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EXHIBIT 10.13
Confidential Treatment
Requested for portions marked*
Master Development & License Agreement
Between
BSQUARE CORPORATION and
MICROSOFT CORPORATION
This Master Development & License Agreement (this "Agreement") is made and
entered into by and between MICROSOFT CORPORATION, a Washington corporation
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MICROSOFT") and
BSQUARE CORPORATION, a Washington corporation located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BSQUARE"), to be effective as of the
1st day of October, 1998.
RECITALS
MICROSOFT has developed a computer software platform known as Microsoft[R]
Windows[R] CE;
MICROSOFT desires to have BSQUARE provide certain development and testing
services in connection with Windows CE, and BSQUARE desires to provide such
services to Microsoft; and
MICROSOFT and BSQUARE intend that this Agreement serve as a master
agreement establishing the basic terms and conditions under which BSQUARE will
undertake particular development and testing projects for MICROSOFT.
The parties agrees as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "APPROVED EXPENSE(S)" shall mean those reasonable and necessary costs
and expenses incurred by BSQUARE in performing work under this Agreement
that are identified as subject to reimbursement by MICROSOFT in a Work Plan
or an amendment thereto, or are subsequently approved by MICROSOFT in
writing, which approval shall not be unreasonably denied.
1.2 "CONFIDENTIAL INFORMATION" shall mean: (i) any trade secrets relating
to either party's product plans, designs, costs, prices and names,
finances, marketing plans, business opportunities, personnel, research
development or know-how; (ii) any information designated by the disclosing
party as confidential in writing or, if disclosed orally, identified at the
time of disclosure as being confidential, or which, under the circumstances
surrounding disclosure, ought to be treated as confidential; and (iii) the
terms and conditions of this Agreement. "Confidential Information" shall
not include information that: (i) is or becomes generally known or
available by publication or otherwise through no fault of the receiving
party; (ii) is known and has been reduced to tangible form by the receiving
party at the time of disclosure and is not subject to restriction; (iii) is
independently developed by the receiving party; or (iv) is made generally
available by the disclosing party without restriction on disclosure.
1.3 "DELIVERABLES" shall mean the various alpha, beta, and final versions
of a Work Product, in source and object code forms (with regard to software
Deliverables), to be delivered by BSQUARE to MICROSOFT, as more fully
described in the applicable Work Plan.
1.4 "DERIVATIVE TECHNOLOGY" shall mean: (i) for copyrightable or
copyrighted material, any translation (including translation into other
computer languages), portation, modification, correction, addition,
extension, upgrade, improvement, compilation, abridgment or other form in
which an existing work may be recast, transformed or adapted; (ii) for
patentable or patented material, any improvement thereon; and (iii) for
material which is protected by trade secret, any new material derived from
such
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existing trade secret material, including new material which may be
protected by copyright, patent and/or trade secret.
1.5 "ERROR(S)" shall mean defect(s) in a Deliverable which prevent it from
performing in accordance with the specifications in the applicable Work
Plan (including, without limitation, bugs identified in Microsoft's bug
tracking RAID database and bugs identified in bug reports prepared
following shipment of product).
1.6 "MICROSOFT INTERNAL REFERENCE NUMBER" shall mean the unique number
assigned by Microsoft to each project undertaken by BSQUARE hereunder
pursuant to the applicable Work Plan, which number shall be used to track
and record the hours worked by each BSQUARE employee assigned to such Work
Plan.
1.7 "SCHEDULE" shall mean the schedule for completion of the Services and
delivery of the Deliverables contained in a Work Plan.
1.8 "SERVICES" shall mean the design and development of a Work Product,
delivery of the applicable Deliverables, performance of the services
described in and pursuant to a Work Plan and related Work Plan management
services.
1.9 "SOURCE CODE" shall mean the source code for MICROSOFT'S Windows CE
and Windows NT operating systems, Visual Tools, and for the Windows CE
Tools and any other source code that may be identified in a Work Plan, as
provided by MICROSOFT to BSQUARE for the limited purpose of providing the
Services pursuant to this Agreement.
1.10 "STANDARD RATE SCHEDULE" shall mean that document attached to and made
a part of this Agreement as Exhibit A, setting forth the hourly rates at
which MICROSOFT shall pay BSQUARE for Services under this Agreement.
1.11 "TEST HARDWARE" shall mean all of the hardware provided to BSQUARE by
MICROSOFT for the limited purpose of testing and developing the Work
Product pursuant to this Agreement.
1.12 "WINDOWS CE" shall mean the MICROSOFT operating system for general
embedded devices and specific targeted platforms and form factors,
including all bug fixes, error corrections, modifications, enhancements,
updates, upgrades, new versions and successor products thereto.
