EX-10.02 3 dex1002.htm PATENT LICENSE AND SETTLEMENT AGREEMENT ***CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN...
EXHIBIT 10.02
***CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO OMITTED PORTIONS
PATENT LICENSE AND SETTLEMENT AGREEMENT
This PATENT LICENSE AND SETTLEMENT AGREEMENT (this “Agreement”) is made and entered into as of March 23, 2007 (the “Effective Date”) by and between Polaris IP, LLC, a limited liability corporation organized and existing under the laws of Texas and having offices at 000 X Xxxxx Xxxxxxxxxx Xxxxxx Xxxxxxxx, Xxxxx 00000 (“Polaris”), and Kana Software, Inc., a corporation organized and existing under the laws of Delaware and having offices at 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, XX 00000 (“Kana”). Polaris and Kana are individually referred to herein as a “Party,” and collectively as the “Parties.”
WHEREAS, Polaris has filed an action against Kana for patent infringement and related claims in an action styled: Polaris IP, LLC v. Sirius Satellite Radio, Inc., Kana Software, Inc., Xxxxxxxxx.xxx, Inc., Capital One Financial Corporation, Capital One Services, Inc., Capital One Bank, Capital One Auto Finance, Inc., Continental Airlines, Inc., and E*TRADE Financial Corp.; Civil Action Xx. 0-00-XX 000, xxxxxxx xx xxx Xxxxxx Xxxxxx District Court for the Eastern District of Texas, Marshall Division (the “Litigation”);
WHEREAS, Kana has denied liability and asserted counterclaims against Polaris in the Litigation; and
ARTICLE I.
As used in this Agreement, the following terms shall have the following meanings:
“Related Company” means with respect to Kana, those Entities that are owned by, own, or are under common control with Kana and listed in Schedule I; and with respect to Polaris, those Entities that are owned by, own, or are under common control with Polaris and listed in Schedule II. Related Company also shall include all other current and future Entities
(Except as provided for under Article VII) that are owned by, own, or are under common control with a Party. An Entity will be a Related Company hereunder only during the period of time such Entity is owned by, owns, or is under common control with a Party.
“Kana Customers” means any and all direct and indirect customers of Kana or any Kana Related Company, including without limitation, resellers, distributors, OEM customers, system integration partners and end-users. The following defendants named in the Litigation meet the definition of Kana Customers: Sirius Satellite Radio, Inc., Xxxxxxxxx.xxx, Inc., Capital One Financial Corporation, Capital One Services, Inc., Capital One Bank, Capital One Auto Finance, Inc., and E*TRADE Financial Corp.
“Kana Product” means any and all software, hardware, products, methods and/or services (including without limitation, training, professional services, and maintenance and support) made, used, sold, licensed, offered for sale, offered for license, imported, exported or distributed by or for the benefit of Kana or any Kana Related Company prior to, on or after the Effective Date. Kana Product also includes software, hardware, and/or products or services, or components thereof which are used, sold, licensed, offered for sale or offered for license under a Third Party brand (e.g., an OEM product), so long as any such Third Party branded product or service is made or provided by or for Kana or a Kana Related Company.
“Polaris Patents” means: (i) any and all Patents owned or controlled by Polaris now or at any time in the future, including but not limited to those Patents listed in Exhibit A to this Agreement; and (ii) any and all Patents in the fields of e-mail response management or natural language processing (or a combination thereof) that are owned or controlled by a Polaris Related Company now or at any time in the future.
“Patents” means (i) all classes and types of patents, including utility patents, utility models, design patents, invention certificates, reexaminations, reissues, extensions and renewals, in all jurisdictions of the world; and (ii) all applications (including provisional and nonprovisional applications), continuations, divisionals, continuations-in-part, and rights to inventions for which applications may be filed, for these classes or types of patents in all jurisdictions of the world. The term “Patents” does not include any copyrights, trademarks, mask work rights, or trade secret rights.
“Entity” means an individual, trust, corporation, partnership, joint venture, limited liability company, association, unincorporated organization or other legal or governmental entity.
“Third Party” means an Entity other than a party to this Agreement or a Related Company of a party to this Agreement.
