Exhibit 10.109
Sun and Microsoft Confidential
[**] = information redacted pursuant to a
confidential treatment request. Such omitted information has been
filed separately with the Securities and Exchange
Commission.
LIMITED PATENT COVENANT AND
STAND-STILL AGREEMENT
This Limited Patent Covenant and
Stand-Still Agreement (the “ Agreement ”) is
entered into as of this 1st day of April, 2004 (the “
Effective Date ”), by and between Sun Microsystems,
Inc., a corporation organized and existing under the laws of the
State of Delaware (“ Sun ”), and Microsoft
Corporation, a corporation organized and existing under the laws of
the State of Washington (“ Microsoft ”). Each of
Sun and Microsoft and their respective Affiliates (defined below)
as of the Effective Date are referred to individually as a
“Party , ” and collectively as the
“Parties .”
In consideration of the promises and
mutual covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Signatories (as defined below) hereto agree as
follows:
I. D EFINITIONS
Capitalized terms used in this Agreement and not
defined in this Section I have the meanings ascribed to them
elsewhere in this Agreement.
“ Affiliates ” means, with
respect to each of Sun or Microsoft as applicable, persons or
entities directly or indirectly (1) controlling Sun or Microsoft,
(2) controlled by Sun or Microsoft, or (3) under common control
with Sun or Microsoft, where control is defined as direct or
indirect ownership of greater than fifty percent (50%) of equity or
other voting interest therein.
“ Authorized Licensees ”
means a third party (including without limitation an original
equipment manufacturer (OEM), replicator, distributor, retailer or
User) that is licensed by a Party to exercise any or all legal
rights with respect to a product of such Party, including without
limitation, copying, using, selling or otherwise distributing such
product.
“ Change of Control ” of Sun
or Microsoft means the acquisition directly or indirectly of more
than forty percent (40%) of the total outstanding voting stock of
such Party by any third party (whether in a single transaction or
series of transactions).
“ Clone Product ” shall mean
a product of one of the Parties that provides (a) all of the same
or substantially all of the same user interface and user commands,
or (b) all or substantially all of the application programming
interfaces (APIs) of a previously commercialized product of the
other Party.
“ Foundry Product ” shall
mean a product which was designed, manufactured, reproduced, sold,
leased, licensed or otherwise transferred through or by a Party for
the primary purpose of attempting to make such product licensed or
immune under the patent rights of the other Party to this
Agreement.
“ Past Damages ” means (i)
any and all damages (including damages for forgone profits) that
have accrued on account of any and all patent infringement that has
occurred before the Effective Date; and (ii) any and all damages
(including damages for forgone profits) that accrue after the
Effective Date on account of any and all patent infringement due
solely to continued use by a User of each individual copy of such
other Party’s products that had been distributed by such
other Party and deployed by a User prior to the Effective
Date.
Sun and Microsoft Confidential
“ User ” means any person,
corporation or other entity that uses a product of a Party for its
own internal use.
II. C OVENANTS N OT TO S UE FOR C ERTAIN P AST D AMAGES
1. Covenants Regarding Past Damages .
Subject to the exception in Section IV, each Party hereby
irrevocably and perpetually covenants to the other Party not to sue
the other Party or its Authorized Licensees (“ Covered
Entities ”), or otherwise seek recovery from such Covered
Entities, for Past Damages with respect to the other Party’s
products and technology. By way of limitation of the foregoing, if
an individual copy of a Party’s product that is licensed for
the purpose of replicating other copies of such Party’s
product (a “ Master Copy ”), has been
distributed prior to the Effective Date, only each additional
authorized copy of such product that has been (a) made by a Party
or its Authorized Licensees from such Master Copy prior to the
Effective Date in accordance with prior practice and the normal
course of business and (b) has been deployed by a User prior to the
Effective Date, shall be deemed subject to this covenant. In no
event shall this covenant apply to (a) any modifications of a
product made by any Authorized Licensee; or (b) any additional
copies of a product that are made or deployed by a User after the
Effective Date.
