OPTION AGREEMENT
This OPTION AGREEMENT is entered into as of this 19th day of December
2000 between NetObjects, Inc., a Delaware corporation ("NetObjects"), and
[***].
WHEREAS, NetObjects' Enterprise Division has developed a product called
NetObjects Collage;
WHEREAS, [***] desires to purchase an option to acquire the assets and
the business of NetObjects' Enterprise Division as a going concern; and
WHEREAS, [***] desires to acquire or license the rights to the current
versions of NetObjects Collage and any and all upgrades or modifications made to
NetObjects Collage (together, "Collage").
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
Article 1.
DEFINITIONS AND REFERENCES
Terms used herein shall have the respective meanings assigned thereto
herein (such definitions to be equally applicable to both the singular and
plural forms of the terms defined). Unless otherwise specified, all references
herein to "Articles" or "Sections" are to Articles or Sections of this Option
Agreement.
ARTICLE 2.
GRANT OF OPTION & LICENSE
Section 2.1 Grant of Purchase Option.
(a) NetObjects hereby grants to [***] the exclusive right (the
"Purchase Option") during the term of the Purchase Option to acquire the assets
and the business of NetObjects' Enterprise Division for cash consideration of
$18 million. For purposes of this Option Agreement, the Enterprise Division
means that portion of NetObjects' business which involves the development,
marketing, license, installation, distribution, support, maintenance and sale of
products used for an integrated content management environment for teams of Web
contributors and developers, while providing centralized control over the site
production effort; professional services for the training, support, maintenance
and installation of such products; and the personnel employed by NetObjects
directly in the development, marketing, installation, sales, maintenance,
support, integration and licensing of such products, and performance of such
services, and shall include, without limitation, the rights to Collage and the
rights to any third party products incorporated therein that NetObjects is
entitled to assign, sublicense or otherwise transfer. The Enterprise Division
also includes the products and services provided by the Enterprise Division, and
the rights to continue such products and services would also be
[***] omitted pursuant to a request for confidential treatment.
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acquired with the Enterprise Division, provided that the Purchase Option will
enable [***] to obtain a perpetual nonexclusive worldwide, royalty- free, field
of use license, but not title, to certain intellectual property and software
used by NetObjects with the Enterprise Division and with other NetObjects
products and services. Such license would include source code (with subsequent
modifications by NetObjects) for TeamFusion Client that could be used by [***]
only to prepare its own derivative works within the field of use. The Enterprise
Division products and services include any and all versions of all software
products of the Enterprise Division, which include the following software
programs and products: NetObjects TeamFusion (other than the single user
version), NetObjects Authoring Server and NetObjects Collage (including both
source code and object code versions thereof and any and all prior releases or
versions of all of them), and related documentation (including, without
limitation, user and training manuals and technical documentation) and any
consulting, training, evaluating or similar service provided by the Enterprise
Division. Completion of the purchase shall be subject to the parties' compliance
with the respective corporate laws and charter documents currently applicable to
each party and the expiration of pre-merger notification periods under U.S.
federal and U.K. antitrust laws.
(b) The Purchase Option shall expire on January 5, 2001, unless the
parties otherwise agree in writing to extend this date.
Section 2.2 Grant of License.
(a) As of the date of expiration of the Purchase Option as provided in
Section 2.1(b), NetObjects hereby grants to [***] a fully-paid, non-exclusive,
worldwide right and license to: (1) use, copy, market, promote, distribute and
sublicense Collage and any third party products incorporated therein in object
code format only to end users and distributors, (2) use a reasonable number of
copies of Collage and any third party products incorporated therein in object
code format only for demonstration, maintenance, support and training purposes
and authorize distributors to use a reasonable number of copies of Collage and
any third party products incorporated therein for such purposes, (3) translate,
copy, in whole or in part, and distribute and authorize distributors and end
users to translate, copy, in whole or in part, and distribute any user
documentation associated with Collage, including local language translations,
for use in connection with this Section 2.2(a), (4) translate, copy, in whole or
in part, and distribute and to authorize distributors to translate, copy, in
whole or in part, and distribute any sales literature, including local language
translations, for Collage, and (5) use, modify and prepare derivative works of
the source code of Collage solely in accordance with Section 2.04(b) of Exhibit
A which is hereby incorporated by reference (the "License").