1.13 "WINDOWS CE TOOLS" shall mean MICROSOFT'S platform development kit for
Windows CE currently known as Windows CE Platform Builder, as well as the
Windows CE Toolkits for Visual Basic, Visual C++ and Visual J++, including
the corresponding runtimes (e.g., MFC, ATL, ADOCE, Java VM, ActiveX Control
Pack, etc.), and including all bug fixes, error corrections, modifications,
enhancements, updates, upgrades, new versions and successor products
thereto.
1.14 "WORK PLAN(S)" shall mean the specifications for Services and related
information, attached to and made a part of this Agreement from time to
time as sequential Exhibits B (e.g., ▇-▇, ▇-▇, ▇-▇ ....). The Work Plans
shall be in the form attached hereto, and shall be signed by both parties.
The Work Plans may be amended from time to time by mutual agreement of duly
authorized personnel of the parties.
1.15 "WORK PRODUCT" shall mean the results of the performance of the work
tasks described in each Work Plan, including without limitation all
Deliverables.
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2. DEVELOPMENT
2.1 Services. BSQUARE shall perform the Services in accordance with and
pursuant to the applicable Work Plan. The parties agree to discuss in good
faith issues that may arise in performance of the work tasks associated
with each Work Plan, including any issues regarding compliance with the
Schedule set forth in the Work Plan, although the Work Plan may be amended
only by mutual agreement of the parties.
2.2 Status Reports. For each individual project set forth in a Work Plan,
BSQUARE shall provide to MICROSOFT, at MICROSOFT's expense, a current and
accurate monthly status report, in a form reasonably acceptable to
MICROSOFT, detailing the status of each project, including current budget
tracking and assessment of ability to meet project milestones. BSQUARE
shall also provide such additional status reports regarding work in
progress as the MICROSOFT project manager may reasonably request from time
to time, at MICROSOFT's expense.
2.3 Personnel/Rate Schedule Adjustments.
2.3.1 BSQUARE shall have on its staff, at the levels and at the
rates specified in Exhibit A, trained and experienced personnel that
primarily are dedicated to and available for the MICROSOFT projects set
forth in the Work Plans. BSQUARE shall use commercially reasonable efforts
to ensure that (i) BSQUARE personnel providing Services under this
Agreement are available for assignment by BSQUARE to work on additional
Work Plans which are similar to those for which they have provided Services
previously, and (ii) BSQUARE personnel providing Services under this
Agreement are not unnecessarily and inefficiently moved between Work Plans
in progress. BSQUARE shall consult with MICROSOFT when establishing and
changing the project teams assigned to each Work Plan. The parties will
meet from time to time to discuss upcoming Work Plans and the anticipated
personnel needs for such projects.
2.3.2 During the term of this Agreement, the parties agree to meet
on an annual basis to establish the Standard Rate Schedule for the upcoming
year, provided that no changes shall be made to the initial Standard Rate
Schedule prior to October 1, 1999. Subsequent Standard Rate Schedule
adjustments shall be effective as of October 1st of the relevant year
(e.g., by Oct. 1, 1999 for the one year period commencing Oct. 1, 1999 and
ending Sept. 30, 1999). In the event that the parties are unable to agree
on a Standard Rate Schedule adjustment by Oct. 1st of the relevant year,
then either party may terminate this Agreement on ninety (90) days prior
written notice, with the existing Standard Rate Schedule remaining in
effect through the date of termination. Any mutually agreed upon Standard
Rate Schedule, if agreed upon after October 1st of the relevant year, shall
be retroactive to October 1st of such year.
2.4 Evaluation of Services.
2.4.1 BSQUARE understands and agrees that it is obligated under
this Agreement to provide MICROSOFT with high quality Work Product and
Services at all times during the term of this Agreement. In addition,
and as further detailed in Section 2.4.3 below, BSQUARE shall be
responsible for initiating prompt and detailed communications with the
appropriate MICROSOFT project leaders regarding any Errors discovered
during the course of development of software code Deliverables. In the
event that any such Errors are caused by a failure of BSQUARE to
provide a high quality Work Product, then Microsoft shall be entitled
(in addition to any other remedies it may have under this Agreement,
at law or in equity) to an appropriate credit for Service time
associated with such Error.
2.4.2 For documentation or report Deliverables, MICROSOFT shall
evaluate each version of such Deliverable. In the event that it
requires corrections, MICROSOFT shall specify the corrections needed
and BSQUARE shall deliver an amended version of such documentation
within five (5) working days.
