Preview of our top selling Intellectual Property Transfer Agreement
Novel / BEA - Technology Transfer, License & Distribution Agreement
Confidential treatment has
been requested regarding these
provisions indicated by "[***]".
The omitted information
has been filed separately
with the Securities and
Exchange Commission.
TUXEDO License and Distribution Agreement
This TUXEDO License and Distribution Agreement (the "Agreement") is made by and between Novell, Inc., a Delaware corporation with a place of business at 122 East 1700 South, Provo, Uta
h, 84606 ("Novell"), and BEA Systems, Inc., ("BEA") a Delaware corporation with its principal place of business located at 2465 E. Bayshore Road, Palo Alto, California 94303.
1 STATEMENT OF PURPOSE. Novell has acquired and/or developed and is the
owner of, or otherwise has authority to license, the TUXEDO Software
identified in Exhibit A. Novell desires to grant to BEA certain rights
and licenses relating to the TUXEDO Software, as set forth in this
Agreement, and to transfer to BEA certain assets relating to the TUXEDO
Software, and BEA desires to obtain the same from Novell.
2 DEFINITIONS. Unless the context clearly requires otherwise, the
capitalized terms used within this Agreement shall have the same meaning
as ascribed to the terms below. The term "Section" within this Agreement
refers to the identified section of this Agreement.
2.1 ADD-ONS shall mean any new feature enhancements or additions not
already present in the Core Code which exist external to the Core
Code, do not consist of Core Code and are not required for full
functionality of the Core Code.
2.2 ASSUMED CONTRACTS shall mean all existing licenses, service
contracts (including documentation), independent contractor
agreements, and other agreements between Novell and another party
relating to the TUXEDO Software, with the exception of Novell's
Master Task Agreement with Novell Japan, Ltd. and related Statements
of Work.
2.3 BEA shall mean BEA Systems, Inc., except in any cases where the
parties may specifically call out other subsidiaries or entities
related to BEA.
2.4 CHANGE OF CONTROL shall mean when, due to a change in ownership
after the Closing:
2.4.1 one of the parties becomes a Subsidiary of some
third-party; or
2.4.2 any person or group (within the meaning of Rule 13d-5
under the Securities Exchange Act as in effect on the
date of execution of this Agreement) shall come to own,
directly or indirectly, beneficially or of record,
voting securities representing more than 50% of the total
voting power of one of the parties. For the purpose of
this Agreement, the parties agree to an exception in the
above-referenced definition of "any person or group" to
exclude E.M. Warburg, Pincus & Co. and its affiliated
2.5 CLOSING shall mean the closing of the transactions contemplated
by this Agreement, which shall occur on the Closing Date.
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2.6 CLOSING DATE shall mean February 23, 1996 or such other date as
the parties may hereafter agree upon.
2.7 CODE shall mean computer programming code. Unless otherwise
agreed, Code shall include Binary Code and Source Code in the form
existing as of the Closing Date.
2.8 BINARY CODE shall mean Code that loads and executes without
further processing by a software compiler or linker or that results
when Source Code is processed by a software compiler.
2.9 SOURCE CODE shall mean the human-readable form of the Code and
related system documentation, including all comments and any
procedural language.
2.10 COMMITTEE shall mean the Technology Coordination Committee to be
formed by BEA and Novell, as further described in Section 6 below.
2.11 CONFIDENTIAL INFORMATION shall mean that information which
relates to the purpose of this Agreement as stated in Section 0 that
a Disclosing Party desires to protect against unrestricted disclosure
or use by the Receiving Party and which if disclosed (i) in tangible
form, is marked in writing as "confidential" or with words of similar
import by the Disclosing Party, or (ii) in oral or visual form, is
designated orally at the time of disclosure as "confidential." The
foregoing notwithstanding, Source Code shall be deemed to be
Confidential Information; otherwise, any information that is not
identified as "confidential" shall be regarded as non-Confidential
Information. Confidential Information shall not include any
information that is (i) already in the possession of the Receiving
Party without obligation of confidence; or (ii) independently
developed by the Receiving Party; or (iii) or becomes available to
the general public without breach of this Agreement; or (iv)
rightfully received by the Receiving Party from a third party without
obligation of confidence; or (v) disclosed after obtaining the
written consent of the Disclosing Party.