(b) The parties intend that the License granted in this Section 2.2
shall be subject to additional terms and conditions set forth in a separate
license agreement (the "License Agreement") in substantially the form attached
as Exhibit A. Furthermore, the parties agree that the provisions of this Section
2.2 are valid and enforceable even if such License Agreement is not concluded
unless NetObjects refunds the Option and License Price and terminates the
License Agreement in accordance with Section 3(b). If NetObjects so refunds the
Price and terminates the License Agreement, the provisions of this Section 2.2
terminate, with the sole exception of the last sentence of 2.2(d) providing for
the
[***] omitted pursuant to a request for confidential treatment.
<PAGE>
continuance of certain licenses granted by [***] during the term the License is
in effect.
(c) The parties agree that the provisions of Section 1.02 and Section
3.01 of Exhibit A are a part of this Agreement.
(d) The License granted in this Section 2.2 shall terminate on December
31, 2003, provided, however, that if (i) the parties enter into a definitive
agreement for the sale and purchase of the Enterprise Division and close the
transaction contemplated therein by March 1, 2001, then the License shall
terminate upon such closing, or (ii) NetObjects exercises its option to
terminate under Section 3(b), then the License will terminate as provided
therein. Any and all sublicenses to Collage which have been granted by [***] all
continue in accordance with their terms notwithstanding any termination of the
License; provided that any such licenses must be object code only and, as to any
sublicensee other than an end user, will expire on or before December 31, 2003.
Section 2.3 IBM Investment.
NetObjects also agrees that in connection with the exercise by [***]
of the Purchase Option, NetObjects will cooperate with [***] to obtain the
agreement of International Business Machines, Inc. to take the following
actions:
(a) Purchase up to [***] of [***] outstanding [***] on the open market
or, if less, [***] million of such [***] following or concurrent with the public
announcement of the completion of [***] purchase of the Enterprise Division of
NetObjects as contemplated in Section 2.1 and, concurrent with NetObjects' and
[***] announcement of their agreement for [***] purchase of the Enterprise
Division, IBM will announce its intent to make such purchase. As part of such
investment transaction, and unless otherwise agreed by IBM and [***], neither
IBM nor any other persons acting in concert with IBM will acquire shares of
[***] representing more than [***] of the aggregate voting power of [***]
outstanding shares for two years from the date of this Option Agreement.
(b) Enter into a strategic relationship with [***] , which may include,
but not be limited to co-marketing, sales and public relations activities.
ARTICLE 3
PAYMENT FOR OPTION & LICENSE
In consideration for the Purchase Option and License granted above,
promptly after this Option Agreement is signed by both parties [***] shall pay
to NetObjects the sum of Four Million Dollars ($4,000,000) (the "Option and
License Price") by wire transfer of immediately available funds to a bank
account designated by NetObjects. The Option Price shall be credited as follows:
(a) In the event the parties complete the purchase and sale of the
Enterprise Division as contemplated under Section 2.1, the amount of the
purchase price for the Enterprise Division shall be reduced by the Option and
License Price already paid.
[***] omitted pursuant to a request for confidential treatment.
<PAGE>
In the event the purchase and sale of the Enterprise Division is not completed
by January 31, 2001, for reason other than the fault of NetObjects including its
failure to obtain shareholder approval of the transaction, then [***] shall,
within 30 days following receipt of NetObjects' invoice, reimburse NetObjects
for the portion of the reasonable expenses of the Enterprise Division incurred
by NetObjects after January 31, 2001 and until March 1, 2001; provided, however,
that [***] does not assume any liability to any third parties for such
expenses.
(b) In the event the parties either are unable to enter into definitive
agreements or are unable to close the transactions contemplated thereby by March
1, 2001, the Option and License Price represents payment in full for the License
granted in Section 2.2 and the License Agreement contemplated therein; provided
that NetObjects, at its option, may refund the Option and License Price to
[***] and terminate the License Agreement upon written notice to [***].
Article 4.
GENERAL PROVISIONS
Section 4.1. Notices. All notices, requests, claims, demands and other
communications given or made pursuant hereto shall be in writing (and shall be
deemed to have been duly given or made upon receipt) by delivery in person, by
telecopy (with confirmation copy of such telecopied material delivered in person
or by registered or certified mail, postage prepaid, return receipt requested)
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section).
If the notice is to [***]:
[***]
If the notice is to NetObjects:
NetObjects, Inc.
301 Galveston Road
Redwood City, California 94063
Attn: Chief Executive Officer
Telecopier: (650) 482-3600
or such other address and to the attention of such other person as such party
may designate by written notice to such other party.
