Exhibit 10.1
LICENSE, DISTRIBUTION AND OPTION AGREEMENT
This License, Distribution and Option Agreement is entered into this
7th day of July, 2003, by and between IXIA, a California corporation doing
business at 00000 Xxxx Xxxxxx Xxxx, Xxxxxxxxx, XX 00000 ("Ixia"), and NETIQ
CORPORATION, a Delaware corporation with its principal place of business at 0000
Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, and its wholly owned subsidiaries
("NetIQ").
In consideration of the premises and mutual covenants contained herein,
and other valuable consideration, the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth:
1.1. "includes"; "including". Except where followed directly by the
word "only", the terms "includes" or "including" shall mean "includes, but is
not limited to" and "including, but not limited to" respectively, it being the
intention of the parties that any listing following thereafter is illustrative
and not exclusive or exhaustive.
1.2. "Chariot Products". The term "Chariot Products" shall mean the
NetIQ products commonly known as "Chariot", "Qcheck" and "AppScanner", and all
versions of each of the foregoing, which are set forth on Schedule 1.2 or which
otherwise are, or become, subject to this Agreement, in both source code and
executable code form, and any technical documentation and user documentation
therefor (excluding any documentation prepared by Ixia, or prepared by any party
other than NetIQ on behalf of Ixia).
1.3. "Chariot Marketing Materials". The term "Chariot Marketing
Materials" shall mean NetIQ's proprietary marketing materials with respect to
Chariot Products, such as data sheets and white papers, as listed on Schedule
1.3.
1.4. "Ixia Derivative". The term "Ixia Derivative" shall mean any
product prepared by or on behalf of Ixia under Section 2 below.
1.5. "Distribution Products". The term "Distribution Products"
shall mean all Chariot Products other than any Ixia Derivative.
1.6. "Chariot Business". The term "Chariot Business" shall mean
NetIQ's business of developing, selling, licensing and supporting NetIQ's
products marketed under the brand names "Chariot", "Qcheck" and "AppScanner".
1.7. "Access Key". The term "Access Key" shall mean an activation
mechanism, implemented in computer software (and not a physical object), which
must be entered by a user into a Chariot Product on the user's computer in order
to activate that Chariot Product for full licensed use.
1.8. "Build Materials". The term "Build Materials" shall mean all
instructions, software, information, notes, references, procedures, programs,
build environments and other materials required for the technical staff of Ixia
to prepare an object code or executable copy of a Chariot Product from the
source code of such Chariot Product, via the procedures of assembly,
compilation, linking and/or any other procedure, without any additional
assistance from NetIQ all such materials actually used by NetIQ therefor, but
shall not include the Build System.
1.9. "Build System". The term "Build System" shall mean the third
party hardware, third party operating software and third party systems and
application software specified on Schedule 1.9, and used in connection with the
Build Materials to prepare an object code or executable code copy of a Chariot
Product from the source code of such Chariot Product, via the procedures of
assembly, compilation, linking and/or any other procedure.
1.10. "Source Materials". The term "Source Materials" shall mean:
(i) all software source code, source code comments and
documentation, data, files, algorithms, notes, patent
documents, processes, designs, drawings, specifications,
plans, techniques, models, software samples and prototypes,
data, schematics, diagrams, formulae, encryption mechanisms
and information, access-control mechanisms and information,
computer programs, designs and structures of computer
programs, programming techniques, flow charts, design
documents, diagrams, proprietary authoring tools, proprietary
software development environments and other intangible
materials comprising or incorporated in the Chariot Products,
including any proprietary development tools, as well as all
instructions, notes, references, programs and Build Materials;
(ii) all of the foregoing (to the extent owned or licensable by
NetIQ) applicable to the creation, preparation, generation and
use of Access Keys in the Chariot Products; and
(iii) all testing, maintenance and support materials, including
lists of known defects, support databases, engineering
documents, source control databases, test plans and automated
test suites, in each case with respect to the Chariot
Products.
1.11. "Source Assets". The term "Source Assets" shall mean the items
listed in Schedule 1.11, and all Source Materials therefor.
1.12. "Electronic Delivery". The term "Electronic Delivery" shall
mean the delivery of a copy of a Chariot Product to an end user, or the use by
an end user of the Chariot Product via any electronic means now known or
hereafter devised whereby all or part of the Chariot Product is delivered
without transporting a physical object incorporating the Chariot Product,
including where the Chariot Product is accessed by the end user over the
Internet.
1.13. "sale"; "sell"; "vend"; etc. The terms "sale", "sell", "vend"
and similar terms are used herein in the context of distribution of the Chariot
Products to mean the sale of a license to
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use a copy or configuration of a Chariot Product. The transfer to a remarketer
or an end user of a copy of a Chariot Product is a license only and does not
transfer any right, title, or interest in or to such Chariot Product to such
remarketer or end user.
1.14. "Option". The term "Option" shall mean the option granted to
Ixia to acquire ownership of the assets comprising the Chariot Business, set
forth in Section 15.1 below.
1.15. "Nonconformity". As used herein, the term "Nonconformity"
shall mean a deviation from the published description, published specifications,
any user documentation or any technical documentation with respect to the
affected Chariot Product to the extent that such deviation is material
1.16. "Effective Date". The term "Effective Date" shall mean the
date first set forth above which, upon execution of this Agreement by both
parties, shall be the effective date of this Agreement.
1.17. "Test Products/Services". The term "Test Products/Services"
shall mean products and/or services which are used to test network/systems
equipment and configurations before such equipment and configurations are
deployed for actual use.
1.18. "Assessment Products/Services". The term "Assessment
Products/Services" shall mean products and/or services which are used in the
assessment of the performance and operation of a data communications network at
a point in time, but which are not used for the day-to-day performance
monitoring of a data communications network.
1.19. "Monitoring Products/Services". The term "Monitoring
Products/Services" shall mean products and/or services which are used in the
day-to-day performance monitoring of a data communications network.
1.20. "Patents". The term "Patents" shall mean all patents owned by
NetIQ or which NetIQ is authorized to license to Ixia, and which cover the
Chariot Products, whether presently issued or issued in the future, and
specifically including the patents identified in Schedule 1.20, and any and all
continuations, continuations-in-part, or divisions thereof.
1.21. "Chariot Business Marks". The term "Chariot Business Marks"
shall mean the names "Chariot", "Qcheck" and "AppScanner."
1.22. "Intellectual Property Rights". The term "Intellectual
Property Rights" shall mean any and all patents, copyrights, mask rights,
trademarks, trade names, service marks, and registrations of and applications
for registration of any of the foregoing and any and all rights in trade secrets
and know-how, and any and all other intellectual property rights recognized in
any jurisdiction now or in the future.
1.23. "Distribution Product Maintenance". The term "Distribution
Product Maintenance" shall mean technical support and customer service offered
by Ixia or NetIQ to end
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users of the Distribution Products at an additional charge beyond the license
fees charged for the Distribution Products., For purposes of this Agreement, the
foregoing reference to "license fees" with respect to Ixia includes only amounts
within the scope of Section 9.1 such that no allocation of amounts between
license fees and Distribution Product Maintenance fees will reduce the amounts
payable to NetIQ under Section 9 below.
1.24. "Support Cutover Date". The term "Support Cutover Date" shall
mean October 1, 2003 (or such other date as agreed in writing by the parties),
which shall be the date as of which the parties have completed the transition of
Distribution Product Maintenance from NetIQ to Ixia and Ixia assumes full
responsibility for such Distribution Product Maintenance, all as set forth in,
and subject to the exceptions in, Section 13 below.
1.25. "Correction". The term "Correction" shall mean any revised
version of any Chariot Product or other computer software or procedure,
including a patch or a workaround, which revised version or other computer
software or procedure is prepared solely for the purpose of correcting
Nonconformities in such Chariot Product.
1.26. "VoIP". The term "VoIP" shall mean transmission of voice or
video over the IP protocol.
1.27. "Development and Test Environment". The term "Development and
Test Environment" shall mean the development and test lab tools and equipment
necessary or useful to support the Chariot Business that will not be provided by
NetIQ hereunder and which are listed on Schedule 1.27.
1.28. Other Terms. The following other terms are defined in the
Sections cited:
"Adjusted Gross Revenues" - Section 9.1.
"Build SOW" - Section 13.3.
"Chariot Prospect" - Section 8.9.
"Confidential Information" - Section 17.1.
"Cure Period" - Section 11.1.
"Distribution Assets" - Section 8.4.
"Distribution Date" - Section 8.3.
"Distribution Transition Period" - Section 8.5.
"Distribution Term" - Section 8.3.
"Distribution Territory" - Section 8.2.
"Guarantee Makeup" - Section 9.3.
"Intellectual Property" - Section 19.7.
"Involved Party" - Section 25.7.
"Major Upgrade" - Section 12.1.
"Minimum Royalty" - Section 9.3.
"Minor Upgrade" - Section 11.2.
"Non-involved Party" - Section 25.7.
"Option Assets" - Section 15.1.
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"Option Effective Date" - Section 15.4.
"Option Exercise Price" - Section 15.3.1.
"Owned Rights" - Section 19.7.
"Scheduled IP Assets" - Section 19.7.1
"Scheduled Rights" - Section 19.7.
"Source Asset License Fee" - Section 3.
"Source Modifications" - Section 4.2.
"Support Exclusion" - Section 13.1.
2. LICENSE TO USE SOURCE CODE AND OTHER SOURCE ASSETS
2.1. NetIQ License to Ixia. Upon delivery of the Source Asset
License Fee (as defined in Section 3 below), NetIQ hereby grants to Ixia a
perpetual, irrevocable, fully-paid-up license to (i) use the Source Assets
(including any Source Modifications (as defined in Section 4.2 below)) to
create, prepare or develop one or more products which use, are derived from,
incorporate, modify, further develop or otherwise exploit the Source Assets or
any portion thereof, including, but not limited to, by combining any or all of
the Source Assets with other products or technology of Ixia or acquired by Ixia
into a single product, (ii) use the Source Assets (including any Source
Modifications (as defined in Section 4.2 below) to create, prepare or develop
Corrections to the Distribution Products (which shall be Source Assets under
this Agreement), and (iii) manufacture, market, distribute or otherwise
commercially exploit any such products and Corrections in object code form only,
in all channels and classes of trade (whether now known or hereafter
established), in all media and forms of expression or communication now known or
later developed, including by Electronic Delivery of any of the foregoing,
throughout the world, including the right, but not the obligation, to use any or
all of the Chariot Business Marks as provided in Section 2.3 below.
Notwithstanding the foregoing, Corrections of the Distribution Products may only
be distributed to end users of Chariot Products in object code form as part of
Distribution Product Maintenance. Any such product (other than, and excluding,
Corrections of Distribution Products) created, prepared or developed by Ixia as
set forth in the preceding sentence shall be deemed to be an Ixia Derivative.
The foregoing grant shall include the right to vend copies of each Ixia
Derivative in conjunction with one or more other hardware and/or software
products such that there is a single price to the end purchaser for the combined
products, and also to vend each Ixia Derivative standing alone. Such grant shall
also include the right to use and reasonably adapt the Chariot Marketing
Materials as Ixia reasonably deems appropriate, for use in connection with the
Ixia Derivatives; provided, however, that Ixia shall have no right to use any
NetIQ trademarks in connection with the Ixia Derivatives, other than as Revised
Marks (as defined in Section 2.3 below) are derived from the Chariot Business
Marks. The licenses granted under this Section 2.1 shall be exclusive to Ixia as
to the Source Assets as embodied in or used with respect to the Chariot Products
(except as NetIQ is permitted to exploit the Chariot Products under this
Agreement) and also as set forth in Section 6 below, but shall otherwise be
nonexclusive and NetIQ shall have no restriction on the use of the Source Assets
as embodied in or used with respect to other NetIQ products or applications
other than with respect to the Charior Products (except as NetIQ is permitted to
exploit the Chariot Products under this Agreement) or as set forth in Section 6
below. Neither party shall do anything which would be inconsistent with this
grant of rights.
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2.2. Further Provisions Specific To NetIQ Patents. Upon delivery of
the Source Asset License Fee (as defined in Section 3 below), and without
limiting the generality of anything contained in this Agreement, NetIQ hereby
grants to Ixia, during the term of the Patents and under NetIQ's rights to the
Patents, a non-exclusive, worldwide, perpetual, irrevocable, fully paid license,
without the right to grant sublicenses (except insofar as Ixia's allowing a
third party to use or resell an Ixia product or service might be considered to
be the grant of a sublicense), to make (including the right to practice methods,
processes and procedures), have made, use, lease, sell, offer for sale and
import any Ixia Derivatives embodying or made in accordance with any invention
of the Patents.
2.3. Right To Use Variants of Chariot Business Marks. Without
limiting the generality of Section 2.1 above, Ixia shall have the right, but not
the obligation, to use the name "Chariot" in combination with other letters as
the product name for any Ixia Derivative (any such combination, a "Revised
Xxxx"), including "IxChariot" and "ChariotTXS", but not including variants which
change only the version number without changing the word "Chariot", "Qcheck" or
"AppScanner" (as applicable)(e.g., "Chariot 2.x") except as set forth in Section
15 below. Ixia will use its own xxxx on products or materials containing such
Revised Xxxx. Ixia may only use the unmodified Chariot Business Marks in
connection with its distribution of the Distribution Products as provided in
Section 8 below.
