LICENSE, DISTRIBUTION, AND ASSET PURCHASE AGREEMENT
This License, Distribution, and Asset Purchase Agreement (the "Agreement") is
made this 6 day of October, 1999 (the "Effective Date"), by and among FWB
SOFTWARE, LLC, a California limited liability corporation with its principal
offices located at 00000 Xxx Xxxx Xxxxx, Xxxxx X-0, Xxxxxx, Xxxxxxxxxx 00000
("FWB"), INSIGNIA SOLUTIONS, INC., a Delaware corporation with its principal
offices located at 00000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("Insignia
US"), and INSIGNIA SOLUTIONS, PLC, an English public company with its principal
offices located at 00000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("Insignia
UK"; together, Insignia US and Insignia UK are the "Insignia Group").
R E C I T A L S:
A. Insignia US, as licensee of Insignia UK, holds the rights to certain
Intellectual Property and proprietary rights used in connection with the
computer software programs designed and marketed by Insignia US under the
tradenames/trademarks "SoftWindows" and "RealPC", including all logos,
trademarks, trade secrets, source code, object code, executable programs, end
user documentation, patents, copyrights, tradenames, service marks, and internet
domain names, whether issued or pending, registered or unregistered. The
preceding SPECIFICALLY EXCLUDES any proprietary rights in the tradename
"SoftWindows," and the source code and object code of Windows and DOS, both of
which Insignia US presently employs pursuant to licenses from Microsoft and IBM,
respectively.
B. Insignia US desires to grant to FWB a license to all of Insignia US's right,
title and interest in SoftWindows, and FWB desires to accept such license, upon
the terms and conditions set forth below.
C. Insignia US wishes to appoint FWB as its sub-contracting manufacturer and
distributor of RealPC, and FWB wishes to serve as Insignia US's manufacturer and
distributor of RealPC, on the terms and conditions set forth herein.
D. The parties intend that Insignia UK will transfer all of its right, title,
and interest in the Intellectual Property to FWB, on the terms and conditions
set forth herein if and when certain conditions are fulfilled by FWB.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS
1.1. "DOS License" means the currently effective license between IBM
and Insignia US granting the latter certain manufacturing and
distribution rights relating to DOS.
1.2. "Embedded Market" means the range of consumer, industrial and
commercial applications whereby computer functionality -- from the
most basic to complex -- is incorporated within hardware and
software devices that are not traditional desktop or laptop
computers.
1.3. "Emulation Market" means consumer and commercial purchasers of
technology through which the functionality of a computer processor
is mimicked by software so that PC-based software applications may
be run on non-PC machines, such as the Mac or UNIX product lines.
1.4. "FWB Products and Services" means the software products and
services that are reasonably related to or derived from the
Intellectual Property.
1.5. "Gross Profit" means, for each applicable period relating to the
Payments, an amount equal to the net sales and services related to
and derived from the Intellectual Property, determined in
accordance with Generally Accepted Accounting Principles, and net
of (i) all royalties due by FWB to third parties; (ii) direct
product costs such as freight, packaging, product manuals; and
(iii) all returns, allowances, and discounts relating to the
Intellectual Property. Indirect costs and expenses relating to
general administration, sales, marketing, and support are
expressly excluded from the calculation of Gross Profit.
1.6. "Intellectual Property" means the all Intellectual Property Rights
held respectively by Insignia UK and Insignia US in RealPC and
SoftWindows, and any derivative works thereof.
1.7. "Intellectual Property Rights" means all worldwide statutory and
common law rights associated solely with (i) patents and patent
applications; (ii) works of authorship including copyrights,
copyright applications, copyright registrations, trademarks,
Internet domain names and "moral rights"; (iii) the protection of
trade and industrial secrets and confidential information; and
(iv) divisions,
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continuations, renewals, and re-issuances of the foregoing now
existing, acquired or devised in the future.
1.8. "JEODE" means the current tradename associated with the
proprietary implementation of virtual machine technology, related
software development tools and services owned by Insignia UK and
developed for the Embedded Market.
1.9. "Microsoft License" means the currently effective license between
Microsoft and Insignia US granting the latter certain
manufacturing and distribution rights relating to the Windows
product line and the SoftWindows tradename.
1.10. "RealPC" means the software application for the Emulation Market
whereby DOS-based applications may be run on non-PC machines. The
RealPC product contains components developed and owned by Insignia
and from IBM per the DOS license.
1.11. "SGI" means the company Silicon Graphics, Inc., its successors and
assigns.
1.12. "SoftWindows" means the software application for the Emulation
Market whereby Windows-based applications may be run on non-PC
machines. The SoftWindows product contains components developed
and owned by Insignia and from Microsoft per the Microsoft
License. Only the Insignia component is intended in any references
to the SoftWindows product. SoftWindows is also a trademark of
Microsoft Corporation.
2. LICENSE RIGHTS FOR SOFTWINDOWS
2.1. Grant of License. Subject to the terms and conditions of this
Agreement and to the extent of Insignia US's Intellectual Property
Rights, Insignia US hereby grants to FWB, a perpetual,
non-transferable, exclusive, worldwide license to modify, use,
publicly display, reproduce, distribute through its normal
distribution channels, and sublicense SoftWindows and derivative
works solely within the Emulation Market.
