CROSS LICENSE AGREEMENT
by and between
Efficient Networks, Inc.
and
Cabletron Systems, Inc.
========================================================================
========
TABLE OF CONTENTS
Page
----
1. CONSTRUCTION AND
DEFINITIONS......................................... 1
1.1
Definitions..................................................... 1
1.2
Construction.................................................... 3
2. LICENSE
GRANTS........................................................ 3
2.1 License to
Efficient............................................ 3
2.2 License to
Cabletron............................................ 3
2.3 Reservation of
Rights........................................... 4
2.4 Delivery and
Assistance......................................... 4
2.5 Further
Assurances.............................................. 4
3. CONFIDENTIAL
INFORMATION.............................................. 4
3.1 Confidential
Information........................................ 4
3.2 Confidential Information
Exclusions............................. 4
3.3 Confidentiality
Obligation...................................... 5
3.4 Confidentiality of Cross License
Agreement...................... 5
3.5 No Confidential Information of Other
Parties.................... 5
3.6 Required
Disclosure............................................. 5
4. REPRESENTATIONS AND
WARRANTIES........................................ 6
4.1 Efficient
Warranties............................................ 6
4.2 Cabletron
Warranties............................................ 6
4.3 Warranty
Disclaimers............................................ 6
5. LIMITATIONS OF
LIABILITY.............................................. 6
5.1 Exclusion of
Damages............................................ 6
5.2 Failure of Essential
Purpose.................................... 7
6.
GENERAL...............................................................
7
6.1
Term............................................................ 7
6.2
Notices......................................................... 7
6.3 Amendments and
Waivers.......................................... 8
6.4 Successors and
Assigns.......................................... 8
6.5 Governing Law/Dispute
Resolution................................ 8
6.6 Counterparts; Third Party
Beneficiaries......................... 8
6.7 Entire Agreement;
Severability.................................. 8
6.8
Captions........................................................ 9
6.9 Representation by Counsel;
Interpretation....................... 9
6.10 Injunctive
Relief............................................... 9
Exhibits:
- ---------
Exhibit A - Efficient Licensed Technology
Exhibit B - Cabletron Licensed Technology
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CROSS LICENSE AGREEMENT
This Cross License Agreement (this "Cross License Agreement" or
-----------------------
"Agreement") is made and entered into by and between Efficient Networks,
Inc., a
---------
Delaware corporation with its principal place of business at 4201 Spring
Valley
Road, Suite 1200, Dallas, Texas, U.S.A., and its Affiliates
(collectively,
"Efficient") and Cabletron Systems, Inc., a Delaware corporation, with
its
---------
principle place of business at 35 Industrial Way, Rochester, New
Hampshire,
U.S.A., and its Affiliates (collectively, "Cabletron"), (each, a
"Party";
--------- -----
together, the "Parties"), and effective as of the closing of the merger
-------
contemplated by the Agreement and Plan of Reorganization (the "Merger
------
Agreement") dated November 21, 1999, as amended, among Efficient,
Cabletron,
- ---------
Flowpoint Acquisition Corporation, a California corporation and a
wholly-owned
subsidiary of Efficient, and Flowpoint Corporation, a California
corporation and
a wholly-owned subsidiary of Cabletron ("Flowpoint") (such date referred
to
---------
herein as the "Effective Date").
--------------
RECITAL
-------
WHEREAS, in connection with the merger transaction contemplated in
the
Merger Agreement, each Party desires to obtain from the other Party a
license to
certain technology and intellectual property rights that shall be
licensable by
the other Party as of the close of such merger transaction, on the terms
and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises contained in this Cross License Agreement, the Parties hereby
agree as
follows:
1. CONSTRUCTION AND DEFINITIONS
1.1 Definitions. The following capitalized terms have the
meanings
-----------
set forth below:
(a) "Affiliate" means any entity which controls, is
controlled
---------
by or is under common control with another entity. For purposes of this
definition, "control" shall mean beneficial ownership of more than fifty
percent
(50%) of the shares of the subject entity entitled to vote in the
election of
directors (or, in the case of an entity that is not a corporation, for
the
election of the corresponding managing authority).