Section 4.2. Entire Agreement. This Option Agreement together with the
License Agreement and Escrow Agreement constitute the entire agreement of the
parties
[***] omitted pursuant to a request for confidential treatment.
<PAGE>
hereto with respect to the subject matter hereof and supersede all prior
agreements and undertakings, both written and oral, with respect to the subject
matter hereof.
Section 4.3. Successors and Assigns. Neither [***] nor NetObjects may
assign any of its rights or obligations hereunder. This Option Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
Section 4.4. Third-Party Beneficiaries. This Option Agreement is for
the sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
thereunder.
Section 4.5. Amendment; Waiver. This Option Agreement may not be
amended or modified except by an instrument in writing duly executed by each
party hereto. Waiver of any term or condition of this Option Agreement shall
only be effective if in a writing signed by the party to be charged therewith
and shall not be construed as a waiver of any subsequent breach or waiver of the
same term or condition, or a waiver of any other term or condition of this
Option Agreement.
Section 4.6. Governing Law. This Option Agreement shall be governed by,
and construed in accordance with, the laws of the State of Maryland applicable
to contracts executed and performed in that state.
Section 4.7. Confidentiality. Neither [***] nor NetObjects shall make
any public disclosure of this Option Agreement unless required by law. Each
party will maintain strict confidentiality with respect to all documents and
information furnished by the other party.
Section 4.8. Counterparts. This Option Agreement may be executed in
counterparts and a party's delivery of a copy of signature page of this
Agreement by electronic facsimile will constitute the party's due execution and
delivery of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Option Agreement to be
executed as of the date first above written individually or by their respective
officers thereunto duly authorized.
[***]
By: /s/
---------------------------------------
Name:
-------------------------------------
Title:
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NETOBJECTS, INC.
By: /s/ Samir Arora
---------------------------------------
Name:
-------------------------------------
Title: CEO
------------------------------------
[***] omitted pursuant to a request for confidential treatment.
<PAGE>
Exhibit A
SOFTWARE LICENSE AGREEMENT
NetObjects, Inc., a Delaware corporation, having an office at 301
Galveston Road, Redwood City, California 94063 ("Licensor"), and [***]
("Licensee"), enter into this Agreement on ________, 2000 (the "Effective Date")
pursuant to the terms of the Option Agreement dated as of December 19, 2000 (
the "Option Agreement") and hereby agree as follows:
ARTICLE I
1.01 License Grant
(a) NetObjects hereby grants to [***] a fully-paid, non-exclusive,
worldwide right and license to: (1) use, copy, market, promote, distribute and
sublicense the Business Products and any third party products incorporated
therein in object code format only to end users and distributors; (2) use a
reasonable number of copies (as provided in Section 1.02) of the Business
Products and any third party products incorporated therein in object code format
only for demonstration, maintenance, support and training purposes and authorize
distributors to use a reasonable number of copies of the Business Products and
any third party products incorporated therein for such purposes; (3) translate,
copy, in whole or in part, and distribute and authorize distributors and end
users to translate, copy, in whole or in part, and distribute any user
documentation associated with the Business Products, including local language
translations, for use in connection with this Section 1.01(a), (4) translate,
copy, in whole or in part, and distribute and authorize distributors to
translate, copy, in whole or in part, and distribute any sales literature,
including local language translations, for the Business Products, and (5) use,
modify and prepare derivative works of the Business Products solely in
accordance with Section 2.04(b) (the "License").
1.02 Royalties and Reports
(a) Royalties. Licensee shall pay Licensor a royalty of $15,000 per
copy of the Business Products made or distributed by or for Licensee under the
License (the "Royalty"). Within 30 days after the end of each month, Licensee
shall provide to Licensor a written report detailing the number of copies
subject to royalty distributed during such month. After receipt of the foregoing
actual reports, Licensor will invoice Licensee accordingly. Licensor's invoice
will identify that portion of the Royalty which represents reimbursement to
Licensor for royalties payable by it in respect of third party intellectual
property contained in the Business Products (the "Third Party Royalty"), and
upon request Licensor will furnish documentation of the Third Party Royalty.
Licensee shall be credited with a pre-paid amount of $4 million to be applied
against the invoiced amounts for Royalty excluding the Third Party Royalty. Any
portion of the pre-paid amount remaining to Licensee's credit at the end of the
initial term of this Agreement, as defined in Section 2.01, shall be
nonrefundable and will be retained by Licensor. Licensee will pay the invoiced
amounts for Third Party Royalty within 30 days of invoice.
