Technology License And Distribution Agreement

Exhibit 10.2

TECHNOLOGY LICENSE AND DISTRIBUTION AGREEMENT

This Technology License and Distribution Agreement (the "Agreement") is entered into this 31 day of October, 1995 (the "Effective Date") between Sun Microsystems, Inc., acting by and through its Java Products Group ("SUN") with its principal place of business at 2550 Garcia Avenue, Mountain View, California 94043 and Borland International, Inc. a Delaware corporation with its principal place of business at 100 Borland Way, Scotts Valley, California 95066-3249 ("Licensee").

RECITALS

WHEREAS SUN wishes to license its JAVA ? programming language and HOTJAVA ? Browser and related technology, while maintaining compatibility among JAVA language based products; and

WHEREAS SUN wishes to protect and promote certain trademarks used in connection with JAVA technology; andWHEREAS Licensee wishes to develop and distribute products based upon Sun's JAVA technology;

NOW THEREFORE, Sun and Licensee enter into this Technology Licensing and Distribution Agreement ("TLDA") on the following terms. 1.0

DEFINITIONS


1.1 "Applet Application Programming Interface or AAPI" means the public application programming interface to the Technology, including all public class libraries and interfaces.

1.2 "Applet" means a Java application which runs on the AAPI.

1.3 "Applet Classes" means the Java classes listed in Exhibit A.

1.4 "Documentation" means users' manuals and programmers' and system guides which SUN provides for use with the Technology and which are more particularly identified in Exhibit A.

1.5 "Derivative Work(s)" means: (i) for material subject to copyright or mask work right protection, any work which is based upon one or more pre-existing works of the Technology, such as a revision, modification, translation, abridgement, condensation, expansion, collection, compilation or any other form in which such pre-existing works may be recast, transformed or adapted, (ii) for patentable or patented materials, any adaptation, subset, addition, improvement or combination of the Technology, and (iii) for material subject to trade secret protection, any new material, information or data relating to and derived from the Technology, including new material which may be protectable by copyright, patent or other proprietary rights, and, with respect to each of the above, the preparation, use and/or distribution of which, in the absence of this Agreement or other authorization from the owner, would constitute infringement under applicable law. Derivative Works specifically excludes Product(s), Value Added Open Packages, Licensee Software, and Licensee-implemented modifications to (i) the Platform-Dependent Part of the Java Runtime Interpreter and (ii) the HotJava Browser.

1.6 "Intellectual Property Rights" means all intellectual property rights worldwide arising under statutory or common law, and whether or not perfected, including, without limitation, all (i) patents, patent applications and patent rights; (ii) rights associated with works of authorship including copyrights, copyright applications, copyright registrations, mask work rights, mask work applications, mask work registrations; (iii) rights relating to the protection of trade secrets and confidential

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information; (iv) any right analogous to those set forth in this Section 1.6 and any other proprietary rights relating to intangible property (other than trademark, trade dress, or service mark rights); and (v) divisions, continuations, renewals, reissues and extensions of the foregoing (as and to the extent applicable) now existing, hereafter filed, issued or acquired.

1.7 "Java Runtime Interpreter" means the program which implements the Java Virtual Machine, as specified in the Java Virtual Machine Specification. The Java Runtime Interpreter consists of the Shared Part and the Platform-Dependent Part.

1.8 "Licensee Software" means any software developed by Licensee which is not a Derivative Work of the Technology and which is designed to run on Technology or any portions thereof.

1.9 "Platform Dependent Part" means those source code files of the Technology which are not in a "share" directory or subdirectory thereof as provided by SUN and which must be compiled with the "share" files to produce the Java Runtime Interpreter.

1.10 "Product(s)" means Licensee's current and future product(s) which implement, integrate and/or embody, in whole or in part, the Technology and/or Licensee-developed Derivative Works thereof, and which are more particularly identified in Exhibit B. Licensee may amend Exhibit B to add Product(s) from time to time. "Product" must represent a significant functional and value enhancement to the Technology such that the primary reason for a customer to license such Product is other than the right to receive a license to the Technology. "Product" must operate in conjunction with the Technology and shall not include other technology which interprets Java bytecodes which replaces or substitutes for the Technology.

1.11 "Shared Part" means those source code files of the Technology which are in any "share" directory or subdirectory thereof as provided by SUN which must be compiled with the Platform Dependent Part to produce the Java Runtime Interpreter.

1.12 "Source Code" means the human readable version, in whole or in part, of the Technology supplied to Licensee and any corresponding comments and annotations.