2.12 CORE CODE shall mean the workstation () and server ()
TUXEDO Software Code as delivered by Novell to BEA pursuant to
Section 15.
2.13 CORE MODIFICATIONS shall mean modifications to any version
of the TUXEDO Software Code, whether made by Novell, BEA,
Subsidiaries, affiliates, or contractors, that are not Add-ons. The
parties specifically agree that, in the event modifications are made
to the Core Code that enable the Core Code to interact with software
outside of the Core Code that creates new functionality, only the
"hooks" or other modifications made to the Core Code itself shall be
deemed Core Modifications; such software outside of the Core Code
shall not be deemed Core Modifications, regardless of the existence
of the hooks to such software that exist within the Core Code itself.
2.14 DERIVATIVE WORK shall mean a work which is based upon or
incorporates one or more preexisting works, such as a revision,
modification, translation, abridgement, condensation, expansion,
collection, compilation or any other form in which such preexisting
works may
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be recast, transformed or adapted, and which, if prepared
without the authorization by the owner of the preexisting works,
would constitute copyright infringement under U.S. copyright laws.
2.15 DISCLOSING PARTY shall mean the party to this Agreement which
transmits information to a Receiving Party.
2.16 DOCUMENTATION shall mean the written or electronic instructions
provided to end users with a computer program.
2.17 NOVELL DOCUMENTATION shall mean the Documentation provided by
Novell to end users relating to the TUXEDO Software.
2.18 BEA DOCUMENTATION shall mean the Documentation provided by BEA
to end users relating to the TUXEDO Software.
2.19 SIGNING DATE shall mean the latter of the dates upon which the
parties execute this Agreement.
2.20 EXTREMELY SENSITIVE INFORMATION shall mean Confidential
Information with respect to which the Disclosing Party reasonably
believes unauthorized disclosure would have a serious adverse effect,
commercial or competitive, on the Disclosing Party. Confidential
Information will only be considered Extremely Sensitive Information
if prior to its disclosure the Disclosing Party gives written notice
to the Receiving Party of the information's general description and
its Extremely Sensitive Information classification.
2.21 INITIAL TERM shall have the meaning given to such term in
Section 14 below.
2.22 MARK shall mean Novell's "TUXEDO" trademark.
2.23 RECEIVING PARTY shall mean the party to this Agreement which
receives information from a Disclosing Party.
2.24 SUBSIDIARY shall mean a corporation, company or other entity (i)
more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, or (ii) which does not
have outstanding shares or securities, as may be the case in a
partnership, joint venture or unincorporated association, but more
than fifty percent (50%) of whose ownership interest representing the
right to make the decisions for such corporation, company or other
entity is, now or hereafter, owned or controlled, directly or
indirectly, by a party hereto, but such corporation, company or other
entity shall be deemed to be a Subsidiary only so long as such
ownership or control exists.
2.25 TRANSFERRED ASSETS shall mean (i) certain items of equipment,
furnishings and other personal property previously used by Novell's
TUXEDO division, as listed in Exhibit D;
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and (ii) all of Novell's shares of stock in the following
entities: USL Mexico and USL SA as identified in Exhibit D.
2.26 TUXEDO SOFTWARE shall mean the Code more fully described in
Exhibit A, including, Core Code and Core Modifications.
3 CLOSING. The transactions contemplated by this Agreement shall be closed
on the Closing Date, at a mutually agreeable time and place.
3.1 DELIVERIES BY NOVELL. At the Closing, Novell shall deliver to
BEA the following documents and materials:
3.1.1 The Transferred Assets listed in Exhibit D
hereto;
3.1.2 A duly executed bill of sale in the form attached
as Exhibit I hereto; and
3.1.3 Such additional documents, instruments and
materials as Novell may be required to deliver to BEA at the
Closing pursuant to this Agreement.