(b) Internal Use and Demonstration Copies. Licensee may make ten copies
of the Business Products and any third party products incorporated therein in
object code format only, for
[***] omitted pursuant to a request for confidential treatment.
<PAGE>
Licensee's own internal use, demonstration, maintenance, support and training
purposes and authorize distributors to use such copies for such purposes, free
of royalty obligation to Licensor. In addition to the ten copies of the Business
Products that Licensee may make free of royalty obligation to Licensor, Licensee
may make up to 40 additional copies of the Business Products and any third party
products incorporated therein, in object code format only, for Licensee's own
internal use, demonstration, maintenance, support and training purposes and
authorize distributors to use such copies for such purposes, and Licensee shall
be liable to Licensor for Third Party Royalty (but no other royalty) on such 40
additional copies.
(c) Records. Licensee shall keep (and shall require its subsidiaries
and distributors to keep) accurate and complete books and records relating to
the reproduction and sublicensing of the Business Products.
(d) Auditing. Licensor shall have the right (and Licensee shall require
subsidiaries who distribute Business Products to grant the right), exercisable
no more than once in any calendar year, to have an independent certified public
accountant inspect and audit the records of the other party referred to in
Section 1.02(c). Such audit shall be conducted upon reasonable written notice
during normal business hours and at a time and place mutually agreed upon by
both parties. Such independent certified public accountants shall be permitted
to report to the party requesting the audit only information regarding the
compliance of the audited party's record keeping with this Section 1.02(c) and
payments that may be owing to the party requesting the audit. If any such audit
reveals a shortfall of greater than five (5%) percent in unreported payments
owed but not made, the party requesting the audit shall be reimbursed by the
other party for the reasonable expense of such audit.
(e) Taxes. All fees and royalties are exclusive of all taxes, duties or
levies, however designated or computed. Licensee shall be responsible for and
pay all taxes based upon the transfer, use, or distribution of Business
Products, or upon payments by Licensee under this Agreement, including, but not
limited to, sales, use, or value-added taxes, duties, withholding taxes and
other assessments now or hereafter imposed on or in connection with this
Agreement or with any sublicense granted hereunder, exclusive of taxes based
upon Licensor's income, revenues or gross receipts. In lieu thereof, Licensee
may provide to Licensor a tax or other levy exemption certificate acceptable to
the taxing or other levying authority.
1.03 Nonassignability
(a) Licensor has entered into this Agreement in contemplation of
personal performance by Licensee and it is Licensor's intention that a transfer
of Licensee's licenses not occur without Licensor's express written consent,
except as provided in Section 1.03(d).
(b) Neither this Agreement nor any licenses hereunder, in whole or in
part, shall be assignable or transferable by Licensor or Licensee (by operation
of law or otherwise) without the other party's express written consent, except
as provided in Section 1.03(d).
(c) Any purported assignment or transfer of this Agreement or licenses
hereunder by Licensee without the other party's necessary consent shall be void
(without affecting any other licenses or rights hereunder).
(d) Notwithstanding (a), (b) and (c) above, this Agreement and any
license grants hereunder shall be assignable or transferable by Licensee without
Licensor's consent in connection
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with Licensee's sale of all or substantially all of its business relating to
distributing the Business Products.
1.04 Publicity
Nothing in this Agreement shall be construed as conferring upon
Licensee any right to include in advertising, packaging or other commercial
activities related to a Business Product, any reference to Licensor (or any of
its Subsidiaries), its trade names, trademarks or service marks (including,
without limitation, "NetObjects") in a manner which would be likely to cause
confusion or to indicate that such Business Product is in any way certified by
Licensor, its Subsidiaries or its controlling affiliates.
1.05 Compliance With Export Laws
Licensee hereby assures Licensor that Licensee will comply with all
applicable U.S. export laws.
ARTICLE II
2.01 Term
(a) The initial term of the License granted in this Agreement shall
terminate on December 31, 2003, provided, however, that if (i) the parties
complete the sale and purchase of the Enterprise Division and close the
transaction contemplated under the Option Agreement by March 1, 2001, the
License shall terminate upon such closing, or (ii) NetObjects exercises its
option under Section 3(b) of the Option Agreement, the License will terminate as
provided therein.
(b) For as long as this Agreement remains in effect, within 60 days
prior to the end of the initial term and 60 days prior to the end of each
successive one calendar year term thereafter, Licensee may renew the term of the
license by written notice to Licensor provided that Licensee is not then in
default of any obligation of Licensee under this Agreement.
