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EXHIBIT 10.6
TECHNOLOGY RIGHTS AGREEMENT
This Agreement entered into this 1st day of October, 1997 by and among
XXX Xxxxxxxxxxx ("EMC"), a Massachusetts corporation, McDATA Holdings
Corporation ("Holdings"), a Delaware corporation and McDATA Corporation ("New
McDATA"), a Delaware corporation.
WHEREAS, the parties desire to acknowledge the rights and interest in
technology belonging to each other;
WHEREAS, Holdings has a number of agreements with IBM Corporation
("IBM") to exclusively provide selected high performance switching products to
IBM ("IBM Agreements"), and Holdings requires assistance from New McDATA to
provide and support such products;
WHEREAS, New McDATA is willing to support EMC and Holdings for
products (as hereinafter defined) sold to IBM under such agreements, and
WHEREAS, the parties wish to make certain other agreements;
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS.
1.1 OldCo Technology shall mean high performance connectivity
products including ESCON and Fibre Channel used primarily in information
switching applications.
1.2 EMC Technology shall mean enterprise storage products including
ICDA and software applications used primarily in computer and network based
applications.
1.3 Effective Date shall mean the date of the Asset Transfer
Agreement.
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1.4 ESCON Products shall mean the high performance ESCON connectivity
products which are or will be cited in the IBM Agreements.
2. ASSIGNMENT OF RIGHTS.
2.1 Subject to the rights retained in Section 2.3 below, Holdings
agrees, as of the Effective Date, to transfer, grant, convey and assign to New
McDATA all right, title and interest in and to all OldCo Technology except for
any connectivity technology related to storage products gained from EMC. Such
ownership of OldCo Technology includes all patents, patent applications,
patentable inventions, trade secrets, trademarks, trade names, service marks,
copyrights, technology licenses, know-how, confidential information, shop rights
and all other intellectual property rights embodied in OldCo Technology.
2.2 EMC retains and owns all right, title and interest in and to all
EMC Technology. Such ownership includes all patents, patent applications,
patentable inventions, trade secrets, trademarks, trade names, service marks,
copy rights, technology licenses, know-how, confidential information, shop
rights and all other intellectual property rights embodied in EMC Technology.
2.3 Holdings retains and reserves for its and its parent's (EMC) own
benefit, the nonexclusive, irrevocable, royalty-free, nonassignable rights and
license to make, use and sell all OldCo Technology including the right to
sublicense others to do any or all of the same, except that Holdings and EMC
shall have no license to any of the trademarks and service marks rights assigned
to New McDATA which exclusively shall belong to New McDATA, and further provided
that, except for ESCON Products, Holdings and EMC and their sublicensees may
only embed OldCo Technology as additional functionality into EMC's current and
further storage products.
3. SUBSEQUENT CONDITIONS.
3.1 Notwithstanding Section 2, upon the expiration or termination of
an agreement that requires sale of a product or products exclusively to IBM, New
McDATA shall work exclusively with Holdings to make available for sale or lease
to third parties any ESCON Products, as reasonably modified for general
availability, now permitted to be sold or leased to third parties ("Permitted
ESCON Products"). Both parties agree to negotiate in good faith a minimum annual
sales goal for Holdings to maintain such exclusivity.
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3.2 For so long as New McDATA and Holdings work on Permitted ESCON
Products as provided in section 3.1 above, New McDATA shall own any improvements
to the OldCo Technology made by New McDATA employees embodied in Permitted ESCON
Products. New McDATA grants to EMC and Holdings an irrevocable, worldwide,
royalty-free, nonexclusive license, with the right to sublicense others, to
make, use and sell such improved OldCo Technology, subject to the same
restrictions set forth in Section 2.
3.3 Should New McDATA fail to supply products which fulfill the
contractual commitment(s) of Holdings to IBM, New McDATA agrees: (1) to grant to
Holdings and IBM a license to all New McDATA intellectual property rights
necessary to fulfill Holdings' contractual commitments to IBM pursuant to
manufacturing rights provisions in the IBM Agreements and (2) to provide to
Holdings and IBM all documentation and information necessary to manufacture the
products and fulfill Holdings' obligations and IBM's requirements pursuant to
manufacturing rights provisions and within the contractual timeframe in the IBM
Agreements.
3.4 Nothing in this Agreement shall restrict the ability of any
party's employees who have, in the past, rightfully been exposed to the
Confidential Information of the other party to use trade secrets contained in
such Confidential Information in the normal course of their duties; provided
however, that the user of such trade secret do what is ordinary and reasonable
to maintain such trade secret status.
4. PAYMENTS.
4.1 No payments shall be due from EMC or Holdings to New McDATA for
any use of the OldCo Technology in any ESCON product made and sold for or by EMC
or Holdings to third parties.