2.2. SGI Exception. The scope of the preceding license grant expressly
excludes the platform of Silicon Graphics work stations, which
distribution rights have been previously exclusively granted by
Insignia US to SGI.
2.3. No Source Code Transfers to Third Parties. FWB shall at no time
during the term of the license grant in Section 2.1 distribute,
sublicense or otherwise transfer or disclose to any third party
SoftWindows, any component, or derivative work thereof in source
code form.
2.4. License Term. The SoftWindows license grant in this Section 2
shall commence on the Effective Date and shall continue in
perpetuity unless terminated automatically upon consummation of
the purchase and transfer of the Intellectual Property on the
terms and conditions set forth in Section 8.
3. INTERIM MANUFACTURING AND DISTRIBUTION RIGHTS FOR REALPC
3.1. Manufacturing Rights. Insignia US, to the extent of its
Intellectual Property Rights in RealPC and pursuant to the DOS
License, hereby appoints FWB as its exclusive manufacturer for
RealPC and shall provide FWB with a Gold Master CD of RealPC for
use within the scope of this Agreement.
3.2. Distribution Rights. Subject to the terms and conditions of this
Agreement and during the term of FWB's manufacturing rights under
Section 3.1, Insignia US hereby appoints FWB as its exclusive,
worldwide distributor of RealPC with respect to all potential
customers whether at the retail or wholesale level, such rights
being non-transferable.
3.3. Term and Manufacturing Limit. The term of the preceding grant
shall commence on the Effective Date and shall continue until the
licenses acquired by Insignia US pursuant to the DOS License and
remaining as of the Effective Date have all been manufactured. The
number of remaining licenses, as of the Effective Date, is
indicated at Schedule 3.1 and represents the maximum number of
copies of RealPC that FWB may manufacture pursuant to this Section
3.1.
4. LICENSE RIGHTS FOR REALPC
4.1. Grant of License. Subject to the terms and conditions of this
Agreement and to the extent of Insignia US's Intellectual Property
Rights, Insignia US hereby grants to FWB, a perpetual,
non-transferable, exclusive, worldwide license to modify, use,
publicly display, reproduce, distribute through its normal
distribution channels, and sublicense RealPC and derivative works
solely within the Emulation Market.
4.2. No Source Code Transfers to Third Parties. FWB shall at no time
during the term of the license grant in Section 4.1 distribute,
sublicense or otherwise transfer or disclose to any third party
RealPC, any component, or derivative work thereof in source code
form.
License Term. The RealPC license grant in this Section 4 shall commence
automatically upon termination of the manufacturing and distribution rights of
Section 3, and shall continue in perpetuity unless terminated automatically
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upon consummation of the purchase and transfer of the Intellectual Property on
the terms and conditions set forth in Section 8.
5. TRADEMARK LICENSE
5.1. Grant of Trademark License. Subject to the terms and conditions
of this Agreement and to the extent of its Intellectual Property
Rights, Insignia US hereby grants to FWB a worldwide,
nonexclusive, non-transferable, royalty-free, license (the
"Trademark License") during the term indicated in Section 5.4, to
use the Licensed Trademarks (defined below) solely in connection
with FWB's marketing, sale and promotion of the FWB Products and
Services.
5.2. Use of Licensed Trademarks. Whenever FWB displays a trademark
owned by Insignia US and identified on Schedule 5.2 (the "Licensed
Trademarks"), FWB shall display it in a size and style less
prominent than, and separate from, FWB's own name, marks or logos,
and accompanied by a -TM- symbol. FWB shall, if commercially
reasonable, legibly display the following trademark legend, which
may be presented in "mouseprint" but must be large enough to be
legible, on all media in or on which FWB displays the Licensed
Trademark(s): "Insignia, RealPC, and all associated trademarks and
logos are trademarks or registered trademarks of Insignia
Solutions, Inc. in the U.S. and other countries."
5.3. Quality Control. FWB shall maintain the quality of the
products and services with which FWB uses the Licensed
Trademarks and the Intellectual Property at a level that meets
or exceeds the quality standards of the industry with
respect to similar products. During the term of the Trademark
License, FWB agrees to provide Insignia US with a
royalty-free copy of any and all products produced by FWB
bearing any Licensed Trademark(s) or using the Intellectual
Property within thirty (30) days prior to first customer
shipment of such product. If within fifteen (15) business days
of receipt of such FWB Product, Insignia US has not informed
FWB that the quality of such product fails to meet Insignia US's
standards, FWB may reasonably assume that the FWB Product is
suitable for distribution pursuant to the terms of this
Agreement. If the FWB Product does not meet or exceed Insignia
US's standards, and Insignia US so notifies FWB in writing
within fifteen (15) business days of receipt, FWB shall use
commercially reasonable efforts to modify such product so
that such standards are met and shall not distribute such FWB
Product with any Licensed Trademark until such standards are met.