(c) Licensor may terminate this Agreement and the license granted under
Section 1.01 at any time upon 45 days' written notice to Licensee if Licensee is
in default of any material obligation of Licensee under this Agreement and
Licensee fails to cure the default within the 45 days after written notice of
default is sent by Licensor.
(d) Any and all sublicenses to Collage which have been granted by
Licensee or its distributors to their customers during the term of the License
shall continue in accordance with their terms notwithstanding any termination of
the License.
2.02 No Other Licenses Implied
No licenses are granted to Licensee with respect to any of the Business
Products Intellectual Property except as provided in Section 1.01.
Notwithstanding the provisions of Article I, it is hereby expressly acknowledged
and agreed by Licensee that the licenses shall not include, and Licensor is not
licensing or transferring, nor is Licensee acquiring or accepting from Licensor,
any patents, licenses, or rights applicable to the non-Business portion of
Licensor's operations, including, but not limited to, any Proprietary
Information used in products and services of Licensor other than the Business
Products or Business Services.
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2.03 Non-Solicitation
Licensee represents to Licensor, and agrees, that during the 12 months
after the Effective Date Licensee will not make any offer of employment,
directly or indirectly, or otherwise solicit other than by general
advertisement, any individual who is employed by Licensor as of the Effective
Date.
2.04 Maintenance and Support
(a) Licensor will designate a primary contact and a back-up contact to
provide at no additional charge Level 3 maintenance service to Licensee. In
particular, Licensor will provide diagnostic services and resolutions
(workarounds, patches, corrected versions, etc.) in the manner provided to other
distributors.
(b) At Licensee's request, Licensor will make available up to four
qualified employees or consultants at reasonable rates for customization and
integration of the Business Products into Licensee's software products. If
Licensor is unable or unwilling to provide these services in a timely manner,
then Licensee will have the ability and right to access the escrowed source code
for the purpose of performing these services itself.
ARTICLE III
3.01 Source Code Escrow
Licensor has escrowed the source code for the Business Products with
Data Security International, Inc. ("DSI") or such escrow agent that might
replace DSI at a subsequent date. Licensor will maintain such escrow during the
term of the Agreement. Licensor will list Licensee as a beneficiary of the
source code escrow pursuant to the terms of the standard "Source Code Escrow
Agreement," used by DSI as revised to conform to this Article III. For the
purposes of this Amendment:
(a) the Business Products will be deemed Escrowed Materials as such
term is used in the Escrow Agreement;
(b) Notwithstanding anything in the Escrow Agreement to the contrary,
when requesting access to or a copy of any Escrowed Material, Licensee shall in
writing agree and confirm that it will have only the license rights granted to
it by the Option Agreement and this Software License Agreement. Licensee shall
further in writing agree and confirm that the Escrowed Material shall be deemed
confidential Information of Licensor pursuant to the Confidential Disclosure
Agreement between Licensor and Licensee as of August 31, 2000, with the actual
date of disclosure of the Escrowed Materials being deemed the initial and final
disclosure date of disclosure thereunder.
(c) So long as Licensee is current with its obligations at that time,
Licensee shall be entitled to obtain the source code, limited to the Business
Products, under this Agreement if Licensor (i) fails to make available or
perform maintenance and support services, including the services described in
Section 2.04, for the Business Products pursuant to the terms of this Agreement
during a period in which Licensee is entitled to such services and Licensor has
not promptly cured such failure despite Licensee's demand that Licensor make
available or perform such services; (ii) files or is the subject of the filing
of a petition by or against Licensor for relief under the United States
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Bankruptcy Code, makes a general assignment for the benefit of creditors,
appoints or has appointed a general receiver or trustee in bankruptcy for
Licensor's business or property, provided that any such events will not apply if
within 30 days thereafter Licensor or its receiver or trustee provides
assurances, reasonably satisfactory to Licensee, of Licensor's continuing
ability and willingness to fulfill all material obligations under this
Agreement; or (iii) ceases business operations generally, unless within 30 days
thereafter a capable successor to the Business Products and Services, reasonably
satisfactory to Licensee, agrees to continue to make available and perform such
maintenance and services. Upon release of the source code from escrow it may
only be used, executed, and reproduced by Licensee internally for the purpose of
providing support and maintenance of Business Products, and for the purpose of
customization and integration of the Business Products with the Licensee's
software products, including without limitation the preparation of derivative
works consisting of bug fixes and updates, which Licensee may distribute and
sublicense externally in object code form only, and for no other purpose.