(b) "Derivative Work" has the meaning ascribed to it
under the
---------------
United States Copyright Law, Title 17 U.S.C. Sec. 101 et. seq., as the
same may
be amended from time to time.
(c) "Improvement" means any adaptation, improvement,
upgrade,
-----------
update, enhancement, new version, bug-fix, patch, extension, Derivative
Work, or
add-on of or to any Technology. Without limiting the foregoing, any
invention
(whether patented or not) that would infringe another patented invention
will be
considered an "Improvement" to such first patented invention.
(d) "Intellectual Property Rights" means any or all of
the
----------------------------
following, in any and all jurisdictions throughout the world, and all
rights in,
arising out of, or associated with: (i) all patents and applications
therefor,
including provisional applications, and all reissues, divisionals,
renewals,
extensions, continuations and continuations-in-part thereof ("Patents");
(ii)
-------
all rights (other than Patents) in inventions (whether patentable or
not),
invention disclosures, trade secrets, proprietary information, know-how,
technology and technical data ("Trade Secrets"); (iii) all copyrights,
copyright
-------------
registrations and applications therefor and all other rights
corresponding
thereto ("Copyrights"); (iv) all mask works, mask work registrations and
----------
applications therefor; (v) all industrial designs and any registrations
and
applications therefor; (vi) any other rights in databases and data
collections;
(vii) any other rights in computer software including all source code,
object
code, firmware, development tools, files, records and data, and all
media on
which any of the foregoing is recorded; (viii) all know-how and show-
how,
whether or not protectible by Patents, Copyrights or Trade Secrets; and
(ix) any
similar, corresponding or equivalent rights to any of the foregoing and
any
other intellectual property or proprietary rights, whether or not
registrable;
provided that all of the foregoing shall expressly exclude any and all
-------
trademarks, trade names, logos and service marks and any similar
indications of
origin or branding.
(e) "Technology" means all technology, including all
know-how,
----------
show-how, techniques, design rules, inventions (whether or not patented
or
patentable), ideas, concepts, methods, algorithms, routines, software,
files,
databases, works of authorship, processes, prototypes, devices and
hardware, and
including all Intellectual Property Rights therein or thereto.
(f) "Efficient Licensed Technology" means all Technology
set
-----------------------------
forth in Exhibit A and any Improvements to such Technology owned by, or
developed and licensable by Flowpoint within one (1) year after the
Effective
Date.
(g) "Cabletron Licensed Technology" means all Technology
set
-----------------------------
forth in Exhibit B and any Improvements to such Technology owned by, or
otherwise developed and licensable by Cabletron within one (1) year
after the
Effective Date.
(h) "CPE" means customer premises equipment; i.e.,
equipment
---
residing at the site of an end user of a communications network, rather
than at
the central office, headend or other central distribution point.
(i) "Cable Modem" means CPE computer peripheral devices
for
-----------
bidirectional data communications with the headend of a cable television
distribution network, over the coaxial or HFC (hybrid fiber-coax) cables
of the
cable television distribution network, including cable modem routers.
(j) "DSL" means digital subscriber line, a technology
for
---
delivering digital data over twisted-pair copper wire telephone lines.
For
purposes of this Agreement, "DSL" shall include ADSL, CDSL, DSL Lite,
HDSL,
IDSL, RADSL, SDSL, UDSL, VDSL and ISDN.
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(k) "Efficient Field of Use" means all CPE products,
software,
----------------------
services and applications.
(l) "Cabletron Field of Use" means all Cable Modem
products,
----------------------
software, services and applications.
1.2 Construction.
------------
(a) For purposes of this Cross License Agreement,
whenever the
context requires: the singular number will include the plural, and vice
versa;
the masculine gender will include the feminine and neuter genders; the
feminine
gender will include the masculine and neuter genders; and the neuter
gender will
include the masculine and feminine genders.
(b) The Parties hereto agree that any rule of
construction to
the effect that ambiguities are to be resolved against the drafting
Party will
not be applied in the construction or interpretation of this Cross
License
Agreement.
