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PATRIOT SCIENTIFIC CORPORATION
FORM 10-KSB
EXHIBIT NO. 10.18
TECHNOLOGY LICENSE AND DISTRIBUTION AGREEMENT DATED JUNE 23, 1997
BETWEEN THE COMPANY AND SUN MICROSYSTEMS, INC.
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TECHNOLOGY LICENSE
AND DISTRIBUTION AGREEMENT
This Technology License and Distribution Agreement (the "Agreement") is
entered into this 23rd day of June, 1997 (the "Effective Date") between Sun
Microsystems, Inc., acting by and through its JavaSoft organization ("Sun") with
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ and Patriot Scientific Corporation, a Delaware corporation with its
principal place of business at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Licensee").
RECITALS
WHEREAS Sun wishes to license its JavaOS technology, while maintaining
compatibility among JAVA language-based products; and
WHEREAS Sun wishes to protect and promote certain trademarks used in
connection with its JavaOS and JAVA technologies; and
WHEREAS Licensee wishes to develop and distribute products based upon
Sun's JavaOS technology;
NOW THEREFORE, Sun and Licensee enter into this Technology Licensing and
Distribution Agreement on the following terms.
1. DEFINITIONS
1.1. "Applet Application Programming Interface" or "AAPI" means the
public application programming interface to the JavaOS
Environment reflected in the Technology as identified in Exhibit
A, the bytecode specification in the Documentation entitled
"Java Virtual Machine Specification" and by the Java language
specification in the Documentation entitled "Java Language
Specification" and as modified by JavaSoft during the term of
this Agreement, including all public class libraries and
interfaces.
1.2. "Applet" means a Java application which (i) runs on the AAP I
and (ii) consists of Java byte codes executable by the Java
Runtime Interpreter (but does not include or incorporate the
Java Runtime Interpreter).
1.3. "Derivative Work(s)" means: (i) for material subject to
copyright or mask work right protection, any work which is based
upon one or more pre-existing works of the Technology, such as a
revision, modification, translation, abridgment, condensation,
expansion, collection, compilation or any other form in which
such pre-existing works may be recast, transformed or adapted,
(ii) for patentable or patented materials, any adaptation,
subset, addition, improvement or combination of the Technology,
and (iii) for material subject to trade secret protection, any
new material, information or data relating to and derived from
the Technology, including new material which may be protectable
by copyright, patent or other proprietary rights, and, with
respect to each of the above, the preparation, use and/or
distribution of which, in the absence of this Agreement or other
authorization from the owner, would constitute infringement
under applicable law. Notwithstanding the above, Derivative Work
shall not mean or include changes, modifications, revisions,
alterations, additions, improvements, or the like, to the PSC
1000 family of processor chips or related hardware of Licensee,
or any other processor chip or hardware listed on Exhibit B
hereto, made by Licensee to accommodate the Technology.
1.4. "Documentation" means the documentation which JavaSoft provides
for use with the Technology, as more particularly identified in
Exhibit A.ll.
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1.5. "Field of Use" means the relevant market segments and/or product
areas identified in Exhibit B.
1.6. "JavaOS Classes" means the JavaOS classes listed in Exhibit
A.l.a.
1.7. "JavaOS Environment' means the combination of the JavaOS Runtime
Interpreter and the JavaOS Classes.
1.8. "JavaOS Runtime Interpreter" means the program which implements
the Java Virtual Machine, as specified in the Java Virtual
Machine Specification, without the need for a desktop-style
operating system, i.e., directly on bare silicon. The JavaOS
Runtime Interpreter consists of the Shared Part and the Platform
- Dependent Part.
1.9. "Licensee Open Classes" means additional Java classes developed
by Licensee which represent extensions to the AAPI, and which
are made available to third parties in either source or binary
form to use in the development of additional software which
outputs Java bytecodes and/or runs on a Java compatible Runtime
Interpreter.
1.10. "Permitted Derivative Work(s)" means Derivative Works made by or
for Licensee that constitute Product(s), Licensee Open Classes,
Licensee-implemented modifications to the Platform Dependent
Part of the Technology and Licensee-implemented modifications to
the Shared Part of the Technology to the extent authorized in
Exhibit G.
1.11. "Platform Dependent Part" means those Source Code files and
corresponding binary code of the JavaOS Environment which are
not in a "share" directory or subdirectory thereof.
1.12. "Product(s)" means a Licensee product into which the Technology
is integrated in whole or in part. A "Product" must: (i) have a
principal purpose which is substantially different from that of
the stand - alone JavaOS Environment; (ii) represent a
significant functional and value enhancement to the JavaOS
Environment; (iii) operate in conjunction with the JavaOS
Environment; and (iv) not be marketed as a technology which
replaces or substitutes for the JavaOS Environment. A current
list of Product(s) is specified in Exhibit B, which may be
amended by Licensee to add Product(s) from time to time. A
microprocessor with the binary of the JavaOS software burned
into the memory thereof shall qualify as a Product for purposes
of this Agreement.