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2.4.3 BSQUARE shall use all reasonable commercial efforts to complete and
deliver the Deliverables set forth in a Work Plan to MICROSOFT, according
to the applicable Schedule. Additional information, reports, documentation
and the like regarding the Services shall be provided by BSQUARE to
MICROSOFT upon the reasonable request of MICROSOFT. BSQUARE shall promptly
raise with MICROSOFT any issues that arise (or which BSQUARE reasonably
foresees arising) regarding the quality or performance of the Deliverables
set forth in the Work Plan, as well as any deviation from the applicable
Schedule for such Deliverables. The parties shall use all reasonable
efforts to promptly address any such issues that may arise, including the
establishment of an appropriate recovery plan to the extent required.
2.5 Design Review and Plan Changes. BSQUARE understands that there may be
additions, deletions or other changes which may affect a Work Plan at any time
during the performance of such Work Plan. Upon notice of any such changes by
MICROSOFT, BSQUARE and MICROSOFT shall work together to make any necessary
changes to the Services, including, if necessary, the compensation owed to
BSQUARE, and BSQUARE shall alter the Work Plan in order to accommodate any such
changes as mutually agreed to by BSQUARE and MICROSOFT.
2.6 Services Performed on MICROSOFT Property. In the event it is necessary for
BSQUARE to perform the Services, or portion thereof, at MICROSOFT'S Redmond,
Washington, campus, BSQUARE shall abide by all MICROSOFT rules, regulations,
and security measures, including any restrictions on access to Confidential
Information.
2.7 Cancellation of Work Plans. Microsoft shall have the right to cancel any
Work Plan for any reason. In the event that Microsoft cancels a work Plan
without cause prior to completion of Services under that Work Plan, Microsoft
shall retain any and all Work Product existing in whatever form at the time of
the cancellation of the applicable Work Plan (including any applicable
documentation) with rights as set forth in Section 4, and pay BSQUARE for all
outstanding invoices applicable to the retained Work Product, with no
additional fee to be paid to BSQUARE thereafter.
2.8 Preferred Vendor. BSQUARE shall be a preferred Microsoft vendor for
Microsoft Visual Tools for Windows CE projects.
2.9 Non-Competition. During the term of this Agreement, neither BSQUARE nor
any entity that owns or controls, is owned or controlled by, or is under common
ownership and control with BSQUARE ("BSQUARE Affiliate") shall, without
Microsoft's prior written consent, design or develop or participate in the
design or development of products (or provide services in connection with
products) which compete with Windows CE, the Windows CE Tools products, the
Microsoft Windows card operating system (including all bug fixes, error
corrections, modifications, enhancements, updates, new versions and successor
products thereto), and/or the Microsoft Windows card tools (including all bug
fixes, error corrections, modifications, enhancements, updates, upgrades, new
versions and successor products thereto) (i) in existence as of the Effective
Date of this Agreement or (ii) which BSQUARE knows or has reason to know
Microsoft intends to develop, is developing, or has developed (itself or in
conjunction with third parties), or intends to acquire.
2.9.1 If BSQUARE requests MS' consent pursuant to the foregoing, such
request shall be in writing. Microsoft will make reasonable efforts to
review the request in Microsoft's discretion and advise BSQUARE of its
decision within 5 business days following Microsoft's receipt of such
request. Microsoft's failure to provide a written response within 10
business days of Microsoft's receipt of such request from BSQUARE shall be
deemed consent.
2.9.2 For the purposes of this Section 2.9, a product will be deemed to
"compete" with Windows CE or the Windows CE Tools products if, on a product
by product basis, such product could be deemed a replacement or alternative
for Windows CE or the relevant Windows CE Tools product, respectively.
Likewise, a product will be deemed to "compete" with the Microsfot Windows
card operating system and/or the Microsoft Windows card tools if, on a
product by
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product basis, such product could be deemed a replacement or
alternative for the Windows card operating system or the relevant
Windows card tools product, respectively. Thus, for example,
applications for Windows CE, such as BFax and Buseful, do not compete
with Windows CE and/or the Windows CE Tools.
2.9.3 The restriction in this Section 2.9 shall not apply to (a)
any BSQUARE products currently on the market as of the Effective Date
of this Agreement; (b) the BSQUARE product under development as of
the Effective Date that is internally referred to by BSQUARE as "CE
Validator"; or (c) a tool product for any other operating system in
the Microsoft Windows family of operating systems, provided that such
tool product does not compete, on a product by product basis, with a
Microsoft tool product for such other Microsoft operating system.
2.9.4 Nothing in this Section 2.9 shall be construed to authorize
BSQUARE or any BSQUARE Affiliate to make use of Microsoft's
intellectual property rights.
3. PAYMENT FOR SERVICES
3.1 Payment. MICROSOFT agrees to pay BSQUARE for work performed in
accordance with the Work Plan, based upon the Standard Rate Schedule
(which schedule may be modified on an annual basis pursuant to Section 2.3
above), and for any Approved Expenses identified in the Work Plan, provided
that BSQUARE shall not exceed the maximum payable amount specified in any
Work Plan without obtaining MICROSOFT's prior written approval.