3.2 DELIVERIES BY BEA. At the Closing, BEA shall deliver to Novell
the following documents and materials:
3.2.1 A duly executed guaranty in the form attached as
Exhibit G hereto (the "Guaranty");
3.2.2 A copy of a certified resolution of BEA's board
of directors, authorizing execution of this Agreement and
approving the transactions described herein.
3.2.3 Such additional documents, instruments and
materials as BEA may be required to deliver to Novell at the
Closing pursuant to this Agreement.
3.3 CONDITIONS TO CLOSING. The obligations of Novell and BEA
hereunder to proceed with the Closing shall be subject to the
following conditions, each of which may only be waived at or before
the Closing as agreed upon in writing by the parties:
3.3.1 The warranties and representations of the other
party shall be true and correct in all material respects as
of the Closing; and
3.3.2 The other party shall have fully performed all of
its material obligations required to be performed at or before
the Closing.
3.4 FINANCIAL STATEMENTS. On or before July 31, 1996, Novell will
provide BEA with audited financial statements for the TUXEDO business
unit, or its predecessor organizations, covering fiscal years 1993,
1994 and 1995. If audited financial statements are not available for
any of these periods, Novell will provide BEA and its auditors access
to the financial
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and business records of the TUXEDO business unit so that they
may prepare such statements, or at Novell's option, Novell or its
auditors may prepare such statements themselves and deliver them
to BEA.
3.5 ADJUSTMENT OF PAYMENTS. Novell acknowledges that BEA has not
had an opportunity prior to the Signing Date to review all of the
Assumed Contracts and other documents relating to the Transferred
Assets. Accordingly, if material deviations are discovered from the
representations and warranties made by Novell under this Agreement
relating to the Assumed Contracts and other Transferred Assets, an
adjustment of the amount of the payments due under Sections 13.1 and
14.2 will be made at the Closing to reasonably reflect the
deviations, provided that in no event shall such an adjustment exceed
ten percent (10%) of the first year payments.
3.6 OBTAINING BENEFIT OF ASSUMED CONTRACTS. At the written request
of BEA, Novell will take all commercially reasonable action, and
cause its affiliates to take all commercially reasonable action, in
order that BEA may obtain the full benefit and enjoyment of the
Assumed Contracts.
4 LICENSES.
4.1 Subject to the terms and conditions specified in this
Agreement, Novell hereby grants, and BEA hereby accepts, a world-
wide, non-transferable (except as otherwise provided herein) license:
4.1.1 to use, duplicate, revise, modify, enhance,
condense, expand, collect, compile, link, adapt, translate,
localize, port, merge or recast TUXEDO Software Source Code;
4.1.2 subject to Section 0, to reproduce, distribute,
and sublicense Source Code;
4.1.3 to install, use, duplicate, market (directly and
indirectly), distribute, merge, package, bundle, and
sublicense, Binary Code of TUXEDO Software, and to authorize
others to perform all or some of the above;
4.1.4 subject to Section 0, to use, duplicate, revise,
modify, enhance, condense, expand, collect, compile, link,
adapt, translate, publish, reissue, or recast Novell
Documentation solely to provide, market and distribute BEA
Documentation for TUXEDO Software, and to authorize others to
do all or some of the above;
4.1.5 to use Novell Confidential Information, including
materials bearing a Novell patent or copyright notice, but only
as necessary to exercise its rights under this Section. This
provision shall not be construed to grant any distribution or
duplication rights or any rights to modify such Confidential
Information; and
4.1.6 in the event this Agreement is terminated (other than
termination due to material breach), Novell grants, and BEA
accepts, a terminable, non-exclusive,
PAGE 5
non-transferrable, fully paid-up, worldwide license to use
TUXEDO Software Source Code solely to support BEA's then
installed base of TUXEDO Software. This conditional license
shall automatically expire ten years from the date of last
customer shipment of TUXEDO Software, which shall not extend
by inference the rights granted in Section 0 beyond
termination or expiration of this Agreement. Further, this
conditional license shall be subject to termination for the
material breach of those sections surviving termination
pursuant to Section 0.