1.13. "Shared Part" means those Source Code files and corresponding
binary code of the JavaOS Environment which are in any 'share"
directory or subdirectory thereof.
1.14. "Source Code" means the human readable version, in whole or in
part, of the Technology whether supplied by JavaSoft or any
other entity, and any corresponding comments and annotations.
1.15. "Technology" means the JavaOS Runtime Interpreter, and the
JavaOS Classes developed by Sun, as more particularly identified
in Exhibit A, and Updates thereto to the extent that Licensee is
entitled to receive them hereunder.
1.16. "Trademarks" means all names, logos, designs, characters, and
other designations or brands used by JavaSoft in connection with
the Technology.
1.17. "Updates" means bug fixes, modifications, variations,
enhancements, to the extent included in a patch or dot release
of the Technology which JavaSoft generally licenses as part of
the Technology.
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2. LICENSE GRANTS
2.1.Source Code License.
Subject to the terms and conditions contained in this Agreement and
subject to Licensee's payments specified in Exhibit C, Sun hereby
grants to Licensee, under and to the extent of Sun's Intellectual
Property Rights and solely for the Field(s) of Use specified in
Exhibit B, a perpetual, worldwide, non-exclusive, non-transferable
license, without the right to sublicense (except as specified in
Section 2.1b(iii)), to: (i) use the Source Code for internal
development and porting purposes, (ii) modify the Source Code to
create Derivative Works (provided that Licensee shall be limited
solely to creating Derivative Works that constitute product(s),
Licensee Open Classes, and Licensee - implemented modifications to
the Platform Dependent Part ("Permitted Derivative Works")), and
(iii) compile the Source Code and Permitted Derivative Works thereof.
Licensee shall have no right to modify or subset the AAPI or to modify
the functional behavior of the JavaOS Runtime Interpreter. Licensee
may use the Source Code of the Shared Part of the JavaOS Environment
to develop Product(s), Licensee Open Classes, and Licensee -
implemented modifications to the Platform Dependent Part, but if it
uses such Source Code, it must use all of it without modification,
except as set forth in Exhibit G.
Except as specified in Section 2.1b(iii), Licensee shall have no right
to distribute the Source Code of the Technology or of Derivative
Works.
Porting.
Licensee may port the Platform Dependent Part to platforms other than
those specified in Exhibit C.
Sun will work with Licensee to identify any changes which are necessary
to the Shared Part of the JavaOS Runtime Interpreter to allow porting
it to other platforms, and Sun will use reasonable efforts to
evaluate the feasibility of implementing such changes or
reclassifying the necessary code as Platform Dependent. Licensee may
sublicense and deliver a copy of the Source Code of the Technology to
third parties (i) only in association with the delivery and
sublicensing of Licensee Products, (ii) solely for the purpose of
enabling such third party to port or localize Products for Licensee,
and (iii) only with Sun's prior written approval. Any such sublicense
shall be made subject to terms and conditions relating to ownership,
use, compatibility, and confidentiality of the Technology
substantially similar to those contained herein.
Bug Fixes. Licensee will inform Sun promptly, and no later than it
informs any third party, of any bugs identified in the Technology,
and to the extent that Licensee elects to correct such bugs, Licensee
will make the Source Code of such bug fixes promptly available to Sun
free of all restrictions as they are implemented.
2.2. Binary Code License.
Sun hereby grants Licensee, under and to the extent of Sun's
Intellectual Property Rights, a non-exclusive, worldwide, fully paid
up license to make, use and reproduce an unlimited number of copies
of the Technology in binary form, for Licensee's internal use during
the term of this Agreement.
Worldwide Distribution. Sun hereby grants Licensee a worldwide,
nonexclusive license to distribute the Product(s) incorporating
the Technology solely in binary form. Licensee may use such
distribution channels as Licensee deems appropriate, including
distributors, resellers, dealers and sales representatives
(collectively, "Distributors"), provided however, that such
Distributors shall not modify the Technology (other than the
drivers thereof), and shall be obligated to abide by the relevant
terms in this Agreement governing use, distribution,
compatibility, and confidentiality.
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2.3.Documentation.
Sun hereby grants to Licensee, under and to the extent of Sun's
Intellectual Property Rights, a non-exclusive, non-transferable
license to: (I) use the Documentation for internal development
purposes, (ii) copy, use and modify the Documentation to create
technically accurate Licensee documentation (which must include
all the relevant Sun copyrights, notices, and marks), (iii)
translate the Documentation into other languages, and (iv)
distribute such translated or modified Documentation in
connection with distribution of the Product(s). Licensee may also
use a pointer to the Sun Documentation on the Internet in
connection with distribution of the Product(s).