5.4. The Trademark License shall commence as of the Effective Date, and
shall terminate concurrently with the termination of the license
or distribution rights granted in Sections 2, 3, and 4, or as
otherwise agreed upon in writing by the parties hereto.
6. PAYMENT OBLIGATIONS
6.1. Initial Fee. In consideration for the grants in Sections 2, 3, 4
and 8, FWB shall deliver to Insignia US upon execution of this
Agreement the non-refundable sum of Twenty-Five Thousand Dollars
($25,000) in immediately available funds, via wire transfer to an
account specified by Insignia US (the "Initial Fee").
6.2. Quarterly Payments.
6.2.1. During the term of any grant under Section 2, 3 or 4, and as
additional consideration for the grants in Sections 2, 3, and
4, FWB shall make non-refundable quarterly payments
("Quarterly Payments") to Insignia US in accordance with
Section 6.2.4 and based upon the annual, cumulative Gross
Profit derived from the FWB Products and Services for the
relevant period.
6.2.2. The Quarterly Payments shall be computed as follows:
6.2.2.1. Ten Percent (10%) of the amount by which annual Gross
Profits for the applicable period exceed $0 but are less
than, or equal to, $500,000; plus
6.2.2.2. Twenty Percent (20%) of the amount by which annual Gross
Profits for the applicable period exceed $500,000 but are
less than, or equal to, $1,000,000; plus
6.2.2.3. Thirty Percent (30%) of the amount by which annual Gross
Profits for the applicable period exceed $1,000,000.
6.2.3. Quarterly Payments shall be calculated on a cumulative,
calendar basis and shall be paid on a quarterly basis. Thus,
for purposes of demonstrating the calculation, if Gross
Profits for the first quarter of a calendar year equal
$1,200,000, then the Quarterly Payment for that quarter
will equal ten percent of the first $500,000 (or $50,000)
plus twenty percent of the next $500,000 (or $100,000),
plus thirty percent of the remainder ($60,000) for a total
Quarterly Payment of $210,000 for that period. If Gross
Profits for the second quarter amounted to $1,000,000, then
the cumulative Gross Profits would equal $2,200,000 and the
Quarterly Payment would be payments owed on $2,200,000
(e.g., $50,000 plus $100,000 plus $400,000 equals $550,000)
minus previous Quarterly Payments during the calendar
year. Following any periodic determination of cumulative
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Gross Profits, any excess Quarterly Payments shall be credited
against future Quarterly Payments only.
6.2.4. Quarterly Payments due to Insignia US pursuant to this Section
6 shall be made in immediately available funds, and shall be
paid to Insignia US on an quarterly basis concurrent with
delivery of the Quarterly Schedule pursuant to Section 6.3.
The first Quarterly Payment shall be calculated based upon
Gross Profits derived from the FWB Products and Services
during the period from the Effective Date through March 31,
2000, only (the "Initial Period").
6.3. Preparation of Schedule. Beginning in March 2000, FWB shall
prepare and deliver to Insignia US within thirty (30) days of the
end of each calendar quarter (March, June, September and December)
a schedule setting forth a reasonably detailed calculation of
Gross Profits by FWB Product and Service with respect to the
calendar quarter just ended. The schedule delivered in April 2000
shall set forth a calculation of Gross Profits with respect to the
Initial Period.
6.4. Audit Rights. Insignia US may, no more frequently than once per
year, retain at its own expense an independent accounting firm
to audit FWB's relevant books and records for any previously
unaudited period(s) with respect to calculating Gross Profits. If
the determination of the accounting firm differs from that of FWB,
the parties shall negotiate in good faith for a period of ten (10)
business days to resolve any differences. Any resolution agreed to
in writing shall be final, conclusive and binding on FWB and
Insignia US with respect to the determination of Gross Profits for
such period. If the parties have agreed that there was a shortfall
in FWB's calculation of Gross Profits for any period, FWB shall
promptly pay to Insignia US the full amount of any underpayment.
If the calculation of Gross Profits by the accounting firm reveals
that the Gross Profits calculation by FWB for any quarter was
understated by five percent (5%) or more, FWB shall reimburse
Insignia US for all reasonable costs associated with the audit.
7. CUSTOMER SUPPORT
7.1. Commencing thirty (30) days after the Effective Date ("Customer
Support Assumption Date"), FWB shall assume responsibility for all
then-existing and future support obligations relating to the Mac
platform for the Intellectual Property (the "Support
Obligations"). UNIX support shall commence on an individual basis,
as each individual customer support agreement comes up for
renewal, such renewal to be forwarded by the Insignia Group to
FWB.
7.2. The Insignia Group shall promptly credit to FWB's Quarterly
Payments a pro-rata portion of any pre-paid fees received in
connection with services rendered, or to be rendered, by FWB
pursuant to the Support Obligations from and after the Effective
Date.
7.3. Between the Effective Date and the Customer Support Assumption
Date, the Insignia Group shall ensure that all existing support
obligations are assigned to FWB effective on the Customer Support
Assumption Date.