2.4. Licenses to Survive Termination. The licenses granted by this
Section 2 shall survive any termination of this Agreement for any reason
whatsoever.
3. SOURCE ASSET LICENSE FEE
As payment in full for the rights granted by NetIQ to Ixia with respect
to the Source Assets, Ixia shall pay to NetIQ a one-time license fee in the
amount of Seventeen Million Five Hundred Thousand Dollars ($17,500,000) (the
"Source Asset License Fee") in cash on the Effective Date by wire transfer of
immediately available funds to an account of NetIQ designated to Ixia. No other
amounts shall be due from Ixia with respect to the licenses granted to Ixia
under Section 2 or any results or proceeds of Ixia's exercise of its licensed
rights under Section 2, including, but not limited to the Ixia Derivatives,
under any circumstances whatsoever.
4. DELIVERY OF SOURCE ASSETS AND BUILD MATERIALS
4.1. Delivery. Within two (2) business days after the Effective
Date, NetIQ shall commence delivery to Ixia at Ixia's California location of a
copy of all items of the Source Assets and Build Materials (including all Source
Materials), via electronic download, such that after delivery has been made,
Ixia would be able to exercise all of its rights with respect to Ixia
Derivatives without ever having to ask NetIQ for any other item. NetIQ shall
diligently pursue such delivery to completion. Notwithstanding the foregoing, no
inadvertent omission by NetIQ from such delivery will be a breach of this
Agreement if NetIQ corrects the omission promptly after discovery by NetIQ or
request by Ixia.
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4.2. Modifications To Source Assets. For a period of eighteen (18)
months after the Effective Date, NetIQ will deliver to Ixia at Ixia's California
location, at no cost to Ixia, any modifications to the Source Assets made by
NetIQ with respect to the Chariot Products (including the Source Materials
therefor)("Source Modifications") via electronic download. Delivery of such
Source Modifications shall be made within thirty (30) days of the later of (a)
such Source Modifications being generally released in any Chariot Product by
NetIQ, and (b) such Source Modifications being requested by Ixia. For a period
of eighteen (18) months after the Effective Date, NetIQ will make available to
Ixia, at Ixia's option, quarterly design reviews to consider material
modifications made to the Chariot Products since the prior design review (or the
Effective Date if no prior design review has yet been held), as well as material
modifications then being implemented. Ixia may propose modifications during the
design review, but NetIQ is under no obligation with respect to any such
proposal. Ixia is also under no obligation to participate in a design review.
5. RESTRICTION ON NETIQ'S REMEDIES AS TO THE SOURCE ASSETS
Because of the substantial amount of the Source Asset License Fee, such
that the loss Ixia would suffer from any termination or restriction of the
license would almost certainly be grossly disproportionate to the actual harm to
NetIQ from any breach by Ixia, NetIQ agrees that the licenses granted to Ixia
under Section 2 above cannot be terminated, suspended or otherwise impaired by
NetIQ under any circumstances whatsoever, and that such licenses will survive
any termination of the Agreement. NetIQ's remedies in the event of a breach of
this Agreement by Ixia will be limited to seeking monetary damages and/or
seeking injunctive relief, provided that injunctive relief may only be used to
restrain a breach: (i) to the limited extent that such breach directly involves
the use by Ixia, or anyone on Ixia's behalf, of the Source Assets in a manner
which is outside the scope of licenses granted to Ixia under Section 2 above,
AND (ii) where the harm to NetIQ is a proximate consequence of such manner of
use. Under no circumstances will NetIQ be entitled to, or Ixia be made subject
to, any injunction or restraint that would restrain Ixia from any use or
exploitation that is within the licenses granted to Ixia under Section 2 above.
Without limiting the generality of the foregoing, under no circumstances
whatsoever will NetIQ be entitled to, or Ixia be made subject to, any injunction
or restraint based on any alleged or actual breach of an obligation to pay
money, which breach shall only be compensated by an award of damages. In
addition, in any circumstance in which NetIQ is entitled to or does seek any
injunctive relief, NetIQ shall be subject to all requirements of the law, with
no diminution as to the required showings and obligations of a moving party in
an injunction proceeding (including, but not limited to, as to bond).
6. CERTAIN RESTRICTIONS ON FIELDS OF USE
6.1. Test Products/Services.
6.1.1. Restricted Test Products/Services. For a period of
seven (7) years commencing on the Effective Date, the licenses granted to Ixia
under Section 2 above shall be exclusive even as to NetIQ for Test
Products/Services, and NetIQ shall not have the right to, and shall not, use or
license the Source Assets or any portion thereof for a period of seven (7) years
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after the Effective Date to create or develop or market or distribute or
participate in the exploitation of any Test Product/Service. The foregoing
restriction shall not apply to the Chariot Products as NetIQ is permitted to
exploit them under this Agreement.
6.1.2. Unrestricted Test Products/Services. Notwithstanding
anything to the contrary contained in Section 6.1.1 above, NetIQ shall not be
subject to any restriction under this Agreement as to Test Products/Services
that are created or developed without the use of the Source Assets or any
portion thereof.
6.2. Assessment Products/Services.
6.2.1. Restricted Assessment Products/Services. For a period
of five (5) years commencing on the Effective Date, the licenses granted to Ixia
under Section 2 above shall be exclusive even as to NetIQ for Assessment
Products/Services, except for Assessment Products/Services that are limited to
the assessment of VoIP issues or security issues, and that do not expose to
users or allow users to modify or edit any of the Source Asset scripts. NetIQ
shall not have the right to, and shall not, use or license the Source Assets or
any portion thereof for a period of five (5) years after the Effective Date to
create or develop or market or distribute or participate in the exploitation of
any Assessment Products/Services except as specifically provided in the
preceding sentence. The foregoing restriction shall not apply to the Chariot
Products as NetIQ is permitted to exploit them under this Agreement.
6.2.2. Unrestricted Assessment Products/Services.
Notwithstanding anything to the contrary contained in Section 6.2.1 above, NetIQ
shall not be subject to any restriction under this Agreement as to Assessment
Products/Services that are created or developed without the use of the Source
Assets or any portion thereof.
6.3. Monitoring Products/Services.
6.3.1. Restricted Monitoring Products/Services.
Notwithstanding anything to the contrary contained in this Agreement, for a
period of two (2) years commencing upon the Effective Date, the licenses granted
under Section 2 above may not be exercised by Ixia to create or develop or
market or distribute or participate in the exploitation of any Monitoring
Product/Service.
6.3.2. Unrestricted Monitoring Products/Services.
Notwithstanding the foregoing, Ixia shall not be subject to any restriction
under this Agreement as to Monitoring Products/Services that are created or
developed without the use of the Source Assets or any portion thereof.
7. IXIA RIGHT TO HIRE NETIQ EMPLOYEES
7.1. Technical Support and Sales Employees. Schedule 7.1 sets forth
a list of NetIQ's customer technical support and sales employees that Ixia can
interview and seek to employ after the Effective Date, which list shall include
Xxxx Xxxx and all NetIQ sales support engineers
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with substantial responsibility for the Chariot Products. In addition to Xx.
Xxxx, Ixia may hire up to one (1) sales support engineer and one (1) outside
sales representative prior to September 1, 2003, and up to two (2) customer
technical support representatives after October 1, 2003 and prior to December 1,
2003. NetIQ agrees not to solicit such employees with counter offers or other
enticements.
7.2. Engineering Employees. Schedule 7.2 sets forth a list of
NetIQ's current engineering employees who have substantial familiarity with the
Chariot Products, which list shall include Xxxx Xxxx. Ixia shall have the right
to seek to interview and seek to employ such employees after the Effective Date;
provided, however, that Ixia shall not employ more than three such employees,
consisting of a maximum of two employees with responsibility for development and
one employee with responsibility for quality assurance. NetIQ agrees not to
solicit such employees with counter offers or other enticements. Once Ixia has
employed any three such employees, Ixia agrees not to solicit for employment,
nor hire for employment as a regular employee or contract employee, or an
independent contractor, any other employees on the aforementioned list for a
period of two (2) subsequent years, except that the foregoing restriction shall
not apply to any person who at the time of the first communication (direct or
indirect) with Ixia concerning such employment; (i) is no longer an employee of,
and is not otherwise providing services to, NetIQ; (ii) has had no communication
with Ixia, directly, through an intermediary or otherwise indirectly, concerning
the possibility of employment (for purposes of the foregoing, any employment
information published to the software engineering community generally, or to the
public at large, shall not be considered a "communication" so long as Ixia did
not, either directly or through any intermediary, make any effort specific to
such former employee to cause such information to come to the attention of such
former employee). If Ixia is unsuccessful in its efforts to employ at least one
designated engineer, NetIQ will make available to Ixia, on Ixia's premises, one
or more qualified engineers for up to 32 person-weeks. If Ixia is able to employ
only one designated engineer, then NetIQ will provide up to 16 person-weeks.
Ixia will reimburse the cost of all travel, lodging, etc., incurred by NetIQ in
providing such services, while NetIQ will be responsible for the cost of
salaries.
7.3. Hiring Effective on Shortened Resignation Notice Period. The
resignation from NetIQ and employment by Ixia of any NetIQ employees under
Sections 7.1 and 7.2 shall be effective, and each such employee hired by Ixia
shall be released from any obligation or expectation of giving a longer period
of notice, as follows:
- Customer technical support persons -10/1/03, unless
otherwise agreed in writing by the parties.
- Xxxx Xxxx and Xxxx Xxxx - immediately upon tendering
notice.
- Sales and Customer Technical Support Representatives
(other than Xxxx Xxxx) - two (2) business days' notice.
Engineering employees (other than Xxxx Xxxx) -two (2)
weeks' notice, except that NetIQ shall use reasonable
commercial efforts to accommodate the shortest possible
notice period.
7.4. No Other Solicitation By Ixia. Except as provided above, Ixia
will not solicit, nor will Ixia hire or otherwise engage, any of NetIQ's
employees, without NetIQ's prior written
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consent, for a period of one (1) year from the Effective Date, except that Ixia
shall have the right to hire any person who is at the time of hire or engagement
is no longer an employee of NetIQ and has not been an employee of NetIQ for at
least three (3) months.
7.5. No Solicitation By NetIQ. NetIQ will not solicit, nor will
NetIQ hire or otherwise engage, any of Ixia's employees, without Ixia's prior
written consent, for a period of one (1) year from the Effective Date, except
that NetIQ shall have the right to hire any person who is at the time of hire or
engagement is no longer an employee of Ixia and has not been an employee of Ixia
for at least three (3) months. The foregoing restriction shall not apply to any
person who at the time of the first communication (direct or indirect) with
NetIQ concerning such employment; (i) is no longer an employee of, and is not
otherwise providing services to, Ixia; (ii) has had no communication with NetIQ,
directly, through an intermediary or otherwise indirectly, concerning the
possibility of employment (for purposes of the foregoing, any employment
information published to the software engineering community generally, or to the
public at large, shall not be considered a "communication" so long as NetIQ did
not, either directly or through any intermediary, make any effort specific to
such former employee to cause such information to come to the attention of such
former employee).
7.6. Exception To Restrictions. The restrictions set forth in
Sections 7.2, 7.4 and 7.5 above shall not apply to any employee whose employment
has been involuntarily terminated by NetIQ or Ixia, as applicable, including as
a consequence of a reduction in force.
8. APPOINTMENT OF IXIA AS EXCLUSIVE DISTRIBUTOR OF DISTRIBUTION PRODUCTS
IN DISTRIBUTION TERRITORY
8.1. Termination of Existing Distribution Agreement. The parties
entered into a certain Reseller Agreement dated December 4, 2002, pursuant to
which Ixia had certain rights to distribute some of the Chariot Products. The
parties agree that such agreement is hereby terminated and canceled without any
further action of any party. Neither party hereto shall have any liability to
the other arising out of the termination of such agreement.
8.2. "Distribution Territory" and "Restricted Distribution
Territory". The term "Distribution Territory" shall mean the United States
(including all its possessions and territories) and Canada. For purposes of the
foregoing, any facility (military, diplomatic or otherwise) operated by the
United States government anywhere in the world shall be considered to be part of
the United States and therefore part of the Distribution Territory. The term
"Restricted Distribution Territory" shall mean Korea, Taiwan, Israel and Japan.
8.3. Distribution Term. The term of Ixia's appointment as, and
right to act as, a distributor as set forth in this Section 8 shall commence
upon the Effective Date and shall continue until December 31, 2004, unless
terminated earlier as set forth in Section 16 below (the "Distribution Term").