(c) As used in this Cross License Agreement, the words
"include"
and "including," and variations thereof, will not be deemed to be terms
of
limitation, but rather will be deemed to be followed by the words
"without
limitation."
(d) Except as otherwise indicated, all references in
this Cross
License Agreement to "Sections" and "Schedules" are intended to refer to
Sections of this Cross License Agreement and Schedules to this Cross
License
Agreement.
(e) The headings in this Cross License Agreement are for
convenience of reference only, will not be deemed to be a part of this
Cross
License Agreement, and will not be referred to in connection with the
construction or interpretation of this Cross License Agreement.
2. LICENSE GRANTS
2.1 License to Efficient. Subject to the terms and
conditions of
--------------------
this Cross License Agreement, Cabletron hereby grants to Efficient,
under the
Cabletron Licensed Technology, a worldwide, non-exclusive, perpetual,
irrevocable, non-terminable, non-transferable, non-sublicensable, paid-
up and
royalty-free license, solely for the Efficient Field of Use, to make,
have made,
use, sell, reproduce, create derivative works of and distribute
products,
provide services, practice processes or methods, and exercise all other
rights
under the Cabletron Licensed Technology.
2.2 License to Cabletron. Subject to the terms and
conditions of
--------------------
this Cross License Agreement, Efficient hereby grants to Cabletron,
under the
Efficient Licensed Technology, a worldwide, non-exclusive, perpetual,
irrevocable, non-terminable, non-transferable, non-sublicensable, paid-
up and
royalty-free license, solely for the Cabletron Field of Use, to make,
have made,
use, sell, reproduce, create derivative works of and distribute
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products, provide services, practice processes or methods, and exercise
all
other rights under the Efficient Licensed Technology. In addition, upon
request
by Cabletron, Efficient and Cabletron shall negotiate in good faith to
determine
reasonable royalty rates under which Efficient would license the
Efficient
Licensed Technology to Cabletron for use in other Cabletron non-DSL CPE
router
products and, subject to reaching agreement on such royalty rates,
Efficient
will license the Efficient Licensed Technology for such other uses.
2.3 Reservation of Rights. Each Party hereby reserves
all rights
---------------------
in and to such Party's Technology not expressly granted hereunder, and
no other
licenses are granted by either Party hereunder, whether by implication,
estoppel
or otherwise.
2.4 Delivery and Assistance. Within ____ days after the
-----------------------
Effective Date: (i) Efficient shall deliver to Cabletron at least one
copy of
each tangible item of Efficient Licensed Technology set forth in Exhibit
A; and
(ii) Cabletron shall deliver to Efficient at least one copy of each
tangible
item of Cabletron Licensed Technology set forth in Exhibit B. Upon the
request
by either Party, the other Party shall provide reasonable additional
information
or assistance in connection with such Party's use of the Technology
licensed to
such Party hereunder.
2.5 Further Assurances. Subject to the terms and
conditions of
------------------
this Cross License Agreement, each Party will, at the other Party's
request and
expense, take all reasonable actions and do all things reasonably
necessary,
proper, or advisable in order to consummate and make effective the
ownership,
license grants and other transactions contemplated by this Cross License
Agreement, including without limitation appropriately documenting such
transactions and assisting the other Party in every proper way to secure
and
maintain the other Party's Intellectual Property Rights in any and all
jurisdictions.
3. CONFIDENTIAL INFORMATION
3.1 Confidential Information. "Confidential Information"
means
------------------------ ------------------------
any information: (i) disclosed by one Party (the "Disclosing Party") to
the
----------------
other (the "Receiving Party"), which, if written, graphic, machine-
readable or
---------------
other tangible form is marked as "Confidential" or "Proprietary," or
which, if
disclosed orally or by demonstration, is identified at the time of
initial
disclosure as confidential or proprietary, and is summarized in writing
and
similarly marked and delivered to the Receiving Party within thirty (30)
days of
initial disclosure; (ii) which at the time it is disclosed is or should
reasonably be known by the Receiving Party to be proprietary or
confidential
information of the Disclosing Party, or (iii) which is embodied in or
learned
from the Disclosing Party's Technology licensed or disclosed hereunder,
whether
or not so marked.