2.4.Compatibility.
JavaOS Compatibility.
From time to time, Sun will make available test suites at no cost for
validating that the portion of Licensee's Product which
interprets Java bytecodes complies with the then - current
Specification of the JavaOS Technology as defined by Sun as of
the date of that test suite ("JavaOS Test Suite"). Sun shall use
reasonable efforts to review any changes to such JavaOS Test
Suites as much in advance as possible with Licensee, but failure
of Sun to do so shall not constitute a breach of this Agreement
and shall not invalidate any such JavaOS Test Suite published by
Sun.
Each revision of a Product released by Licensee must pass a JavaOS
Test Suite that was current within one hundred twenty (120) days
before First Customer Shipment of such revision of such Product.
Licensee shall not release or distribute to any third party the
portion of Licensee's Product that interprets Java bytecodes,
which does not successfully pass such JavaOS Test Suite. In the
event that Licensee elects to use a version of the Technology
that is newer than that which is required under this Section,
Licensee agrees to pass the JavaOS Test Suite that corresponds to
such newer version.
If Licensee provides Sun with written notice of the existence of a
bug in a current JavaOS Test Suite, Licensee shall be released
from compatibility with the minimum portion of such JavaOS Test
Suite necessary to avoid the impact of such bug, until such time
as Sun provides to Licensee a corrected or new JavaOS Test Suite.
Applet Tag Compatibility. Any Product that reads or writes hypertext
markup language (HTML) or standard generalized markup language
(SGML) shall use the Document Type Definition ("DTD") as
specified in Exhibit E when referencing the Applet tag, unless
another DTD is defined for the Applet tag by an industry
standard.
Branding and Trademarks. Licensee shall use a logo specified by Sun
that indicates compatibility with the JavaOS Test Suites (the
"Compatibility Logo") in a trademark manner on all Licensee
Product(s) distributed hereunder. The terms and conditions
governing the parties' agreement as to trademarks, logos, and
branding shall be governed by the Trademark License entered into
herewith, attached as Exhibit F hereto, and incorporated by
reference herein.
2.5.Licensee Open Classes.
Licensee shall deliver to Sun free of all restrictions the
specification for the application programming interface for each
Licensee Open Class as early as is reasonably possible but in no
event later than the date on which it first provides such
specification or an implementation thereof to any third party.
Included in such specification shall be an appropriate test suite
sufficiently detailed to allow Sun and third parties to produce
implementations compatible with the
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specification. Licensee shall use its reasonable commercial
efforts to clarify and correct the specification or the test
suite upon written request by Sun and failure to do so within
sixty (60) days after such request shall constitute breach of
this Agreement.
Licensee shall notify Sun as soon as it has made any general
disclosure (i.e., not subject to confidentiality obligations) of
such specification, or first releases a Product implementing such
specification, after which Sun shall have no obligation of
confidentiality whatsoever with respect to such specification.
Licensee agrees that it will take no steps whatsoever to prevent
Sun or any third party from creating independent and compatible
implementations based on such specification, provided that such
implementations do not violate Licensee's patents, copyrights or
trade secrets in Licensee's implementation of the Licensee Open
Classes (i.e., Licensee agrees that it will not enforce copyright
or patent claims that relate to interface or compatibility with
such specification).
Licensee shall confine the names of all Licensee Open Classes to
names beginning with "COM. Licensee" or such other convention as
Sun may reasonably require and shall not modify or extend the
names of public class or interface declarations whose names begin
with "Java", "COM.sun" or their equivalents in any subsequent
naming convention. Licensee will make reasonable commercial
efforts to ensure that other commercial software packages which
it redistributes conform to this convention.
Licensee hereby grants Sun a non-exclusive, worldwide, fully - paid -
up license to use an unlimited number of copies of the Licensee
Open Classes, in binary form, for Sun's internal use, such use
including but not limited to demonstration rights. Licensee
agrees to reasonably negotiate in good faith with Sun the terms
of a commercial license for the source code of the Licensee Open
Classes. The parties agree that the FEES and other terms and
conditions of this Agreement are a reasonable standard against
which to judge such a license on a proportionate basis comparing
the scope and complexity of the portion of the Licensee Open
Class being licensed to the scope and complexity of the
Technology.
2.6. Ownership.
Ownership by Sun. Sun retains all right, title and interest in the
Technology, Documentation, Updates, bug fixes, Trademarks, and
Derivative Works, (except for Permitted Derivative Works) and
associated Intellectual Property Rights. Licensee agrees to
execute (in recordable form where appropriate) any instruments
and/or documents as Sun may reasonably request to verify and
maintain Sun's ownership rights, or to transfer any part of the
same which may vest in Licensee for any reason. Licensee further
agrees to promptly deliver to Sun any in source code form
Derivative Works (except for Permitted Derivative Works) of the
Technology created by Licensee pursuant to and during the term of
this Agreement. Sun shall have no obligations of confidentiality
to Licensee for such Derivative Works, nor shall Sun be obligated
to incorporate any such Derivative Works into the Technology.