8.4. Appointment; Manufacturing and Distribution of Distribution
Products. Subject to the restrictions and conditions set forth in this
Agreement, NetIQ hereby appoints Ixia as the
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exclusive (except as provided by Section 8.6 below prior to the Distribution
Exclusivity Date) distributor of the Distribution Products in the Distribution
Territory, effective as of the Effective Date, and as a nonexclusive distributor
of the Distribution Products throughout the rest of the world, and grants to
Ixia the right during the Distribution Term to manufacture, market and
distribute copies of each Distribution Product together with Access Keys, in
object code form only, with user documentation, in all channels and classes of
trade (whether now known or hereafter established), in all media and forms of
expression or communication now known or later developed, including by
Electronic Delivery of any of the foregoing, and the right to use any or all of
the assets set forth in Schedule 8.4 (the "Distribution Assets") in connection
with the exercise of its rights under this Section 8. Such grant shall include
the right to vend copies of each Distribution Product in conjunction with one or
more other hardware and/or software products in such that there is a single
price to the end purchaser for the combined products, and also to vend each
Distribution Product standing alone. Such grant shall also include the right to
use and reasonably adapt the Chariot Marketing Materials in connection with
vending the Distribution Products. Neither party shall do anything which would
be inconsistent with this grant of rights. Within two (2) business days after
the Effective Date, NetIQ shall deliver to Ixia all of the Distribution Assets
(except to the extent that any of the Distribution Assets are duplicates of
materials being delivered pursuant to Section 4 above). Notwithstanding the
foregoing, NetIQ agrees that for a reasonable period after the Effective Date,
and at no cost or charge to Ixia or to any customer, NetIQ will issue Access
Keys to Ixia (or to any party as directed by Ixia) upon Ixia's request, and
within two (2) business days after it receives such request, until Ixia has
fully implemented its own Access Key generation and issuance.
8.5 Sales to Customers Outside the Distribution Territory.
8.5.1 Generally. Ixia agrees to notify a designated
representative of NetIQ regarding the details of each sale of Distribution
Products to a customer outside the Distribution Territory, including the
customer, contact details, product, and volume ("Transaction Details"), in
connection with the generation of any Access Key for such transaction. Ixia will
implement a procedure as part of its Access Key processing workflow to ensure
that notification of the Transaction Details will be made to NetIQ within 24
hours of the Access Key being generated. NetIQ will treat the Transaction
Details as Ixia Confidential Information, unless otherwise agreed to by Ixia in
writing on a case-by-case basis.
8.5.2 Sales to Customers in Restricted Distribution
Territory. Ixia will not have the right to market and sell Distribution Products
to customers in the Restricted Distribution Territory without NetIQ's prior
written consent, given with respect to a specific transaction and on a
case-by-case basis. NetIQ will not unreasonably withhold its consent; provided,
however, that NetIQ may withhold its consent in any instance where NetIQ
believes, in its reasonable discretion, that such transaction will harm its own
commercial interests in that specific geographical region. NetIQ will treat any
request for consent made by Ixia hereunder as Ixia Confidential Information,
unless otherwise agreed to by Ixia in writing on a case-by-case basis. The
provisions of Section 8.5.1 shall apply to all transactions made with respect to
customers in the Restricted Distribution Territory. Notwithstanding the
foregoing, Ixia may market and sell Distribution Products to customers in Korea,
Taiwan and Israel, provided that (a) the sale is part
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of a bundled sale with Ixia hardware and the Distribution Product is sold for
use with that Ixia hardware, or (b) the sale is made to an existing Ixia
hardware customer and the Distribution Product is sold for use with that Ixia
hardware.
8.5.3 Sales to Certain Ixia Distributors. NetIQ will use
reasonable commercial efforts to enter into contractual relationships with
distributors of Ixia hardware located in Korea, Taiwan or Israel wherein NetIQ
will sell Chariot Products to such distributors solely for bundling with Ixia
hardware and resale of the bundled product. Ixia will strongly encourage such
distributors to enter into such a contractual relationship and will not act to
hinder the formation of such a contractual relationship in any way.
8.6 Termination of Certain Distribution Rights of Third Parties;
Orders Pending As Of Effective Date.
8.6.1. Termination of Resellers; Pending Reseller Orders.
Promptly after the Effective Date, NetIQ shall give notice to all of its
resellers with contractual rights to distribute Chariot Products in the
Distribution Territory that such contractual rights shall be terminated
effective as of thirty five (35) days after the Effective Date (the
"Distribution Exclusivity Date") and that such resellers shall have no right to
distribute Chariot Products in the Distribution Territory after the Distribution
Exclusivity Date. NetIQ shall fulfill all orders received from a reseller within
the Distribution Territory for any Chariot Product which are pending as of or
placed after the Effective Date and prior to the Distribution Exclusivity Date
("Distribution Transition Period"). Thirty (30) days after the Distribution
Exclusivity Date, NetIQ shall report to Ixia all sales of Chariot Products to
resellers in the Distribution Territory made during the Distribution Transition
Period. Thereafter, on a quarterly basis, including the quarter ending September
30, 2003, NetIQ shall remit to Ixia the proceeds, if any, received from such
sales, less commissions, freight, taxes, and insurance, together with clear
documentation of the transaction to which such payments apply.
8.6.2. Orders Other Than From Resellers. Except as set forth
in Section 8.6.1. above, NetIQ shall turn over to Ixia all orders from within
the Distribution Territory for any Chariot Product which are pending as of the
Effective Date or which are received by NetIQ after the Effective Date, and such
orders shall become Ixia orders in all respects, including as to payment. If
NetIQ has received any payments with respect to any such orders, or if NetIQ
receives any payments with respect to such orders after the Effective Date,
NetIQ shall promptly remit such payments to Ixia, together with clear
documentation of the transaction to which such payments apply.
8.7. Right To Use Qcheck. NetIQ has prepared a limited version of
Chariot called "Qcheck" which it makes available on its website for download,
without charge, by potential customers. The rights granted to Ixia in Section
8.4 above shall include Qcheck, except that such rights shall be exclusive
throughout the world as to all parties, including NetIQ. Promptly after the
Effective Date, NetIQ shall cease distribution of Qcheck and shall remove from
its website
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all offers to download, and all capabilities to download, Qcheck, and NetIQ
shall not make available any other similar product as a free or "loss leader"
download or promotion. During the Distribution Term, NetIQ shall maintain on its
website a reasonably prominent, and reasonably easy to locate, reference to
Qcheck, which reference shall state the availability of Qcheck from Ixia and
contain a hypertext link to the appropriate page of Ixia's website. Such
reference shall also identify Ixia as a "Primary Development Partner" of NetIQ.
In no event shall NetIQ modify Qcheck in any way after the Effective Date
without the express and unambiguous prior written consent of Ixia.
8.8. Subdistributors. Ixia will have the right to appoint one or
more subdistributors.
Marketing of the Distribution Products. Ixia shall determine, in its
sole discretion, the manner and method of Ixia's marketing and distribution of
the Distribution Products and exploiting any other rights granted by NetIQ with
respect to the Distribution Products, including marketing expenditures,
advertising and promotion, packaging, channels of distribution and the suggested
retail price or other pricing of the Distribution Products or such other rights.
NetIQ, at its sole expense, shall provide reasonable sales and marketing support
commencing on the Effective Date and continuing through December 31, 2003, to
assist Ixia with Ixia's launch of the Distribution Products and distribution
appointment, including assigning a single qualified sales and marketing employee
to work full time providing such assistance. In addition, promptly after the
Effective Date NetIQ, at its sole expense, shall provide to Ixia, via electronic
delivery, all sales history with respect to Distribution Products, contact and
other sales, marketing and support customer information pertaining to Chariot
Business customers in the Distribution Territory and all sales leads generated
in, and all product inquiries received from parties in, the Distribution
Territory pertaining to the Chariot Products in order that Ixia may use such
information in connection with the marketing and support of the Distribution
Products and/or the Ixia Derivatives, and shall not disclose such information to
any third party.
8.9. Sales Training. NetIQ agrees to provide to Ixia up to ten (10)
days of sales training, in no more than five (5) separate sessions, of Ixia
personnel by NetIQ's personnel (or equivalently competent personnel) who provide
such sales training at NetIQ's two-day sales training seminars. Such training
shall be at Ixia's facility in Calabasas, California, or at such other place(s)
as Ixia reasonably designates. Such training shall take place at times mutually
agreed to, except that all such training shall be provided no later than
December 31, 2003, unless otherwise agreed in writing by the parties. Such
training shall be provided at no charge to Ixia, except that Ixia shall pay, or
reimburse NetIQ for, all reasonable coach-class travel, lodging, per diem and
other expenses, plus any materials costs. Ixia shall have the right to videotape
such training for its own internal use.
8.10. Referral and Reporting To Ixia of Sales Prospects. For
purposes of this Agreement, the term "Chariot Prospect" shall mean any party
that contacts NetIQ or is referred to NetIQ where such party has indicated an
interest in purchasing Chariot, excluding any party who NetIQ reasonably
believes is located outside of the Distribution Territory. Commencing upon the
Effective Date and continuing for so long as Ixia is an exclusive distributor of
Chariot in the Distribution Territory, NetIQ shall refer all Chariot Prospects
to Ixia, and shall also report to Ixia,
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not less often than once per week, any contact information received from any
Chariot Prospect and the substance, if any, of the contact.
8.11. Third Party Rights. NetIQ shall be solely responsible, at its
own expense, for obtaining all rights and/or permissions necessary for the use
of all technology contained in the Distribution Products and the commercial
exploitation of the Distribution Products. NetIQ agrees that it will make any
payments required to be made to any third parties to obtain such rights and
permissions, and will do so on a timely basis.
8.12. Further Assurances of NetIQ. NetIQ agrees to execute such
documents as Ixia may reasonably request from time to time to vest in Ixia any
and all of the rights granted or transferred by NetIQ hereunder. NetIQ shall
take all reasonable steps to have each of those persons who has or will have
participated for or on behalf of NetIQ execute any such agreements.
8.13. Ixia Distribution Covenants. Ixia shall manufacture the
Distribution Products such that they conform to the standards and specifications
for the Distribution Products as established by NetIQ. Ixia will ensure that any
Distribution Product delivered to a customer is properly and accurately
reproduced and is free from viruses, worms or other harmful code which was not
in any code delivered to Ixia by NetIQ. Ixia will indemnify and defend NetIQ, in
accordance with the provisions of Section 21.2, against any claim brought by an
Ixia customer alleging that any Distribution Product manufactured by Ixia, or on
its behalf, was not properly and accurately reproduced and/or contained a virus,
worm or other harmful code (which was not in any code delivered to Ixia by
NetIQ).
9. PAYMENTS FOR DISTRIBUTION PRODUCTS
9.1. Adjusted Gross Revenues. For purposes of this Agreement,
"Adjusted Gross Revenues" shall mean amounts recognized as revenue by Ixia, in
accordance with generally accepted accounting principles (GAAP) consistently
applied, in connection with the licensing, distribution, sale or other
exploitation of copies of each Distribution Product and in connection with
Distribution Product Maintenance, less: (i) good faith trade discounts; (ii)
good faith promotional, markdown or similar credits against amounts invoiced;
(iii) returns, refunds and credits; and (iv) any federal, state or foreign
sales, excise or other taxes or tariffs imposed on copies of any Distribution
Product or other forms of any Distribution Product (not including any tax based
on Ixia's net income).
9.2. Royalties. As payment in full for all copies of any
Distribution Products and for the right to provide Distribution Product
Maintenance, Ixia shall pay to NetIQ royalties as follows:
(i) for each calendar quarter up through December 31,
2004, an amount equal to fifty percent (50%) of the
first One Million Dollars ($1,000,000) of Adjusted
Gross Revenues of Ixia for such calendar quarter;
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(ii) an amount equal to forty percent (40%) of the
Adjusted Gross Revenues of Ixia for such calendar
quarter in excess of One Million Dollars ($1,000,000)
up to Two Million Dollars ($2,000,000); and
(iii) an amount equal to twenty-five percent (25%) of the
Adjusted Gross Revenues of Ixia for such calendar
quarter in excess of Two Million Dollars.
In the event that Ixia exercises the Option, there will be no further royalties
or other amounts due to NetIQ with respect to any exploitation of the
Distribution Products or any Distribution Product Maintenance after December 31,
2004.
9.3. Minimum Quarterly Payment; Credit Against Minimum. Ixia
guarantees that it will pay NetIQ at least Five Hundred Thousand Dollars
($500,000) per quarter for six (6) calendar quarters, for a total of Three
Million Dollars ($3,000,000), irrespective of whether Ixia's Adjusted Gross
Revenues are sufficient to generate such amount in royalties. In the event that
the royalties due under Section 9.2 above for any applicable calendar quarter
are less than Five Hundred Thousand Dollars ($500,000), Ixia shall pay NetIQ an
amount equal to the difference between the actual royalties earned for such
quarter and Five Hundred Thousand Dollars ($500,000) (the "Guarantee Makeup"),
which payment shall be made together with the payment of royalties.
