SUPPLIER AND RESELLER AGREEMENT









EXHIBIT 10.74




 




***PORTIONS

OF THIS EXHIBIT HAVE BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL

TREATMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.




 




OEM SUPPLY AGREEMENT




 




This OEM

Supply Agreement (the “Agreement”) is entered into as of March 22, 2002, by and

between NEOWARE

SYSTEMS, INC. (“Neoware”), a Delaware corporation, with its

principal place of business at 400 Feheley Drive, King of Prussia, Pennsylvania

19406, and NETWORK COMPUTING DEVICES, INC. (“NCD”), a Delaware

corporation, with its principal place of business at 301 Ravendale Avenue,

Mountain View, California 94043.




 




WHEREAS,

NCD is presently engaged in the business of designing, developing,

manufacturing, distributing and selling server and thin client management

software marketed under the ThinPath and Thinfrastructure brand names, and thin

client products, including Network Computers marketed under the NC900 brand

name, and Windows-based thin client devices marketed under the ThinStar brand

name;




 




WHEREAS,

contemporaneously with the execution and delivery hereof, Neoware is acquiring

the goodwill and certain assets used or useful in NCD’s business of designing,

developing, manufacturing, distributing and selling the Windows-based thin

client devices marketed under the ThinStar brand name pursuant to an Asset

Purchase Agreement, dated as of March 22, 2002, to which Neoware and NCD are

parties (the “Purchase Agreement”); and




 




WHEREAS,

NCD wishes to purchase ThinStar products from Neoware and distribute  such

products in Europe, the Middle East and Africa, and Neoware is willing to

supply NCD with such products.




 




NOW, THEREFORE,

in consideration of the mutual covenants contained herein, the parties,

intending to be legally bound hereby, agree as follows:




 




1.             Appointment as Distributor;

Territory; Products.




 




1.1           Subject to all the terms and

conditions of this Agreement, Neoware hereby appoints NCD for the term of this

Agreement as an exclusive distributor of the Products (as hereinafter defined)

only to persons and entities located and taking delivery in Europe, the Middle

East and Africa (the “Territory”).  NCD

agrees to purchase the Products exclusively from Neoware in accordance with the

terms of this Agreement. Products resold by NCD for further distribution may be

distributed only through persons who are bound in writing to all the

restrictions on NCD contained in this Agreement.  Except as set forth herein, nothing in this Agreement shall be

construed as limiting in any manner Neoware’s marketing or distribution

activities or its appointment of other suppliers, resellers, distributors,

licensees or agents with respect to any of its products (except for the

Products marketed and sold under the ThinStar brand) or any of its intellectual

property, including the intellectual property which is a part of the Products

(except for the ThinStar brand name).




 




1.2           “Products” shall mean the products

marketed and sold under the ThinStar brand set forth in Attachment A, together

with the documentation provided therewith by Neoware.  Any update, enhancement or improvement of a Product that is made

generally 




 





























 




available by Neoware, that is

substantially similar to such Product, and that is marketed under the same

product number and nomenclature as such Product, shall be added to Attachment A

as a new Product.  Neoware reserves the

right to change or modify any Product at any time.  Neoware may add or delete products to or from Attachment A.  Initially, the Products will be units of

NCD’s current product line of ThinStar 332, ThinStar 332Web and ThinStar 500

units until NCD’s and NCD’s suppliers’ inventory of such units (the “Existing

Inventory”) has been consumed in accordance with Section 8.3 of the Purchase

Agreement.  Thereafter, Neoware shall

supply the ThinStar Products either with client software and functionality the

same as NCD’s client software and functionality, provided that NCD develops

such software at its sole cost, or with Neoware’s  standard client software, extended by NCD’s client-side management

software, provided that NCD develops such software at its sole cost.  If NCD develops such software, Neoware shall

provide limited telephone technical assistance to NCD to assist NCD in doing

so.  Additionally, Neoware will agree to

provide versions of its thin client products based upon Linux, Windows CE,

Windows NTe and Windows XPe to NCD, provided that NCD extends these products

with NCD’s client-side management software. 

Neoware and NCD will collaborate to develop additional products with functionality

and pricing required to meet NCD’s market requirements




 




2.             Supply and Payment Terms.




 




2.1           Neoware agrees to sell the Products

to NCD, and NCD agrees to purchase the Products from Neoware, in accordance

with the terms and conditions of this Agreement.




 




2.2           Products shall be delivered F.O.B.

Neoware’s applicable warehouse or place of production, in the United States,

China, Taiwan or other location of origin. Neoware shall supply the Products to

NCD at a fixed price that represents a minimum of *** (***) margin over actual

burdened cost to Neoware, except with respect to ThinStar Voyager units, which

Neoware shall supply to NCD at a fixed price representing a minimum of ***

(***) margin to Neoware. As of the date hereof, prices payable by NCD are those

set forth in Attachment B.  Neoware

shall have the right, from time to time or at any time, to change such prices

to conform to the foregoing minimum margin requirements, upon thirty (30) days

written notice.  New prices will apply

to all shipments made after the end of such notice period.  In addition, NCD will pay ***.  Payment shall be made in U.S. dollars.  Terms of payment will be net sixty (60) days

from invoice date, unless otherwise agreed to in writing by NCD and Neoware, or

unless Neoware at any time determines that NCD’s credit is not satisfactory, in

which case payment terms shall be C.O.D. 