4.2 BEA acknowledges that Novell does not own the localizations and
translations that Novell Japan, Ltd., a majority-owned Subsidiary of
Novell in Japan, or Novell Japan's sublicensees have made or
contracted to be made to any of the TUXEDO Software, which
localizations and translations are not subsumed under the definitions
thereof. BEA acknowledges that, should BEA desire to obtain such
rights or otherwise enter into an agreement respecting those rights,
that it must obtain those rights from, or enter into an agreement
respecting such rights with, Novell Japan or its sublicensees. In
this regard, Novell agrees to exercise commercially reasonable
efforts to facilitate negotiations between Novell Japan. Ltd. and
BEA. In addition, Novell represents and warrants that it has not
granted to Novell Japan, Ltd. or any other party any exclusive rights
with regard to the distribution of non-localized versions of TUXEDO
Software in Japan.
5 DISTRIBUTION AND MARKETING; EXCLUSIVITY.
5.1 BEA DISTRIBUTION AND MARKETING RIGHTS. During the Initial Term,
BEA shall have the exclusive right to market, distribute and
sublicense the TUXEDO Software in all markets and distribution
channels worldwide, subject to the exceptions granted Novell below,
existing licenses granted by Novell to third parties, and to the
terms and conditions of this Agreement. The foregoing includes,
without limitation, the right to market and sublicense TUXEDO
Software to OEMs, VARs and ISVs for integration into their product
offerings, as well as directly to end users.
5.2 NOVELL DISTRIBUTION AND MARKETING RIGHTS.
5.2.1 Novell shall retain the exclusive right to market,
distribute and sublicense TUXEDO Software () for the
NetWare operating system platform (currently NetWare
Transactions and TransactionLink), as well as the right to
market, distribute and sublicense TUXEDO Software technology
or any portions thereof, whether at the or level, as
a feature or component of other Novell software (e.g.,
utilizing TUXEDO Software as a messaging component in
GroupWise or as a component included within NetWare). Except
as set forth above, Novell shall not sell TUXEDO Software as
a stand-alone product or in any bundle where TUXEDO is the
only product of substantial value to the end user, whether
under the TUXEDO name or another name.
5.2.2 Novell retains the right to expose TUXEDO API's within the
NetWare Transactions SDK (Software Developers Kit). Novell
also shall retain the right to
PAGE 6
use all TUXEDO programming and administration API's in the
creation of its own product set where TUXEDO functionality
is embedded in Novell products. Other than as set forth
above, Novell will not expose TUXEDO programming and
administrative API's for use by developers, users, or others
external to Novell who are creating or using applications,
administrative tools, or other functions for their own use
or resale; nevertheless, Novell retains the right to expose
interface abstractions (e.g. IDL, OCX, C++, etc.) to
developers that will allow developers or users to take
advantage of Novell services and products employing TUXEDO
technology or offering TUXEDO functionality. However,
except as set forth above regarding NetWare Transactions and
TransactionLink and except as to software developers kits,
Novell shall not ship product containing the abstractions
that allow use of the TUXEDO functionality for one year
following Closing.
5.2.3 BEA acknowledges that Novell will be retaining one or more
copies of the TUXEDO Software Source Code, including all
modifications and enhancements made thereto until the
Closing Date, and that Novell shall have the perpetual right
after the Closing Date to further modify and to market and
distribute the TUXEDO Software as permitted by this
Agreement, subject to the exclusive rights granted to BEA
5.2.4 Novell shall have the option to license and distribute,
under the Novell name, the TUXEDO client software () as
part of its Transactions and TransactionLink product set.
BEA will offer Novell terms no less favorable than those
offered to other BEA distributors, but in no event shall the
discount from suggested list price be less than 65% during
the Initial Term. In addition, Novell retains the right to
bundle, at no cost to Novell, 25 client software ()
licenses with the NetWare Transactions SDK (Software
Developers Kit) for use by external application developers
who are developing applications for use on NetWare via
NetWare Transactions.
