Infomodeler Technology Transfer & License Agmt

EXHIBIT 10.12


INFOMODELER TECHNOLOGY TRANSFER AND LICENSE AGREEMENT
This Agreement is made as of October 7, 1996 (the "Effective Date") by and between Asymetrix Corporation ("Asymetrix"), a Washington corporation having its principal office at 110 - 110th Avenue N.E., Suite 700, Bellevue, Washington 98004, and ASX Corporation ("ASX"), a Washington corporation having an office at 110 - 110th Avenue N.E., Suite409, Bellevue, Washington 98004.


In consideration of the covenants and conditions hereinafter set forth, Asymetrix and ASX agree as follows:


1. DEFINITIONS.


(a) "Asymetrix Product" means a product of Asymetrix that incorporates or
----------------- otherwise utilizes any portion of the InfoModeler Technology in combination with other technology of Asymetrix or third parties such that a majority of the functionality of such product is derived from technology other than the InfoModeler Technology.


(b) "ASX Product" means a product of ASX that incorporates or otherwise
----------- utilizes the InfoModeler Technology, either alone or in combination with other technology of ASX or third parties such that a majority of the functionality of such product is derived from the InfoModeler Technology.


(c) "Competing Product" means any product that competes with an ASX
----------------- Product; provided, however, that "Competing Product" shall not include any products in the ToolBook II or SuperCede product lines, including any successors to such product lines, whether marketed under the `ToolBook II' or `SuperCede' names or not, even if such products can perform some of the same functions as an ASX Product.


(d) "Confidential Information" means (i) any of a party's proprietary
------------------------ technology or computer software in all versions and forms of expression, whether or not the same has been patented or the copyright thereto registered, is the subject of a pending patent or registration application, or forms the basis for a patentable invention; (ii) any manuals, notes, documentation, technical information, drawings, diagrams, specifications, formulas or know-how related to any of the foregoing; (iii) any information regarding current or proposed products, customers, contracts, business methods, financial data or marketing data; and (iv) any other information that is clearly marked or designated as confidential or proprietary by such party. Confidential Information includes unwritten information that is identified by such party as confidential at the time of disclosure. Confidential Information does not include information which: (v) was in a party's lawful possession prior to the disclosure and had not been obtained by such party either directly or indirectly from the other party; (vi) is lawfully disclosed to such party by a third party without restriction on disclosure; (vii) is independently developed by such party without reference to the other party's Confidential Information; or (viii) is publicly disclosed by the other party. It shall be the receiving party's burden to show information is not Confidential Information of the other party.


(e) "InfoModeler Technology" means all original works of authorship,
---------------------- inventions, software source code, algorithms, documentation, know-how, concepts, techniques and discoveries and all other subject matter which Asymetrix has developed as of the date of this Agreement and which are related to the InfoModeler and database query projects of the Asymetrix Client/Server Division, including copyrights and trade secrets covering the foregoing throughout the world, but not including the Patents; provided, however, that "InfoModeler Technology" shall not include any know-how, ideas, concepts, techniques or discoveries related to computer programming or software applications development generally, whether known to Asymetrix prior to or developed in the course of developing any particular software.


(f) "Net Revenue" means all revenue to ASX from sales of ASX Products or
----------- services related to ASX Products, less any amounts for returns, sales taxes collected by ASX, shipping and handling charges, separately invoiced amounts for export duties and customs charges, and amounts written off as uncollectable in accordance with ASX's normal accounting practices, all with respect to sales of ASX Products or services related to ASX Products only.


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(g) "Patents" means any issued patents and patent applications (including
------- any future patents that may be issued to ASX pursuant to such applications), including any foreign equivalents, covering aspects of the InfoModeler Technology now owned or hereafter acquired by ASX.


2. TRANSFER OF INFOMODELER TECHNOLOGY.


(a) Assignment. Asymetrix hereby sells, assigns, transfers and conveys to
---------- ASX all of its right, title and interest in and to the InfoModeler Technology, including without limitation all documents and files in both printed and electronic form relating thereto.


(b) Registered User and Prospect Lists. Asymetrix shall provide ASX with
---------------------------------- all information related to the existing registered users of Asymetrix's InfoModeler product, which ASX may use for whatever purpose it deems appropriate. Asymetrix shall also provide ASX with a list of all known qualified prospective customers for the InfoModeler products, which ASX may use for whatever purpose it deems appropriate. Asymetrix may continue to use such InfoModeler registered user and prospect lists for whatever purpose Asymetrix deems appropriate.


(c) Referrals. Following execution of this Agreement, Asymetrix shall
--------- refer all inquiries regarding the InfoModeler products to ASX, including sales leads and potential strategic partners, and shall cease to sell the InfoModeler product. Asymetrix shall not be entitled to any compensation for such referrals beyond the revenue based payments described in Section 6.