Notwithstanding the foregoing, Ixia shall be entitled to a credit against the
Guarantee Makeup for any calendar quarter if NetIQ has recognized revenues in
excess of Five Hundred Thousand Dollars ($500,000) for such calendar quarter
from sales of the Distribution Products made through any other reseller(s) and
sales of maintenance services with respect to the Distribution Products (itself
or through resellers)(the "Guarantee Credit"). The Guarantee Credit shall be an
amount equal to eighty percent (80%) of the excess of such other revenues over
Five Hundred Thousand Dollars ($500,000). The Guarantee Credit shall be applied,
if possible, in advance of the time Ixia is to pay the Guarantee Makeup for the
calendar quarter with respect to which the Guarantee Credit arose. If the
Guarantee Credit amount is determined after Ixia makes the particular payment,
then NetIQ shall refund the portion of the particular Guarantee Makeup offset by
the Guarantee Credit, not later than thirty (30) days after determining the
existence and amount of the Guarantee Credit. The information contained in a
report accounting for a Guarantee Credit shall be conclusively deemed correct
and binding upon Ixia, resulting in the loss of all further audit rights with
respect to such report, unless specifically challenged by written notice from
Ixia within two (2) years from the date such report was delivered by NetIQ.
NetIQ agrees to allow an independent certified public accountant, at Ixia's sole
expense, to audit and analyze appropriate and relevant accounting records of
NetIQ at NetIQ's premises to verify accurate accounting for and calculation of
the Guarantee Credit. Any such audit shall be commenced no later than twelve
(12) months after termination or expiration of the Distribution Term and must be
performed in accordance with Generally Accepted Auditing Standards and Generally
Accepted Accounting Principles, all consistently applied. Any understatement of
the Guarantee Credit determined by such audit shall be promptly corrected in
full by NetIQ, but only if NetIQ has been given a complete, unredacted copy of
the auditors' report and any work papers reasonably necessary for NetIQ to
evaluate the correctness of such determination. In addition to correcting such
understatement, if any such audit discloses an understatement of the Guarantee
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Credit (excluding the amount of any understatement which was corrected by NetIQ
prior to the date Ixia gives NetIQ notice of its intent to audit NetIQ's
accounting records) of more than ten percent (10%) of the Guarantee Credit for
the period as to which the discrepancy has arisen, NetIQ shall pay the
reasonable auditors' charges for such audit. Any such audit shall be permitted
during business hours within ten (10) days of receipt of Ixia's written request.
No audit (other than the first audit) credit may be conducted less than six
months after the previous audit. Notwithstanding anything to the contrary
contained in this Agreement, unless Ixia terminates this Agreement due to a
material breach by NetIQ, Ixia will be responsible to pay to NetIQ royalties
that otherwise would have accrued through December 31, 2004, or Three Million
Dollars ($3,000,000) (as may be adjusted by any Guarantee Credits issued in
accordance with this Section 9.3)(the "Minimum Royalty").
9.4. Ixia To Determine Its Own Resale Prices. Ixia is free to
determine its own resale prices for each Distribution Product unilaterally. Each
party understands that neither NetIQ nor any employee or representative of NetIQ
may give any special treatment (favorable or unfavorable) to Ixia as a result of
its selection of prices. No employee or representative of NetIQ nor anyone else
associated or affiliated with NetIQ has any authority to tell Ixia what Ixia's
prices for any Distribution Product must be or to inhibit in any way Ixia's
pricing discretion with respect to any Distribution Product.
9.5. Evaluation Copies. Ixia may, in its sole discretion,
distribute copies of each Distribution Product at no charge for the purpose of
demonstrating the Distribution Product or for other promotional purposes.
9.6. Overpayment. In the event that NetIQ receives an overpayment,
including royalties paid on Distribution Product copies which are subsequently
returned, NetIQ shall repay such overpayment to Ixia promptly after Ixia gives
written notice to NetIQ of such overpayment, provided that NetIQ agrees that
Ixia, without limiting any of its other remedies, may deduct the amount of such
overpayment from any further royalties accruing to NetIQ's account or from other
amounts payable to NetIQ hereunder.
9.7. Payment; Audit. Ixia shall account to NetIQ for royalties due
hereunder in calendar quarterly periods, except that the first accounting period
shall end on September 30, 2003, irrespective of the Effective Date. Within
forty-five (45) days after the last day of each quarter, Ixia will furnish to
NetIQ a royalty report specifying the Adjusted Gross Revenues for the
Distribution Products and Distribution Product Maintenance for such quarter and
the royalties earned by, and other amounts due under this Section 9 with respect
to the Distribution Products and Distribution Product Maintenance, and each such
royalty report shall be accompanied by payment of all sums shown to be due
thereby, after deduction of any and all proper deductions. The royalties shall
be determined in accordance with generally accepted accounting principles (GAAP)
consistently applied. The foregoing shall constitute payment in full for the
Distribution Products and Distribution Product Maintenance. The information
contained in a royalty report shall be conclusively deemed correct and binding
upon NetIQ, resulting in the loss of all further audit rights with respect to
such report, unless specifically challenged by written notice from NetIQ within
two (2) years from the date such report was delivered by Ixia. Ixia agrees to
allow
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an independent certified public accountant, at NetIQ's sole expense, to audit
and analyze appropriate and relevant accounting records of Ixia at Ixia's
premises to verify accurate accounting for and payment of all moneys due NetIQ
hereunder. Any such audit shall be commenced no later than twelve (12) months
after termination or expiration of the Distribution Term and must be performed
in accordance with Generally Accepted Auditing Standards and Generally Accepted
Accounting Principles, all consistently applied. Any underpayment determined by
such audit shall be promptly corrected in full by Ixia, but only if Ixia has
been given a complete, unredacted copy of the auditors' report and any work
papers reasonably necessary for Ixia to evaluate the correctness of such
determination. In addition to correcting such underpayment, if any such audit
discloses an underpayment to NetIQ (excluding the amount of any underpayment
which was corrected by Ixia prior to the date NetIQ gives Ixia notice of its
intent to audit Ixia's accounting records) of more than ten percent (10%) of the
amount due for the period as to which the discrepancy has arisen, Ixia shall pay
the reasonable auditors' charges for such audit. Any such audit shall be
permitted during business hours within ten (10) days of receipt of NetIQ's
written request. No audit (other than the first audit) may be conducted less
than six months after the previous audit.
9.8. No Additional Amounts Due. Except as expressly provided in
this Agreement, no other royalties or monies shall be payable or paid to NetIQ.
10. EXPENSES
Except as expressly set forth in this Agreement, each party shall bear
all expenses incurred by such party in connection with its performance
hereunder. In no event shall either party incur any expense whatsoever on behalf
of the other party without first having received written authorization from such
other party.
11. CONTINUING OBLIGATIONS OF NETIQ
11.1. Corrections. In the event that any Nonconformity is found in a
Chariot Product during the Distribution Term, NetIQ shall prepare and deliver to
Ixia, at no charge to Ixia and via electronic download, a Correction within
forty-five (45) days from the time at which NetIQ discovers or is otherwise
apprised of the Nonconformity (the "Cure Period"). If the Nonconformity is not
susceptible of being remedied within such period, the Cure Period shall be
extended for so long as NetIQ is diligently pursuing a remedy. If NetIQ fails to
promptly deliver to Ixia a Correction by the end of the Cure Period, as it may
be extended, and upon demand by Ixia, Ixia may make other arrangements to
prepare such Correction, and may charge the reasonable costs of doing so to sums
accruing to NetIQ hereunder. Subject to Ixia's provision to NetIQ of detailed
documentation substantiating such costs, including (as applicable) timesheets,
Ixia's chargeable costs may be (i) the amount of fees paid to a third party for
preparing such Correction(s); (ii) Ixia's internal staff costs and out-of-pocket
expenses if Ixia prepares such Correction(s); or (iii) a combination of (i) and
(ii) if both a third party and Ixia prepare such Correction(s).
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11.2. Minor Upgrades. As used herein, the term "Minor Upgrade" shall
mean an upgrade or enhancement of any Chariot Product which represents a minor
increase in the functionality or performance of any Chariot Product and/or a
Correction of such Chariot Product and which, in accordance with accepted
commercial practice in the software industry, is designated by NetIQ with a
version number that is changed from the preceding version number only in the
numbers to the right of the decimal point, but shall not include any Major
Upgrade, as defined in Section 12.1 below. During the Distribution Term, NetIQ
shall provide to Ixia, without additional charge and via electronic download,
any and all Minor Upgrades which NetIQ releases with respect to any Chariot
Product. All Minor Upgrades shall be deemed to be included within the definition
of the "Chariot Products" hereunder. Except for any Corrections which may be
required under Section 11.1 above, NetIQ shall not be under any obligation to
prepare any Minor Upgrades of any Chariot Product.
12. RIGHTS IF NETIQ PREPARES MAJOR UPGRADE OR REPLACEMENT PRODUCT
12.1. Definitions. As used herein, the term "Major Upgrade" shall
mean an upgrade or enhancement of any Chariot Product which represents a
substantial increase in the functionality, performance and content of such
Chariot Product and which, in accordance with accepted commercial practice in
the software industry, is designated by NetIQ with a version number that is
changed from the preceding version number in the numbers to the left of the
decimal point. Any Major Upgrade as to which Ixia acquires the right to market
and distribute under this Agreement shall be deemed to be included within the
definition of the "Chariot Products" hereunder.
12.2. Major Upgrades of Any Chariot Product; Replacement Product. In
the event that NetIQ releases one or more Major Upgrades of any Chariot Product
during the Distribution Term, or releases any product which is a replacement for
a Chariot Product, NetIQ shall provide such Major Upgrade or such replacement
product to Ixia at no additional charge and via electronic download.
Notwithstanding the foregoing, Ixia will retain the distribution rights granted
under this Agreement for any prior release of a Distribution Product delivered
to Ixia hereunder. Any such Major Upgrade or replacement product shall be deemed
to be included within the definition of the "Chariot Products" hereunder.
Notwithstanding the foregoing, NetIQ shall not be under any obligation to
prepare any Major Upgrades of, or replacement products for, any Chariot Product.
13. END USER TECHNICAL SUPPORT AND CUSTOMER SERVICE; TRAINING
13.1. Distribution Product Maintenance. Commencing on the Support
Cutover Date, and continuing during remainder of the Distribution Term, Ixia
shall provide Distribution Product Maintenance to all end users of the Chariot
Products, other than any Ixia Derivatives, in the Distribution Territory,
provided that Ixia shall have the right to refer end users to NetIQ for end user
support as to versions of Chariot set forth in Schedule 13.1, which versions
will not be supported by Ixia (each such version, a "Support Exclusion"). As
well, Ixia will not assume Distribution Product Maintenance for the Defense
Intelligence Agency. The Distribution Product Maintenance provided by Ixia shall
be reasonably comparable to that made available on
- 18 -
the Effective Date by NetIQ to end users of the Distribution Products, and the
initial price of such Distribution Product Maintenance shall not materially
exceed that charged by NetIQ on the Effective Date. Prior to the Support Cutover
Date NetIQ, at its sole expense, shall provide to Ixia via electronic download
at Ixia's facility in California, all open service requests for support within
the Distribution Territory contained in NetIQ's support databases, all data
useful in resolving Chariot support problems that can reasonably be provided
without disclosing identities of customers outside the Distribution Territory
and without substantial compilation effort, problem reports, FAQ sets, solutions
and other records pertaining to or applicable to the end user support provided
by NetIQ with respect to the Chariot Products. Ixia and NetIQ shall develop an
appropriate plan to transition NetIQ's existing maintenance customers to Ixia,
which plan shall specify, among other things, that Ixia will reimburse NetIQ for
any salary, retention bonuses and benefits with respect to the two (2) full time
employees of NetIQ that are currently assigned to end user support with respect
to the Chariot Products, together with any other direct costs incurred by NetIQ
in connection with such provision of end user support, all of which in the
aggregate shall not exceed eighty thousand dollars ($80,000), for a period to be
mutually agreed (which shall not extend past the Support Cutover Date). On or
before August 1, 2003, NetIQ will pay to Ixia the amount of one million, two
hundred eighteen thousand, seven hundred and eight dollars ($1,218,708), less
(a) the employee costs and direct costs referred to in the preceding sentence,
and (b) the amounts attributable to prepaid maintenance for the Defense
Intelligence Agency, as payment of maintenance fees for such Distribution
Product Maintenance obligations being assumed by Ixia. Ixia and NetIQ agree to
cooperate in connection with the foregoing and with Ixia's hiring of NetIQ
employees under Section 7.1 above so as to maintain NetIQ's ability to perform
its Distribution Product Maintenance obligations through the Support Cutover
Date under this Section 13.1, but also to assure the complete and effective
transition of such services to Ixia in a time and manner which allows Ixia to be
sufficiently prepared to take over Distribution Product Maintenance on the
Support Cutover Date. After completion of the Build SOW (as defined in Section
13.3 below, NetIQ will provide reasonable assistance, not to exceed six (6)
person-hours per month, to Ixia with respect to any questions or problems
concerning the Chariot Products or the use of the Chariot Products and otherwise
in connection with Ixia's provision of Distribution Product Maintenance. As to
end users of the Ixia Derivatives, Ixia shall be solely responsible for
providing end user technical support and customer service to all such end users
throughout the world, without any right to refer them to NetIQ or to receive
assistance from NetIQ with respect thereto.