1.13 "Technology" means the Java Runtime Interpreter, Java Compiler, HotJava Browser, and the Applet Classes developed by SUN, as more particularly identified in Exhibit A, and Upgrades thereto.

1.14 "Trademarks" means all names, logos, designs, characters, and other designations or brands used by SUN in connection with the Technology.

1.15 "Upgrades" means any bug fixes, modifications, variations, enhancements, or revisions of the Technology for the platforms specified in Exhibit C which SUN generally licenses as part of the Technology. The term "Upgrades" does not include ports of the Technology to additional platforms.

1.16 "Value Added Open Packages" means additional Java classes developed by Licensee which represent extensions to the AAPI, and which are made available to third parties in either source or binary form to use in the development of additional Java-based software.

1.17 "HotJava Browser" means the Java classes more particularly identified as "Technology: HotJava Browser" in Exhibit A.

1.18 "Java Compiler" means the Java programs more particularly identified as "Technology: Compiler" in Exhibit A. 2.0

LICENSE GRANTS


2.1 Source Code License

a. Subject to the terms and conditions contained in this Agreement and subject to payment to SUN of the applicable license fees specified in Exhibit C, SUN hereby grants to Licensee, and Licensee hereby accepts, under the Intellectual Property Rights of SUN, a worldwide, non-exclusive, non-transferable license, without the right to sublicense (except as specified in Sections 2.1b (iii) and 2.2 (b) below), to access, use, modify, reproduce and view the
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Technology in Source Code form, solely for the purpose(s) of porting, developing, compiling to binary form and supporting Product(s), Licensee Software, Value Added Open Packages, and Licensee-implemented modifications to the Platform Dependent Part. Licensee shall have no right to modify the interface or the functional behavior of the Java Runtime Interpreter or the Applet Classes and explicitly shall not have the right to modify or create a subset of the AAPI.


Except as specified in Section 2.1b (iii), Licensee shall have no right to distribute the Source Code of the Technology or of Derivative Works, whether alone or as incorporated with Product(s), Licensee Software, Value Added Open Packages, Licensee-implemented modifications to the Platform Dependent Part, or Upgrades.


b. Porting.


(i) Licensee may port the Platform Dependent Part to platforms other than those specified in Exhibit C. Licensee may use the Source Code of the Shared Part of the Java Runtime Interpreter to develop Products, *****, and Licensee-implemented modifications to the Platform Dependent Part, but if it uses such Source Code, it must use all of it without modification.


(ii) SUN will work with Licensee to identify any changes which are necessary to the Shared Part of the Technology to allow porting, optimization, or other platform-specific modifications thereto in accordance with the procedure specified below:


Licensee may at any time during the term of this Agreement provide SUN with a detailed written request that a specifically identified portion of the Shared Part of the Technology be modified, including the reason(s) for such proposed modification and support for their belief that compatibility will not be compromised by such modification. SUN will respond to Licensee's request *****, indicating whether, in SUN's sole discretion, the portion of the Shared Part that is the subject of Licensee's request will be moved into the Platform Dependent Part of the Technology. If SUN informs Licensee that such portions will be moved from the Shared Part, Licensee may make such modifications, subject to its obligation to maintain compatibility hereunder.


If SUN determines that such portions may not be moved from the Shared Part, SUN may offer to make the modifications to the Shared Part in a timely fashion, or authorize Licensee to make such modifications. If Licensee makes such modifications, the changes can be made only for the purpose and platform specified, and only as long as compatibility with the Virtual Machine specification and with then-current test suites (or a new test suite created expressly for such modifications) is maintained. Any additional test suites which may be provided by SUN shall not count against the limitation of four (4) test suites per year specified in Section 2.4. The changes shall be considered Derivative Works, and SUN shall have no obligation to incorporate such changes into any future releases of the Technology.


(iii) Licensee may sublicense and deliver a copy of the Source Code of the Technology to third parties only in association with the delivery and sublicensing of Licensee Products, and solely for the purpose of enabling such third party to port or localize Products for Licensee. Any such sublicense shall be made subject to terms and conditions relating to ownership, use, and confidentiality of the Technology substantially similar to those contained herein.