5.3 TERM OF EXCLUSIVITY. The exclusive rights granted above to BEA
shall become non-exclusive at the end of the Initial Term, unless BEA
elects to continue marketing and licensing TUXEDO Software pursuant
to the option given it in Section 14.2.
5.4 REFERENCE SELLING BY NOVELL. Novell may "reference sell" the
TUXEDO Software (including Core Modifications made by BEA) to
Novell's customers. Such sales efforts will be turned over to BEA
sales representatives in order for BEA to close deals with the Novell
customer. For all such reference sales efforts that result in BEA
granting TUXEDO Software licenses to Novell's customers, Novell shall
receive from BEA a finders fee equal to 10% of the standard TUXEDO
Software License Fee charged by BEA. As part of the transition
period, Novell will have an affirmative obligation to inform BEA of
all "deals in progress" and provide reasonable assistance to BEA to
allow BEA to take over the handling of those deals.
PAGE 7
6 TECHNOLOGY COORDINATION COMMITTEE.
6.1 FORMATION; MEMBERSHIP. The Committee shall be formed by BEA and
Novell promptly after the Closing Date and shall exist throughout the
Initial Term, unless otherwise agreed by both parties. Membership of
the Committee shall consist of two (2) representatives named by
Novell and two (2) representatives named by BEA. Such
representatives shall be knowledgeable and qualified to perform their
duties on the Committee. The Committee shall meet at least
quarterly, at mutually agreeable times and places.
6.2 RESPONSIBILITIES. The Committee shall have the following
responsibilities:
6.2.1 Coordinate plans for future development of the TUXEDO
Software and ensure interoperability between BEA's and
Novell's developments with respect to the TUXEDO Software
during the Initial Term.
6.2.2 Approve the development and release process for new versions
of TUXEDO Software, including both Core Modifications and
Add-ons, to ensure that released software is of a quality
consistent with Novell's products.
6.2.3 Patents:
6.2.3.1 The parties recognize the value of
patents dealing with TUXEDO Software. In this regard, BEA
agrees to provide to Novell reasonable assistance in the
prosecution of patent applications existing as of the
Closing Date and the enforcement of those applications
should they be issued as patents. The Committee will
oversee the requests for assistance from Novell and the
coordination of efforts to secure patents from existing
patent applications, including PCT and other international
6.2.3.2 The Committee will coordinate the
timely assistance of BEA personnel in the completion of
Novell's Invention Disclosure Forms for the identification
of patentable subject matter related to the Core Code and
Core Modifications in the development of TUXEDO Software.
The parties contemplate the possibility of filing patent
applications during the course of TUXEDO Software
development and agree to use commercially reasonable
efforts to complete all invention disclosures in a timely
manner to allow for maximum patent coverage both in the US
and internationally. The Committee will provide for Novell
legal department personnel to spend time with the TUXEDO
Software developers to ascertain whether any new Core
Modifications are patentable on at least a quarterly basis.
Prior to the release of any new software containing a Core
Modification covered by an Invention Disclosure Form,
Novell's legal department shall have an opportunity of not
more than 45 days after the completion of an Invention
Disclosure Form to ascertain whether patent protection
should be sought for new or improved features prior to loss
of international filing
PAGE 8
rights due to public disclosure or
any offer for sale. BEA agrees to provide to Novell
reasonable assistance in the disclosure and filing of
patent applications related to Core Code and Core
6.2.4 The parties specifically agree that the Committee shall have
responsibility only for coordinating and approving the plans
and processes as set forth in Sections 6.2.1, 6.2.2, and
6.2.3 above, and not for making any other decisions with
respect to the TUXEDO Software.
6.3 DISPUTE RESOLUTION. In the event a party disagrees with the
Committee's position on an issue, each party shall be entitled to
appoint two (2) additional members to the Committee, of Vice
President level or higher, to facilitate resolving the dispute.
Alternatively, the parties may agree to escalate the dispute to
senior management within each company to seek a resolution at such
7 CONTRACT ADMINISTRATION. To facilitate an effective relationship and administration of and compliance with this Agreement, the parties hereby appoint the following contacts:
Novell: Mark Epstein
Novell, Inc.