13.2. Ixia Right To Prepare Corrections To Distribution Products.
Notwithstanding, and without limiting, waiving or relieving, NetIQ's obligation
to prepare Corrections under Section 11.1 above, Ixia shall have the right, but
not the obligation, to prepare and release Corrections of the Distribution
Products. In the event that during the Distribution Term Ixia does prepare any
such Correction of any Distribution Product and releases such Correction to its
customers as part of Distribution Product Maintenance, Ixia shall promptly
deliver to NetIQ, at no cost and in both source and object code form, such
Correction, and NetIQ shall have the irrevocable, royalty-free, nonexclusive
right to deliver such Correction to end users outside the Distribution Territory
and to incorporate such Correction into the code base for the affected Chariot
Product. Ixia shall assign, transfer and otherwise convey to NetIQ an undivided,
co-equal interest in the Intellectual Property Rights in such Correction,
without a duty to account,
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and shall execute such documents and provide such assistance as NetIQ may
reasonably request, at NetIQ's expense, to evidence, perfect or effect such
conveyance.
13.3. Build Services. NetIQ shall provide reasonable assistance to
Ixia in accordance with the statement of work set forth in Schedule 13.3 to
enable Ixia to recreate the build environments, test environments and support
lab environments applicable to the Chariot Products (the "Build SOW"). Such
services shall be provided at NetIQ's facility in Raleigh, North Carolina. Ixia,
at its own risk and expense, shall obtain the components of the Build System and
ship the Build System and Build Materials to NetIQ's facilities. Ixia may send
up to five (5) employees to assist in the performance of the Build SOW at
NetIQ's facilities, subject to such employees' execution of an appropriate form
of non-disclosure and compliance with NetIQ's reasonable policies.
13.4. Ixia Right To Take Over One Or More Support Exclusion(s). Ixia
may elect, on one or more occasions, to take over Distribution Product
Maintenance of one or more Support Exclusion(s). In such event, Ixia will notify
NetIQ and the parties will cooperate to transition the Distribution Product
Maintenance of the specified Support Exclusion(s), including having NetIQ
provide services in the nature of the Build Services with respect to such
Support Exclusion(s), and Section 13.3 above shall apply in all respects to such
services, all at no additional charge to Ixia, provided that Ixia shall be
responsible for all out-of-pocket expenses of either party in connection
therewith.
13.5. Distribution Product Maintenance After Distribution Term.
After the Distribution Term, if Ixia exercises the Option, Ixia shall provide
Distribution Product Maintenance to all end users of the Chariot Products
throughout the world, without any right to refer them to NetIQ or to receive
assistance from NetIQ with respect thereto. If Ixia does not exercise the
Option, then the rights and obligations of the parties as to Distribution
Product Maintenance shall be as set forth in Section 15.6 below.
13.6. Development and Test Environment. Ixia, at its own risk and
expense, shall be responsible for procuring the tools and equipment comprising
the Development and Test Environment.
14. JOINT ANNOUNCEMENT OF AGREEMENT
Prior to the execution of this Agreement, the parties shall jointly
prepare one or more press releases announcing this Agreement and the
relationship established hereunder, but any such press releases must be approved
by both parties before being issued. Without limiting the other matter which may
be included, each party shall have the right to include its own company
information of the kind that is customarily included in such press releases by
public companies.
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15. IXIA OPTION TO ACQUIRE ASSETS COMPRISING CHARIOT BUSINESS
15.1. Option. Ixia shall have the unilateral option to acquire from
NetIQ the assets comprising the Chariot Business which are set forth in Schedule
15.1 (the "Option Assets") on the terms and conditions set forth in this Section
15, which is the "Option".
15.2. Time and Manner of Exercise. The Option may be exercised at
any time after September 1, 2004 through and including January 15, 2005, by
giving unequivocal and unambiguous notice to NetIQ and tendering payment of the
Option Exercise Price (as defined in Section 15.3.1 below). The Option shall be
conclusively and irrevocably deemed exercised upon such notice and tender, and
no subsequent event (other than Ixia's bank's failure or refusal to release
funds upon lawful presentment of a lawful payment instrument) shall be grounds
for NetIQ to rescind, revoke, cancel or otherwise terminate or avoid the
exercise of the Option and/or the grant to Ixia of the Option Assets.
15.3. Option Exercise Price.
15.3.1. Option Exercise Price. In the event that Ixia
exercises the Option, Ixia shall pay to NetIQ a one-time payment in the amount
of Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Option Exercise
Price"). The Option Exercise Price shall be due in full at the time of exercise
of the Option and shall be paid in cash on the exercise date by wire transfer of
immediately available funds to an account of NetIQ designated to Ixia.
15.3.2. No Further Amounts Due With Respect To Option or
Option Assets. The amounts set forth in this Section 15.3 constitute payment in
full for the exercise of the Option and for the Option Assets. Accordingly, no
other payments, royalties or monies shall be payable or paid to NetIQ with
respect to the Chariot Products or the Chariot Business even though Ixia's sales
of the Chariot Products may continue into perpetuity. Notwithstanding the
foregoing and irrespective of its exercise of the Option, Ixia shall be
responsible to pay the Source Asset License Fee and the Minimum Royalty.
15.4. Rights of Ixia Upon Exercise. Upon exercise of the Option, the
provisions of this Section 15.4 shall automatically become effective as of
January 1, 2005 (the "Option Effective Date"); and all rights granted to Ixia
hereunder with respect to the Distribution Products shall become exclusive to
Ixia (even as to NetIQ) throughout the entire world, royalty-free, perpetual and
irrevocable; and NetIQ shall automatically be deemed to have granted to Ixia all
right, title and interest in and to the Option Assets (including the Chariot
Business Marks, which shall be assigned to Ixia). In addition, promptly after
the exercise of the Option, NetIQ shall give notice to all of its resellers with
contractual rights to distribute Chariot Products that such contractual rights
shall be terminated effective as of the later of (i) the earliest date on which
NetIQ can make such termination effective, or (ii) the Option Effective Date,
and that such resellers shall have no right to distribute any Chariot Products
anywhere in the world after such date. NetIQ shall turn over to Ixia all orders
for any Chariot Product which are pending as of the Option Effective Date, and
such orders shall become Ixia orders in all respects, including as to payment.
If NetIQ has received any payments with respect to any such orders, or if NetIQ
receives any payments with respect to such orders after the Option Effective
Date, NetIQ shall promptly remit such payments to Ixia, together with clear
documentation of the transaction to which such payments apply.
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NetIQ shall also turn over to Ixia all records of all sales of Chariot Products
by NetIQ after the Option Effective Date, including a schedule of all deferred
maintenance revenues together with payment of the amount of all such deferred
maintenance revenues. Without limiting the generality of the foregoing, upon
exercise of the Option, any restriction on variants of the Chariot Business
Marks under Section 2.3 above, shall be conclusively deemed stricken from this
Agreement and of no further force and effect. In such event, the parties agree
to implement a reasonable and mutually agreeable transition plan pursuant to
which any NetIQ branding or other reference to NetIQ in connection with the
Distribution Products will be discontinued.
15.5. NetIQ Covenants Re Option Assets. NetIQ covenants that after
the Effective Date up to and including the Option Effective Date, if Ixia
exercises the Option, or up to and including January 15, 2005 if Ixia does not
exercise the Option, or such earlier date as this Agreement may be terminated,
NetIQ: (a) will continue to operate the Chariot Business and will not make any
substantial changes to the Chariot Business; (b) will not enter into any
agreement or business arrangement concerning the Option Assets that is outside
the ordinary course of the Chariot Business as it has been conducted by NetIQ;
(c) will not enter into any maintenance contract with any end user on terms that
are substantially less favorable to NetIQ than NetIQ's maintenance agreements as
of the Effective Date; and (d) will not intentionally take any action, or omit
to take any action, where the result would be the waste of the Option Assets or
any material part of the Option Assets. NetIQ shall take all steps necessary to
ensure that it is able to deliver the Option Assets to Ixia on the Option
Effective Date.
15.6. If Ixia Does Not Exercise Option. If Ixia does not exercise
the Option, Ixia shall choose one of the following two alternatives, and shall
give written notice of its choice to NetIQ on or before January 15, 2005:
(i) The first alternative is that Ixia's distribution
appointment under 8.4 above will become nonexclusive,
with no limitation as to territory, in which case
Ixia will pay royalties to NetIQ as provided in
Section 9.2 above (using the definition of "Adjusted
Gross Revenues" set forth in Section 9.1 above), but
with no minimum commitment as to any sales period
after December 31, 2004. In such event, Ixia will
continue to provide Distribution Product Maintenance
and the provisions of Section 8 will continue in
force except as modified in this Subparagraph (i).
This arrangement will continue for an initial period
of one (1) year, and will be renewable annually
thereafter upon the mutual written consent of both
parties.
(ii) The second alternative is that Ixia's distribution
appointment under 8.4 above will terminate on January
15, 2005, and Ixia will cease all sale of
Distribution Products anywhere in the world. In such
case, Ixia will make reasonable efforts to transition
Distribution Product Maintenance to NetIQ, within a
period of time not materially dissimilar to the
initial transition of these responsibilities from
NetIQ to Ixia. Ixia and NetIQ will each make
reasonable efforts to facilitate such a transition so
that no customer is left without sufficient end user
technical support or customer
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service at any point in time. Ixia will transfer all
deferred revenue for Distribution Product Maintenance
to NetIQ as of January 1, 2005, in a single cash
payment made on or before January 30, 2005. NetIQ
will reimburse Ixia for all reasonable out-of-pocket
expenses incurred by Ixia in connection with the
provision of Distribution Product Maintenance during
the transition period.
Should Ixia fail to provide timely written notice of its election, then Ixia
shall be deemed to have selected the alternative set forth in Section 15.6(i)
above.
16. TERMINATION
16.1. No Termination Except As Explicitly Set Forth. Unless, and
except as, otherwise explicitly set forth elsewhere in this Agreement, this
Agreement may not be terminated by either party except in accordance with this
Section 16.
16.2. Termination For Cause. Except as otherwise provided, either
party may terminate this Agreement at any time (subject to the limitation set
forth in Section 5 above) effective upon written notice of termination to the
other party in the event that such other party materially fails to perform any
of its material obligations hereunder and such failure continues unremedied for
a period of thirty (30) days after written notice of such failure from the party
alleging such failure.
16.3. Ixia Termination Without Cause. Ixia (but not NetIQ) may
terminate this Agreement without cause upon thirty (30) days' notice to NetIQ,
but such termination shall not relieve Ixia of its obligations under Section 3
and Section 9.3 above. NetIQ agrees that if such notice of termination is given,
NetIQ shall do nothing to derogate Ixia's rights hereunder until such time as
those rights actually end in accordance with the terms hereof.
16.4. Effects of Termination. Except as expressly set forth herein,
in the event of any termination or expiration of this Agreement, Ixia's right to
distribute the Chariot Products hereunder (other than as to the Ixia
Derivatives, which rights are not subject to termination) shall immediately
terminate, except that: (i) provided that Ixia complies with all other terms and
conditions of this Agreement, including payment of any royalties for
Distribution Products and Distribution Product Maintenance, Ixia may fulfill the
executory (as of the effective date of termination) portion of any contracts
entered into by Ixia with third parties concerning the Chariot Products, or any
of them, for up to twelve (12) months after the effective date of termination of
this Agreement, in which case NetIQ shall continue to comply with all other
terms and conditions of this Agreement as to such fulfillment by Ixia; and (ii)
Ixia will continue to provide Distribution Product Maintenance until the
transition referenced herein is complete. Ixia will make reasonable efforts to
transition Distribution Product Maintenance to NetIQ, as promptly as practicable
after the effective date of termination. Ixia and NetIQ will each make
reasonable efforts to facilitate such a transition so that no customer is left
without sufficient end user technical support or customer service at any point
in time. Ixia will transfer all deferred revenue for Distribution Product
Maintenance to NetIQ as of the effective date of termination.
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NetIQ will reimburse Ixia for all reasonable out-of-pocket expenses incurred by
Ixia in connection with the provision of Distribution Product Maintenance during
the transition period.
16.5. No Effect On End Users. Upon an end user acquiring a Chariot
Product, the end user shall be entitled to use that Chariot Product indefinitely
consistent with the end user's license. The rights of end users are independent
of this Agreement and will survive any termination of this Agreement for any
reason whatsoever.
16.6. Right To Use Chariot Product For Support. No termination of
this Agreement for any reason whatsoever shall limit in any way Ixia's right to
use the Chariot Products for the purpose of providing Distribution Product
Maintenance to the limited extent expressly permitted under Section 16.5, and
Ixia may make and maintain copies of the Chariot Products to use as replacements
for defective copies of the Chariot Products, but Ixia may not otherwise
manufacture or distribute copies of the Chariot Products except as expressly
provided herein.
