infringement against Licensed Products.
Licensee agrees not to take any action inconsistent with this Agreement in the
enforcement, conduct or settlement of any action.
ARTICLE 10
LIMITATION OF LIABILITY
10.1 Except for
(a) the indemnification provided in the article entitled
"Indemnification" (and except as otherwise provided by any
specific limitations set out in such section),
(b) claims arising from a Party's breach of its confidentiality
obligations set out in the Article entitled "Confidentiality", and
(c) claims by or against a Party for bodily injury or tangible
property damage caused by the fault of the other Party,
no Party's cumulative liability for damages UNDER THIS AGREEMENT (WHETHER IN
contract, tort, or any other theory of liability) shall exceed *.
10.2 EXCEPT WITH RESPECT TO 10.1(a) and 10.1(b), IN NO EVENT SHALL ANY PARTY BE
LIABLE FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND,
INCLUDING WITHOUT LIMITATION, LOST BUSINESS, LOST SAVINGS, LOST DATA, AND LOST
PROFITS, EVEN IF THE BREACHING PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
ARTICLE 11
FORCE MAJEURE
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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11.1 Neither party shall be in default or liable for any loss or damage
resulting from delays in performance or from failure to perform or comply with
terms of this agreement due to any causes beyond its reasonable control during
the continuation of such causes, which causes include but are not limited to
Acts of God or the public enemy; riots and insurrections, war, accidents, fire,
strikes and other labor difficulties (whether or not the party is in a position
to concede to such demands), embargoes, judicial action; lack of or inability to
obtain export permits or approvals, necessary labor, materials, energy,
components or machinery, acts of civil or military authorities.
ARTICLE 12
TERM AND TERMINATION
12.1 This Agreement shall become effective on the Effective Date and shall
continue in effect unless terminated as set out herein.
12.2 In the event any Party is in a curable material breach of, or fails to
perform a material obligation under, this Agreement, then the other Party may by
notice to the Party in default, require the breach to be cured or the obligation
to be performed. If, within sixty (60) days of the receipt of such notice, such
Party fails to undertake a reasonable course of action to cure such breach, or
fails to perform such obligation, the notifying Party may, by notice, terminate
this Agreement.
12.3 In the event that Licensee:
(a) admits in writing its inability to pay its debts generally as they
become due;
(b) commits an act of bankruptcy;
(c) is the subject of a petition or assignment in bankruptcy under
applicable bankruptcy laws or other similar laws;
(d) files a notice of intention to make a proposal under the
Bankruptcy and Insolvency Act, commences proceedings under the
Companies' Creditors Arrangement Act, or otherwise seeks a
reorganization under applicable bankruptcy laws or any other
similar law or statute of any relevant jurisdiction;
(e) makes an assignment for the benefit of its creditors;
(f) consents to the appointment of a receiver or receiver-manger of
itself or of the whole or any substantial part of its property;
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(g) enters into an arrangement or composition with or for the general
benefit of its creditors; or
(h) fails to satisfy any final judgment rendered against it within the
period so permitted,
Nortel may terminate this Agreement immediately upon notice.
12.4 Apart from those copies of the Licensed Materials necessary for Licensee to
meet its support obligations to existing End Users at the time of termination,
Licensee shall, within sixty (60) days of termination, return to Nortel or
certify in writing to Nortel that all other copies of the Licensed Materials in
the possession or control of Licensee have been destroyed. Except for Licensee's
use which is strictly necessary for it to meet its support obligations to
existing End Users at the time of termination, Licensee shall immediately
discontinue the exercise of the rights granted hereunder and the use of the
Licensed Materials.
12.5 In the event a Contractor, Distributor, Subsidiary or Affiliate of Licensee
is in a curable material breach of, or fails to perform a material obligation
under, its services, distribution or sublicense agreement, which results in a
material contravention of the terms and conditions of this Agreement, Nortel may
notify the breaching Contractor, Distributor, Subsidiary or Affiliate, and
Licensee in writing of such contravention. If, within sixty (60) days of the
receipt of such notice, such Contractor, Distributor, Subsidiary or Affiliate
fails to undertake a reasonable course of action to cure such breach, or fails
to perform such obligation, Licensee shall, by notice, terminate the rights
related to this Agreement granted under the distribution or sublicense
agreement. Within sixty (60) days of such termination, Licensee shall require
the Contractor, Distributor, Subsidiary or Affiliate to discontinue use of, and
either return to Licensee or destroy, any copies of the Licensed Materials in
its possession, other than those copies necessary for such Distributor,
Subsidiary or Affiliate to meet its support obligations to existing End Users.
12.6 All sublicenses of Licensed Products properly granted to End Users pursuant
to this Agreement, whether granted by Licensee, its Distributors, Subsidiaries
or Affiliates, shall survive termination of this Agreement.
12.7 In addition to this Article, the Articles entitled "Definitions",
"Representations", "Limitation of Liability", "Indemnification" and
"Confidentiality" shall survive termination of this Agreement.
