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EXHIBIT 99.17
EXECUTION COPY
EXHIBIT D
LICENSE AGREEMENT
This
License Agreement (the "AGREEMENT") is entered into effective
this
21st day of January, 2005 (the "EFFECTIVE
DATE") by and between NACT
Acquisition, Inc., a Delaware corporation
("NACT"), and Verso Technologies,
Inc., a Minnesota corporation
("VERSO").
WHEREAS,
Verso and NACT are parties to an Asset Purchase Agreement dated
as of even date hereof (the "ASSET PURCHASE
AGREEMENT"); and
WHEREAS,
pursuant to the Asset Purchase Agreement, NACT agreed to
purchase
substantially all of the assets of NACT
Telecommunications, Inc., a wholly owned
subsidiary of Verso; and
WHEREAS,
the NTS software product created by NACT Telecommunications,
Inc.
is included among the assets transferred to
NACT under the Asset Purchase
Agreement; and
WHEREAS,
NACT agreed in the Asset Purchase Agreement to grant to Verso a
license to the source code of the NTS
product and certain other rights in
partial consideration for the transfer of
assets to NACT; and
WHEREAS,
Verso and Jacksonville Technology Associates, Inc. ("JTA") are
in
negotiations for the purchase of
substantially all of the assets of JTA by Verso
(the "JTA TRANSACTION").
NOW,
THEREFORE, in consideration of the mutual promises set forth in
this
Agreement, Verso and NACT agree as
follows:
1. Definitions.
In
addition to the other terms defined herein, the following
definitions
shall apply to this Agreement:
"Affiliate" means any entity in which a party owns or controls 50%
or more
of the voting securities or interest and
any entity which controls 50% or more
of the voting securities or interest of a
party.
"Documentation" means all notes, drawings, commentary, flow charts,
user
documentation, and other documentation
pertaining to the Licensed Software that
is reasonably required for Verso to
integrate the Licensed Software into Verso
Products and to support and maintain the
Licensed Software.
"Intellectual Property Rights" means all (i) rights associated with
works
of authorship, including, without
limitation, exclusive exploitation rights,
copyrights and moral rights; (ii)
trademark, trade dress, and trade name rights;
(iii) trade secret rights; (iv) designs,
algorithms, and all other industrial
property rights; (v) patents, patent
applications, extensions, combinations,
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divisions, or reissues of the foregoing;
and (vi) other intellectual property
and proprietary rights of every kind.
"Licensed
Software" means the NTS software version 2.5, in source code
form, including, without limitation, all
software which makes up the build
environment required to compile and package
the entire NTS product line and any
modifications, upgrades, updates and
enhancements thereto in existence as of the
Effective Date or provided to Verso
pursuant to Section 8(b) of this Agreement.
"Verso
Products" means the products manufactured, offered, sold,
licensed
or distributed by Verso and its Affiliates
as of the Effective Date (which shall
include for this purpose (i) the products
of JTA in existence as of the
Effective Date, provided that Verso and JTA
consummate the JTA Transaction and
(ii) the Deliverables delivered to JTA in
accordance with the Cable & Wireless
Project (as defined below)), and any future
releases, upgrades, new versions or
enhanced versions of such products.