(iv) Licensee may localize the Technology to support distribution of Licensee's First Customer Shipment ("FCS") versions of the Product(s). Licensee's modifications for the purpose of localization shall be considered Derivative Works. The parties understand that SUN intends to support localization in the Technology, and Licensee agrees to follow SUN's standard localization strategy.


c. Bug Fixes. Licensee will inform SUN promptly, and no later than it informs any third party, of any bugs in and bug fixes for the Technology, and Licensee will make such bug fixes available to SUN free of all restrictions promptly as they are identified.
*****

Confidential treatment has been requested for the redacted portions. The confidential redacted portions have been filed separately with the Securities and Exchange Commission.
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2.2 Binary Code License.

a. SUN hereby grants and Licensee hereby accepts a non-exclusive, worldwide, fully paid up license to use an unlimited number of copies of the Technology in binary form, for Licensee's internal use during the term of this Agreement.


b. Worldwide Distribution. Licensee may distribute the Product(s), Licensee Software, Value Added Open Packages, Licensee-implemented modifications to the Platform Dependent Part, Upgrades and associated Documentation provided to Licensee by SUN in binary form worldwide and may use such distribution channels as Licensee deems appropriate, including distributors, ISVs, resellers, dealers and sales representatives (collectively, "Distributors"), provided, however, that such Distributors shall not modify the Technology or any portions thereof.


2.3 Documentation.

a. SUN hereby grants to Licensee, and Licensee hereby accepts, under SUN's Intellectual Property Rights, a non-exclusive, non-transferable license (i) to use and distribute the unmodified Documentation, (ii) to use and modify the Documentation to create technically accurate unaltered subsets of the documentation which shall include all the relevant SUN copyrights, notices, and marks, (iii) to translate the Documentation into other languages for use and distribution with non-U.S. versions of Product(s), and (iv) to distribute such modified and/or translated Documentation. Licensee may also use a pointer to the SUN Documentation on the Internet in connection with distribution of the Product(s).


2.4 Compatibility

a. Java Compatibility


(i) Initially, the AAPI shall be that which is reflected in the Technology as identified in Exhibit A, by the bytecode specification in the Documentation entitled "Java Virtual Machine Specification" and by the Java language specification in the Documentation entitled "Java Language Specification." Subsequently, the AAPI may be modified by SUN and SUN will give Licensee written notice thereof.


(ii) From time to time, SUN shall supply Licensee with test suites at no cost for validating that the portion of Licensee's Product which interprets Java bytecodes complies with the then-current specification of the AAPI as defined by SUN as of the date of that test suite ("Java Test Suite"). Without the consent of Licensee, which consent shall not be unreasonably delayed or denied, SUN shall not supply more than four (4) versions of such Java Test Suites in any one (1) calendar year. SUN shall use reasonable efforts to review any changes to such Java Test Suites as much in advance as possible with Licensee, but failure of SUN to do so shall not constitute a breach of this Agreement and shall not invalidate any such Java Test Suite supplied by SUN. Changes to Java Test Suites to correct errors shall not be counted against the limitation to four (4).


(iii) Each revision of a Product released by Licensee must pass the Java Test Suite that was current one hundred twenty (120) days before First Customer Shipment of such Product. Licensee shall not release or distribute to any third party the portion of Licensee's Product that interprets Java bytecodes, which does not successfully pass such Java Test Suite. If Licensee provides SUN with a copy of an existing publicly-available Applet which Licensee in good faith believes cannot be made to operate using best engineering efforts under any Java Runtime Interpreter which successfully passes the Java Test Suite, then Licensee shall be released from compatibility with the minimum portion of the Java Test Suite necessary to cause that application to be able to operate until such time as SUN provides to Licensee a corrected or new Java Test Suite, and a demonstration and technical description adequate for implementation of a system which both runs the application and such Java Test Suite.


(iv) Licensee shall promptly announce and use best efforts to ship Product(s) based on Upgrades to the Technology (excluding solely HotJava-specific Upgrades) as delivered by
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SUN during the term of this Agreement. Licensee shall use best efforts to correct any incompatibility with the AAPI, as determined by the applicable Java Test Suite, which arises from integrating such Upgrade, whether such incompatibility is detected before or after FCS of the affected Product(s).


(v) Branding and Trademarks. Licensee shall use a logo specified by SUN that indicates compatibility with the Java Test Suites (the "Java Compatibility Logo") in a trademark manner on all Licensee Product(s) distributed hereunder. The terms and conditions governing the parties' agreement as to trademarks, logos, and branding shall be governed by the Trademark License entered into herewith, attached as Exhibit G hereto, and incorporated by reference herein.


b. HotJava Compatibility


(i) The HotJava Browser code can only be used and/or shipped with Java implementations that are AAPI compliant, as tested by the then-current Java Test Suite from SUN, under the same rules as described in Sections 2.4(a).


(ii) Any works derived from the HotJava Browser source which has the capability to browse the World Wide Web must support execution of AAPI-compliant applications using the standard Applet tag as defined in Exhibit F.