8. RIGHT TO PURCHASE INTELLECTUAL PROPERTY
8.1. Vesting of Right to Purchase. If and when the sum of the
Quarterly Payments made by FWB to Insignia US pursuant to
Section 6.2 equals Five Hundred and Fifty Thousand Dollars
($550,000) (the "Vesting Date"), FWB will have a vested interest
in acquiring all right, title and interest to all interests in the
Intellectual Property (without trademark rights to the Insignia
name and logo) held by Insignia UK, and Insignia UK will transfer
the same to FWB upon request. FWB may, at its sole discretion,
deliver such funds to Insignia US so that such funds plus any
previous Quarterly Payments equal Five Hundred and Fifty Thousand
Dollars ($550,000) thus accelerating the arrival of the Vesting
Date.
8.2. Purchase of Intellectual Property; Assumption of Liabilities. Upon
passage of the Vesting Date and upon request by FWB, Insignia UK
shall sell, transfer, assign and deliver unto FWB and its
successors and assigns forever, the Intellectual Property (without
trademark rights to the Insignia name and logo), and all
additional existing Support Obligations (the "Assumed
Liabilities"), and FWB will assume the Assumed Liabilities, and
purchase the Intellectual Property. There shall be no additional
consideration required for the transfer of the Intellectual
Property.
8.3. Taxes. FWB will pay all sales and use taxes and transfer taxes,
if any, applicable to the transfer of the Intellectual Property
provided for by this Section 8.
8.4. Transfer of Intellectual Property. Delivery of the source code and
object code comprising part of the Intellectual Property (the
"Code") shall be completed by transferring the Code via remote
telecommunications from Insignia UK's place of business to or
through FWB's computer system.
Page 4 of 14
8.5. Conditions to Obligations of FWB. The obligation of FWB to
consummate the purchase of the Intellectual Property and to assume
the Assumed Liabilities pursuant to this Agreement is subject to
the satisfaction of the following conditions, any of which may be
waived by FWB:
8.5.1. Representations and Warranties; Performance of Obligations.
The representations and warranties of each of Insignia UK
and Insignia US set forth in Section 11 hereof and in all
agreements, documents and instruments executed and delivered
pursuant hereto or in connection with the transfer of the
Intellectual Property and Assumed Liabilities to FWB (i) shall
have been and be true and correct in all material respects as
of the Effective Date and, except where the context otherwise
requires, (ii) as of the Vesting Date as though made on and as
of the Vesting Date. Each of Insignia US and Insignia UK shall
have performed in all material respects the agreements and
obligations necessary to be performed by it under this
Agreement prior to the Closing Date.
8.5.2. Certificates and Instruments of Transfer. The Insignia Group
shall have delivered to FWB the following:
8.5.2.1. possession of all documentation comprising part of, or
evidencing title to, the Intellectual Property,
provided that in no event shall FWB receive possession of
any tangible personal property, such as storage media, in
connection with the Code;
8.5.2.2. a Xxxx of Sale and Assignment and Assumption, executed by
Insignia UK;
8.5.2.3. a Trademark Assignment relating to RealPC, executed by
Insignia US; and
8.5.2.4. other documents required to be delivered by the Insignia
Group in order to effect the transactions contemplated
hereby, in form and substance reasonably satisfactory to
FWB and its counsel.
8.5.3. Microsoft License. FWB shall have entered into a license
agreement with Microsoft with respect to the Microsoft
component of SoftWindows.
8.5.4. DOS License. FWB shall have entered into a license agreement
with IBM with respect to the DOS component of RealPC.
8.5.5. Consents. The Insignia Group shall have obtained all necessary
consents required in connection with the transfer to FWB of
the Intellectual Property and Assumed Liabilities, and shall
have delivered to FWB evidence of all such consents.
8.6. Conditions of Obligations of the Insignia Group. The obligations
of each of Insignia UK and Insignia US to consummate the sale and
purchase contemplated by this Agreement are subject to the
satisfaction of the following conditions, any of which may be
waived by either Insignia US or Insignia UK:
8.6.1. Representations and Warranties; Performance of Obligations.
The representations and warranties of FWB set forth in Section
12 and in all agreements, documents and instruments executed
and delivered pursuant hereto or in connection with this
Agreement and the transfer of the Intellectual Property and
Assumed Liabilities shall have been and be true and correct in
all material respects as of (i) the Effective Date and (ii) as
of the Vesting Date as though made on and as of the Vesting
Date. FWB shall have performed in all material respects the
agreements and obligations necessary to be performed by it
under this Agreement prior to the Vesting Date.
8.6.2. Deliveries by FWB. FWB shall have delivered to Insignia US the
following:
8.6.2.1. the Initial Fee and all Quarterly Payments required
hereunder; and
8.6.2.2. the Xxxx of Sale and Assignment and Assumption, executed
by FWB.
9. CLOSING DATE AND TERMINATION OF AGREEMENT
9.1. Closing Date. The closing for the consummation of the purchase and
sale of the Intellectual Property contemplated by this Agreement
(the "Closing") shall, unless another date or place is agreed to
in writing by the parties, take place on or about the Vesting Date
(the "Closing Date") at a place to be determined by the parties.
9.2. Termination of Agreement. This Agreement may be terminated and
abandoned at any time prior to the Closing Date by mutual consent
of the parties, or by either party for material breach by the
other party.