Ownership by Licensee. Licensee retains all right, title and interest
in Permitted Derivative Works created by Licensee pursuant to and
during the term of this Agreement, subject to Sun's underlying
rights in the Technology and associated Intellectual Property
Rights identified in Section 2.6a. Licensee further retains all
right, title and interest in all changes, modifications,
revisions, alterations, additions, improvements, or the like, to
the PSC 1000 family of processor chips or related hardware of
Licensee, or any other processor chip or hardware listed on
Exhibit B hereto, made by Licensee to accommodate the Technology.
2.7. Protection of Sun's Rights. Licensee shall use, modify and practice
the Technology and manufacture, market, distribute and sell
Product(s), Licensee Open Classes, and Licensee - implemented
modifications to the Platform - Dependent Part of the JavaOS Runtime
Interpreter only in a manner consistent with the terms of this
Agreement, and only in a manner reasonably
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designed not to jeopardize or prejudice Sun's Intellectual Property
Rights, including trademarks, trade dress and service marks, and
other proprietary rights.
2.8. No Other Grant. Each party agrees that this Agreement does not grant
any right or license, under any Intellectual Property Rights of the
other party, or otherwise, except as expressly provided in this
Agreement, and no other right or license is to be implied by or
inferred from any provision of this Agreement or by the conduct of
the parties.
2.9. Pre - Release. Licensee may release Product(s) based on the pre - FCS
Technology licensed by Sun hereunder only for beta testing purposes.
3.0 SUPPORT AND UPDATES
3.1 During the Support Period (as defined below), Sun shall provide
to Licensee under the terms and conditions of this Agreement, Updates
for the platforms specified in Exhibit C when and if any such Updates
are made available by Sun to any commercial licensee similarly
situated.
3.2 Subject to payment of the fee specified in Exhibit C (3b), Sun
shall assign the equivalent of one (1) half-time engineer to be
available via phone, electronic mail and/or scheduled appointment
during regular business hours to support Licensee, from the Effective
Date through the fifth (5th) anniversary of the Sun FCS Date (as
defined below) (the "Support Period"). The selection of the support
engineer shall be at Sun's sole discretion. Licensee may designate a
maximum of three (3) contacts to interface with the Sun support
engineer.
3.3 Upon the request of Licensee, Sun agrees to reasonably negotiate
in good faith for additional support through a separate support
agreement.
4.0 PAYMENT
4.1 License and Support Fees and Royalties. Licensee shall pay to Sun
the license and support fees and royalties set forth in Exhibit C
within thirty (30) days from the Effective Date of this Agreement,
unless otherwise specified in Exhibit C. Thereafter, and for the term
of the Agreement, Licensee shall pay the Support Fee on or before the
anniversary of the Effective Date.
4.2 Taxes. All payments required by this Agreement shall be made in
United States dollars, are exclusive of taxes, and Licensee agrees to
bear and be responsible for the payment of all such taxes, including,
but not limited to, all sales, use, rental receipt, personal property
or other taxes and their equivalents which may be levied or assessed
in connection with this Agreement (excluding only taxes based on
Sun's net income).
4.3 Records. Licensee shall maintain account books and records
consistent with Generally Accepted Accounting Principles appropriate
to Licensee's domicile, as may be in effect from time to time,
sufficient to allow the correctness of the royalties required to be
paid pursuant to this Agreement to be determined.
4.4 Audit Rights. Sun shall have the right to audit such accounts
upon reasonable prior notice. The right to audit may be exercised
through an independent auditor of Sun's choice (the "Auditor"). The
Auditor shall be bound to keep confidential the details of the
business affairs of Licensee and to limit disclosure of the results
of any audit to only the sufficiency of the accounts and the amount,
if any, of any additional payment or other payment adjustment that
should be made. Such audits shall not occur more than once each year
(unless discrepancies are discovered in excess of the five percent
(5%) threshold set forth in Section 4.5, in which case two
consecutive quarters per year may be audited). Except as set forth in
Section 4.5 below, Sun shall bear all costs and expenses associated
with the exercise of its rights to audit.
4.5 Payment Errors. In the event that any errors in payments shall be
determined, such errors shall be corrected by appropriate adjustment
in payment for the quarterly period during which the error is
discovered. In the event of an underpayment of more than five percent
(5%) of the proper amount
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owed, upon such underpayment being properly determined by the
Auditor, Licensee shall reimburse Sun the amount of said underpayment
and the reasonable charges of the Auditor in performing the audit
that identified said underpayment, and interest on the overdue amount
at the maximum allowable interest rate from the date of accrual of
such obligation.