3.2 Invoices. BSQUARE shall invoice MICROSOFT by the seventh day of each
month (or the following Monday if the seventh day falls on a weekend) for
the amounts due for work performed under any Work Plan in the prior month.
Billing will be recorded in hourly increments by project, and MICROSOFT
Internal Reference Number, sufficient for MICROSOFT to determine the
number of hours each engineer worked on any given MICROSOFT project on
each day. In the event that MICROSOFT provides a form to detail BSQUARE
▇▇▇▇▇▇▇▇, BSQUARE agrees to utilize such forms as MICROSOFT may supply.
MICROSOFT shall pay each undisputed invoice within thirty (30) days of
receiving each invoice. Invoices shall include reasonable supporting
materials (not including any source code-type information, which is to be
delivered as part of the Deliverables set forth in the Work Plan)
documenting the Services performed by BSQUARE.
3.3 One-time Declining Revenue Adjustment. In the event the average
monthly invoice billed to MICROSOFT for any consecutive three (3) month
period during the term of this Agreement falls below the total invoice
amount for the one month immediately preceding such three (3) month period
(the "Baseline Month"), MICROSOFT agrees to pay to BSQUARE an amount equal
to three times the difference between seventy-five percent (75%) of the
invoice for the Baseline Month and the average monthly invoice for the
three consecutive months; provided that such an adjustment shall only be
made once, for the first such consecutive three month period during the
term. Thus, for example, if in January the monthly invoice is $100,000,
and the average monthly invoice for February through April of the same
year is $70,000, then MICROSOFT would pay BSQUARE $15,000 ([75,000-70,000]
X 3). Notwithstanding the foregoing, MICROSOFT shall not be required to
pay such an adjustment where MICROSOFT has provided BSQUARE with at least
ninety days prior written notice that BSQUARE may experience a decline in
revenue as described in this Section 3.3.
4. RIGHTS
4.1 Work Made For Hire. The Work Product has been specially ordered and
commissioned by MICROSOFT. BSQUARE agrees that the Work Product is a "work
made for hire" for copyright purposes, with all copyrights in the Work
Product owned by MICROSOFT.
4.2 Assignment. To the extent that the Work Product does not qualify as
a work made for hire under applicable law, and to the extent that the Work
Product includes material subject to copyright, patent, trade
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secret, or other proprietary right protection, BSQUARE hereby assigns to
MICROSOFT, its successors and assigns, all right, title and interest in and to
the Work Product, including, but not limited to the following:
4.2.1 Any copyrights that BSQUARE may possess or acquire in the Work
Product and all copyrights and equivalent rights in the Work Product
throughout the world, including all renewals and extensions of such rights
that may be secured under the laws now or hereafter in force and effect in
the United States of America or in any other country or countries;
4.2.2 All rights in and to any inventions, ideas, designs, concepts,
techniques, discoveries, or improvements, whether or not patentable,
embodied in the Work Product or developed in the course of BSQUARE's
creation of the Work Product, including but not limited to all trade
secrets, utility and design patent rights and equivalent rights in and to
such inventions and designs throughout the world regardless of whether or
not legal protection for the Work Product is sought;
4.2.3 The right to prepare Derivative Technology with exclusive rights
to authorize others to do the same;
4.2.4 Copies of any documents, magnetically or optically encoded
media, or other materials created by BSQUARE under this Agreement; and
4.2.5 The right to ▇▇▇ for infringements of the Work Product which may
occur before the date of this Agreement, and to collect and retain damages
from any such infringements.
4.3 Assistance. At MICROSOFT's expense, BSQUARE shall execute and deliver such
instruments and take such other action as may be requested by MICROSOFT to
perfect or protect MICROSOFT's rights in the Work Product and to carry out the
assignments set forth in this Section 4.
4.4 Assignment/Waiver of Moral Rights. BSQUARE hereby irrevocably transfers and
assigns to MICROSOFT any and all "moral rights" that BSQUARE may have in the
Work Product and any Derivative Technology thereof. BSQUARE also hereby forever
waives and agrees never to assert any and all "moral rights" it may have in the
Work Product and Derivative Technology, even after termination of the Services.