4.2 EMC shall negotiate in good faith with New McDATA compensation
for the use of OldCo Technology in any Fibre Channel product made and sold for
or by EMC or Holdings to third parties. The negotiation shall be arm's length
and the compensation shall be based solely on the value of the added
functionality provided by the OldCo Technology.
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5. NONCOMPETITION CLAUSE.
5.1 For a period of three (3) years from the date of this Agreement,
EMC and Holdings agree that they will not develop or manufacture high
performance connectivity products competitive to New McDATA. For the same
period, New McDATA agrees that it will not develop or manufacture enterprise
storage products competitive to EMC.
5.2 Nothing in this Section shall preclude any of the parties from
acquiring competitive products from third parties.
6. CONFIDENTIALITY.
6.1 "Confidential Information" shall mean information or materials
provided by one party to the other which are in tangible form and labeled
"confidential" or the like, or, if disclosed orally, are identified as being
confidential at the time of disclosure and are followed up within two (2) weeks
in a tangible form that is appropriately labeled. Confidential Information shall
not include information or materials that (1) were, on the effective date of
this Agreement, generally known to the public; or (2) become generally known to
the public after the effective date of this Agreement other than as a result of
the act or omission of the receiving party; or (3) were rightfully known to the
receiving party prior to that party receiving same from the disclosing party; or
(4) are or were disclosed by the disclosing party to a third party generally
without restriction on disclosure; or (5) the receiving party lawfully received
from a third party without that third party's breach of agreement of obligation
of trust; or (6) are independently developed by the receiving party or (7) are
disclosed in response to a valid order by a court or other governmental body or
is otherwise required by law to be disclosed.
6.2 The receiving party shall not (1) make Confidential Information
available to any of its employees or consultants who do not have a "need to
know" in order to carry out the purposes of this Agreement or are not bound by
confidentiality provisions similar to those in this Agreement; (2) disclose any
Confidential Information to any third party; or (3) use Confidential
Information for any purpose other than contemplated by this Agreement. The
receiving party shall be held to the same standard of care it applies to its own
information and materials of a similar nature.
6.3 All Confidential Information disclosed under this Agreement shall
remain the property of the disclosing party. Further, no license under any
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patent or other intellectual property right is granted or conveyed by one party
disclosing Confidential Information to another party.
6.4 Termination of this Agreement shall not relieve a party of its
obligations to maintain in confidence the Confidential Information from the
other parties, which obligation shall continue for a period of three (3) years
from the date of the disclosure under this Agreement.
7. ASSURANCES.
7.1 Each party agrees to execute and deliver any instruments or
documents and take such further actions as necessary to evidence more fully the
ownership and licensing of rights provided herein.
7.2 Each party agrees to:
a. Execute and acknowledge and deliver any affidavits or documents
regarding the respective technology of the parties,
b. Provide testimony in connection with any proceeding affecting the
right, title, interest or benefit of the parties to the technology,
c. Perform any other acts deemed necessary to carry out the intent of
this Agreement.
8. MISCELLANEOUS.
8.1 This Agreement shall be governed by the laws of the State of
Delaware.
8.2 Neither party shall assign any of its rights or obligations under
this Agreement without the prior written consent of the other.
8.3 Each party agrees to indemnify and hold harmless the other
parties for any causes of action, claims or other demands related to their
technology or products except that New McDATA does not indemnify EMC or Holdings
with respect to any products made by or for EMC or Holdings for which New McDATA
receives no compensation.
8.4 The OldCo Technology, ESCON Products and Permitted ESCON Products
are provided "AS IS" without any warranties of any kind, either expressed or
implied. NEW McDATA EXPRESSLY DISCLAIMS THE IMPLIED
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WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT WITH RESPECT TO THE OLDCO TECHNOLOGY, ESCON PRODUCTS AND
PERMITTED ESCON PRODUCTS OR ITS USE BY EMC OR HOLDINGS.
8.5 IN NO EVENT SHALL ANY PARTY BE LIABLE TO THE OTHER PARTIES OR ANY
OTHER THIRD PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT
DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS OR LOST SALES, ARISING OUT
OF THIS AGREEMENT, WHETHER THE CLAIM IS BASED IN TORT OR CONTRACT EVEN IF THE
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8.6 This Agreement in conjunction with the Asset Transfer Agreement,
Service Agreement and other concurrently executed agreements among the parties
constitutes the entire agreement between the parties with respect to the subject
matter hereof, and it supersedes any prior or contemporaneous written or oral
agreement. This Agreement shall not be modified except by a signed, written
agreement dated subsequently.
AGREED AND ACCEPTED
XXX Xxxxxxxxxxx New McDATA Corporation
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
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Title: V.p. Corporate and Business Development Title:_________________________
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Date:_________________________________ Date:__________________________
McDATA Holdings Corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Vice President
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Date:_________________________________
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