9.3. Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.2, notice thereof shall be
promptly given by the terminating party to the other parties and
thereafter this Agreement shall forthwith become void, and there
shall be no liability or obligation on the part of Insignia US or
FWB or any of their respective affiliates except that nothing
herein will relieve any party from liability for any breach of any
representation, warranty, agreement or covenant herein or damages
resulting therefrom.
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9.4. Survival. Notwithstanding the termination of this Agreement,
the provisions of Sections 11 and 12 shall continue in effect
for a period of one (1) year.
10. INDEMNIFICATION
10.1. FWB's Indemnity Obligation. FWB hereby agrees to defend and fully
indemnify the Insignia Group against any legal proceeding brought
against it to the extent such claim arises from (i) a breach by
FWB of any of the covenants, representations and warranties
contained herein, or (ii) FWB's use of the Intellectual Property
in connection with the marketing or distribution of FWB Products
and Services, other than a claim described in Section 10.2 below.
FWB will pay all damages, costs and fees awarded by a court of
competent jurisdiction, or such settlement amount negotiated by
FWB, attributable to such claim.
10.2. Insignia's Indemnity Obligation. The Insignia Group will defend
and fully indemnify FWB against any legal proceeding brought
against FWB, to the extent such claim (i) arises from a breach by
the Insignia Group of any of the covenants, representations and
warranties contained herein, or (ii) is based on a claim that
FWB's authorized use of the Intellectual Property is an
infringement of a third party Intellectual Property Right, and
will pay all damages costs and fees awarded by a court of
competent jurisdiction, or such settlement amount negotiated by
the Insignia Group attributable to such claim. The foregoing
shall not apply to any claims of intellectual property
infringement based upon the combination of the Intellectual
Property with code, technology or documentation from other
sources.
10.3. Prerequisites. Under Sections 10.2 above, FWB must, and under
Section 10.1 above, the Insignia Group must: (i) provide notice of
the claim promptly to the party providing an indemnity; (ii) give
the indemnifying party sole control of the defense and settlement
of the claim; (iii) provide the indemnifying party, at
indemnifying party's expense, all available information,
assistance and authority to defend; and (iv) not have compromised
or settled such claim or proceeding without the indemnifying
party's prior written consent.
10.4. Additional Remedies. Should the Intellectual Property become, or
in the opinion of the Insignia Group be likely to become, the
subject of a claim of infringement for which indemnity is provided
above pursuant to Section 10.2, the Insignia Group may, at its
sole option, attempt to procure on reasonable terms the rights
necessary for FWB to exercise its license rights under this
Agreement with respect to the infringing items, or to modify the
infringing items so that they are no longer infringing without
substantially impairing their function or performance. If the
Insignia Group is unable to do the foregoing after reasonable
efforts, then the Insignia Group may send a notice of such
inability to FWB together with a refund of any Quarterly Payments
received from FWB for the infringing items and terminate this
Agreement.
10.5. Indemnification Exclusive. Absent common law fraud or intentional
misrepresentation, the indemnification provisions of this Section
10 shall be the exclusive remedy for breach of any representation
or warranty contained in this Agreement.
11. REPRESENTATIONS AND WARRANTIES OF THE INSIGNIA GROUP
The Insignia Group hereby represents and warrants to FWB, as of the Effective
Date or as otherwise set forth in such representation or schedule hereto, as
follows:
11.1. Organization. Insignia US is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and
has the requisite power and authority to conduct its business as
it is presently being conducted and to own and lease its
properties and assets. Insignia UK is duly incorporated, validly
existing and in good standing under the laws of the England and
has the requisite power and authority to conduct its business as
it is presently being conducted and to own and lease its
properties and assets
11.2. Authorization. The execution and delivery of this Agreement by
each of Insignia US and Insignia UK and the performance of each
of their obligations hereunder have been duly authorized by all
requisite action on the part of each, and no other action or
approval is necessary for the execution, delivery or performance
of this Agreement by the Insignia Group. The Insignia Group has
full right, power, authority and capacity to execute, deliver and
perform this Agreement and such other agreements and instruments
as are contemplated hereby. This Agreement has been duly executed
and delivered by Insignia and is a valid and binding obligation of
the Insignia Group, enforceable in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now
or hereafter in effect, relating to or limiting creditors' rights
generally and (b) general principles of equity (whether considered
in an action in equity or at law).
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11.3. No Contingent Obligations. The Insignia Group has no legal
obligation, absolute or contingent, to any other person to sell or
license any of the Intellectual Property (other than as
contemplated in the ordinary course of business), and has not
taken any steps to enter into any agreement or arrangement, whether
written or verbal, with respect thereto.
11.4. Title to Intellectual Property. Except as described in connection
with the Microsoft License and DOS License, Insignia UK and/or its
affiliated companies has good and marketable title to all of the
Intellectual Property free and clear of all Encumbrances of any
nature whatsoever. To the knowledge of Insignia UK, no right of
Insignia UK in the Intellectual Property (i) conflicts with,
infringes upon or otherwise violates any rights of others, (ii) is
subject to any pending or overtly threatened litigation or other
adverse claims or infringement by any other party, or (iii) is
based upon proprietary information of others that has been
illegally obtained. There has been no written, or to the knowledge
of Insignia UK, other claim of infringement by Insignia UK of any
domestic or foreign patents, trademarks, service marks, copyrights,
or any other intellectual property of any other party.