2. License.
NACT
hereby grants to Verso and its Affiliates, effective as of the
Effective Date, a perpetual, irrevocable
(except as expressly provided in
Section 13), non-exclusive,
non-transferable (except as expressly provided in
Section 14(a)), world-wide, fully paid up,
royalty free right and license (the
"LICENSE") to:
(a) use,
merge, translate, reproduce, install, perform, display, modify,
alter, and adapt the Licensed Software and
the Documentation, and to create
derivative works from the Licensed Software
and the Documentation, solely for
purposes of integrating the Licensed
Software into Verso Products and
maintaining such Licensed Software;
(b)
compile the Licensed Software and any modifications or
derivates
thereof into executable or machine readable
versions, solely for purposes of
integrating the Licensed Software into
Verso Products and maintaining such
Licensed Software;
(c)
directly or through resellers or distributors, distribute,
license,
and sublicense the Licensed Software and
any modifications or derivatives
thereof created by Verso to end users and
other customers in executable or
machine readable form only as a component
and solely as a component of Verso
Products;
(d) create
documentation for end users and other customers using all or
parts of the Documentation and to
distribute such documentation to resellers,
distributors and end users and other
customers of Verso Products; and
(e) escrow
the source code of versions of the Licensed Software (excluding
any third-party software contained therein)
distributed in executable form under
subparagraph (c) above in escrow accounts
for the benefit of third parties;
provided, that (i) such escrow is subject
to an agreement substantially in the
form of the Master Preferred Source Code
Escrow Agreement attached as Attachment
A and (ii) the Addendum to the Master
Preferred Source Code Escrow Agreement
attached as Attachment B is executed by the
Escrow Agent, Preferred Beneficiary
and Verso prior to the deposit of such
source code with the Escrow Agent.
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3. Delivery.
NACT
hereby acknowledges the receipt of a CD purporting to contain
the
Licensed Software and Documentation. To the
extent such CD does not contain the
Licensed Software and Documentation, NACT
shall promptly remedy such defect.
4. Limitations;
Covenants.
(a) Except
as provided in Section 1(e) and Section 14(a), Verso shall not
disclose, distribute or otherwise make
available the Licensed Software in source
code form to any third party other than to
employees and contractors of Verso
and its Affiliates who (i) have signed a
written confidentiality agreement
(containing provisions no less restrictive
than the provisions set forth in
Section 11 hereof) and (ii) need to have
access to such information for purposes
of exercising the rights granted to Verso
under this Agreement on behalf of
Verso.
(b) In
connection with distributing, licensing or sublicensing the
Licensed Software pursuant to Section 2(c)
hereof, Verso shall enter into a
written agreement (or cause its
distributors or resellers to enter into a
written agreement) with each end user or
other customer containing terms no less
protective of the Licensed Software than
the terms contained in Verso's form of
End User License Agreement set forth in
Attachment C.
(c) Verso
shall promptly deliver to NACT an executed copy of any Addendum
to the Master Preferred Source Code Escrow
Agreement executed pursuant to the
terms of Section 2(e) or otherwise. NACT
agrees that the information contained
in such documents shall be deemed to be the
Confidential Information of Verso as
provided in Section 11 of this Agreement;
provided, however, that NACT may
disclose any Addendum to the Master Source
Code Escrow Agreement to the extent
necessary to enforce its rights thereunder
or otherwise to effectuate the
purposes of such document.
5. Third Party
Software.
To the
knowledge of NACT, Verso will not need to license any
third-party
software to exercise or enjoy any of its
rights under this Agreement to develop
the Licensed Software except for the
following third-party development tools:
(a) Informix Dynamic Server database
licensed by IBM, (b) Rave 4.0 and 5.0
licensed by Nevrona Designs, (c) Infopower
2000 and 3000 Pro licensed by
Woll2Woll Software, (d) CodeSite 2 licensed
by Raize Software, (e) Raize
Components 2.52 licensed by Raize Software,
and (f) Delphi 6 Enterprise licensed
by Borland. Verso will be responsible, at
its own cost, for obtaining its own
licenses of these development tools. In
addition, Verso will need to obtain run
time licenses of Informix Dynamic Server
database and Rave prior to
distributing, licensing, and/or
sublicensing products containing the Licensed
Software to third parties.
6. Ownership.
(a) The
Licensed Software and the Documentation and the Intellectual
Property Rights contained therein are owned
by NACT. Verso shall have no right,
title or interest therein except as
expressly set forth in this Agreement, and
NACT reserves all right in the Licensed
Software and Documentation not expressly
granted herein.
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(b) All modifications,
alterations, and derivations of the Licensed
Software and Documentation created by or on
behalf of Verso and at Verso's
expense in accordance with the terms of
this Agreement shall be the proprietary
information of Verso, and NACT shall have
no right, title or interest therein.
Verso and its licensors shall own all
Intellectual Property Rights in and to
such modifications, alterations and
derivations subject only to NACT's rights in
the Licensed Software and Documentation.