(iii) From time to time SUN shall supply Licensee with test suites at no cost for validating that software which is derived from the HotJava Browser is compatible with the then-current base implementation of the HotJava Browser as defined by SUN as of the date of that test suite ("HotJava Test Suite"). Without the consent of Licensee, which consent shall not be unreasonably delayed or denied, SUN shall not supply more than four (4) versions of such Test Suites in any one (1) calendar year. SUN shall use reasonable efforts to review any changes to such HotJava Test Suites as much in advance as possible with Licensee, but failure of SUN to do shall not constitute a breach of this Agreement and shall not invalidate any such HotJava Test Suite supplied by SUN. Changes to HotJava Test Suites to correct errors shall not be counted against the limitation to four (4).


(iv) Licensee shall make reasonable commercial efforts to conform any work derived from the HotJava Browser to the HotJava Test Suite most recently supplied by SUN. Licensee shall be allowed to use the logo specified by SUN that indicates compatibility with the HotJava Test Suites (the "HotJava Compatibility Logo") on derived work only if it passes such HotJava Test Suites and if Licensee commits its intent to conform to future such test suites. Licensee may create and distribute Product(s) derived from the HotJava Browser which do not pass the HotJava Test Suite, provided that the HotJava Compatibility Logo is not used in conjunction with such Product(s), and such Product(s) are Java Compatible as specified in Section 2.4(a).


c. Compiler Compatibility


(i) Any Product(s) that performs compiling function must continue to compile the complete Java language as described in the Java Language Specification, and be able to generate fully-interpretable machine-independent bytecodes for the Java Virtual Machine.


(ii) From time to time, SUN shall supply Licensee with test suites at no cost for validating that the portion of Licensee's Product which interprets Java bytecodes complies with the then-current specification of the AAPI as defined by SUN as of the date of that test suite ("Java Language Test Suite"). Without the consent of Licensee, which consent shall not be unreasonably delayed or denied, SUN shall not supply more than four (4) versions of such Java Language Test Suites in any one (1) calendar year. SUN shall use reasonable efforts to review any changes to such Java Language Test Suites as much in advance as possible with Licensee, but failure of SUN to do so shall not constitute a breach of this Agreement and shall not invalidate any such Java Language Test Suite supplied by SUN. Changes to Java Language Test Suites to correct errors shall not be counted against the limitation to four (4).
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(iii) Licensee shall promptly announce and use best efforts to ship Product(s) based on Upgrades to the Technology as delivered by SUN during the term of this Agreement. Licensee shall use best efforts to correct any incompatibility with the AAPI, as determined by the applicable Java Language Test Suite, which arises from integrating such Upgrade, whether such incompatibility is detected before or after FCS of the affected Product(s).


2.5. Value Added Open Packages

(i) Licensee shall deliver to SUN free of all restrictions the specification for the application programming interface for Value Added Open Package as early as is reasonably possible but in no event later than the date on which it first provides such specification or an implementation thereof to any third party. Included in such specification shall be an appropriate test suite sufficiently detailed to allow SUN and third parties to produce compatible implementations of the specification. Licensee shall use its reasonable commercial efforts to clarify and correct the specification or the test suite upon written request by SUN and failure to do so within sixty (60) days after such request shall constitute breach of this Agreement.


(ii) Licensee shall notify SUN as soon as it has made any general disclosure (i.e., not subject to confidentiality obligations) of such specification, or first releases a Product implementing such specification, after which SUN shall have no obligation of confidentiality whatsoever with respect to such specification, and Licensee agrees that it will take no steps whatsoever to prevent SUN or any third party from creating implementations based on such specification, provided that such implementations do not violate Licensee's patents, copyrights (except that Licensee agrees that it will not enforce copyright claims that relate to interface or compatibility) or trade secrets in the implementation of the Value Added Open Packages.


(iii) Licensee shall confine the names of all Value Added Open Packages to names beginning with "COM.Licensee" or such other convention as SUN may reasonably require and shall not modify or extend the names of public class or interface declarations whose names begin with "java", "COM.sun" or their equivalents in any subsequent naming convention. Licensee will make reasonable commercial efforts to ensure that other commercial software packages which it redistributes conform to this convention.


(iv) Licensee hereby grants and SUN hereby accepts a non-exclusive, worldwide, fully-paid-up license to use an unlimited number of copies of the Value Added Open Packages, in binary form, for SUN's internal use, such use including but not limited to demonstration rights. Licensee agrees to reasonably negotiate in good faith with SUN the terms of a commercial license for the source code of the Value Added Open Packages. The parties agree that the fees and other terms and conditions of this Agreement are a reasonable standard against which to judge such a license on a proportionate basis comparing the scope and complexity of the portion of the Value Added Open Package being licensed to the scope and complexity of the Technology.