3.2 Confidential Information Exclusions. Confidential
-----------------------------------
Information will exclude information that the Receiving Party can
demonstrate
is: (i) now or hereafter, through no unauthorized act or failure to act
on
Receiving Party's part, in the public domain; (ii) known to the
Receiving Party
from a source other than the Disclosing Party (including former
employees of the
Disclosing Party) without an obligation of confidentiality at the time
Receiving
Party receives the same from the Disclosing Party, as evidenced by
written
records; (iii) hereafter furnished to the Receiving Party by a third
party as a
matter of right and without restriction on
-4-
disclosure; (iv) furnished to others by the Disclosing Party without
restriction
on disclosure; or (v) independently developed by the Receiving Party
without use
of the Disclosing Party's Confidential Information. Nothing in this
Cross
License Agreement shall prevent the Receiving Party from disclosing
Confidential
Information to the extent the Receiving Party is legally compelled to do
so by
any governmental investigative or judicial agency pursuant to
proceedings over
which such agency has jurisdiction; provided, however, that prior to any
such
disclosure, the Receiving Party shall (a) assert the confidential nature
of the
Confidential Information to the agency; (b) immediately notify the
Disclosing
Party in writing of the agency's order or request to disclose; and (c)
cooperate
fully with the Disclosing Party in protecting against any such
disclosure and/or
obtaining a protective order narrowing the scope of the compelled
disclosure and
protecting its confidentiality.
3.3 Confidentiality Obligation. The Receiving Party shall
treat as
--------------------------
confidential all of the Disclosing Party's Confidential Information and
shall
not use such Confidential Information except for the purposes of
exercising its
rights and performing its obligations under this Cross License
Agreement.
Without limiting the foregoing, the Receiving Party shall use the same
degree of
care and means that it utilizes to protect its own information of a
similar
nature, but in any event not less than reasonable care and means, to
prevent the
unauthorized use or the disclosure of such Confidential Information to
third
parties. The Receiving Party shall have appropriate written agreements
with
employees or contractors with access to the Confidential Information
sufficient
to comply with the provisions of this Cross License Agreement.
3.4 Confidentiality of Cross License Agreement. Each Party
agrees
------------------------------------------
that the terms and conditions of this Cross License Agreement will be
treated as
the other Party's Confidential Information and that no reference to this
Cross
License Agreement or to activities pertaining thereto may be made in any
form of
press release or public statement without first consulting with the
other Party;
provided, however, that each Party may disclose the terms and conditions
of this
- -------- -------
Cross License Agreement: (i) as may be required by law or in connection
with any
governmental filing; (ii) to legal counsel of the Parties; (iii) in
connection
with the requirements of an initial public offering or securities
filing; (iv)
in confidence, to accountants, banks, and financing sources and their
advisors;
(v) in confidence, in connection with the enforcement of this Cross
License
Agreement or rights under this Cross License Agreement; or (vi) in
confidence,
in connection with a merger or acquisition or proposed merger or
acquisition, or
the like.
3.5 No Confidential Information of Other Parties. Each Party
--------------------------------------------
represents and warrants to the other that it has not used and shall not
use in
the course of its performance hereunder, and shall not disclose to the
other,
any confidential information of any third party, unless it is expressly
authorized in writing by such third party to do so.
3.6 Required Disclosure. In the event the Receiving Party is
-------------------
required to disclose the Disclosing Party's Confidential Information
pursuant to
the order or requirement of a court, administrative agency, or other
governmental body, the Receiving Party shall provide prompt notice
thereof to
the Disclosing Party and shall use its reasonable efforts to obtain a
protective
order or otherwise prevent public disclosure of such information.
-5-
4. REPRESENTATIONS AND WARRANTIES
4.1 Efficient Warranties. Efficient represents, warrants and
--------------------
covenants to Cabletron that (i) it has the full right and authority to
enter
into this Cross License Agreement and grant the rights and licenses
granted
herein; and (ii) it has not previously granted and will not grant any
rights in
conflict with the rights and licenses granted herein.