“Kana Vendors” means any and all Entities in Kana’s or any Kana Related Company’s supply chain, including suppliers, development partners, vendors, joint venture partners, outsource manufacturers and independent contractors.
ARTICLE II.
Kana Product). Kana and/or any Kana Related Company also shall be entitled to challenge the validity and/or enforceability of any Polaris Patent in any administrative proceeding (e.g., in a patent office or alternative dispute resolution proceeding) responsive to an allegation of infringement of a Polaris Patent brought against Kana, a Kana Related Company, or a Kana Customer or Kana Vendor (but for Kana Customers and Kana Vendors, solely with respect to any Kana Product), or in any circumstance where a Kana Product has been accused of infringement of a Polaris Patent and Kana or a Kana Related Company has a indemnity or defense obligation with respect to the accused Kana Product.
ARTICLE III.
3.1.1. Kana and Kana Related Companies to make, have made, use, sell, offer for sale, license, offer for license, import, export and otherwise distribute the Kana Products;
3.1.2. Kana Customers to use, sell, offer for sale, license, offer for license, import, export and otherwise distribute (directly and/or indirectly through partners) the Kana Products; and
3.1.3. Kana Vendors to make, sell and use the Kana Products, and portions thereof, solely for and on behalf of Kana and the Kana Related Companies.
In the event any Kana Related Company ceases to meet the definition of Kana Related Company (such Entity thus becoming a “Former Kana Related Company”), then the license granted to that Former Kana Related Company pursuant to this Section 3.1 above will terminate, except to the extent that such Former Kana Related Company makes, has made, uses, imports, sells, offers to sell, licenses, offers to license, exports, otherwise distributes and/or exploits any Kana Product prior to becoming a Former Kana Related Company. In such event, the license to the Former Kana Related Company to make, have made, use, import, sells, offer to sell, license, offer to license, export and otherwise distribute and exploit such Kana Products shall continue, but only with respect to those products and any future versions and improvements thereof.
ARTICLE IV.
4.1. Within five (5) court days after the initial payment of the consideration to Polaris under Section 5.1 below, the Parties shall cause their respective counsel to execute and file the stipulated motion in the form set forth in Exhibit B dismissing with prejudice all claims, affirmative defenses, and counterclaims between the parties in the Litigation, except that Kana, Kana Related Companies and the Kana Customers named in the Litigation shall preserve all defenses to any claim for infringement, including without limitation the ability to assert a patent’s invalidity or unenforceability, which can be asserted only in the event that Polaris alleges infringement by any of said entities of any Polaris Patent. The Parties shall promptly proceed with any and all additional procedures needed to dismiss with prejudice the Litigation. The Parties agree that the settlement of the Litigation is intended solely as a compromise of disputed claims, counterclaims and defenses.
4.2. The Parties acknowledge and agree that this Agreement is enforceable according to its terms with respect to final dismissal with prejudice of all claims in the Litigation, subject to Article II above and Section 4.1 regarding the preservation of defenses.
4.3. The Parties agree that they shall bear their own costs and attorneys’ fees relating to the Litigation and to the negotiation of this Agreement.
ARTICLE V.
5.1. In consideration of the license, release and covenants granted by Polaris and the dismissal by Polaris of the Litigation hereunder, Kana agrees to pay to Polaris a total of *** U.S. Dollars ($*** USD), payable in twenty (20) equal quarterly installments of *** dollars ($***) (due and payable no later than each March 15, June 15, September 15 and December 15 (or if such date is not a business day, the next occurring business day), except for the first payment which shall be made on April 16, 2007) over a period of five years, by wire transfer to an account specified by Polaris and attached hereto as Exhibit C. In the event that Kana fails to make any payment hereunder following written notice to Kana describing the alleged failure with reasonable specificity and a 30-day opportunity to cure such alleged failure following receipt of such notice, then (i) Polaris shall be entitled to (a) maintain all the benefits (including any amount previously collected) provided to Polaris under this Agreement, (b) selectively at any time terminate any or all of Sections 2.1, 2.2, 3.1, 7, 8.1(a) and 8.4 and Article IV, (c) collect all fees and costs (including attorneys’ fees and costs) incurred by Polaris in attempting to effect collection and (d) collect interest on any unpaid amounts at the maximum rate allowed by law from the specified date of non-payment through the date of payment and (ii) the Kana shall be deemed to have waived its ability to assert the provisions related to its ability to bring any actions in response to any claim of related to or arising from the infringement of any Polaris Patents as set forth in Section 2.3, 2.4, and 3.3 (and all of the foregoing rights shall be in addition to any other rights Polaris may have under this Agreement or at law or equity).