4.5 Source Code License Grant. MICROSOFT hereby grants to BSQUARE a personal,
non-exclusive, non-transferable, non-assignable license during the term of this
Agreement to use and modify the Source Code for the sole purpose of providing
the Services pursuant to this Agreement. BSQUARE shall only exercise the
foregoing license rights on BSQUARE's premises, MICROSOFT's premises or other
locations expressly designated by MICROSOFT in the applicable Work Plan,
provided that such Source Code shall at all times reside only on the Microsoft
network or shall reside locally on the individual machines or workstations of
the BSQUARE personnel working with the Source Code (e.g., versus on servers in
BSQUARE's local area network). The Source Code provided hereunder shall be
considered Confidential Information and, therefore, shall be subject to the
terms and conditions of Section 6 of this Agreement. BSQUARE may disclose the
Source Code only to BSQUARE's employees and independent contractors that
MICROSOFT has approved in writing in advance, and only on a need-to-know basis.
BSQUARE shall execute appropriate written agreements with its employees and
independent contractors sufficient to enable it to comply with all the
provisions of this Agreement, including non-disclosure and assignment of rights.
4.6 Test Hardware License Grant. MICROSOFT hereby grants to BSQUARE a personal,
non-exclusive, non-transferable, non-assignable license during the term of this
Agreement to use the Test Hardware for the sole purpose of providing the
Services pursuant to this Agreement. BSQUARE shall not use the Test Hardware for
any purpose other than for the testing and development of the Work Product
pursuant to the terms of this Agreement. The Test Hardware provided hereunder
shall be considered Confidential Information and, therefore, shall be subject to
the terms and conditions of Section 6 of this Agreement. BSQUARE may disclose
the Test Hardware only to BSQUARE's employees and independent contractors that
MICROSOFT has approved in writing in advance, and only on a need-to-know basis.
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BSQUARE may not disclose, distribute, or disseminate the Test Hardware to
third parties without the written permission of MICROSOFT in each instance.
4.7 Return of Materials. Upon the termination of this Agreement as
provided in Section 9, BSQUARE shall return all copies of the Source Code,
Test Hardware and Microsoft Confidential Information, to the extent
provided only for performance of the Services under this Agreement (versus
being provided by MICROSOFT for use under more than one agreement between
MICROSOFT and BSQUARE), in BSQUARE's possession or under its control within
ten (10) days following the termination date. BSQUARE shall take all
necessary steps to ensure that electronic copies of such Source Code, Test
Hardware and Confidential Information are not retained by BSQUARE, its
employees, or any authorized independent contractors. BSQUARE shall provide
a declaration signed by an officer of BSQUARE attesting that all copies of
the Source Code, Test Hardware, Confidential Information and related
materials have been returned to MICROSOFT and/or destroyed.
4.8 No Other Rights. BSQUARE agrees that this Agreement does not grant to
it any rights other than what is granted in this Section 4 and for the
limited purposes set forth therein. Under no circumstances will the license
grants set forth in this Section 4 be construed as granting, by
implication, estoppel or otherwise, a license to any MICROSOFT technology
other than the Source Code and Test Hardware, solely for the purposes
designated herein. All rights not expressly granted herein are expressly
reserved by MICROSOFT.
5. NO OBLIGATION/INDEPENDENT DEVELOPMENT
Notwithstanding any other provision of this Agreement, MICROSOFT shall have
no obligation to market, sell or otherwise distribute the Work Product, either
alone or in any MICROSOFT product. Except as provided in Sections 2.8 and 6,
nothing in this Agreement will be construed as restricting MICROSOFT'S ability
to acquire, license, develop, manufacture or distribute for itself, or have
others acquire, license, develop, manufacture or distribute for MICROSOFT,
similar technology performing the same or similar functions as the technology
contemplated by this Agreement, or to market and distribute such similar
technology in addition to, or in lieu of, the technology contemplated by this
Agreement.
6. CONFIDENTIALITY
6.1 Each party shall protect the other's Confidential Information from
unauthorized dissemination and use with the same degree of care that such
party uses to protect its own like information. Neither party will use the
other's Confidential Information for purposes other than those necessary to
directly further the purposes of this Agreement. Neither party will
disclose to third parties the other's Confidential Information without the
prior written consent of the other party. Except as expressly provided in
this Agreement, no ownership or license rights are granted in any
Confidential Information.
6.2 Each party acknowledges that monetary damages may not be a sufficient
remedy for unauthorized disclosure of Confidential Information and that, in
the event of such unauthorized disclosure, the non-breaching party shall be
entitled, without waiving any other rights or remedies, to such injunctive
or equitable relief as may be deemed proper by a court of competent
jurisdiction.
6.3 The parties' obligations of confidentiality under this Agreement shall
not be construed to limit either party's right to independently develop or
acquire products without use of the other party's Confidential Information.