For the avoidance of doubt, NACT shall
retain all right, title and interest in and
to corrected versions of the
Licensed Software provided to Verso in
accordance with Section 8(b).
7. Bankruptcy.
In the
event of the dissolution, bankruptcy or insolvency of NACT,
NACT
acknowledges that, if NACT rejects this
Agreement in any bankruptcy proceeding,
Verso may elect to retain its rights under
this Agreement as provided in Section
365(n) of the United States Bankruptcy
Code.
8. Warranties.
NACT
hereby warrants and represents to Verso as follows:
(a) NACT
has the right to grant the License to Verso, and, subject to
Section 5, Verso's exercise of its rights
under this Agreement shall not violate
the rights of any third party granted by
NACT or violate the obligations of NACT
under any agreement with a third party. As
of the Effective Date, there is no
actual or, to the knowledge of NACT,
threatened suit or claims by any third
party based on any of the foregoing.
(b) For a
period of one (1) year from the Effective Date (the "WARRANTY
PERIOD"), (i) the version of the Licensed
Software delivered to Verso by NACT
(as may, from time to time, be modified by
updates, upgrades, modifications or
enhancements distributed by NACT to Verso
in accordance with this Section 8(b))
shall be free from defects and shall
operate in accordance with the
specifications for the Licensed Software
and the relevant portions of the
Documentation in all material respects; and
(ii) the Documentation shall reflect
the operation of the Licensed Software, in
each case in all material respects.
NACT shall promptly correct any errors,
defects or malfunctions in the Licensed
Software and Documentation reported by
Verso during the Warranty Period and
shall promptly provide Verso with the
corrected versions of the Licensed
Software and the Documentation free of
charge. NACT agrees to respond to Verso's
requests for corrections to errors with a
time estimate for the correction of
such errors as follows: those classified as
high priority within 48 hours, those
classified as medium priority within 5
(five) business days, and those
classified as low priority within fifteen
(15) business days, in each case
following written notice by Verso to NACT
of such errors and the applicable
priority level. After expiration of the
Warranty Period, NACT shall provide
Verso with the ability to obtain support
and maintenance on terms and conditions
mutually agreeable to the parties.
(c) THE
EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT ARE IN LIEU OF
ALL
OTHER WARRANTIES, WHETHER WRITTEN OR ORAL,
EXPRESS, IMPLIED, OR STATUTORY,
REGARDING THE LICENSED SOFTWARE AND THE
DOCUMENTATION, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES OF
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MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE OR NON-INFRINGEMENT.
9. Additional
Support.
(a) During
the Warranty Period, NACT shall provide to Verso, without
additional charge, reasonably necessary
telephone or email consultation
requested by Verso in connection with its
use and operation of the Licensed
Software or any problems therewith.
Telephone consultation shall be requested
and provided only during NACT's normal
business hours. NACT shall provide one
(1) standard two (2)-week training course
on the Licensed Software to up to five
(5) Verso personnel without charge to
Verso. The training course shall be
provided at NACT's Provo, Utah facility at
a time mutually agreeable to the
parties. Verso shall be responsible for all
travel, lodging and other living
costs for its personnel attending the
training course.
(b) The
effectiveness of subsections (i) and (ii) immediately below
shall
be contingent on the consummation of the
JTA Transaction or Verso entering into
a subcontract agreement with JTA to perform
services for JTA for the Cable &
Wireless Project (as defined below).
(i) NACT agrees to provide the deliverables listed in Attachment
D
hereto
(the "DELIVERABLES") to Verso free of charge in connection with
the
Cable
& Wireless Panama S.A. ("CABLE & WIRELESS") project being
performed
by Verso
in Panama (the "CABLE AND WIRELESS PROJECT"). Verso hereby
acknowledges the receipt of the Phase 1 Deliverables. The Phase
3
Deliverables shall be delivered by NACT no later than thirty (30)
business
days after
specifications and definitions for such Deliverables have been
provided
by Verso to NACT. The parties acknowledge that the definition
of
the Phase
3 Deliverables has not been fully defined. The Deliverables
shall be
subject to approval and acceptance by Cable & Wireless.