5.2. All taxes imposed as a result of the existence of this Agreement or the performance hereunder shall be paid by the Party required to do so by applicable law.
ARTICLE VI.
ARTICLE VII.
ASSIGNMENT AND CHANGE OF CONTROL
7.2. In the event Kana or a Kana Related Company sells or transfers all or a portion of its assets or business to which the licenses granted in Section 3.1 relate to another Entity (“Spin-Off Entity”), and such Spin-Off Entity agrees in writing to the terms set forth in this Agreement, then this Agreement may be assigned to such Spin-Off Entity and the licenses granted herein will continue in effect with regard to the sold or transferred portion, but will not extend to any products, methods or services of any such Spin-Off Entity (other than the Kana Products otherwise covered under this Agreement, and future versions and improvements thereof). If this Agreement is assigned to the Spin-Off Entity, the Agreement will no longer provide any benefit to Kana or any Kana Related Company. Notwithstanding any assignment of this Agreement to a Spin-Off Entity, or any subsequent assignment of this Agreement by the Spin-Off Entity, Kana shall not be relieved of its obligation to make the payments to Polaris set forth in Section 5.1 above.
7.3. Except as set forth in Sections 7.1 and 7.2, this Agreement may not be assigned by Kana without the prior written permission of Polaris, which permission shall not be unreasonably withheld or delayed, and any attempt to assign without such permission will be void. Polaris may not assign or transfer this Agreement to any Third Party.
7.4. Polaris, on behalf of itself and the Polaris Related Companies, covenants and agrees that it and they shall not assign or otherwise transfer any Polaris Patents to any Third Party unless such Third Party shall first agree, in a binding and legally enforceable document, to be bound by the licenses and covenants applicable to such Patents pursuant to this Agreement.
ARTICLE VIII.
8.1. Representations and Warranties.
(a) Polaris, on behalf of itself and the Polaris Related Companies, represents and warrants as of the Effective Date that (i) Polaris or the Polaris Related Companies
own the Polaris Patents, and has the right to grant the releases, covenants and licenses of the full scope set forth herein without payment of any consideration to any Polaris Related Company or Third Party, (ii) to the knowledge of Polaris and the Polaris Related Companies, the Polaris Patents are valid and enforceable, and (iii) neither Polaris or any of the Polaris Related Companies has assigned or otherwise transferred to any other Entity any rights to any causes of action, damages or other remedies, or any Polaris Patents, claims, counterclaims or defenses, relating to the Litigation or any Polaris Patent.
(b) Nothing contained in this Agreement shall be construed as:
(i) a warranty or representation by either Party that any manufacture, sale, use or other disposition of products by the other party has been or will be free from infringement of any Patents;
(ii) an agreement by either Party to bring or prosecute actions or suits against third parties for infringement, or conferring any right to the other Party to bring or prosecute actions or suits against third parties for infringement;
(iii) conferring any right to the other Party to use in advertising, publicity, or otherwise, any trademark, trade name or names of either Party, or any contraction, abbreviation or simulation thereof without the prior written consent of the other Party;
(iv) conferring by implication, estoppel or otherwise, upon either Party, any right or license under other Patents except for the rights and licenses expressly granted hereunder; or
(v) an obligation to furnish any technical information or know-how.