16.7. Survival. The rights and obligations of the parties set forth
in Sections 2, 4.2, 5, 6, 8.12, 9.2, 9.3, 9.6, 9.7, 9.8, 10, 15.3.2, 15.4,
15.5(ii), 16.4-16.7 and 17-25 shall survive any termination or expiration of
this Agreement for any reason whatsoever.
17. CONFIDENTIALITY
17.1. Confidential Information. For purposes of this Agreement,
"Confidential Information" shall mean any information or material which is
proprietary to the disclosing party or designated as Confidential Information by
the disclosing party and not generally known other than by the disclosing party,
and shall include the terms and conditions of, but not the fact of, this
Agreement (subject to any announcement in accordance with the provisions of
Section 14 above). Confidential Information also includes any information which
the disclosing party obtains from any third party which the disclosing party
treats as proprietary or designates as Confidential Information, whether or not
owned by the disclosing party. "Confidential Information" does not include the
following: (i) information which is known by the receiving party at the time of
receipt from the disclosing party which is not subject to any other
nondisclosure agreement between the parties; (ii) information which is now, or
which hereafter becomes, generally known to the industry through no fault of the
receiving party, or which is later published or generally disclosed to the
public by the disclosing party; or (iii) information which is otherwise lawfully
developed by the receiving party, or lawfully acquired from a third party
without any obligation of confidentiality.
17.2. No Disclosure. During the term of this Agreement and
thereafter, the receiving party agrees to hold in confidence and not to disclose
or reveal to any person or entity any Confidential Information disclosed
hereunder without the clear and express prior written consent of a duly
authorized representative of the disclosing party. The receiving party further
agrees not
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to use or disclose any of the Confidential Information for any purpose at any
time, other than for the limited purpose(s) of this Agreement. In the event that
either party is directed to disclose any portion of any Confidential Information
of the other party or any other materials of other party in conjunction with a
judicial proceeding or arbitration, the party so directed shall immediately
notify the other party both orally and in writing. Each party agrees to provide
the other with reasonable cooperation and assistance in obtaining a suitable
protective order and in taking any other steps to preserve confidentiality.
17.3. No Publicity. Information relating to the substance of this
Agreement shall be deemed Confidential Information, and neither party shall
disclose such information to third parties without the prior written consent of
the other.
17.4. No Confidential Information of Other Parties. NetIQ represents
and warrants that it will not use in the course of its performance hereunder,
and will not disclose to Ixia, any confidential information of any third party
(including competitors of Ixia or NetIQ) unless NetIQ is expressly authorized in
writing by such third party to do so.
18. OWNERSHIP
18.1. Chariot Products Other Than Ixia Derivatives. As between NetIQ
and Ixia, all right, title and interest in and to, and ownership of, the
Intellectual Property Rights in each Chariot Product which is not an Ixia
Derivative shall remain at all times exclusively in NetIQ, and Ixia shall not
acquire any right, title, or interest therein, except as expressly set forth
herein. Notwithstanding the foregoing, the Intellectual Property Rights in the
Option Assets will be transferred to Ixia upon Ixia's exercise of the Option;
provided, however, that NetIQ shall have the right to continue to use that
portion of the Option Assets that consists of business records as may be
reasonably necessary to operate its business. Notwithstanding the foregoing, the
parties shall jointly own, without a duty to account, all right, title and
interest, including all Intellectual Property Rights, in and to any Corrections
made by Ixia pursuant to Section 13.2.
18.2. Modifications to Chariot Products; Other Matter Prepared By
Ixia. As between NetIQ and Ixia, all right, title and interest in and to, and
ownership of, the Intellectual Property Rights in any modifications to any
Chariot Products made hereunder, and all Ixia Derivatives, and any other matter
prepared by Ixia in connection with the Chariot Products and/or exercise of its
rights under this Agreement, shall remain at all times exclusively in Ixia
subject to Section 18.1 above, and NetIQ shall not acquire any right, title, or
interest therein. Notwithstanding the foregoing, the parties shall jointly own,
without a duty to account, all right, title and interest, including all
Intellectual Property Rights, in and to any Corrections made by Ixia pursuant to
Section 13.2.
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19. REPRESENTATIONS AND WARRANTIES OF NETIQ
Except as otherwise expressly set forth on Schedule 19 or as otherwise
set forth in a schedule referenced in this Section 19, NetIQ represents and
warrants to Ixia as set forth in Sections 19.1 through 19.14:
19.1. Incorporation and Good Standing. NetIQ is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
is duly registered or otherwise authorized to transact business in each
jurisdiction in which such registration or other authorization is required by
reason of the activities in which NetIQ is engaged. NetIQ has all requisite
power and authority to own, lease and operate its assets, properties and
business, to carry on its business as now being conducted, to execute and
deliver this Agreement, and to perform its obligations hereunder and effect the
transactions contemplated hereby.
19.2. Authorization and Binding Obligations. All requisite action
has been taken by NetIQ to authorize and approve the execution, delivery and
performance of this Agreement by NetIQ. This Agreement has been duly executed
and delivered by NetIQ and the obligations of NetIQ under this Agreement are
legal, valid and binding obligations, enforceable in accordance with the terms
hereof except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and limitations on the availability of equitable remedies.
19.3. No Conflicts. The execution, delivery and performance of this
Agreement by NetIQ and the consummation of the transactions contemplated by this
Agreement will not (a) violate any provision of the charter or other
organizational documents of NetIQ, (b) violate, conflict with or result in (or
with notice or lapse of time or both result in) a breach of or default under any
term or provision of any contract or agreement to which NetIQ is a party or by
or to which NetIQ or any of its assets or properties are or may be bound, (c)
violate any order, judgment, injunction, award or decree of any court or
arbitration body, or any governmental, administrative or regulatory authority,
by or to which NetIQ or any of its assets or properties are or may be bound, or
(d) violate any statute, law or regulation.
19.4. No Approvals Required. No approval or consent of any
governmental, administrative or regulatory body or any other person or entity is
required to be obtained by NetIQ for the execution, delivery or performance of
this Agreement.
19.5. Litigation. Except as set forth in Schedule 19.5, there are no
claims, actions, suits, arbitrations, proceedings or investigations by or before
any court or arbitration body, any governmental, administrative or regulatory
agency, or any other body, pending or threatened against, affecting or relating
to the Chariot Products or the Chariot Business or the transactions contemplated
by this Agreement, nor is there any basis for any such claim, action, suit,
arbitration, proceeding or investigation. There are no existing or threatened
orders, judgments or decrees of any court or arbitration body, any governmental,
administrative or regulatory agency, or any other body, which specifically apply
to NetIQ or any of its properties or assets and which may affect the Chariot
Products or the Chariot Business.
- 26 -
19.6. Contracts. Schedule 19.6 contains a list of the following
agreements (and a description of any such agreements which are oral) to which
NetIQ is a party and which pertain to the Chariot Products or the Chariot
Business, and true and correct copies of such agreements (if in writing) and all
other agreements, leases or plans listed or described on any other Schedule to
this Agreement have been provided to Ixia or its counsel:
(a) each agreement, contract, commitment or arrangement
whereby NetIQ acquired any intellectual property (as owner, lessee, licensee or
on any other basis) which has been incorporated in the Chariot Products;
(b) each agreement, contract, commitment or arrangement
with any dealer, distributor, broker, agent, or sales representative concerning
the marketing or resale of the Chariot Products;
(c) each noncompetition agreement with respect to the
Chariot Products (excluding any agreements with NetIQ employees);
(d) each agreement, contract, commitment or arrangement
entered into outside the ordinary course of business with respect to the Chariot
Business or the Chariot Products; and
(e) each agreement, contract, commitment or arrangement
entered into which NetIQ reasonably believes has had or will have a material
adverse effect on the Chariot Business.
19.7. Intellectual Property Rights.
19.7.1. Scheduled Intellectual Property Assets. Schedule
19.7.1 lists each patent, registered copyright, mask right, trademark, trade
name, and service xxxx, and each registration of or application for registration
of any of the foregoing and the expiration date, if any, thereof, which is owned
by NetIQ or registered in the name of NetIQ, and which: (i) is incorporated in
Chariot or any version of Chariot; (ii) is specific to the Chariot Products or
the Chariot Business, or necessary to the conduct and operation of the Chariot
Business as conducted and operated by NetIQ as of the Effective Date; and/or
(iii) is a Source Asset (all of the foregoing collectively, "Scheduled IP
Assets"). All of the applications listed on Schedule 19.7.1 are still pending in
good standing and have not been abandoned.
19.7.2. Intellectual Property Assets Which Are Not Scheduled.
There are certain inventions, trade secrets, technology, processes, designs,
drawings, notes, specifications, plans, techniques, models, samples, prototypes,
data, documentation, schematics, diagrams, formulae, computer programs, designs
and structures of computer programs, programming techniques, source codes,
object code, unregistered copyrights or other intellectual property or
proprietary rights which: (i) are incorporated in Chariot or any version of
Chariot; (ii) are specific to the Chariot Products or the Chariot Business, or
necessary to the conduct and operation of the Chariot Business as conducted and
operated by NetIQ as of the Effective Date; and/or (iii) are
- 27 -
Source Assets (all of the foregoing collectively, "Unscheduled IP Assets").
19.7.3. Intellectual Property Rights. The Scheduled IP Assets
and the Unscheduled IP Assets are referred to collectively as "Intellectual
Property". NetIQ is the owner of, or otherwise has the right to exercise, all
Intellectual Property Rights in the Chariot Products. The Intellectual Property
includes all of the intellectual property, other than the Build System and
Development and Test Environment, necessary to the conduct of, or, to NetIQ's
knowledge, primarily used by NetIQ in connection with, the Chariot Business.
Schedule 19.7.3 identifies any Intellectual Property which is licensed from a
third party ("Licensed IP Assets"). Schedule 19.7.3 identifies any Licensed IP
Assets as to which NetIQ has any obligation to pay royalties or any other fees
which are unpaid as of, or which may become due after, the Effective Date. NetIQ
is the sole and exclusive owner of all right, title and interest in and to the
Intellectual Property with the exception of the Licensed IP Assets.
(collectively, "Owned IP Assets"). NetIQ has good and valid licenses or other
rights to use the Licensed IP Assets, and except as set forth on Schedule
19.7.3, all of such licenses or other rights are in writing and are
transferable. NetIQ has entered into valid and binding written nondisclosure
agreements with all third parties who have been provided or permitted access by
NetIQ to Intellectual Property which is Confidential Information. Except as set
forth on Schedule 19.7.3, NetIQ has entered into valid and binding written
agreements with any parties (other than parties who were employees of NetIQ at
the time) who provided any Intellectual Property to NetIQ (other than for
NetIQ's own internal use) which provide for the transfer of that Intellectual
Property to NetIQ. Except as set forth on Schedule 19.7.3 and for end user
licenses granted in the ordinary course of business, all of NetIQ's right, title
and interest in, to and under the Intellectual Property is freely transferable,
and is free and clear of any encumbrances, options, distribution rights and
restrictions. NetIQ has not granted any licenses or distribution rights to the
Intellectual Property to third parties other than pursuant to the license or
distribution agreements listed on Schedule 19.7.3 or Schedule 19.6 and end user
licenses granted in the ordinary course of business. As of the Effective Date
and except as set forth on Schedule 19.7.3 or Schedule 19.5, there are no
pending or threatened claims, actions, suits, proceedings, judgments, decrees or
orders (whether asserted by or against NetIQ) affecting or relating to the
Intellectual Property, NetIQ's right, title and interest therein or the
validity, use, transfer or potential transfer of NetIQ's right, title and
interest therein, or alleging that the Intellectual Property, or any part of the
Intellectual Property, conflicts with, violates or infringes the proprietary or
contractual rights of others, and there are no existing grounds on which any
such claim might be made and/or such action, suit or proceeding might be
commenced.
19.8. Licenses and Third Party Rights. To the extent that any third
parties have any rights with respect to any portion of any Chariot Product,
NetIQ has obtained any and all such third party rights or permissions which are
required for the uses contemplated by this Agreement and for Ixia's exercise of
the rights granted to it under this Agreement. NetIQ has obtained all applicable
licenses and has paid and/or will timely pay all applicable payments for the
rights to incorporate any third party works into any Chariot Product, and for
the rights to reproduce, distribute, perform, display and/or create derivative
works based upon such works, as applicable. NetIQ shall be solely responsible
for paying such amounts, without any right of reimbursement from Ixia.
- 28 -
19.9. Product Operation. For a period of two (2) years from the
Effective Date, the Chariot Products, and each of them and each version of them,
will be reasonably free from any Nonconformities, and each Chariot Product, and
each version of each Chariot Product, will operate as described in, and in
conformance with the specifications and the end user documentation for the
particular Chariot Product or version. Notwithstanding the foregoing, NetIQ
shall not be responsible for Nonconformities which result from any modification
of a Chariot Product not made or authorized by NetIQ.
19.10. Compliance. NetIQ has at all times conducted its business so
as not to violate or contravene in any material respect any applicable laws,
rules or regulations, or to breach or default in its obligations under all
material agreements entered into by NetIQ, in each case which pertain to the
Chariot Products or the Chariot Business.