NACT
agrees to
make all corrections and changes in the Deliverables required
to
obtain
such acceptance and approval without charge; provided, that
NACT
shall be
obligated to contribute no more than 160 hours of development
for
and
testing of the Phase 3 Deliverables without charge. Once this level
is
exceeded,
Verso will pay NACT the rate of $100/hour for development for
and
$80/hour for testing of the Phase 3 Deliverables. If the
160-hour
level is
exceeded, NACT will provide weekly time reports for work
performed
on the Phase 3 Deliverables stating in reasonable detail the
work
performed and hours worked for each individual assigned to the
Cable
&
Wireless Project.
(ii) NACT will provide a warranty on each Deliverable at no
charge
in
accordance with the terms set forth in Section 8(b) for a one
(1)-year
period
commencing on the date of the acceptance of the Deliverable by
Cable
& Wireless. Thereafter, NACT shall make support available for
the
Deliverables at an additional charge on reasonable terms
(including,
without
limitation, price) mutually agreed upon by the parties.
(c) NACT
and Verso agree that Verso may only seek damages or any other
remedy for breach of this Section 9 if
Verso requests to NACT in writing
performance (or re-
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performance) by NACT of the applicable
service and, within 30 days of the
receipt of such notice, NACT has failed to
cure such breach.
10. Indemnity.
(a) NACT,
at its own cost and expense, shall indemnify and hold harmless
Verso, its Affiliates or assignees, and
their respective directors, officers,
employees and agents from and against any
claim, demand, cause of action, debt
or liability, including, without
limitation, costs and reasonable attorneys'
fees (collectively, "LOSSES"), to the
extent that such Losses result from a
third-party claim that the Licensed
Software or Documentation, as provided to
Verso by NACT, infringes or violates the
Intellectual Property Rights of any
third party.
(b) Verso,
at its own cost and expense, shall indemnify and hold harmless
NACT, its Affiliates or assignees, and
their respective directors, officers,
employees and agents from and against any
Losses to the extent that such Losses
result from a third-party claim that any
modifications or alterations of the
Licensed Software or Documentation created
by Verso infringe or violate any
Intellectual Property Rights of any third
party, or any other third-party claim
arising from the exercise by Verso of its
rights hereunder, except to the extent
(i) such Losses result from NACT's gross
negligence or willful misconduct or
(ii) NACT would otherwise be responsible
for such Losses pursuant to Section
10(a).
(c) The
indemnifying party shall be responsible, at its cost and
expense,
for the defense and all negotiations
relative to the settlement of any claim
subject to the indemnification provisions
of this Section 10; provided, however,
that (i) Verso may not settle any claim in
a manner that would have an adverse
affect on the rights of NACT in the
Licensed Software or Documentation without
the prior written consent of NACT (to be
granted in its sole discretion) and
(ii) nothing in this Section 10(c) shall be
deemed to prohibit either party from
engaging its own counsel in connection with
such claim and participating in its
own defense. The indemnified party shall
promptly provide the indemnifying party
with written notice of any claim which the
indemnified party believes falls
within the scope of this Section 10 and, at
the indemnifying party's cost and
expense, shall provide reasonable
assistance to the indemnifying party in
connection with such claims.
(d)
Limitation on Liability. EXCEPT FOR DAMAGES ARISING FROM CLAIMS
OF
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
CLAIMS OF BREACH OF SECTION 11
("CONFIDENTIALITY") OR EITHER PARTIES'
INDEMNIFICATION OBLIGATIONS UNDER THIS
SECTION 10, NEITHER PARTY, NOR ITS
AFFILIATES NOR ITS NOR THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
AFFILIATES, SUBCONTRACTORS OR LICENSORS,
SHALL BE LIABLE TO THE OTHER PARTY, OR ITS
DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, AFFILIATES, SUBCONTRACTORS OR
LICENSORS, FOR INCIDENTAL, INDIRECT,
PUNITIVE, E