5.0 ADDITIONAL AGREEMENT OF PARTIES
5.1 Notice of Breach or Infringement. Each party shall notify the
other immediately in writing when it becomes aware of any breach or
violation of the terms of this Agreement, or when Licensee becomes
aware of any potential or actual infringement by a third party of the
Technology or Sun's Intellectual Property Rights therein.
5.2 Notices. Licensee shall not remove any copyright notices,
trademark notices or other proprietary legends of Sun or its
suppliers contained on or in the Technology or Documentation. Each
unit of Product(s) containing the Technology distributed by Licensee
shall include in Licensee's documentation, or in other terms and
conditions of sale, notices substantially similar to those contained
on and in the Technology. Licensee or its Distributors shall require
an end user license agreement for each unit of Product(s) shipped and
Licensee shall provide Sun with a copy of such form agreement for
review and approval. If Licensee or its Distributors use a package
design or label for the Product(s), such package design or label
shall include an acknowledgment of Sun as the source of the
Technology and such other notices as specified in Exhibit F. In
addition, Licensee shall comply with all reasonable requests by Sun
to include Sun's copyright and/or other proprietary rights notices on
the Product(s), documentation or related materials, including but not
limited to the notices and acknowledgments as specified in Exhibit F.
5.3 End User Support. Licensee shall provide technical and
maintenance support service for its distributors and end user
customers in accordance with Licensee's standard support practices.
Sun shall not be responsible for providing any support to Licensee's
distributors or customers for the Technology or the Product(s).
5.4 Marketing. Licensee will cooperate with Sun on mutually agreeable
marketing and promotional activities relating to the Technology.
Licensee's initial press announcement concerning execution of this
Agreement must be reviewed and approved by Sun prior to its release.
5.5 Use of Licensee's name. Licensee hereby authorizes Sun to
identify Licensee as a user of the Technology in advertising,
marketing, collateral, customer lists and customer success stories
prepared by or on behalf of Sun for the Technology, provided that
Licensee will have the right to approve the use of its name, such
approval not to be unreasonably withheld or delayed.
6.0 LIMITED WARRANTY AND DISCLAIMER
6.1 Limited Warranty. Sun represents and warrants that the media on
which the Technology is recorded will be free from defects in
materials and workmanship for a period of ninety (90) days after
delivery. Sun's sole liability with respect to breach of this
warranty is to replace the defective media. Except as expressly
provided in this Section 6.1, Sun licenses the Technology and
Documentation to Licensee on an "AS IS" basis.
6.2 General Disclaimer. EXCEPT AS SPECIFIED IN THIS AGREEMENT, ALL
EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
OR NON - INFRINGEMENT, ARE HEREBY DISCLAIMED.
6.3 Logo Disclaimer. SUN MAKES NO WARRANTIES OF ANY KIND RESPECTING
THE COMPATIBILITY LOGO(s), INCLUDING THE VALIDITY OF SUN'S RIGHTS IN
THE COMPATIBILITY LOGO(s) IN ANY COUNTRY, AND DISCLAIMS ANY AND ALL
WARRANTIES THAT MIGHT OTHERWISE BE IMPLIED BY APPLICABLE LAW,
INCLUDING WARRANTIES AGAINST INFRINGEMENT OF THIRD PARTY TRADEMARKS.
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6.4 Limitation. The warranties set forth in this Article 6.0 are
expressly subject to Section 9.0 (Limitation of Liability).
7.0 CONFIDENTIAL INFORMATION
7.1 Confidential Information. For the purposes of this Agreement,
"Confidential Information" means the Technology and that information
which relates to (i) Sun hardware or software, (ii) Licensee hardware
or software, (iii) the customer lists, business plans and related
information of either party, and (iv) any other technical or business
information of the parties, including the terms and conditions of
this Agreement. In all cases, information which a party wishes to be
treated as "Confidential Information" shall be marked as
"confidential" or "proprietary" (or with words of similar import) in
writing by the disclosing party on any tangible manifestation OF the
information transmitted in connection with the disclosure, or, if
disclosed orally, designated as "confidential" or "proprietary" (or
with words of similar import) at the time of disclosure. Sun has no
obligation of confidentiality to Licensee with respect to Derivative
Works (except for Permitted Derivative Works) and the specifications
of the Licensee Open Classes.
7.2 Preservation of Confidentiality. The parties agree that all
disclosures of Confidential Information (as defined under Section 7.1
above) shall be governed by and treated in accordance with the terms
of the Confidential Disclosure Agreement (the "CDA") attached hereto
as Exhibit D and incorporated herein by reference, modified as
follows:
the definition of "Confidential information" shall be as set forth
in Section 7.1 above notwithstanding any definition set forth
in the CDA;
the use of Confidential Information shall be limited to the scope
of the licenses provided in this Agreement; and
the obligations of confidentiality expressed in the CDA shall
extend three (3) years beyond termination of this Agreement,
except with respect to Sun Source Code which shall be held in
confidence in perpetuity; and
the CDA shall remain in effect for the term of this Agreement.