Licensee must continue to pay the Royalty on the Business Products, as specified
in Section 1.02(a) and at all times during which it has the source code;
provided, however, that if Licensee has obtained the source code due to any of
the contingencies specified in clauses (ii) and (iii) of this Section 3.01(c),
the Royalty payable under Section 1.02(a) shall be reduced from $15,000 per copy
to $10,000 per copy.
ARTICLE IV
The provisions of Article 4 of the Option Agreement shall apply mutatis
mutandis to this Agreement.
ARTICLE V
5.01 Trademarks and Trade names.
(a) Trademark Rights. Licensor hereby represents that Licensor is the
owner of all right, title, and interest in and to those trademarks listed in
Appendix I ("Trademarks") and Licensee agrees that it does not acquire any right
hereunder to adopt or use the Trademarks in any manner whatsoever except as
expressly provided in this Agreement.
(b) Use of Trademarks. During the term of this Agreement, Licensor
grants Licensee a nonexclusive, worldwide, field of use license (revocable only
in accordance with this Agreement) to use the Trademarks to identify the
Business Products for Licensee's marketing promotion, distribution and
sublicensing of the Business Products and Business Services. In carrying out its
licensed marketing, promotion, distribution and sublicensing activities,
Licensee shall use the Trademarks in the same manner as Licensor uses the
Trademarks. Any goodwill attaching to a party's trademarks, service marks, or
trade names belongs to such party and this Agreement does not grant the other
party any right to use them except as set forth explicitly herein. If Licensor
objects to Licensee's improper use of Licensor's names or trademarks, Licensee
will take all reasonable steps necessary to resolve Licensor's objections.
Licensee may combine the Trademarks with its own name and current trademarks but
not with any other names or marks, and agrees that this Agreement does not
constitute any conveyance of any right, title or interest in or to any
Trademarks, except for the permitted uses provided herein.
(c) Infringements. Licensee shall use reasonable efforts to notify
Licensor of an infringement or attempted infringement by third parties of a
Trademark, and shall cooperate with
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Licensor at Licensor's expense in taking action against such third party with
respect to such infringement.
ARTICLE VI. Warranty.
(a) Warranty on Software. Licensor warrants that the Business Products
will conform in all material respects to their written documentation at the time
of delivery to Licensee and for a period of 30 days thereafter. Licensor makes
no warranty to the end-users of Business Products, and any such warranty shall
be made and honored by Licensee alone. Licensor also warrants that: (i) it has
the right to enter into this Agreement and its performance of this Agreement
will not violate the terms of any contract, obligation, law, regulation or
ordinance to which it is or becomes subject; (ii) no claim, lien, or action
exists or is threatened against Licensor that would interfere with Licensee's
rights under this Agreement; (iii) the Business Products are safe for any use
consistent with and will comply with the warranties, specifications and
requirements in this Agreement; (iv) support services will be performed using
reasonable care and skill; (v) the Business Products and support services which
interact in any capacity with date data are Year 2000 ready such that when used
in accordance with their associated documentation they are capable of correctly
processing, providing, receiving and displaying date data, as well as exchanging
accurate date data with all products with which the Business Products and
support services are intended to be used within and between the twentieth and
twenty-first centuries; (vi) the Business Products and support services which
interact in any capacity with monetary data are euro-ready such that when used
in accordance with their associated documentation they are capable of correctly
processing monetary data in the euro denomination and respecting the euro
currency formatting conventions (including the euro sign); (vii) the Business
Products will be tested for, and do not contain, harmful code; (viii) the
Business Products and support services do not infringe any privacy, publicity,
reputation or intellectual property right of a third party; and (ix) all authors
have agreed not to assert their moral rights (personal rights associated with
authorship of a work under applicable law) in the Business Products, to the
extent permitted by law. EXCEPT FOR THE FORGOING REPRESENTATIONS AND WARRANTIES,
NO OTHER WARRANTY OR CONDITION, EXPRESSED OR IMPLIED, INCLUDING WARRANTIES OR
CONDITIONS RELATED TO FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, IS
GRANTED TO LICENSEE OR END USERS, AND ALL SUCH WARRANTIES AND CONDITIONS ARE
EXPRESSLY EXCLUDED.