(a) with the prior written consent of the other Party;
(b) to any governmental body having jurisdiction and specifically requiring such disclosure;
(c) in response to a valid subpoena or as otherwise may be required by law;
(d) for the purposes of disclosure in connection with the Securities and Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, and any other reports filed with the Securities and Exchange Commission, or any other filings, reports or disclosures that may be required under applicable laws or regulations, or rules of any stock exchange or the NASDAQ national market or the OTC market;
(e) to a party’s accountants, legal counsel, tax advisors and other financial, business and legal advisors, subject to obligations of confidentiality and/or privilege;
(f) as required during the course of litigation and subject to protective order; provided however, that any production under a protective order would be protected under an “Attorneys Eyes Only” or higher confidentiality designation; and
(g) in confidence, in connection with a proposed merger, financing, acquisition, or similar transaction;
provided, however, that prior to any such disclosure pursuant to paragraph (c) hereof, the Party making the disclosure shall notify the other Party and, that prior to any such disclosure pursuant to paragraphs (c) and/or (g) hereof, the Party making the disclosure shall take reasonable actions in an effort to minimize the nature and extent of such disclosure.
If to Polaris to: | ||
c/o | Managing Member | |
Polaris IP, LLC | ||
000 X Xxxxx Xxxxxxxxxx Xxxxxx | ||
Xxxxxxxx, Xxxxx 00000 | ||
Facsimile: (000) 000-0000 | ||
With simultaneous copy to: | ||
General Counsel | ||
Intellectual Property Navigation Group, LLC | ||
000 X Xxxxx Xxxxxxxxxx Xxxxxx | ||
Xxxxxxxx, Xxxxx 00000 | ||
Facsimile: 000-000-0000 | ||
If to Kana to: | ||
c/o | General Counsel | |
Kana Software, Inc. | ||
000 Xxxxxxxxxxxx Xxxxx | ||
Xxxxx Xxxx, XX 00000 | ||
Facsimile: 000-000-0000 | ||
With simultaneous copy to: | ||
Xxxxxx X. Xxx, Esq. | ||
Fenwick & West LLP | ||
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx | ||
Xxx Xxxxxxxxx, XX 00000 | ||
Facsimile: 415-281-1350 |
Such notices shall be deemed to have been served when received by addressee. Either Party may give written notice of a change of address and, after notice of such change has been received, any notice or request shall thereafter be given to such Party as above provided at such changed address.
8.5. Governing Law. This Agreement and matters connected with the performance thereof shall be construed, interpreted, applied and governed in all respects in accordance with the laws of the United States of America and the State of Texas, without reference to conflict of laws principles.
8.6. Jurisdiction. Polaris and Kana agree (a) that all disputes and litigation regarding this Agreement, its construction and matters connected with its performance shall be subject to the exclusive jurisdiction of the state and federal courts in the Eastern District of Texas located in Marshall, Texas (the “Court”), and (b) to submit any disputes, matters of interpretation, or enforcement actions arising with respect to the subject matter of this Agreement exclusively to the Court. The Parties hereby waive any challenge to the jurisdiction or venue of the Court over these matters.
notice, Polaris shall (or shall cause the Polaris Related Company to) within thirty (30) days of receipt of such notice: (a) dismiss that portion of the lawsuit solely with respect to the activities of any such Kana Customer or Kana Vendor that are licensed, released, or subject to the covenants or other rights granted under the terms of this Agreement, and take any other actions necessary to come into compliance with Section 2.2; or (b) notify Kana that it needs more information; or (c) notify Kana of the reasons why Polaris believes that the Kana Customer or Kana Vendor is not covered by this Agreement. In the event Polaris needs more information or does not believe the Kana Customer or Kana Vendor is covered by this Agreement, then the Parties shall cooperate and negotiate in good faith for the remainder of the thirty (30) day period with regard reaching agreement as to whether the Kana Customer or Kana Vendor is covered by this Agreement. Kana shall not bring any action against Polaris or its Related Companies, as the case may be, for breach of this Agreement if such lawsuit is dismissed within such thirty (30) day period or the breach is otherwise resolved within such thirty (30) days pursuant to the terms of this Section 8.8.
POLARIS IP, LLC | KANA SOFTWARE, INC. | |||||||
By: | /s/ Xxxxx Xxxxxxxxxxx | By: | /s/ Xxx Xxxxx | |||||
Name: | Xxxxx Xxxxxxxxxxx | Name: | Xxx Xxxxx | |||||
Title: | Managing Member | Title: | Chief Administrative Officer |