8.0 LIMITED INDEMNITY
8.1 Licensee acknowledges that Sun shall not be liable for any
defects or deficiencies in the Technology or in any Product, process
or design created by, with or in connection with the Technology
whether or not such defects and/or deficiencies are caused, in whole
or in part, by defects or deficiencies in the design or
implementation of the Technology. Upon delivery of the Technology by
Sun pursuant to this Agreement, Sun will provide to Licensee a
limited indemnity as described in Sections 8.2 - 8.5 below.
8.2 Sun will defend, at its expense, any legal proceeding brought
against Licensee, to the extent it is based on a claim that use of
the Technology is an infringement of a trade secret or copyright in
any country that is a signatory to the Berne Convention, and will pay
all damages awarded by a court of competent jurisdiction attributable
to such claim, provided that Licensee: (i) provides notice of the
claim promptly to Sun; (ii) gives Sun sole control of the defense and
settlement of the claim; (iii) provides to Sun, at Sun's expense, all
available information, assistance and authority to defend; and (iv)
has not compromised or settled such proceeding without Sun's prior
written consent.
8.3 Should any Technology or any portion thereof become, or in Sun's
opinion be likely to become, the subject of a claim of infringement
for which indemnity is provided under Section 8.2, Sun shall, as
Licensee's sole and exclusive remedy for ongoing infringement, elect
to: (i) obtain for Licensee the right to use such Technology; (ii)
replace or modify the Technology so that it becomes non - infringing;
or (iii) accept the return of the Technology and grant Licensee a
refund of the License Fee and royalties, as depreciated on a five
year straight-line basis.
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8.4 Sun shall have no liability for any infringement or claim which
results from: (i) use of other than a current unaltered version of
the Technology, if such version was made available to Licensee; (ii)
use of the Technology in combination with any non -Sun-provided
equipment, software or data; or (iii) Sun's compliance with designs
or specifications of Licensee.
8.5 THIS ARTICLE STATES THE ENTIRE LIABILITY OF SUN WITH RESPECT TO
INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS BY THE TECHNOLOGY.
SUN SHALL HAVE NO OTHER LIABILITY WITH RESPECT TO INFRINGEMENT OF
INTELLECTUAL PROPERTY RIGHTS OF LICENSEE OR ANY THIRD PARTY AS A
RESULT OF USE, LICENSE, OR SALE OF TECHNOLOGY.
8.6 Indemnity by Licensee. Except for claims for which Sun is
obligated to indemnify Licensee under Section 8.2, Licensee shall
defend and indemnify Sun from any and all claims brought against Sun
by third parties, and shall hold Sun harmless from all corresponding
damages, liabilities, costs and expenses, (including reasonable
attorneys' fees) incurred by Sun arising out of or in connection with
Licensee's use, reproduction or distribution of the Technology,
Product(s) or Licensee Open Classes. Licensee's obligation to provide
indemnification under this Section shall arise provided that Sun: (i)
gives notice of the claim promptly to Licensee; (ii) gives Licensee
sole control of the defense and settlement of the claim; (iii)
provides to Licensee, at Licensee's expense, all available
information, assistance and authority to defend; and (iv) has not
compromised or settled such proceeding without Licensee's prior
written consent.
9.0 LIMITATION OF LIABILITY
9.1 Limitation of Liability. Except for express undertakings to
indemnify under this Agreement and/or breach of Sections 2.4, 2.5,
7.0 or 9.2:
Each party's liability to the other for claims relating to this
Agreement, whether for breach or in tort, shall be limited to
the license fees and royalties paid by Licensee for the
Technology related to the claims.
b. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT (INCLUDING LOSS OF PROFITS,
USE, DATA, OR OTHER ECONOMIC ADVANTAGE), NO MATTER WHAT THEORY OF
LIABILITY, EVEN IF THE EXCLUSIVE REMEDIES PROVIDED FOR IN THIS
AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF EITHER PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OR PROBABILITY OF SUCH DAMAGES.
FURTHER, LIABILITY FOR SUCH DAMAGE SHALL BE EXCLUDED, EVEN IF THE
EXCLUSIVE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR
ESSENTIAL PURPOSE. The provisions of this Section 9.0 allocate the
risks under this Agreement between Sun and Licensee and the parties
have relied upon the limitations set forth herein in determining
whether to enter into this Agreement. 9.2 High Risk Activities. The
Technology is not designed or intended for use in online control of
aircraft, air traffic, aircraft navigation or aircraft
communications; or in the design, construction, operation or
maintenance of any nuclear facility. Sun disclaims any express or
implied warranty of fitness for such uses. Licensee agrees that it
will not knowingly use or license the Technology for such purposes,
and that it will ensure that its customers and end users of the
Technology are provided with a copy of the foregoing notice.