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7. WARRANTIES
7.1 BSQUARE. BSQUARE warrants and represents that:
7.1.1 It has the full power to enter into this Agreement and make
the assignments and grant the license rights set forth herein;
7.1.2 It has not previously and will not grant any rights in the
Work Product (including without limitation all Deliverables) to any
third party that are inconsistent with the rights granted to
MICROSOFT herein;
7.1.3 The Work Product (including without limitation all
Deliverables) is original to BSQUARE and does not infringe any
copyright, patent trade secret, or other proprietary right held by any
third party provided, however, that this warranty does not apply with
regard to any patent infringement necessitated by compliance with any
Work Plan hereunder unless BSQUARE had knowledge of such infringement;
7.1.4 The Work Product (including without limitation all
Deliverables) will be created by employees of BSQUARE within the
scope of their employment and under obligation to assign inventions
to BSQUARE, or by independent contractors under written obligations
to assign all rights in the Work Product to BSQUARE; and
7.1.5 The Services shall be performed in a professional manner and
shall be of a high grade, nature, and quality.
7.2 MICROSOFT. MICROSOFT warrants and represents that it has the full
power to enter into this Agreement and make the assignments and grant
the license rights set forth herein.
8. INDEMNITY
8.1 Indemnity.
8.1.1 Except as covered in Section 8.1.4, BSQUARE shall, at its
expense, defend, indemnify and hold harmless MICROSOFT and
MICROSOFT'S subsidiaries, affiliates, directors, officers, employees,
agents and independent contractors from any and all costs, damages,
liabilities and fees reasonably incurred by MICROSOFT, including but
not limited to fees of attorneys and other professionals, with
respect to any claim or action arising out of or in any way related
to a breach by BSQUARE of this Agreement, including without
limitation of the warranties and representations set forth in Section
7 above; provided that: (i) MICROSOFT provides BSQUARE reasonably
prompt notice in writing of any such claim or action and permits
BSQUARE, through counsel mutually acceptable to MICROSOFT and
BSQUARE, to answer and defend such claim or action; (ii) MICROSOFT
provides BSQUARE information, assistance and authority, at BSQUARE's
expense and reasonable request, to help BSQUARE defend such claim or
action; and (iii) BSQUARE will not be responsible for any settlement
made by MICROSOFT without BSQUARE's written permission, which
permission will not be unreasonably withheld.
8.1.2 MICROSOFT shall have the right to employ separate counsel and
participate in the defense of any claim or action. BSQUARE shall
reimburse MICROSOFT upon demand for any payments made or losses
suffered by it at any time after the date hereof, based upon the
judgment of any court of competent jurisdiction or pursuant to a bona
fide compromise or settlement of claims, demands, or actions, in
respect to any damages related to any claim or action under this
Section 8.
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8.1.3 BSQUARE may not settle any claim or action under this Section
8 on MICROSOFT'S behalf without first obtaining MICROSOFT'S written
permission, which permission will not be unreasonably withheld. In
the event MICROSOFT and BSQUARE agree to settle a claim or action,
BSQUARE agrees not to publicize the settlement without first
obtaining MICROSOFT'S written permission, which permission will not
be unreasonably withheld.
8.1.4 MICROSOFT shall, at its expense, defend BSQUARE, BSQUARE
subsidiaries, affiliates, directors, officers and employees and pay
the amount of any final judgment, or settlement approved by
MICROSOFT, in connection with any claim or action brought against any
of the indemnified parties to the extent it is based upon a claim
that BSQUARE's use of the Source Code as authorized under this
Agreement infringes or violates any third party copyright, patent,
trade secret or other third party proprietary right; provided that:
(i) BSQUARE provides MICROSOFT reasonably prompt notice in writing of
any such claim or action and permits MICROSOFT through counsel of its
choosing to answer and defend such claim or action and (ii) BSQUARE
provides MICROSOFT with information, assistance and authority, at
MICROSOFT's expense with respect to actual and out of pocket expenses
and otherwise at BSQUARE's expense, to help MICROSOFT to defend such
claim or action. In consideration of MICROSOFT's indemnity pursuant
to this Section, BSQUARE agrees that it shall not settle any claim or
action subject to this subsection without first obtaining MICROSOFT's
consent, which consent may be withheld in the sole discretion of
MICROSOFT.
8.2 Duty to Correct. Notwithstanding Section 8.1, should the Work Product
or any portion thereof be held to constitute an infringement covered by
Section 8.1.1 and use of the Work Product or any portion thereof as
contemplated by this Agreement be enjoined or be threatened to be
enjoined, BSQUARE shall notify MICROSOFT and immediately, at BSQUARE's
expense: (i) procure for MICROSOFT the right to continue use, sale, and
marketing of the Work Product, or portion thereof, as applicable; or (ii)
replace or modify the Work Product, or portion thereof, with a version
that is non-infringing, provided that the replacement or modified version
meets the specifications in the applicable Work Plan to MICROSOFT'S
satisfaction. If (i) or (ii) are not available to BSQUARE, in addition to
any damages or expenses reimbursed under Section 8.1, BSQUARE shall refund
to MICROSOFT all amounts paid to BSQUARE by MICROSOFT under such
applicable Work Plan.