11.5. Title to Licensed Trademarks. Insignia US and/or its affiliated
companies has good and marketable title to all of the Licensed
Trademarks free and clear of all Encumbrances of any nature
whatsoever. To the knowledge of Insignia US, no right of Insignia
US in the Licensed Trademarks (i) conflicts with, infringes upon
or otherwise violates any rights of others, (ii) is subject to any
pending or overtly threatened litigation or other adverse claims or
infringement by any other party, or (iii) is based upon proprietary
information of others that has been illegally obtained. There has
been no written, or to the knowledge of the Insignia Group, other
claim of infringement by Insignia US of any domestic or foreign
patents, trademarks, service marks, copyrights, or any other
intellectual property of any other party.
11.6. Intellectual Property Warranty. The Insignia Group hereby warrants
that, to the extent of the Insignia Group's Intellectual Property
Rights, the Intellectual Property that is the subject of this
Agreement, as delivered to FWB, shall operate substantially in
accordance with the end user documentation accompanying SoftWindows
and RealPC, respectively. The Insignia Group hereby expressly
disclaims to the full extent allowed by law all terms, warranties,
and conditions, including, without limitation, that the
Intellectual Property is free of defects, merchantable,
satisfactory, or fit for a particular purpose. Insignia does not
warrant that the Intellectual Property will meet FWB's requirements
or that its use will be uninterrupted or error free. This
disclaimer of warranty constitutes an essential part of this
Agreement, and no use of the Intellectual Property is authorized
except subject to this disclaimer.
11.7. Proceedings; No Violations; Permits. To the knowledge of the
Insignia Group, there is no suit, action, or proceeding threatened
against or affecting either company that is likely to prevent or
materially delay the consummation of the transactions contemplated
by this Agreement. To the knowledge of the Insignia Group, it is in
violation of any applicable law, statute, order, rule, or
regulation promulgated, or judgment entered against either Insignia
UK or Insignia US, in a manner which is reasonably likely to
materially adversely affect the business or operations of either,
or delay the consummation of the transactions contemplated by this
Agreement. The Insignia Group holds all consents, licenses,
permits, grants or other authorizations required to permit
operation of its assets and conduct of its business as it is
presently being conducted.
11.8. No Conflict. Neither the execution and delivery of this Agreement
by the Insignia Group nor the consummation of the transactions
contemplated hereunder nor the fulfillment by the Insignia Group
of any of its terms will:
11.8.1. conflict with or result in a breach by either Insignia US or
Insignia UK of, or constitute a default under, or create an
event that, with the giving of notice or the lapse of time, or
both, would be a default under or breach of, or give a right
to terminate or cancel under, any of the terms, conditions or
provisions of (i) any indenture, mortgage, lease, deed of
trust, pledge, loan or credit agreement involving $50,000 or
more, or any other material contract, arrangement or agreement
to which either Insignia US or Insignia UK is a party or to
which any material portion of the assets of Insignia US or
Insignia UK is subject, (ii) the Certificate of Incorporation
or By-Laws of Insignia US, or (iii) any judgment, order, writ,
injunction, decree or demand of any governmental entity which
materially affects either Insignia US or Insignia UK, or is
likely to adversely affect the ability of either Insignia US
or Insignia UK to conduct its business (as conducted prior to
the Closing) or own or convey its assets;
Page 7 of 14
11.8.2. result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any material assets
of Insignia US or which materially affects Insignia US's
ability to conduct its business as conducted prior to the date
of this Agreement; or
11.8.3. cause a loss or adverse modification of any permit, license,
or other authorization granted by a governmental entity to or
otherwise held by either Insignia US or Insignia UK, except
for any such loss or adverse modification which would not,
individually or in the aggregate, result in a material adverse
effect.
11.9. No Consents. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental entity
or any other party is required to be made or obtained by the
Insignia Group in connection with the execution, delivery and
performance by the Insignia Group of this Agreement and the
consummation of the transactions contemplated hereby, including the
transfer to FWB of the Intellectual Property.
11.10. Customer Support Receipts. From the Effective Date, the Insignia
Group shall forward to FWB any and all sums received for Customer
Support relating to the Intellectual Property to be provided by
FWB after the Effective Date.
12. REPRESENTATIONS AND WARRANTIES OF FWB
FWB hereby represents and warrants to the Insignia Group as follows:
12.1. Organization. FWB is a duly organized limited liability company,
validly existing and in good standing under the laws of the State
of California and has the requisite power and authority to conduct
its business as it is presently being conducted and to own and
lease its properties and assets.