4.2 Cabletron Warranties. Cabletron represents, warrants and
--------------------
covenants to Efficient that (i) it has the full right and authority to
enter
into this Cross License Agreement and grant the rights and licenses
granted
herein; and (ii) it has not previously granted and will not grant any
rights in
conflict with the rights and licenses granted herein.
4.3 Warranty Disclaimers. Nothing set forth in this Cross
License
--------------------
Agreement will be construed to be:
(a) a warranty, representation or admission by either
Party as
to the validity, enforceability or scope of any Technology licensed
hereunder;
(b) a warranty or representation by either Party that
the use of
such Party's Technology for the manufacture, use, licensing, sale,
importation
or other exploitation of the Technology or the exercise of any license
granted
to the other Party hereunder will be free from infringement of any
Intellectual
Property Right of any third party; or
(c) an obligation on either Party to file any Patent
application
or to secure any Patent or to maintain any Patent through the payment of
patent
maintenance fees or otherwise.
(d) EXCEPT AS EXPRESSLY SET FORTH IN THIS CROSS LICENSE
AGREEMENT, (1) ALL TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS, AND ALL
OTHER
ITEMS OR RIGHTS PROVIDED, SOLD, TRANSFERRED OR LICENSED HEREUNDER ARE
PROVIDED
"AS IS" AND WITHOUT WARRANTY OF ANY KIND, AND (2) EACH PARTY MAKES NO,
AND
HEREBY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, STATUTORY, OR
IMPLIED,
INCLUDING WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR
A
PARTICULAR PURPOSE WITH RESPECT THERETO.
5. LIMITATIONS OF LIABILITY
5.1 Exclusion of Damages. EXCEPT FOR A BREACH OF SECTION 3,
IN NO
--------------------
EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS,
COST OF
PROCUREMENT OF SUBSTITUTE GOODS, OR FOR ANY OTHER INDIRECT, SPECIAL,
RELIANCE,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THIS
CROSS
LICENSE AGREEMENT, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), PRODUCT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT SUCH
PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
-6-
5.2 Failure of Essential Purpose. The limitations specified
in this
----------------------------
Section 5 shall survive and apply even if any limited remedy specified
in this
Cross License Agreement is found to have failed of its essential
purpose.
6. GENERAL
6.1 Term. The term of this Cross License Agreement shall
commence on
----
the Effective Date and shall continue in perpetuity thereafter.
6.2 Notices. All notices, requests and other communications
to any
-------
Party hereunder shall be in writing (including facsimile transmission)
and shall
be given,
if to Efficient, to:
Efficient Networks, Inc.
4201 Spring Valley Road, Suite 1200
Dallas, TX 75244
Attention: Jill Manning
Telecopy: 972-991-3887
Telephone: 972-991-3884
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attention: Kenneth Siegel, Esq.
Michael Kennedy, Esq.
Telecopy: 650-493-6811
Telephone 650-493-9300
if to Cabletron, to:
Cabletron Systems, Inc.
35 Industrial Way
Rochester, NH
Attention: General Counsel
Telecopy: ________________
Telephone: 630-332-9400
with a copy to:
Ropes & Gray
One International Place
Boston, MA 02110
Attention: David A. Fine, Esq.
Telecopy: 617-951-7000
Telephone: 617-951-7050
-7-
All such notices, requests and other communications shall be deemed
received on
the date of receipt by the Receiving Party thereof if received prior to
5 p.m.
in the place of receipt and such day is a business day in the place of
receipt.
Otherwise, any such notice, request or communication shall be deemed not
to have
been received until the next succeeding business day in the place of
receipt.
6.3 Amendments and Waivers.
----------------------
(a) Any provision of this Cross License Agreement may be
amended
or waived if, but only if, such amendment or waiver is in writing and is
signed,
in the case of an amendment by each Party to this Cross License
Agreement, or in
the case of a waiver by the Party against whom the waiver is to be
effective.