10.0 TERM AND TERMINATION
10.1 Term. The term of this Agreement shall begin on the Effective
Date and shall continue for a period of three (3) years, or until
terminated as provided below. Each year for five (5) consecutive
years following expiration of the initial three (3) year term, at
Licensee's sole option, Licensee may extend the term of this
Agreement for one (1) additional year. Licensee shall indicate its
intent to extend the Agreement by written notice to Sun within thirty
(30) days prior to the expiration of the preceding term. Termination
is permitted either for breach of this Agreement, upon thirty (30)
days written notice to the other party and an opportunity to cure
within such thirty (30) day period, or upon
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any action for infringement of any patent relating to the Technology
by Licensee against Sun or any of Sun's licensees of the Technology.
(Notwithstanding the above, Licensee reserves and retains to itself
the exclusive right to all of its pre - existing technology related
to the PSC 1000 family of processor chips and related hardware of
Licensee, and any other processor chip or hardware listed on Exhibit
B hereto, and shall have the right to enforce any copyright or patent
claims relating thereto.) In addition, at any time after the initial
twelve months of the term of this Agreement, termination is also
permitted upon sixty (60) days written notice by Licensee to Sun
stating that Licensee is terminating the making, importing, use, sale
and distribution of Licensee's Products, in which event all Support
and Update Fees set forth in Exhibit C shall be prorated to the date
of termination.
10.2 Effect of Expiration. Upon expiration of this Agreement, Sun
shall retain use, under the terms of this Agreement, of the
Intellectual Property Rights received hereunder, and Licensee shall
be authorized to: (i) distribute Product(s) containing the version of
the Technology incorporated therein at the time of expiration,
subject to Licensee's continued compliance with the Test Suites
current at the time of expiration, and payment of royalties, and (ii)
retain one (1) copy of the Technology in Source Code form to support
customers having copies of Product(s) distributed by Licensee prior
to the expiration hereof. All other rights of Licensee shall
terminate upon such expiration.
10.3 Effect of Termination. In the event of termination of this
Agreement by Sun in accordance with Section 10.1 above, Licensee
shall promptly: (i) return to Sun all copies of the Technology and
Derivative Works thereof in tangible or electronic form,
Documentation, and Confidential Information (collectively "Sun
Property") (excluding Licensee Open Classes and Licensee -
implemented modifications to the Platform Dependent Part) in
Licensee's possession or control; or (ii) permanently destroy or
disable all copies of the Sun Property in Licensee's possession or
control, except as specifically permitted in writing by Sun; and
(iii) provide Sun with a written statement certifying that Licensee
has complied with the foregoing obligations. All rights and licenses
granted to Licensee shall terminate upon such termination.
10.4 No Liability for Expiration or Lawful Termination. Neither party
shall have the right to recover damages or to indemnification of any
nature, whether by way of lost profits, expenditures for promotion,
payment for goodwill or otherwise made in connection with the
business contemplated by this Agreement, due to the expiration or
permitted or lawful termination of this Agreement. EACH PARTY WAIVES
AND RELEASES THE OTHER FROM ANY CLAIM TO COMPENSATION OR INDEMNITY
FOR TERMINATION OF THE BUSINESS RELATIONSHIP UNLESS TERMINATION IS A
MATERIAL BREACH OF THIS AGREEMENT.
10.5 No Waiver. The failure of either party to enforce any provision
of this Agreement shall not be deemed a waiver of that provision. The
rights of Sun under this Section 10.0 are in addition to any other
rights and remedies permitted by law or under this Agreement.
10.6 Survival. The parties' rights and obligations under Sections
2.0, 4.0, 5.2, 5.3, 6.0, 7.0, 8.0, 9.0, 10.0, and 11.0 shall survive
expiration or termination of this Agreement, excluding in the event
of breach by Licensee, Licensee's rights under Section 2.0, which
shall terminate.
10.7 Irreparable Harm. The parties acknowledge that breach of
Sections 2.0, 5.2, 5.3, 7.0, 9.2, or 11.6 may cause irreparable harm,
the extent of which would be difficult to ascertain. Accordingly,
they agree that, in addition to any other legal remedies to which a
non-reaching party might be entitled, such party may seek immediate
injunctive relief in the event of a breach of the provisions of such
Articles.
11.0 MISCELLANEOUS
11.1 Notices. All notices must be in writing and delivered either in
person or by certified mail or registered mail, postage prepaid,
return receipt requested, to the person(s) and address specified
below. Such notice will be effective upon receipt.