ARTICLE 13
NOTICES
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13.1 Any and all notices or other information to be given by one of the Parties
to the other shall be deemed sufficiently given when forwarded by prepaid,
registered or certified first class air mail or by facsimile, telegram or hand
delivery to the other Party at the following address:
If to Nortel: Northern Telecom Limited
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Corporate Secretary
If to Licensee: Applied Digital Access, Inc.
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx
X.X.X. 00000
Attention: President and CEO
and such notices shall be deemed to have been received fifteen (15) business
days after mailing if forwarded by mail, and the following business day if
forwarded by facsimile, telegram or hand delivery.
13.2 The aforementioned address of either Party may be changed at any time by
giving fifteen (15) business days prior notice to the other Party in accordance
with the foregoing.
13.3 In the event of a generally-prevailing labor dispute or other situation
which will delay or impede the giving of notice by any such means, in either the
country of origin or of destination, the notice shall be given by such specified
mode as will be most reliable and expeditious and least affected by such dispute
or situation.
ARTICLE 14
GENERAL PROVISIONS
14.1 Nothing in this Agreement shall be construed as establishing or implying
any partnership or joint venture between the Parties hereto, and nothing in this
Agreement shall be deemed to constitute either of the Parties hereto as the
agent of the other Party or authorize either Party to incur any expenses on
behalf of the other Party or to commit the other Party in any way whatsoever,
without obtaining the other Party's prior written consent.
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14.2 This Agreement and the AsseT Purchase Agreement set forth the entire
agreement and understanding between the Parties with respect to the subject
matter addressed herein and supersedes and cancels all previous negotiations,
agreements, commitments, and writings in respect to the subject matter hereof,
including, but not limited to, the License Agreement executed between the
Parties on July 15, 1996, and the Interim Licensed Agreement executed between
the Parties on January 24, 1997. Neither Party hereto shall be bound by any
term, clause, provision or condition save as expressly provided in this
Agreement or as duly set forth on or subsequent to the date hereof in writing,
signed by duly authorized representatives of the Parties.
14.3 Either Party may assign all or any portion of this Agreement without the
other Party's consent. In no event shall either Party create any contractual
relations between any third party and the other Party.
14.4 In the event of an enforceable decision or directive declaring invalid an
essential part of this Agreement, without which this Agreement would not have
been entered into, this Agreement may, at the option of either Party, be
terminated upon the giving of notice to the other Party. Save as before set
forth, in the event that any term, clause, provision or condition of this
Agreement shall be similarly adjudged invalid for any reason whatsoever, such
invalidity shall not affect the validity or operation of any other term, clause,
provision or condition and such invalid term, clause, provision or condition
shall be deemed to have been deleted from this Agreement.
14.5 Licensee represents and warrants that it will not, without the prior
written consent, if required, of the U.S. Department of Commerce or its
counterparts in nations other than the U.S., export, directly or indirectly, the
Licensed Materials to any prohibited country specified in the applicable export
administration regulations.
14.6 The failure of either Party to give notice to the other Party of the breach
or non-fulfillment of any term, clause, provision or condition of this Agreement
shall not constitute a waiver thereof, nor shall the waiver of any breach or
non-fulfillment of any term, clause, provision or condition of this Agreement
constitute a waiver of any other breach or non-fulfillment of that or any other
term, clause, provision or condition of this Agreement.
14.7 Neither Party shall use the name of the other in any advertising, public
relations or media release without the prior written consent of the other.
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14.8 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia, Canada and the courts of the Province
of British Columbia and appellate courts therefrom shall have non-exclusive
jurisdiction to determine all matters in dispute hereunder. All proceedings
shall be conducted in English.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first above mentioned.
NORTHERN TELECOM LIMITED APPLIED DIGITAL ACCESS, INC.