(c) Technical Support. Following execution of this Agreement, ASX shall be
----------------- responsible for providing technical support to all end users of the InfoModeler product licensed by ASX as well as the existing registered user base originally licensed by Asymetrix. Asymetrix may refer any technical support calls received after the date hereof to ASX's technical support staff, and such calls shall be given equal priority with calls directly to ASX regardless of whether the end user was licensed InfoModeler by Asymetrix or ASX.


3. LICENSE TO INFOMODELER SOFTWARE.


(a) Grant and Scope. Subject to the restrictions set forth in Section
--------------- 3(b), ASX hereby grants to Asymetrix a non-exclusive, royalty-free, world-wide, perpetual, non-terminable right and license (i) to modify, copy, merge, and incorporate any portion of the InfoModeler Technology into other computer programs in connection with the design, development, and manufacture of Asymetrix Products; (ii) to make, have made, duplicate, have duplicated, modify, use, market, display, perform, sell, license, or otherwise transfer or distribute object code copies of the InfoModeler Technology but only incorporated into and forming a part of Asymetrix Products, and to authorize Asymetrix's distributors, resellers, value added resellers, original equipment manufacturers and other parties authorized by Asymetrix to market or distribute Asymetrix Products to do any of the foregoing described in this subsection 3(a)(ii); and (iii) to make and use a reasonable number of copies of Asymetrix Products for purposes of marketing, training, and demonstrations related to the Asymetrix Products. ASX hereby grants to Asymetrix a non-exclusive, royalty- free, world-wide, perpetual, non-terminable license under all of the Patents to allow Asymetrix to fully exercise the rights granted hereby.


(b) Restrictions. Asymetrix shall not be permitted to market, display,
------------ perform, sell, distribute, sublicense or otherwise transfer the InfoModeler Technology (i) on a standalone basis separate and apart from the Asymetrix Products; (ii) as part of any Competing Product; or (iii) in source code form. Nothing herein shall prevent Asymetrix from developing, marketing and distributing Competing Products provided that any such Competing Products do not incorporate any InfoModeler Technology and are developed without reference to ASX Confidential Information.


(c) Survival. The license granted hereby is intended to be perpetual and
-------- shall continue and be binding on the surviving party in any merger or consolidation of ASX or purchaser of all or substantially all of the assets of ASX.


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4. RIGHTS TO MODIFICATIONS.


ASX shall own any all modifications, updates, upgrades and future versions of the InfoModeler Technology made by ASX following the Effective Date, and Asymetrix shall have no rights with respect to any of the foregoing pursuant to this Agreement. Any modifications to the InfoModeler Technology made by Asymetrix hereunder shall be owned in their entirety by Asymetrix, and Asymetrix shall have no rights with respect to any of the foregoing pursuant to this Agreement.


5. ASX COMMON STOCK.


In consideration of the transfer of the InfoModeler Technology to ASX and the covenants and agreements of Asymetrix hereunder, ASX shall, concurrently with the execution of this Agreement issue to Asymetrix 3,500,000 shares of the $.01 par value common stock of ASX. ASX represents, warrants and agrees that upon issuance, such shares of ASX common stock shall be duly authorized, validly issued, fully paid and nonassessable.


6. REVENUE BASED PAYMENTS.


(a) Revenue Based Payments. In consideration of the transfer of the
---------------------- InfoModeler Technology to ASX and the covenants and agreements of Asymetrix hereunder, ASX shall make revenue based payments to Asymetrix in an amount equal to 8% of Net Revenues for a period of five years from the Effective Date.


(b) Payment and Reporting. ASX shall provide to Asymetrix a written
--------------------- statement, accompanied by a check for all revenue based payments then payable, not later than 30 days after the close of each calendar quarter during which revenue based payments accrued and specifying for such quarter: (i) the Net Revenues for the calendar quarter; (ii) the amount of any credit against such revenue based payments for the particular calendar quarter (if applicable); and (iii) a calculation of the revenue based payments payable to Asymetrix.


(c) Records and Audit. ASX shall keep accurate records and books of account
----------------- concerning its Net Revenues adequate to determine the amount of the revenue based payments owed Asymetrix, which shall be preserved by ASX in a safe place for a period of one year following the five-year period during which such revenue based payments are payable. Throughout the five-year period during which revenue based payments are payable to Asymetrix, and during the year following expiration thereof, Asymetrix or its certified public accountants shall have the right, upon 30 days prior written notice and at Asymetrix's expense, to audit ASX's records concerning the distribution of the InfoModeler Products; provided that such right shall be limited to one audit in any twelve month period. If an audit reveals that ASX has underpaid the per copy royalties due Asymetrix, ASX shall promptly pay to Asymetrix the amount of the underpayment. If such underpayment exceeds five percent of the total amount actually owed, ASX shall promptly reimburse Asymetrix for its costs and expenses in performing such audit. All information obtained in the audit shall be kept confidential by Asymetrix and its certified public accountants, except to the extent necessary for Asymetrix to enforce its rights under this Agreement. The certified public accountants conducting any such audit shall execute a non- disclosure agreement reasonably acceptable to ASX p ...