(b) Defective Software. Should the Business Products fail to meet the
warranty set forth above, Licensor will, at its sole option, repair or replace
the Business Products such that they conform to their Documentation. In the
event such options are not commercially practical, Licensor shall return any
Royalty Payment paid for such defective Business Products.
(c) Remedies. ARTICLES VI and VII CONTAIN THE EXCLUSIVE REPRESENTATION,
WARRANTIES AND ASSOCIATED REMEDIES FOR ANY CLAIM ASSOCIATED WITH THE PERFORMANCE
OF THE BUSINESS PRODUCTS, REGARDLESS OF WHETHER SUCH CLAIM IS MADE IN CONTRACT,
TORT OR ON OTHER LEGAL THEORY.
ARTICLE VII -- Liability and Indemnification.
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(a) Limitations on Liability. Each party to this Agreement agrees that,
regardless of the form of any claim, SUCH PARTY'S SOLE REMEDY AND THE OTHER
PARTY'S SOLE OBLIGATION SHALL BE GOVERNED BY THIS AGREEMENT, AND IN NO EVENT
SHALL EITHER PARTY'S LIABILITY EXCEED THE GREATER OF $4 MILLION OR THE FEES
ACTUALLY PAID FOR THE BUSINESS PRODUCT(S) THAT GAVE RISE TO THE CLAIM DURING THE
12 MONTH PERIOD IMMEDIATELY PRECEDING THE CLAIM, PROVIDED THAT THE ABOVE
LIMITATION SHALL NOT APPLY TO CLAIMS FOR INFRINGEMENT PURSUANT TO SECTION (c) OF
ARTICLE VII OF THIS AGREEMENT, EXCEPT FOR CLAIMS FOR PATENT INFRINGEMENT IN
OTHER COUNTRIES (HEREINAFTER DEFINED). EACH PARTY EXPRESSLY AGREES THAT IN NO
EVENT SHALL THE OTHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL OR
SPECIAL DAMAGES, WHETHER UNDER BREACH OF WARRANTY, BREACH OF CONTRACT,
NEGLIGENCE, OR ANY OTHER LEGAL THEORY, WHETHER IN TORT OR CONTRACT, EVEN IF SUCH
OTHER PARTY HAS BEEN APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING,
INCLUDING WITHOUT LIMITATION DAMAGES FROM INTERRUPTION OF BUSINESS, LOSS OF
PROFITS OR BUSINESS OPPORTUNITIES, LOSS OF USE OF SOFTWARE, LOSS OF DATA, COST
OF RECREATING DATA, COST OF CAPITAL, COST OF ANY SUBSTITUTE SOFTWARE, OR LOSSES
CAUSED BY DELAY. THE PARTIES ACKNOWLEDGE AND AGREE THAT DAMAGES ARISING DIRECTLY
FROM A THIRD PARTY CLAIM OR SUIT BROUGHT AGAINST LICENSEE AS CONTEMPLATED BY
SECTION (c) OF ARTICLE VII ARE DEEMED TO BE ACTUAL AND DIRECT DAMAGES. Licensee
shall not be responsible for any damages or expenses resulting from alteration
or unauthorized use of the Business Products, or from unintended or unforeseen
results obtained by Licensee resulting from such use.
(b) Warranty Exclusions. Should any law under which this Agreement is
interpreted prohibit exclusion of certain conditions or warranties, the required
conditions or warranties shall be deemed included. The liability of each party
for any breach of such term, condition or warranty shall be limited, at the
option of such party, to any one or more of the following, as applicable: (i)
replacement of the Business Products with functionally comparable software; (ii)
repair of the Business Products to meet the required warranty or condition;
(iii) payment of the cost of replacing the Business Products or of acquiring
equivalent software; (iv) payment of the cost of having the Business Products
repaired; or (v) a refund or payment of an amount equal to of the fees paid for
the Business Products giving rise to the claim.