--------------------------------- -----------------------------------------
Authorized Signature Authorized Signature
--------------------------------- -----------------------------------------
Printed Name and Title Printed Name and Title
--------------------------------- -----------------------------------------
Authorized Signature Authorized Signature
--------------------------------- -----------------------------------------
Printed Name and Title Printed Name and Title
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SCHEDULE "A"
LICENSED MATERIALS
DSS II Subsystems
Subsystem Description
--------- -----------
ALS Alarm Surveillance
APM Application Process Manager
* * Interface 2
* * License*
* Interface
* Base for *Subsystem
BSI Binary System Interface
COM Communications
CUE USer Interface for*
* * Filter
DAS Database Alignment System
DBM Database Management Subsystem
* * Interface
DSS I/O Management System (otherwise referred to as 1MS)
ELS Event Logging Subsystem
EPM Network Performance Manager (otherwise referred to as EPM)
ESI External System Interface
* * Translator
GEN Generic Network Element Manager
* * Interface
* * Custom Phase I (otherwise known as *)
* * Interface
NEM Network Element Manager
* * Interface
* * Interface
OWS Operations Workstation System
* * Server
RTT Reach Through Tool
XXX Service Availability Manager
SIS Service Inventory Management
SMS Service Management System
SOT Selected Object Tool
SPR Service Provisioner
SSN DSS II Application Utilities
* * Interface
* * Interface
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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TMS Test Management System
XXX Topological Display
UPM User Profile Management
22
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SCHEDULE "B"
SUBLICENSING TERMS
Sublicense agreements with End Users shall include terms and conditions
substantially similar to the following:
1. restrict use of the Licensed Products or Licensed Information to object code
form only;
2. prohibit causing or permitting the reverse engineering, disassembly or
decompilation of the Licensed Products or Licensed Information except to the
extent permitted by law or required to obtain interoperability with other
independently created software programs;
3. prohibit title to the licensed products or Licensed Information from passing
to the End User;
4. disclaim Nortel's liability for any damages, whether direct, indirect,
incidental or consequential arising from the use of the Licensed Products or
Licensed Information;
5. in any sublicense to United States Government End Users, include the
following on all copies of Licensed Products distributed to United States
Government End Users:
By accepting delivery of this software, the Government hereby agrees that
this software qualifies as commercial computer software within the meaning
of the acquisition regulation(s) applicable to this procurement. The terms
and conditions of this license shall pertain to the Government's use and
disclosure of this software, and shall supersede any conflicting contractual
terms and conditions. If this license fails to meet the Governments minimum
needs or is inconsistent in any respect with Federal procurement law, the
Government agrees to return this software, unused to the seller. The
following additional statement applies only to procurement governed by DFARS
Subpart 227.4 (1988): "Restricted Rights - Uses, duplication and disclosure
by the Government is subject to restrictions as set forth in subparagraph
(c)(1)(ii) of the Rights in Technical Data and Computer Software clause at
DFARS 252.227-7013 (1988).
6. require End Users to comply with all applicable governmental legislation or
regulations imposing restrictions on the export of products; and
7. require End Users, at the termination of the sublicense, to discontinue use
and destroy or return to Licensor the Licensed Products or Licensed
Information,
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associated documentation and all archival or other copies of the Licensed
Products or Licensed Information.
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SCHEDULE "C"
EXCLUDED CUSTOMERS
*, Inc. / *, Inc.
* Communications Limited
* Limited*, S.A.
* Limited* / The Kingdom of *
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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SCHEDULE "D"
THIRD-PARTY SOFTWARE
Non-Commercial Software
Software Version
-------- -------
ACE *
Athena Widget *
clist
dbug
expect
gcc (Sun) *
GCC Compiler *
gmake *
gmalloc *
perl *
xpm *
Commercial Software
-------------------
Software Version Vendor
-------- ------- ------
Booch Components * Rogue Wave
C++ Compiler (HP-UX) - Hewlett-Packard
* * *
* * *
* * *
* * *
* * *
* * *
* - *
* * *
* * *
*
Code Centre * Centerline
* * *
dde * Hewlett-Packard
* * *
* * *
FrameBuilder * Adobe
26
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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Software Version Vendor
-------- ------- ------
HP-UX Development Environment * Hewlett-Packard
HP OpenView DM Platform * Hewlett-Packard
Motif * Open Software
Foundation
* - *
Object Center - Centerline
* * *
* - *
Pure Coverage * Pure
Purify * Purify
Quantify - Purify
* * *
* * *
* * *
* * *
* * *
UIL Compiler - Open Software Foundation
* * *
Windows * * Microsoft Corporation
Windows * * Microsoft Corporation
Corel Draw - Corel Corporation
xdb * Hewlett-Packard
xmt widget * Open Software Fdtn.
X11 * Open Software Fdtn.
Foundation
ARS - Remedy Corporation
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* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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SCHEDULE "E"
*
*
*
*
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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INDEX
ARTICLE TITLE
------- -----
1 DEFINITIONS
2 GRANT OF RIGHTS
3 THIRD-PARTY SOFTWARE
4 PROVISION OF LICENSED MATERIALS
5 TECHNICAL ASSISTANCE
6 ESCROW
7 CONFIDENTIALITY
8 REPRESENTATIONS
9 INDEMNIFICATION
10 LIMITATION OF LIABILITY
11 FORCE MAJEURE
12 TERM AND TERMINATION
13 NOTICES
14 GENERAL PROVISIONS
SCHEDULE "A" LICENSED INFORMATION
SCHEDULE "B" SUBLICENSING TERMS
SCHEDULE "C" EXCLUDED ENTITIES
SCHEDULE "D" THIRD-PARTY SOFTWARE
SCHEDULE "E" *
* Certain confidential portions of this Exhibit were omitted by means of
blacking out the text (the "Xxxx"). This Exhibit has been filed separately
with the Secretary of the Commission without the Xxxx pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act of 1934.
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