12.2. Authorization. The execution and delivery of this Agreement by FWB
and the performance of its obligations hereunder have been duly
authorized by all requisite action on the part of FWB and its
members, and no other action by FWB is necessary for the execution,
delivery or performance of this Agreement by FWB. This Agreement
has been duly executed and delivered by FWB, and is a valid and is
a valid and binding obligation of FWB, enforceable against it in
accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium
or other similar laws, now or hereafter in effect, relating to or
limiting creditors' rights generally, and (b) general principles
of equity (whether considered in an action in equity or at law).
12.3. No Conflict. Neither the execution and delivery of this Agreement
by FWB nor the consummation of the transactions contemplated
hereunder nor the fulfillment by FWB of any of its terms will
violate, conflict with or result in a breach by FWB of, or
constitute a default by it under, or create an event that, with
the giving of notice or the lapse of time, or both, would be a
default under or breach of, any of the terms, conditions or
provisions of (i) any indenture, mortgage, lease, deed of trust,
pledge, loan or credit agreement or any other material contract,
arrangement or agreement to which FWB is a party or to which a
material portion of the assets of FWB is subject, (ii) the articles
of organization or operating agreement of FWB, (iii) any law or
regulation applicable to FWB, or (iv) any judgment, order, writ,
injunction, decree or demand of any governmental entity which
materially affects FWB or which materially affects the ability of
FWB to conduct its business.
13. COVENANTS
13.1. Further Assurances. Each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions
contemplated by this Agreement.
13.2. Termination of Microsoft License. Insignia US shall terminate the
Microsoft License on or prior to October 31, 1999.
13.3. Sublicense of the Intellectual Property. Following any sale and
transfer of the Intellectual Property to FWB pursuant to this
Agreement, the Insignia Group shall have a perpetual, transferable,
royalty-free license to use, modify, create derivative works,
reproduce, distribute, license, sublicense, and publicly display
all code comprising the Intellectual Property solely within the
Embedded Market. Furthermore, FWB affirms that neither FWB nor
any party to whom FWB might license or transfer FWB's rights in
the Intellectual Property will ever make, directly or indirectly,
any claim or assertion of any infringement or misappropriation with
respect to the Intellectual Property and any product or service
that Insignia, any Insignia licensee, or subsequent transferee of
any Intellectual Property Right Insignia may hold in its
then-current technology.
13.4. Non-Competition.
13.4.1. Non-Competition by the Insignia Group. During the term of
this Agreement and for a period of five (5) years following,
neither Insignia US nor Insignia UK nor any of their
respective
Page 8 of 14
transferees shall directly compete with FWB in the Emulation
Market. This covenant shall not apply to the ownership by
Insignia US or Insignia UK of five percent (5%) or less of
the outstanding voting securities of any corporation or other
entity which has its securities listed on a national
securities exchange or on the Nasdaq Stock Market, and shall
not be interpreted to prevent Insignia US or Insignia UK from
entering into any license, merger, joint venture or other
agreements with any other party who directly competes with
FWB in the Emulation Market, provided that any competing
product created as a result of such license, merger, or joint
venture does not incorporate the Intellectual Property, or any
improvements thereto.
13.4.2. Non-Competition by FWB. During the term of this Agreement and
for a period of five (5) years following, neither FWB nor any
transferee shall use, or allow any third party to use, the
Intellectual Property in order to develop and market new
products or services that directly compete with any products
or services in the Embedded Market. This covenant shall not
apply to the ownership by FWB of five percent (5%) or less of
the outstanding voting securities of any corporation or other
entity which has its securities listed on a national
securities exchange or on the Nasdaq Stock Market, and shall
not be interpreted to prevent FWB from entering into any
license, merger, joint venture or other agreements with any
other party who directly competes with Insignia US or Insignia
UK in the Embedded Market, provided that any competing product
created as a result of such license, merger, or joint venture
does not incorporate any of the Intellectual Property, or any
improvements thereto.
13.4.3. Scope of Non-Compete. The covenants contained in this
Section 13 shall apply to the entire world. The parties have
agreed that it is reasonable to have the provisions of this
Section 13 apply to the entire world for various reasons,
including, without limitation, that (i) the Insignia Group
currently sells and distributes their products and related
services to parties in numerous countries and after the
closing of the transactions contemplated by this Agreement,
the Insignia Group shall continue to sell and distribute their
products throughout all of the world, and (ii) FWB intends to
sell and distribute the FWB Products and Services, and any
product based upon or derived from the Intellectual Property,
throughout all of the world.
14. MISCELLANEOUS
14.1. Expenses. Each of FWB and Insignia US shall bear their own
respective expenses incurred in connection with the
preparation and negotiation of this Agreement and all related
ancillary documents, and in connection with the consummation
of the transactions contemplated by this Agreement.
14.2. Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto and the other documents, agreements and
instruments executed and delivered pursuant to this Agreement,
contains the entire agreement between the parties with respect
to the matters provided therein, and supersedes any previous
agreements and understandings between the parties with respect
to those matters.
14.3. Governing Law. This agreement shall be governed by and construed
in accordance with the laws of the State of California applicable
to such agreements. Any action, suit or other proceeding initiated
by Insignia US, Insignia UK or FWB against any other party under
or in connection with this Agreement may be brought in any Federal
or state court in the State of California, as the party bringing
such action, suit or proceeding shall elect, having jurisdiction
over the subject matter thereof. The parties hereby submit
themselves to the jurisdiction of any such court and agree that
service of process on them in any such action, suit or proceeding
may be effected by the means by which notices are to be given to
it under this Agreement.