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Sun Licensee
Sun Microsystems, Inc. Patriot Scientific Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, UCUP01-05 10989 Via Frontera
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - 2233 ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: JavaSoft General Counsel Attn:
11.2 Partial Invalidity. If any term or provision of this Agreement
is found to be invalid under any applicable statute or rule of law
then, that provision notwithstanding, this Agreement shall remain in
full force and effect and such provision shall be deleted unless such
a deletion would frustrate the intent of the parties with respect to
any material aspect of the relationship established hereby, in which
case, this Agreement and the licenses and rights granted hereunder
shall terminate.
11.3 Complete Understanding. This Agreement and the Exhibits hereto
constitute and express the final, complete and exclusive agreement
and understanding between the parties with respect to its subject
matter and supersede all previous communications, representations or
agreements, whether written or oral, with respect to the subject
matter hereof. No terms of any purchase order or similar document
issued by Licensee shall be deemed to add to, delete or modify the
terms and conditions of this Agreement. This Agreement may not be
modified, amended, rescinded, canceled or waived, in whole or part,
except by a written instrument signed by the parties.
11.4 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions of
this Agreement in any other language shall be for accommodation only
and shall not be binding on the parties to this Agreement. All
communications and notices made or given pursuant to this Agreement,
and all documentation and support to be provided, unless otherwise
noted, shall be in the English language.
11.5 Governing Law. This Agreement is made under and shall be
governed by and construed under the laws of the State of California,
regardless of its choice of laws provisions. 11.6 Compliance with
Laws. The Technology, including technical data, is subject to U.S.
export control laws, including the U.S. Export Administration Act and
its associated regulations, and may be subject to export or import
regulations in other countries. Licensee agrees to comply strictly
with all such regulations and acknowledges that it has the
responsibility to obtain such licenses to export, re-export or import
the Technology or Product(s) as may be required after delivery to
Licensee.
Licensee shall make reasonable efforts to notify and inform its
employees having access to the Technology of Licensee's obligation to
comply with the requirements stated in this Article.
11.7 Disclaimer of Agency. Licensee is not authorized to make any
representation or warranty on behalf of Sun to its end users or third
parties. The relationship created hereby is that of licensor and
licensee and the parties hereby acknowledge and agree that nothing
herein shall be deemed to constitute Licensee as a franchisee of Sun.
Licensee hereby waives the benefit of any state or federal statutes
dealing with the establishment and regulation of franchises.
11.8 Delivery. As soon as practicable after the Effective Date, Sun
shall deliver to Licensee one (1) copy of each of the deliverables
set forth in Exhibit A. Licensee acknowledges that certain of the
deliverables are in various stages of completion and agrees to accept
the deliverables as and to the extent completed as of the date of
delivery and "AS IS." In the event any deliverable is already in the
possession or custody of Licensee, such item(s) shall, to the extent
used in connection with the rights granted in Section 2.0 above, be
subject to the terms of this Agreement, notwithstanding any
pre-existing agreement or understanding between Licensee and Sun with
respect to such items.
11.9 Assignment and Change in Control. This Agreement may not be
assigned by either party without the prior written consent of the
other party, which consent shall not be unreasonably withheld or
delayed, except that Sun may assign this Agreement to a majority -
owned subsidiary.
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13
11.10 Construction. This Agreement has been negotiated by Sun and
Licensee and by their respective counsel. This Agreement will be
fairly interpreted in accordance with its terms and without any
strict construction in favor of or against either party.
11.11 Force Majeure. Except for the obligation to pay money, neither
party shall be liable to the other party for non-performance of this
Agreement, if the non-performance is caused by events or conditions
beyond that party's control and the party gives prompt notice under
Section 11.1 and makes all reasonable efforts to perform.
11.12 Exhibits:
The following are included herein by reference as integral parts of
this Agreement:
Exhibit A - Description of Technology and Documentation
Exhibit B - Identification of Licensee Product(s)
Exhibit C - Schedule of Fees and Royalties
Exhibit D - Confidential Disclosure Agreement
Exhibit E - Document Type Definition
Exhibit F - Trademark License
Exhibit G - Shared Part Exceptions
11.13 Section References. Any reference contained herein to an
article of this agreement shall be meant to refer to all subsections
of the article.
11.14 No Competitive Restrictions. The Parties agree that nothing in
this Agreement is intended to prohibit Licensee from independently
developing or acquiring technology that is the same as or similar tot
he Technology, provided that Licensee does not do so in breach of
Exhibit D to this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
Sun Microsystems, Inc. Licensee:
By: /S/ ▇▇▇▇ ▇ ▇▇▇▇▇▇ By: /S/ M.A. ▇▇▇▇▇▇▇
---------------------------- ----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: M.A. ▇▇▇▇▇▇▇
Title: President, JavaSoft Title: President & CEO
Date: 6/23/97 Date: 6/30/97
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