19.11. Status of Agreements. NetIQ has, in all material respects,
performed all material obligations required to be performed by it and is not in
default under any agreement, lease or other instrument to which it is a party or
by which it is bound, in each case which pertains to the Chariot Products or the
Chariot Business. To the best knowledge of NetIQ, all other parties to such
agreements, leases or other instruments are in material compliance therewith,
and no event has occurred which with notice or lapse of time or both would
constitute a default thereunder; provided, however, that the foregoing shall not
apply to customer payment obligations with respect to sales made prior to the
Effective Date.
19.12. Full Disclosure. The Schedules attached hereto and all
information set forth therein are true and correct in all material respects. No
representation or warranty made by NetIQ in this Agreement, and no statement,
schedule or certificate made by NetIQ furnished or to be furnished to Ixia
pursuant to this Agreement or in connection with the transactions contemplated
by this Agreement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.
19.13. Brokers. NetIQ has not retained any broker, finder or other
person that is entitled to any broker's, finder's or other fee or commission in
connection with the Agreement or the transactions contemplated thereby.
19.14. Reliance. The foregoing representations and warranties are
made by NetIQ with the knowledge and expectation that Ixia is placing, and is
entitled to place, complete reliance thereon in entering into, and performing
its obligations under, this Agreement, notwithstanding any independent
investigations conducted by or on behalf of Ixia whether in contemplation of or
pursuant to this Agreement or otherwise.
20. IXIA'S REPRESENTATIONS AND WARRANTIES
Except as otherwise expressly set forth on Schedule 20, Ixia hereby
represents and warrants to NetIQ as follows:
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20.1. Organization, Power and Authority. Ixia is a corporation duly
organized and validly existing under the laws of California, with all requisite
power and authority to own, lease and operate its assets, properties and
business, to carry on its business as now being conducted, to execute and
deliver this Agreement, and to perform its obligations hereunder and effect the
transactions contemplated hereby.
20.2. Authorization. All requisite action has been taken by Ixia to
authorize and approve the execution, delivery and performance of this Agreement
by Ixia. This Agreement has been duly executed and delivered by Ixia and the
obligations of Ixia under this Agreement are legal, valid and binding
obligations, enforceable in accordance with the terms hereof except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
limitations on the availability of equitable remedies.
20.3. No Conflicts. The execution, delivery and performance of this
Agreement by Ixia and the consummation of the transactions contemplated by this
Agreement will not (a) violate any provision of the Articles of Incorporation or
Bylaws of Ixia, (b) violate, conflict with or result in (or with notice or lapse
of time or both result in) a breach of or default under any term or provision of
any contract or agreement to which Ixia is a party or by or to which Ixia or any
of its assets or properties are or may be bound, (c) violate any order,
judgment, injunction, award or decree of any court or arbitration body, or any
governmental, administrative or regulatory authority, by or to which Ixia or any
of its assets or properties are or may be bound, or (d) violate any statute, law
or regulation.
20.4. No Approvals Required. No approval or consent of any
governmental, administrative or regulatory authority or any other person or
entity is required for the execution, delivery or performance of this Agreement
by Ixia.
20.5. Full Disclosure. No representation or warranty made by Ixia in
this Agreement, and no statement, schedule or certificate made by Ixia furnished
or to be furnished to NetIQ pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained therein not misleading.
20.6. Brokers. Except as set forth on Schedule 20.6, Ixia has not
retained any broker, finder or other person that is entitled to any broker's,
finder's or other fee or commission in connection with the Agreement or the
transactions contemplated thereby.
20.7. Reliance. The foregoing representations and warranties are
made by Ixia with the knowledge and expectation that NetIQ is placing, and is
entitled to place, complete reliance thereon in entering into, and performing
its obligations under, this Agreement, notwithstanding any independent
investigations conducted by or on behalf of NetIQ whether in contemplation of or
pursuant to this Agreement or otherwise.
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21. INDEMNITY
21.1. Indemnification By NetIQ. NetIQ, at its sole expense, will
defend, and NetIQ agrees to indemnify and hold Ixia, its subsidiaries,
successors, stockholders (including any parent entity), officers, directors,
predecessors, assigns, agents, employees, attorneys and representatives of each
of them, past or present, harmless from and with respect to any loss or damage
(including, but not limited to, reasonable attorneys' fees and costs and
expenses of litigation) incurred in connection with, any suit or proceeding
brought by a third party against Ixia insofar as such suit or proceeding shall
be based upon (i) a claim alleging facts or circumstances that, if true, would
constitute (a) a breach of any representation or warranty of NetIQ set forth in
Section 19 hereof, or (b) a breach of the covenants given by NetIQ in Section
15.5 above, or (ii) a claim brought by a third party to the extent it alleges
that the Source Assets or Chariot Products, or any of them, directly infringe
the Intellectual Property Rights of a third party, provided Ixia gives NetIQ
prompt written notice of any such claim and provides NetIQ such reasonable
cooperation and assistance as NetIQ may request from time to time in the defense
thereof. Ixia shall permit NetIQ to control such litigation. Ixia shall have the
right, but not the obligation, to participate in such litigation or proceeding
at its sole expense through counsel of its own choosing. NetIQ shall pay any
damages and costs assessed against Ixia (or paid or payable by Ixia pursuant to
a settlement agreement, provided that Ixia will not enter into any settlement
without the prior written consent of NetIQ, which consent shall not be
unreasonably withheld or delayed) in connection with such a suit or proceeding,
provided Ixia has given NetIQ prompt written notice of such claim.
21.2. Indemnification By Ixia. Ixia, at its sole expense, will
defend, and Ixia agrees to indemnify and hold NetIQ, its subsidiaries,
successors, stockholders (including any parent entity), officers, directors,
predecessors, assigns, agents, employees, attorneys and representatives of each
of them, past or present, harmless from and with respect to any loss or damage
(including, but not limited to, reasonable attorneys' fees and costs and
expenses of litigation) incurred in connection with, any suit or proceeding
brought by a third party against NetIQ insofar as such suit or proceeding shall
be based upon (i) a claim alleging facts or circumstances that, if true, would
constitute (a) a breach of any representation or warranty of Ixia set forth in
Section 20 or (b) a breach of the covenants given by Ixia in Section 8.12 above;
(ii) a claim brought by a third party to the extent it alleges that an Ixia
Derivative infringes the Intellectual Property Rights of a third party (to the
extent such claim does not directly result from the Source Assets or Chariot
Products themselves); or (iii) an Indemnified Patent Action (as defined in
Section 22.6 below). Except for an Indemnified Patent Action in which NetIQ is
the Initiating Party (as defined below), NetIQ shall permit Ixia to control such
litigation. NetIQ shall have the right, but not the obligation, to participate
in such litigation or proceeding at its sole expense through counsel of its own
choosing. Ixia shall pay any damages and costs assessed against NetIQ (or paid
or payable by NetIQ pursuant to a settlement agreement, provided that NetIQ will
not enter into any settlement without the prior written consent of Ixia, which
consent shall not be unreasonably withheld or delayed) in connection with such a
suit or proceeding, provided NetIQ has given Ixia prompt written notice of such
claim.
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22. ACTIONS TO PROTECT INTELLECTUAL PROPERTY RIGHTS
22.1 General. NetIQ agrees to assist Ixia in enforcing the Patents
against Third Parties who infringe such one or more Patents relating to the Ixia
Derivative and/or the Distributed Products within the scope of the rights
exclusively licensed to Ixia set forth in this Agreement which rights are in
existence at the time of the written notice from Ixia to NetIQ as provided below
("Defined Infringement.") For these purposes, a Third Party shall be any entity
which does not, directly or indirectly, Control and is not Controlled by or
under common Control with either Ixia or NetIQ and which is not or does not
become a licensee of the relevant Patents. The term "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and operating policies of such entity through the
ownership of more than 50% of the voting or equity securities, voting trust or
other ownership interest in the entity. Notwithstanding any other provisions of
the Agreement, this Section 22 is the sole section permitting Ixia to enforce
the Patents.
22.2 Actions. In the event that Ixia learns of a possible Defined
Infringement, Ixia shall promptly notify NetIQ in writing identifying the
infringer ("Defined Infringer"), the Patent believed to be infringed and the
nature of the infringement. NetIQ shall have one hundred and twenty (120) days
from the date of the notice to file an action against the Defined Infringer with
or without financial assistance by Ixia and NetIQ shall not be eligible for
indemnity as provided in Section 22.6. If NetIQ does not file an action against
the Defined Infringer before the expiration of such 120-day period, Ixia shall
have one hundred and twenty (120) days ("Ixia Notice Period") during which Ixia
shall have the right to make a formal request that NetIQ initiate a lawsuit
against a Defined Infringer as the Initiating Party (as defined below), but
NetIQ shall be under no obligation to do so in response to such request. Any
such request by Ixia must be made by submitting a notarized Request To Proceed
With Legal Action in the form set forth on Schedule 22.2, and Section 22.6 below
shall not apply to any legal action initiated by NetIQ without receiving such
notarized Request To Proceed With Legal Action. The parties acknowledge that
because of the potentially large liability Ixia could incur under Section 22.6
below, the foregoing procedure must be strictly followed to assure that there is
no uncertainty on the part of either Ixia or NetIQ that Ixia is requesting NetIQ
to proceed and that NetIQ is relying upon its right to indemnification under
22.6 below. NetIQ shall have thirty (30) days from the date on which it receives
such Request to Proceed With Legal Action in which to notify Ixia as to whether
NetIQ will initiate the particular lawsuit against the Defined Infringer as the
Initiating Party. If NetIQ declines to initiate the particular lawsuit, or if
NetIQ takes no action within such thirty (30) day period, Ixia shall have the
right to initiate such lawsuit by requesting NetIQ in writing to file the
lawsuit against the Defined Infringer on the Patents listed in such written
notice ("On Behalf Litigation Notice") with NetIQ as the plaintiff or cause
NetIQ to join Ixia as a co-plaintiff as may be reasonably necessary to bring the
suit in a particular jurisdiction. In this situation, Ixia shall be the
Initiating Party. The On Behalf Litigation Notice must be received during the
Ixia Notice Period; provided however that if the days remaining in the Ixia
Notice Period after receipt of the Request To Proceed With Legal Action is less
than thirty (30) days, then the Ixia Notice Period shall be extended on a day
for day basis so that the period after receipt of the Request To Proceed With
Legal Action is thirty (30) days.
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22.3. Control of Litigation. The party who commences the litigation
against the Defined Infringer ("Initiating Party") shall control such
litigation. Notwithstanding the foregoing, the non-initiating party
("Non-Initiating Party") may, at its sole expense, participate in such
litigation through counsel of its own choice, subject to the right of the
Initiating Party to control such litigation; provided however that if Ixia is
the Non-Initiating Party, Ixia shall not (i) file any pleadings and/or documents
without the prior written approval of NetIQ which shall not be unreasonably
withheld, (ii) settle any litigation without obtaining a license or covenant not
to xxx reasonably acceptable to NetIQ from the Defined Infringer of its
Intellectual Property Rights for NetIQ for its products and services or (ii)
make any statement or admission regarding the validity of the Patents without
the prior written permission of NetIQ. In addition to the obligations set forth
above, if Ixia is the Initiating Party and decides to terminate or settle such
litigation, Ixia shall give NetIQ at least thirty (30) days prior written notice
and the terms of such termination or settlement, which shall be subject to
NetIQ's reasonable approval. If Ixia is the Initiating Party and NetIQ has
reasonable concerns about the manner in which Ixia is prosecuting the lawsuit,
NetIQ may take over control of the lawsuit as it relates to Patents at NetIQ's
expense.
22.4. Costs of Prosecution; Recovery. As used herein, the term
"Contribution" shall mean amounts incurred by a party to this Agreement as
attorneys' fees and other costs and expenses of litigation with respect to a
Defined Infringement (whether or not a formal legal proceeding is commenced),
but shall not include any internal personnel costs (including internal legal
personnel) or other internal costs of a party. For purposes of the foregoing,
out-of-pocket costs of a party or its personnel that are in the reasonable
course and scope of the prosecution of the Defined Infringement shall not be
considered "internal costs" and shall be counted as part of the party's
Contribution. "Contribution" shall also include amounts otherwise qualifying as
such but which are paid indirectly through another party. Except as provided in
Section 22.6, the Initiating Party shall bear all expenses incurred in such
litigation and shall keep all recoveries from such action; provided that the
parties may voluntarily agree to share expenses and the recovery. Except as
provided in Section 22.6, in any instance where each party has made
Contributions with respect to litigation of the Defined Infringement and such
lawsuit results in an actual recovery, the amounts recovered shall be divided as
follows:
(i) First, the proceeds of any recovery shall be applied
to reimburse the Contributions of each party, by
dividing the proceeds pro rata according to the pro
rata amount of the total Contributions of the parties
until the Contributions have been reimbursed in full,
and neither party shall receive amounts in excess of
its Contribution until both parties have recovered
their actual Contributions.
(ii) Second, if, and only if, there are any amounts
remaining after each party has received full
reimbursement for its Contributions, such amounts
shall
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be divided pro rata according to the pro-rata amount
of the total Contributions of the parties.