(c) Intellectual Property Right Infringement. Licensor shall, at its
cost, defend or, at its sole option, settle any claim or suit brought against
Licensee for infringement by any Business Product of any copyright, trademark or
trade secret or any United States, Canadian, Mexican, Australian, Japanese,
Chinese, Indian, Israeli or European Community Country ("Named Countries")
patent or subject to the limitation of liability set forth in Section (a) of
Article VII, any patent in countries outside of the Named Countries ("Other
Countries") provided that Licensee (i) notifies Licensor promptly in writing of
any such claim or suit; (ii) gives Licensor all relevant information in its
possession and reasonable assistance in settling and/or defending the suit; and
(iii) gives Licensor full authority and control of the defense and/or settlement
of any such action, provided that Licensee may participate in the defense at its
expense. Licensor shall not be liable for any costs or expenses incurred by
Licensee (i) without Licensor's prior written authorization with respect to
legal defense costs and expenses only; (ii) for any claim that arises in whole
or in part from the use of non-
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Business Products to the extent that such a claim is based solely on the
combination, operation or use of the Business Products with programs or data not
supplied byLicensor; or (iii) for any claim based on Licensee's modification of
the Business Products to the extent that such a claim is based solely on the
combination, operation or use of the Business Products with programs or data not
supplied by Licensor, if such infringement would have been avoided but for the
combination, operation or use of the Business Products with such other programs
or data. If the Business Products become subject to a claim of infringement for
which Licensor may become liable, Licensor shall, to the extent commercially
feasible (i) obtain for Licensee the right to continue using the Business
Products; or (ii) replace or modify the Business Products to make them
non-infringing, so long as the replacement or modification meets substantially
similar specifications; or, (iii) if (i) and (ii) are not commercially feasible,
Licensor may terminate this Agreement and refund to Licensee the royalties and
license fees paid under this Agreement. EXCEPT FOR THE INDEMNIFICATION
OBLIGATIONS PROVIDED IN THIS AGREEMENT, LICENSOR SHALL HAVE NO LIABILITY TO
LICENSEE OR ITS CUSTOMERS FOR COPYRIGHT, PATENT, TRADEMARK OR TRADE SECRET OR
ANY OTHER CLAIM ASSOCIATED WITH INFRINGEMENT OF A PROPRIETARY RIGHT
LICENSOR: LICENSEE:
NetObjects, Inc. [***]
By: By:
------------------------------------ -------------------------------
Name: Name:
---------------------------------- -----------------------------
Title: Title:
--------------------------------- ----------------------------
Date: Date:
---------------------------------- -----------------------------
[***] omitted pursuant to a request for confidential treatment.
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DEFINITIONS APPENDIX
Terms used herein or in the Technology License Agreement to which this
Definition Appendix is attached shall have the meanings assigned below:
"Business" means the Enterprise Division of NetObjects as described in
Section 2.1 of the Option Agreement.
"Business Products" means NetObjects Collage version 1.5 (consisting of
the software products identified in Schedule C "Collage Standard Licensing
Package" and Schedule D "Collage Additional Licensing Options" to Licensor's
standard Collage Software License and Services Agreement), and also means
NetObjects Collage version 2.0 as of the date of its first commercial shipment
by NetObjects, and any other versions, releases, editions and upgrades to
Collage during the term of this Agreement.
"Business Products Intellectual Property" means the patents,
copyrights, trademarks applicable to the Business Products and the Business
Products Proprietary Information that NetObjects owns or has the right to
license to [***].
"Business Products Proprietary Information" means all information
(whether or not protectable by patent, copyright, or trade secret rights) not
generally known to the public, including, but not limited to, works of
authorship, inventions, discoveries, patentable subject matter, product
information and development work-in-process used by the Business by the
Effective Date which are needed or desirable to produce and market Business
Products and to provide Business Services.
"Business Products Trademarks" means those trademarks identified in
Appendix III.
"Business Services" means any consulting, training, evaluating or
similar service related to the Business Products.
"End User" means a customer of Licensee whose use of the Business
Products in object code format is limited to internal use and not
redistribution.
"Subsidiary" of a company means a corporation or other legal entity (i)
the majority of whose shares or other securities entitled to vote for election
of directors (or managing authority) is now or hereafter controlled by such
company either directly or indirectly, or (ii) which does not have outstanding
shares or securities but the majority of whose ownership interest representing
the right to manage such corporation or other legal entity is now or hereafter
owned and controlled by such company either directly or indirectly, but any such
corporation or other legal entity shall be deemed to be a subsidiary of such
company only as long as such control or ownership and control exists.
[***] omitted pursuant to a request for confidential treatment.
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APPENDIX I
LICENSED TRADEMARKS
1. PageDraw
2. SiteStyles
3. SiteStructure
4. AutoSites
5. Everywhere HTML
6. "The Web needs you"
7. NetObjects TeamFusion
8. NetObjects Fusion
9. TeamFusion
10. NetObjects Collage
11. NetObjects Authoring Server
12. NetObjects Content Contributor Client
13. NetObjects ScriptBuilder
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