2.6 Ownership

a. Ownership by SUN. SUN retains all right, title and interest in the Technology, including Derivative Works, Documentation, Upgrades, bug fixes, and Trademarks, and associated Intellectual Property Rights, but excluding Product(s), Value Added Open Packages, Licensee Software, and Licensee-implemented modifications to the Platform-Dependent Part of the Java Runtime Interpreter and modifications to the HotJava Browser, and associated Intellectual Property Rights (subject to SUN's underlying rights in the Technology and associated Intellectual Property). Licensee agrees to execute (in recordable form where appropriate) any instruments and/or documents as SUN may reasonably request to verify and maintain SUN's ownership rights, or to transfer any part of the same which may vest in Licensee for any reason. Licensee further agrees to promptly deliver to SUN any Derivative Works of the Technology created by Licensee pursuant to and during the term of this Agreement. SUN shall have no obligations of confidentiality to Licensee for such Derivative
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Works, nor shall SUN be obligated to incorporate any such Derivative Works into the Technology.


b. Ownership by Licensee. Licensee retains all right, title and interest in the Product(s), Value Added Open Packages, Licensee Software, and Licensee-implemented modifications to the Platform-Dependent Part of the Java Runtime Interpreter and modifications to the HotJava Browser, created by Licensee pursuant to and during the term of this Agreement, subject to SUN's underlying rights in the Technology and associated Intellectual Property Rights identified in Section 2.6a. In the event that the parties desire to undertake joint development activities, the parties agree to negotiate and enter into a separate joint development agreement for such activities.


2.7 Protection of SUN's Rights. Licensee shall use, modify and practice the Technology and manufacture, market, distribute and sell Product(s), Value Added Open Packages, Licensee Software, and Licensee-implemented modifications to the Platform-Dependent Part of the Java Runtime Interpreter only in a manner consistent with the terms of this Agreement, and only in a manner reasonably designed not to jeopardize or prejudice SUN's Intellectual Property Rights, including trademarks, trade dress and service marks, and other proprietary rights.

2.8 No Right To Sublicense or Transfer. Except as specifically provided in Sections 2.1b(iii) and Section 2.2 above, Licensee shall have no right to sublicense or transfer any of the rights or licenses granted in this Agreement.

2.9 No Other Grant. Each party agrees that this Agreement does not grant any right or license, under any Intellectual Property Rights of the other party, or otherwise, except as expressly provided in this Agreement, and no other right or license is to be implied by or inferred from any provision of this Agreement or by the conduct of the parties.

2.10 Contractors. Licensee may retain third parties to furnish services to it in connection with its development and manufacture of Product(s); provided, however, that all such third parties who perform work in furtherance of such activities shall execute appropriate documents: (i) acknowledging their work-made-for-hire status, (ii) effecting assignments of all Intellectual Property Rights with respect to such work to Licensee or SUN, as appropriate, and (iii) undertaking obligations of confidentiality respecting such work. SUN may, upon its request, review any such form documents and agreements proposed for use by Licensee prior to any such use of contractors for development or manufacture of the Product(s).

2.11 Value Added Requirement. Licensee will distribute the Technology only as part of a Product and not on a stand-alone basis.

2.12 Pre-Release. Licensee may release Product(s) based on the pre-FCS Technology licensed by SUN hereunder only for beta testing purposes.

2.13 Early Access. SUN will provide Licensee with access to pre-release versions of the Technology at the same time as SUN makes such versions available to other early access licensees similarly situated. The Java Products Group intends to treat other SUN engineering groups in the same manner with respect to delivery of early access versions and Upgrades to the Technology. 3.0

SUPPORT AND UPGRADES


3.1 During the Support Period (as defined below), SUN shall provide to Licensee under the terms and conditions of this Agreement, Upgrades for the platforms specified in Exhibit C when and if any such Upgrades are made available by SUN to any commercial licensee similarly situated.

3.2 Subject to payment of the fee specified in Exhibit C (3. b), SUN shall assign, at Sun's discretion, the equivalent of one (1) half-time engineer to be available via phone, electronic mail and/or scheduled appointment during regular business hours to support Licensee, from the Effective Date through the fifth (5th) anniversary of the SUN FCS Date (as defined below) (the "Support Period"). Licensee may designate a maximum of three (3 ...