14.4. Headings. The Section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this agreement.
14.5. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (a)
delivered personally or (b) sent by registered or certified mail,
postage prepaid, or (c) sent by overnight courier with a nationally
recognized courier, or (d) via facsimile confirmed in writing in
any of the foregoing manners, as follows:
If to Insignia: Insignia Solutions, Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
Page 9 of 14
with a copy to: Insignia Solutions, Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
If to FWB: FWB Software, LLC
00000 Xxx Xxxx Xxxxx
Xxxxx X0
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
with a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If sent by mail, notice shall be considered delivered five (5) business days
after the date of mailing, and if sent by any other means set forth above,
notice shall be considered delivered upon receipt thereof. Any party may by
notice to the other parties change the address to which notice or other
communications to it are to be delivered or mailed.
14.6. Assignability. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors
and permitted assigns. Notwithstanding the foregoing, this
Agreement shall not be assignable by any party without the written
consent of the other parties, which consent shall not be
unreasonably withheld, and any such purported assignment by any
party without such consent shall be void.
14.7. Waivers and Amendments. Any waiver of any term or condition of
this Agreement, or any amendment or supplementation of this
Agreement, shall be effective only if in writing and signed by the
parties hereto. A waiver of any breach or failure to enforce any
of the terms or conditions of this Agreement shall not in any way
affect, limit or waive a party's rights hereunder at any time to
enforce strict compliance thereafter with every term or condition
of this Agreement.
14.8. Public Announcements. The parties agree that they shall issue a
mutual announcement relating to this transaction no later than one
(1) business day prior to Insignia's earnings release, presently
scheduled for October 20, 1999.
14.9. Severability. If any term or provision of this Agreement shall, in
any jurisdiction, be invalid or unenforceable, such term or
provision shall be ineffective as to such jurisdiction to the
extent of such invalidity or unenforceability without invalidating
or rendering unenforceable such term or provision in any other
jurisdiction, or affecting any other provision of this Agreement.
14.10. Arbitration. With the exception of any matter involving a request
for injunctive relief, any dispute regarding the validity, the
terms or any aspect of this Agreement, or any act which allegedly
has or would violate any provision of this Agreement, will be
submitted to binding arbitration and shall be administered by the
JAMS/Endispute, Inc. ("JAMS") or the American Arbitration
Association ("AAA"), which shall be the exclusive remedy for such
claim or dispute. The selection of JAMS or AAA will be at the
option of the claimant, and the matter shall be conducted in
accordance with the rules for commercial arbitration then in
effect for the tribunal selected. The arbitrator shall be appointed
by the arbitration body and shall be a retired judge or attorney
licensed to practice law in California having more than five years
of substantial experience in litigation of similar disputes. Unless
the parties otherwise agree, the arbitrator shall apply the
California Evidence Code to proceedings and the substantive
California and federal law applicable to the claim asserted, as
though the matter were heard in the courts of those jurisdictions
located in the State of California. The arbitrator shall not have
the power to commit errors of law or legal reasoning, and the award
may be vacated pursuant to California Code of Civil Procedure
Sections 1286.2 or 1286.6 for any such error. The arbitration shall
be conducted in Orange County, California, at a site to be
determined by the arbitrator. Unless specifically awarded by the
arbitrator, each party shall bear the cost of its own attorneys'
fees and expenses.
Page 10 of 14
14.11. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together
shall constitute but one agreement. Facsimile signatures shall be
treated as if they were originals.
[SIGNATURES ON FOLLOWING PAGE]
Page 11 of 14
IN WITNESS WHEREOF, authorized officers of the parties hereto have
duly executed this License, Distribution, and Asset Purchase Agreement as of
the Effective Date.
On behalf of:
Insignia Solutions, Inc.
By: BY: /s/ XXXXXXX X. XXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------------
Title: President & CEO
-------------------------------------------
Date: October 6, 1999
-------------------------------------------
Insignia Solutions, Plc.
By: BY: /s/ XXXXXXX X. XXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------------
Title: President & CEO
-------------------------------------------
Date: October 6, 1999
-------------------------------------------
FWB Software, LLC
By: BY: /s/ XXXXX X. XXXX
-------------------------------------------
Name: Xxxxx X. Xxxx
-------------------------------------------
Manager of Parallax Capital Partners, LLC,
Title: Manager of FWB Software, LLC
-------------------------------------------
Date: October 6, 1999
-------------------------------------------
Page 12 of 14
SCHEDULE 3.1
DOS LICENSES REMAINING AS OF EFFECTIVE DATE
As of the Effective Date, the number of DOS licenses remaining under the DOS
License is twenty four thousand, five hundred twenty-nine (24,529).
Page 13 of 14
SCHEDULE 5.1
LICENSED TRADEMARKS
[LOGO]
RealPC-Registered Trademark-
Insignia-TM-
Insignia Solutions-TM-
Page 14 of 14