2. New Affiliates . Any entity that
becomes an Affiliate after the Effective Date also shall covenant
not to sue or otherwise seek recovery from the other Party or its
Authorized Licensees as set forth in the covenants in Sections
II.1, and shall be bound by Sections II.3 and II.4, as applicable.
The only Affiliates that shall receive the benefits of such
covenants from the other Party are Affiliates which are Affiliates
as of the Effective Date.
3. Scope . Each Party also hereby
warrants, represents and agrees that the damages subject to the
above covenant are not limited to those arising from facts, losses,
claims or matters disclosed or known as of the Effective Date of
this Agreement. Without limiting the generality of the foregoing,
each Party expressly waives any and all defenses, rights and
benefits that it might otherwise have in relation to this covenant
under or by virtue of the provisions of Section 1542 of the Civil
Code of the State of California or any other similar provision of
the statutory or common law of any other state or of the United
States. Section 1542 of the California Civil Code reads as
follows:
A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
4. Assignment of Patents/Change of Affiliate
Status . If either Party assigns any patent that it owns or
controls or any right to enforce such patent, the assigning Party
shall require as a condition of any such assignment that the
assignee covenant not to sue or otherwise seek recovery from (i)
the other Party or its Authorized Licensees as set forth in
Sections II.1 and (ii) the other Party as set forth in Sections
II.2 with respect to such patent. If an Affiliate ceases to be an
Affiliate after the Effective Date, (a) the covenant and other
rights provided under this Section II to the other Party and its
Authorized Licensees with respect to patents owned or controlled by
such Affiliate at the time of the status change shall continue, and
(b) if such Affiliate was an Affiliate on the Effective Date, it
shall continue to receive the benefit of the foregoing covenant
only to the same extent and with respect to its same products that
it received prior to its status change.
Sun and Microsoft Confidential
III. S TAND -S TILL
1. Further Covenant . During the
Stand-Still Period, each Party hereby covenants not to bring or
prosecute any judicial, administrative or other proceedings of any
kind against the other Party for or based on patent infringement on
account of the making, use, sale, offer for sale, importation,
export or other disposition or promotion of any of the other
Party’s products. The foregoing covenant is personal to the
Parties and does not apply to any third party, including any
Authorized Licensee of either Party. The foregoing covenant shall
not prevent either Party from engaging in discussions with any
third party or the other Party regarding the licensing of its
patents, or from enforcing its patents against any entity other
than a Party. Further, nothing shall prevent the Parties from
seeking damages after the Stand-Still Period terminates for patent
infringement occurring during the Stand-Still Period and not
subject to the covenants not to sue set forth in Section II of this
Agreement. If either Party violates this covenant, the other Party
shall be free to immediately end the Stand-Still Period. For
purposes of this Agreement, “ Stand-Still Period
” means the period beginning on the Effective Date and ending
on the date six (6) months after the Effective Date.
2. New Affiliates/Assignment of
Patents/Change of Affiliate Status . Any entity that becomes an
Affiliate after the Effective Date shall be deemed included in the
term “Party”, as applicable, for purposes of Section
III and shall be subject to and receive the benefit of the covenant
in Section III.1. If any proceeding has been commenced prior to the
date such entity becomes an Affiliate, the affected Parties shall
jointly apply to the applicable court or agency to stay such
proceeding until the end of the Stand-Still Period. If either Party
assigns any patent it owns or controls or any right to enforce such
patent, the assigning Party shall require as a condition of any
such assignment that the assignee covenant not to bring or
prosecute any proceeding as set forth in Section III.1 with respect
to such patent. If an Affiliate ceases to be an Affiliate after the
Effective Date, (i) the covenant and other rights provided under
this Section III to the other Party with respect to patents owned
or controlled by such Affiliate at the time of the status change
shall continue until the end of the Stand-Still Period; and (ii)
the