122 East 1700 South
Provo, Utah 84606
BEA: Edward W. Scott, Jr.
BEA Systems, Inc.
2465 E. Bayshore Dr.
Palo Alto, California 94303
E
ach party's contact person shall be responsible for managing that party's performance under this Agreement and all necessary coordination with the other party. Each party will advise the other in writing of any change regarding its appointed contact pers
o
n. The BEA contact person listed above (or his designee) shall monitor and report quarterly on BEA's compliance with contractual obligations under this Agreement, including but not limited to staffing requirements, development progress, providing Novell
w
ith Core Modifications, revenue targets, revenue reporting, and finders fees calculations as required pursuant to Section 5.4. Such reports shall be provided within 30 days after the end of each calendar quarter to the Novell contact person set forth abo
ve and to:
Novell: Contract Accounting
Novell, Inc.
2180 Fortune Drive
MS F6-54-2
San Jose, CA 95131
Fax: (408) 577-5553
PAGE 9
8 OBLIGATIONS OF BEA.
8.1 DEVELOPMENT STAFF. BEA shall employ at the end of each year no
less than the following numbers of full-time (or full-time
equivalent) developers, devoted to TUXEDO Software development,
during the Initial Term:
1996: 35 developers
1997: 47 developers
1998: 62 developers
8.2 MARKETING AND SALES REQUIREMENTS. BEA shall be required to meet
the following minimum sales/revenue requirements during the Initial
Term:
1996: $30 million in gross sales of, and other revenues
from, TUXEDO Software (including all versions thereof),
and professional and technical services (such as
support and maintenance) related to TUXEDO Software
1997: $50 million in gross sales and revenues, as described
1998: $80 million in gross sales and revenues, as described
The parties acknowledge that Novell's requirement of minimum
sales and revenues amounts is appropriate and reasonable, given
Novell's grant of exclusive rights to BEA and Novell's interest in
preserving the market for TUXEDO Software, particularly in the event
this Agreement is terminated. In any event, BEA shall use
commercially reasonable efforts to actively market TUXEDO Software
for those markets to which BEA is given distribution rights
hereunder. In the event BEA does not meet the above minimum
sales/revenue requirements, Novell shall have the following rights:
If BEA makes at least 50% of the minimum revenue requirement for a
particular year but less than 90%, Novell shall have the right, upon
written notice, to cancel BEA's exclusivity rights under this
Agreement, thereby making all licensed rights of BEA during the
Initial Term non-exclusive. Rights obtained by BEA should it
exercise its option pursuant to Section 14.2 will be subject to any
licenses or other rights granted by Novell to other parties during
this period of nonexclusivity. If BEA makes less than 50% of the
minimum revenue requirement for a particular year, such failure shall
be deemed a material default and grounds for Novell to terminate this
8.3 DEVELOPMENT OBLIGATIONS
8.3.1 INTEGRATION OF TUXEDO SOFTWARE WITH NDS. After the Closing
Date, BEA shall continue development work on the integration
of the TUXEDO Software with Novell's NDS software as a name
server and a security server (providing authentication
security and single sign-on for NetWare clients accessing
information in NDS, and enabling of the NDS administrator to
locate, browse, and set user access privileges to
TUXEDO-based applications on Unix or NT using NDS security
permissions). These capabilities will optionally augment and
enhance the TUXEDO Software's current internal versions of
these services. The
PAGE 10
specifications for such product, the acceptability of the
final product, and dependencies on NDS technology and
interfaces required to complete the product shall be
determined by good faith negotiations between the parties
within ninety (90) days of the Closing Date, and shall be
set forth in a Statement of Work executed by both parties.
In the event the parties are unable to agree upon such a
Statement of Work that is reasonably acceptable to Novell
within such time frame, Novell shall have the option to
terminate and rescind this Agreement. If such product is
not completed until after the target date set by the
Statement of Work, BEA shall pay to Novell the following
amounts as compensation for the damages to Novell due to the
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