9. TERM AND TERMINATION
9.1 Term. The term of this Agreement shall run from the Effective Date
through July 1, 2000 and may be renewed for an additional year (through
July 1, 2001) by mutual agreement of the parties.
9.2 Termination By Either Party For Cause. Either party may suspend
performance and/or terminate this Agreement immediately upon written
notice at any time if:
9.2.1 The other is in material breach of any material warranty, term,
condition or covenant of this Agreement, other than those contained in
Section 6, and fails to cure that breach within thirty (30) days after
written notice thereof; or
9.2.2 The other party is in material breach of Section 6.
9.3 Effect of Termination. In the event of termination or expiration of
this Agreement for any reason, Sections 3 (with respect to payment for
Services completed prior to expiration or termination), 4.1 - 4.4, 4.7 -
4.8, 5, 6, 7, 8, 9.3, 10 and 11.4 shall survive termination or expiration.
Neither party shall be liable nor owe any compensation to the other solely
by reason of exercising the right to terminate granted by this provision.
Microsoft shall retain any and all Work Product (including without
limitation all Deliverables) existing in whatever form at the termination
or expiration of this Agreement (including any applicable documentation)
with rights as set forth in Section 4.
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10
10. LIMITATION OF LIABILITIES
WITH THE EXCEPTION OF ANY BREACH OF SECTIONS 4.5, 6 AND 8, NEITHER PARTY
SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL
DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
EXCEPT AS SET FORTH IN SECTION 7, BSQUARE SPECIFICALLY DISCLAIMS ANY AND
ALL WARRANTIES WITH REGARD TO THE WORK PRODUCT PROVIDED HEREUNDER, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OF FITNESS, FUNCTIONALITY OR
MERCHANTABLITY, WHETHER EXPRESS OR IMPLIED.
11. GENERAL
11.1 Notices. All notices and requests in connection with this Agreement
shall be deemed given as of the day they are received either by messenger,
delivery service, or in the United States of America mails, postage
prepaid, certified or registered, return receipt requested, and addressed
as follows:
To BSQUARE: To MICROSOFT:
BSQUARE Corporation Microsoft Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇ One Microsoft Way
Bellevue, WA 98006 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Attention: Gen. Mgr., Consumer
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Appliance Div.
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Copy to: Vice President of Copy to: Law & Corporate Affairs
Legal Affairs Fax: ▇▇▇-▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
or to such other addresses as a party may designate pursuant to this
notice provision.
11.2 Independent Contractors. BSQUARE is an independent contractor for
MICROSOFT, and nothing in this Agreement shall be construed as creating an
employer-employee relationship, a partnership, or a joint venture between
the parties.
11.3 Taxes. In the event taxes are required to be withheld on payments
made under this Agreement by any U.S. (state or federal) of foreign
government, MICROSOFT may deduct such taxes from the amount owed BSQUARE
and pay them to the appropriate taxing authority. Microsoft shall in turn
promptly secure and deliver to BSQUARE an official receipt for any taxes
withheld. MICROSOFT will use reasonable efforts to minimize such taxes to
the extent permissible under applicable law.
11.4 Governing Law. This Agreement shall be governed by the laws of the
State of Washington as though entered into between Washington residents
and to be performed entirely within the State of Washington, and BSQUARE
consents to jurisdiction and venue in the state and federal courts sitting
in the State of Washington. In any action or suit to enforce any right or
remedy under this Agreement or to interpret any provision of this
Agreement, the prevailing party shall be entitled to recover its costs,
including reasonable attorneys' fees.
11.5 Assignment. This Agreement shall be binding upon and inure to the
benefit of each party's respective successors and lawful assigns;
provided, however, that BSQUARE may not assign this Agreement, in whole or
in part, without the prior written approval of MICROSOFT.
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11.6 Construction. Except to Sections 3.1, 6, 9 and 10 herein above,
should a court of competent jurisdiction find any provision of this
Agreement, or portion hereof, to be unenforceable, that provision of the
Agreement will be enforced to the maximum extent permissible so as to
effect the intent of the parties, and the remainder of this Agreement
will continue in full force and effect. Should Sections 3, 6, 9 or 10
herein, or any portion thereof, be held unenforceable, then in that event
either party shall have a right to immediately terminate this Agreement
by written notice to the other party. Failure by either party to enforce
any provision of this Agreement will not be deemed a waiver of future
enforcement of that or any other provision. This Agreement has been
negotiated by the parties and their respective counsel and will be
interpreted fairly in accordance with its terms and without any strict
construction in favor or against either party.