(b) No failure or delay by any Party in exercising any
right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any
single or partial exercise thereof preclude any or other further
exercise
thereof or the exercise of any other right, power or privilege. The
rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or
remedies provided by law.
6.4 Successors and Assigns. The provisions of this Cross
License
----------------------
Agreement shall be binding upon and inure to the benefit of the Parties
hereto
and their respective successors and assigns; provided that neither Party
may
assign, delegate or otherwise transfer any of its rights or obligations
under
this Cross License Agreement without the consent of the other Party
hereto,
except that either Party may assign this Cross License Agreement in
connection
with a merger or acquisition of such Party or the sale or transfer of
all or
substantially all of the business, stock or assets of such Party.
6.5 Governing Law/Dispute Resolution. This Cross License
Agreement
--------------------------------
shall be governed by and construed in accordance with the law of the
State of
Texas, without regard to its conflicts of law rules. All disputes
arising out of
this Agreement shall be subject to the exclusive jurisdiction and venue
of the
Texas state courts in Dallas, Texas (or, if there is exclusive federal
jurisdiction, the United Stated District Court for the Northern District
of
Texas), and the parties consent to the personal and exclusive
jurisdiction of
these courts.
6.6 Counterparts; Third Party Beneficiaries. This Cross
License
---------------------------------------
Agreement may be signed in any number of counterparts, each of which
shall be an
original, with the same effect as if the signatures thereto and hereto
were upon
the same instrument. This Cross License Agreement shall become effective
when
each Party hereto shall have received a counterpart hereof signed by the
other
Party hereto. No provision of this Cross License Agreement is intended
to confer
upon any Person other than the Parties hereto any rights or remedies
hereunder.
6.7 Entire Agreement; Severability. This Cross License
Agreement
------------------------------
constitutes the entire agreement between the Parties with respect to the
subject
matter of this Cross License Agreement and supersedes all prior
agreements and
understandings, both oral and written, between the Parties with respect
to the
subject matter of this Cross License Agreement. If at any time
subsequent to the
date hereof any term or provision of this Cross License
-8-
Agreement shall be determined to be partially or wholly illegal, void or
unenforceable, such provision shall be of no force and effect to the
extent so
determined, but the illegality or unenforceability of such term or
provision
shall have no effect upon and shall not impair the legality or
enforceability of
any other term or provision of this Cross License Agreement.
6.8 Captions. The captions herein are included for
convenience of
--------
reference only and shall be ignored in the construction or
interpretation
hereof.
6.9 Representation by Counsel; Interpretation. The Parties
-----------------------------------------
acknowledge that each Party to this Cross License Agreement has been
represented
by counsel in connection with this Cross License Agreement and the
transactions
contemplated by this Cross License Agreement. Accordingly, any rule of
law or
any legal decision that would require interpretation of any claimed
ambiguities
in this Cross License Agreement against the Party that drafted it has no
application and is expressly waived. The provisions of this Cross
License
Agreement shall be interpreted in a reasonable manner to effect the
intent of
the Parties.
6.10 Injunctive Relief. It is understood and agreed that,
-----------------
notwithstanding any other provision of this Cross License Agreement,
either
Party's breach of confidentiality obligations or provisions relating to
proprietary rights may cause irreparable damage for which recovery of
money
damages would be inadequate, and that the other Party will therefore be
entitled
to seek timely, injunctive relief to protect such Party's rights under
this
Cross License Agreement in addition to any and all remedies available at
law.
Each Party further agrees that no bond or other security shall be
required in
obtaining such equitable relief, nor will proof of actual damages be
required
for such equitable relief. Each Party hereby expressly consents to the
issuance
of such injunction and to the ordering of such specific performance.
IN WITNESS WHEREOF, the Parties, by their duly authorized
representatives,
have executed this Cross License Agreement as of the Effective Date.
Efficient Networks, Inc. Cabletron Systems, Inc.
/s/ JILL MANNING /s/ PIYUSH PATEL
By:________________________________
By:________________________________
Jill Manning Piyush Patel
Name:______________________________
Name:______________________________
Chief Financial Officer President
Title:_____________________________
Title:_____________________________