22.5. Assistance. The Non-Initiating Party shall perform such acts
that the Initiating Party, at the Initiating Party's expense, believes are
reasonably necessary or desirable to prosecute the litigation under this
Section. Without limiting the foregoing, the Non-Initiating Party shall (i) make
available to the Initiating Party its counsel, inventors and other employees for
interview and/or testimony (ii) reasonably cooperate with the Initiating Party
to bring such action and (iii) execute such documents which may be desirable to
prosecute such litigation.
22.6. Special Patent Indemnification. The term "Indemnified Patent
Action" shall mean any patent infringement action against a Defined Infringer
that is: (i) initiated by NetIQ pursuant to a notarized Request To Proceed With
Legal Action in the form set forth on Schedule 22.2; or (ii) initiated by Ixia
as an Initiating Party. Any Indemnified Patent Action shall be governed by the
provisions of Section 21.2 and of Sections 22.3 through 22.5 except to the
extent set forth in this Section 22.6. Ixia shall indemnify and hold NetIQ
harmless as set forth in Section 21.2 in the event that upon or after the
commencement of an Indemnified Patent Action (including paying NetIQ's
reasonable attorneys' fees, costs and expenses of litigation within sixty (60)
days of the end of the calendar quarter in which they were incurred): (i) any
party files a lawsuit against NetIQ alleging that the filing of the Indemnified
Patent Action constitutes wrongdoing by NetIQ (whether or not such lawsuit
includes other claims, and whether or not any such other claims are related to
the subject matter of the Indemnified Patent Action); or (ii) a Defined
Infringer files any claim against NetIQ (whether as part of the Indemnified
Patent Action or in a separate lawsuit). In such event, any amounts awarded to
Ixia and/or NetIQ (whether on the claims made by Ixia and/or NetIQ or awarded on
some other basis) shall be allocated as follows:
(i) First, the proceeds of any award shall be allocated
to reimburse the Contributions of each party to the
litigation of the claims made by Ixia and/or NetIQ
(the "Affirmative Claim Contributions"), by
allocating the proceeds pro rata according to the pro
rata amount of the total Affirmative Claim
Contributions of both parties until the Affirmative
Claim Contributions have been allocated full
reimbursement, and neither party shall be allocated
amounts in excess of its Affirmative Claim
Contributions until both parties have been allocated
their actual Affirmative Claim Contributions.
(ii) Second, if, and only if, there are any amounts
remaining after each party has been allocated full
reimbursement for its Affirmative Claim
Contributions, such amounts shall be allocated to any
amounts awarded to any adverse party and against
either or both of Ixia and NetIQ.
(iii) Third, if, and only if, there are any amounts
remaining after any amounts awarded to any adverse
party and against either or both of Ixia and NetIQ,
such amounts shall be allocated to any amounts due to
NetIQ from Ixia as indemnification, but not as yet
paid, which amounts shall be treated as
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amounts paid by Ixia as indemnification, but only to
the extent the funds are actually received by NetIQ.
(iv) Fourth, if, and only if, there are any amounts
remaining after allocation to NetIQ of due but unpaid
indemnification, such amounts shall be allocated to
reimburse Ixia for its amounts paid to NetIQ as
indemnification and for its Contributions with
respect to any part of the litigation that were not
reimbursed as part of Ixia's Affirmative Claim
Contributions.
(v) Fifth, if, and only if, there are any amounts
remaining after allocation to Ixia as reimbursement
under subparagraphs (i) through (iv) above, the
remaining amounts shall be allocated to NetIQ for its
Contributions with respect to any part of the
litigation that were not reimbursed as part of
NetIQ's Affirmative Claim Contributions. For the
purposes of this subparagraph Contributions shall not
include any amounts paid to NetIQ as reimbursement by
Ixia.
(vi) Sixth, if, and only if, there are any amounts
remaining after allocation to Ixia as reimbursement
under subparagraphs (i) to (v) above, the remaining
amounts shall be allocated to the parties pro rata
according to the pro-rata amount of the total
Affirmative Claim Contributions of the parties.
Nothing in the foregoing allocation shall be construed to relieve Ixia of its
obligation to indemnify NetIQ, and NetIQ's indemnity shall not be reduced or
delayed in any way by any inability to collect, or delay in collecting, any
amounts from any other party. It is a principle of the foregoing allocation that
so long as NetIQ is indemnified to the full extent provided under this
Agreement, neither party should receive an actual gain with respect to the
litigation unless and until the other party has been repaid all of its
out-of-pocket expenses.
23. "BLUE PENCILLING" AND SEVERABILITY
23.1. Blue Pencilling Generally. While the provisions hereof are
considered by the parties to be reasonable in light of the particular
circumstances hereof, if any provision of this Agreement shall be determined by
any court, arbitrator or other legal authority to be void, invalid, illegal or
unenforceable in any respect for any reason whatsoever, but would be valid if
part of the wording thereof were deleted or changed, then such provision shall
apply with such modifications as may be necessary to make it valid and
effective, and the court, arbitrator or other legal authority is authorized and
directed to reform such provision to the minimum extent necessary to make such
provision valid and enforceable in conformity with this Agreement.
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23.2. Blue Pencilling of Specific Provisions. Without limiting the
generality of Section 23.1 above, even though the restrictions and covenants set
forth in Section 6 above are considered by the parties to be reasonable in light
of the particular circumstances hereof, and have been explicitly bargained for
by Ixia, it is recognized that restrictions and covenants of such nature may be
unenforceable for reasons unforeseen. Accordingly, if any of such restrictions
or covenants shall be adjudged to be void as going beyond what is reasonable in
all the circumstances for the protection of the interests acquired hereunder by
Ixia but would be valid: (i) if part of the wording thereof were deleted; (ii)
the time periods (if any) therein were reduced; (iii) the range of activities or
area dealt with thereby reduced in scope; or (iv) any combination of the
foregoing, then such restriction or covenant shall apply with such modifications
as may be necessary to make it valid and effective, and the court, arbitrator or
other legal authority is authorized and directed to reform such provision to the
minimum extent necessary to make such provision valid and enforceable in
conformity with this Agreement.
23.3. Severability. In the event that it is determined by any court,
arbitrator or other legal authority that any provision(s) cannot be modified as
set forth in Section 23.1 or Section 23.2 above (as applicable), then such
provision(s) shall be deemed to be stricken herefrom, and the validity, legality
and enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
24. NOTICES
Except as specifically provided herein, all notices required hereunder
shall be in writing and shall be given by: (i) personal delivery, in which case
notice shall be deemed effective upon personal delivery; or (ii) national
overnight courier service, in which case notice shall be deemed effective one
(1) business day following deposit with the national overnight courier service;
or (iii) U.S. mail, certified or registered, postage prepaid, return receipt
requested, in which case notice shall be deemed effective three (3) days
following deposit in the U.S. mail. The addresses for giving notice shall be the
addresses set forth following, or any other address as shall be specified by a
party in a written notice to the other party:
To Ixia: Ixia
00000 X. Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxx Xxxxxx, CFO
With a copy to: Xxxxxx X. Xxxxxx, Esq.
c/o Tekelec
00000 X. Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
To NetIQ: NetIQ Corporation
0000 Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
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25. MISCELLANEOUS
25.1. Entire Agreement. This Agreement, together with the Schedules
attached hereto, all of which are incorporated by reference as though fully set
forth in this Agreement, constitutes the entire understanding and agreement
between the parties hereto and supersedes any and all prior or contemporaneous
representations, understandings and agreements between Ixia and NetIQ with
respect to the subject matter hereof, all of which are merged herein.
Notwithstanding the foregoing, the parties understand and agree that any
confidentiality agreements between the parties are separate from this Agreement,
and, except as may be expressly stated herein, nothing contained in this
Agreement shall be construed as affecting the rights or obligations of either
party set forth in any such agreement. It is expressly understood and agreed
that no employee, agent or other representative of either party has any
authority to bind such party with regard to any statement, representation,
warranty, or other expression unless the same is specifically set forth or
incorporated by reference herein. It is expressly understood and agreed that,
there being no expectation of the contrary between the parties hereto, no usage
of trade or custom and practice within the industry, and no regular practice or
method of dealing between the parties hereto, shall be used to modify,
supplement or alter in any manner the terms of this Agreement or any part
hereof. This Agreement shall not be modified, amended or in any way altered
except by an instrument in writing signed by an officer of NetIQ and an officer
of Ixia.
25.2. Compliance with Export Laws. Ixia acknowledges that the Source
Assets, Chariot Products, Distribution Products and any direct products thereof
may be subject to United States export laws, statutes and regulations. Ixia will
at all times comply with the provisions of such laws, statutes and regulations
including obtaining any necessary or required licenses. Ixia shall not export or
re-export or otherwise transmit, directly or indirectly, the Source Assets,
Chariot Products, Distribution Products or any direct products thereof into, or
use the Source Assets, Chariot Products, Distribution Products or any direct
products thereof in, any country prohibited or restricted under United States
export laws, statutes or regulations or any other applicable laws.
25.3. Independent Parties. Nothing contained herein shall be deemed
to create or construed as creating a joint venture or partnership between Ixia
and NetIQ. Neither party is, by virtue of this Agreement or otherwise,
authorized as an agent or legal representative of the other party. Neither party
is granted any right or authority to assume or to create any obligation or
responsibility, express or implied, on behalf of or in the name of the other
party or to bind such other party in any manner. Further, it is not the
intention of this Agreement or of the parties hereto to confer a third party
beneficiary right of action upon any third party or entity whatsoever, and
nothing hereinbefore or hereinafter set forth shall be construed so as to confer
upon any third party or entity other than the parties hereto a right of action
under this Agreement or in any manner whatsoever.
25.4. Waiver. No waiver of any provision of this Agreement or any
rights or obligations of either party hereunder shall be effective, except
pursuant to a written instrument
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signed by the party or parties waiving compliance, and any such waiver shall be
effective only in the specific instance and for the specific purpose stated in
such writing.
25.5. Amendments. All amendments or modifications of this Agreement
shall be binding upon the parties despite any lack of consideration so long as
the same shall be in writing and executed by the parties hereto in accordance
with the other terms of this Agreement regarding modifications.
25.6. Assignment. Neither party shall have the right to, and each
party covenants that it will not, assign or transfer this Agreement or any of
its rights, duties or obligations hereunder, and this Agreement may not be
involuntarily assigned or assigned by operation of law, without the prior
written consent of the other party, which consent may be granted or withheld by
such other party in its sole discretion, except that either party shall have the
right to assign or transfer this Agreement or any interest herein (including
rights and duties of performance) to any entity: (i) which owns more than fifty
percent (50%) of such party's issued and outstanding capital stock or voting
interest; (ii) in which such party owns more than fifty percent (50%) of the
issued and outstanding capital stock or voting interest; (iii) which acquires
all or substantially all of such party's operating assets, (iv) which is under
common ownership or control with such party, or (v) into which such party is
merged or reorganized pursuant to any plan of merger or reorganization. Any
attempted assignment without such consent shall be null and void. This Agreement
shall be binding upon and inure to the benefit of each of the parties hereto and
their respective legal successors and permitted assigns.
25.7. Choice of Law; Forum and Jurisdiction. This Agreement was
entered into in the State of California, and its validity, construction,
interpretation and legal effect shall be governed by the laws and judicial
decisions of the State of California applicable to contracts entered into and
performed entirely within the State of California and by applicable federal law,
and the choice-of-law provisions of California law shall not be applied to
substitute the law of any other State or nation. The parties expressly agree
that any action arising out of or relating to this Agreement shall be filed and
maintained only in the courts of the State of California or the United States
District Court for any federal district in California. The parties hereby
consent and submit to the personal jurisdiction of such courts for the purposes
of litigating any such action. Notwithstanding the foregoing, each party agrees
that in the event that a party hereto (the "Involved Party") becomes involved in
any legal action with a third party, and either: (i) the other party hereto (the
"Non-involved Party") is a necessary party to the resolution of such legal
action, or (ii) the particular legal action gives rise to legal claims between
the parties hereto arising out of or relating to this Agreement, then the
Non-involved Party waives the exclusive jurisdiction provision set forth above
with respect to such legal action.
25.8. Attorneys' Fees. In the event any litigation or other
proceeding is brought by either party arising out of or relating to this
Agreement, the prevailing party in such litigation or other proceeding shall be
entitled to recover from the other party all costs, attorneys' fees and other
expenses incurred by such prevailing party in such litigation or proceeding.
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25.9. Force Majeure. Neither party shall be deemed in default if its
performance or obligations hereunder are delayed or become impossible or
impractical by reason of any act of God, war, fire, earthquake, labor dispute,
accident, civil commotion, epidemic, act of government or government agency or
officers, or any other cause beyond such party's control.
25.10. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
IXIA NETIQ CORPORATION
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxx
--------------------------------- --------------------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxx X. Xxxx
President and Senior Vice President, Corporate
Title: Chief Executive Officer Title: Strategy and Development
Date: 07/06/03 Date: 07/05/03
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