11.7 Force Majeure. This Agreement and the parties' performances
hereunder are subject to all contingencies beyond the reasonable control
of the parties (whether or not now in the contemplation of either of the
parties), including, but not limited to, force majeure; strikes; labor
disputes; floods; civil commotion; war; riot; acts of God; rules, laws,
orders, restrictions, embargoes, quotas or actions of any government,
foreign or domestic, or any agency or subdivision thereof; casualties;
fires; earthquakes; accidents; shortages of transportation facilities;
detention of goods and merchandise by customs authorities; loss of goods
and merchandise in public or private warehouses; or other casualty or
contingency beyond the reasonable control of the parties or otherwise
unavoidable.
11.8 Entire Agreement. This Agreement does not constitute an offer by
MICROSOFT and it shall not be effective until signed by both parties.
Subject to Section 1.14, this Agreement constitutes the entire agreement
between the parties with respect to the Services and all other subject
matter hereof and merges all prior and contemporaneous communications,
and supersedes all prior agreements between the parties regarding the
subject matter of this Agreement, including, without limitation, the
Development & License Agreement effective June 12, 1997, as amended by
Amendment No. 1 effective December 17, 1997, and as amended by Amendment
No. 2 effective March 15, 1998. This Agreement shall not be modified
except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of BSQUARE and MICROSOFT by their
respective duly authorized representatives.
11.9 Joint Press Release. Upon execution of this Agreement by both
parties, the parties agree to work together to prepare and issue a
mutually acceptable joint press release to announce their relationship
under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above. All signed copies of this Agreement shall be deemed
originals. This Agreement shall be effective upon execution on behalf of
BSQUARE and MICROSOFT by their duly authorized representatives.
MICROSOFT CORPORATION BSQUARE CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------
By By
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------
Name (Print) Name (Print)
VP President/CEO
---------------------------- ----------------------------
Title Title
2/1/99 January 28, 1999
---------------------------- ----------------------------
Date Date
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EXHIBIT A
STANDARD RATE SCHEDULE
BSQUARE will charge MICROSOFT at the applicable rate specified below for each
hour of services rendered under a Work Plan (unless otherwise expressly
provided in the applicable Work Plan) by the associated Job Title Category on a
project by project basis using MICROSOFT Internal Reference Numbers.
TOTAL STAFFING LEVELS
--------------------------------------------------------------------------------
JOB TITLES (DUTIES) CATEGORY HOURLY RATE
--------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ *
(Architect - compiler or kernel/OS)
--------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ *
(System Engineer - compiler, debugger
and OS)
--------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ *
(Application Engineer - visual tools, IDE,
MFC, etc.)
--------------------------------------------------------------------------------
STE Level 1 STE1 *
(Test lead)
--------------------------------------------------------------------------------
STE Level 2 STE2 *
(System Test Engineer)
--------------------------------------------------------------------------------
STE Level 3 STE3 *
(Application Test Engineer)
--------------------------------------------------------------------------------
Group Manager PM1 *
(Top Level Project Mgr)
--------------------------------------------------------------------------------
Project Manager PM2 *
(Multi-project PM for Compiler)
--------------------------------------------------------------------------------
User Education Level 1 UE1 *
(Editor)
--------------------------------------------------------------------------------
User Education Level 2 (Writer) UE2 *
--------------------------------------------------------------------------------
-----------
* Confidential treatment requested
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EXHIBIT B
WORK PLANS
This Exhibit is made pursuant to that certain Master Services Agreement and
Intellectual Property Assignment (the "Agreement"), dated October 1, 1998 by
and between BSQUARE CORPORATION ("BSQUARE") and MICROSOFT CORPORATION
("MICROSOFT").
A. Project:
B. Project Description:
C. Maximum payable amount for Project:
D. Additional IP Accessed:
E. MICROSOFT internal reference number:
F. Expected staffing level requirements:
Job Category Quantity Rate Start End Days Hours Total Payment
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total $____________
G. Special Terms:
These Special Terms are intended by the parties to amend, modify and supersede
to the extent of any inconsistencies, the provisions of the main Agreement
solely with regard to this Work Plan (including the Services performed and the
Work Product developed with respect to this Work Plan).
[insert special terms if any]
This Exhibit shall be attached to and incorporated into the Agreement, and,
except as provided above, is subject to all the terms and conditions of the
Agreement.
MICROSOFT CORPORATION BSQUARE CORPORATION
------------------------------ ------------------------------
By (Sign) By (Sign)
------------------------------ ------------------------------
Name (Print) Name (Print)
------------------------------ ------------------------------
Title Title
------------------------------ ------------------------------
Date Date
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