NCD’s payment obligations shall be secured pursuant to the terms of the

Escrow and Security Agreement, dated March 22, 2002, between Neoware and NCD.




 




2.3           Copies of software Products are

licensed for distribution only and are not sold.  NCD is not entitled to receive any source code or source

documentation relating to the Products. Software components of Product(s) shall

be licensed by Neoware to the end-user customer in accordance with the terms of

the software license accompanying the relevant Product(s).  NCD shall inform its resellers in writing,

and require them to deliver to the end-user




 




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customer the applicable

software licenses with the relevant Product(s), and if required by applicable

law,  obtain the customer’s signature on

such licenses.




 




3.             Orders; Shipment.




 




3.1           Neoware and NCD will agree to a

schedule for the manufacture and shipment of Products. Once agreed to,

manufacture and shipment of Products will be in accordance with NCD’s binding

purchase orders (“Purchase Orders”). Purchase Orders shall be numbered and

dated and reference this Agreement in accordance with the provisions set forth

in Attachment C.




 




3.2           NCD forecasts of Product purchases

beyond ninety (90) days (or some other mutually agreed period) are for planning

purposes only, are not firm, and will be issued every two weeks. Such forecasts

shall not constitute or be deemed to be binding commitments by NCD.




 




3.3           Neoware will manufacture Products

according to the quantity and delivery schedules set forth in Purchase Orders

in effect from time to time during the term of this Agreement. Product Lead

Times shall be set forth in Attachment B. 

Neoware shall either acknowledge or object to each Purchase Order within

five (5) days of receipt. Lack of acknowledgment by Neoware shall constitute

acceptance.  Purchase Order Releases

shall authorize shipment of Product to NCD or NCD customers.




 




3.4           Neoware will use its commercially

reasonable efforts to meet any scheduled ship dates but reserves the right to

schedule, reschedule or make partial shipments at its discretion; provided,

however, that Neoware shall use its commercially reasonable efforts to give NCD

notice for such rescheduling or partial shipments.




 




3.5           Upon delivery to the carrier, title

(except as set forth herein) and risk of loss for all Product(s) shall pass to

NCD.  Neoware shall use NCD’s specified

carriers as identified on NCD’s Purchase Orders.  In the event of loss or damage, NCD shall notify the carrier and

the insurer for the purpose of filing a claim. 

Neoware will provide reasonable assistance to NCD in establishing any

such claim.




 




3.6           Product over-shipment, incorrect

shipment or receipt of a D.O.A. (Dead On Arrival) unit may be returned without

penalty as set forth in Attachment D.




 




3.7           Neoware shall package, handle and

label the Products so as to protect the Products from loss or damage, in

conformance with good commercial practice, NCD’s specifications (provided NCD’s

packing specifications do not create such non-conformance), government

regulations, or other applicable standards. 

Neoware shall be responsible for loss or damage resulting from such

non-conformance.  Invoices will be

forwarded to NCD the next business day after shipment.




 




4.             NCD’s Covenants and Representations.




 




Except as

expressly and unambiguously provided herein, NCD represents, warrants and

agrees:




 




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4.1           Not to (i) disassemble, decompile or

otherwise reverse engineer the Products or otherwise attempt to learn the

source code, structure, algorithms or ideas underlying the Products, (ii) rent,

lease or otherwise provide temporary access to a Product, except as agreed by

Neoware, (iii) copy or modify the Products, or (iv) allow others to do any of

the foregoing.




 




4.2           To use its commercially reasonable

efforts to successfully market, distribute and support (including installation,

training and other support) the Products on a continuing basis, and to comply

with good business practices and all laws and regulations relevant to this

Agreement or the subject matter hereof.




 




4.3           To keep Neoware informed as to any

major problems encountered with the Products and any resolutions arrived at for

those problems, and to communicate promptly to Neoware material modifications,

design changes or improvements of the Products suggested by any customer,

employee or agent.  NCD will also

promptly notify Neoware of any infringement of any trademarks or other

proprietary rights relating to the Products, of which it becomes aware.




 




4.4           To comply with all export laws and

restrictions and regulations of the Department of Commerce or other United

States or foreign agency or authority, and not to export, or allow the export

or reexport of any Product in violation of any such restrictions, laws or

regulations. NCD shall, with the assistance of Neoware, which assistance shall

be promptly provided, obtain any necessary licenses and/or exemptions with

respect to the export from the U.S. of all material or items deliverable.




 




4.5           To obtain and maintain, at its

expense, any business licenses, permits and approvals which are required to

sell the Products and to comply with applicable law and regulations.




 




4.6           To demonstrate the Products when

demonstrating thin client products to customers and prospective customers at

trade shows, seminars and all other marketing events.




 




4.7           To advertise the Products in its

advertisements, product brochures and on its website.  All advertisements and promotional materials of the Products

shall be subject to the prior approval of Neoware, which approval shall not be

unreasonably withheld.




 




4.8           To provide Neoware with access to its

sales force for training and to invite Neoware’s employees to joint

presentations to its customers and prospects.




 




4.9           To dedicate a product marketing

person whose primary responsibility will be to support marketing and sales of

the Products to its customers.




 




4.10         To provide Neoware with monthly

sales-out reports by the end of each month detailing the company name, postal

code, quantity and configuration of the Products shipped in the prior month to

end customers or resellers for all end customers or resellers to whom Neoware

does not directly ship products.




 




4.11         To comply with Neoware’s business

compliance requirements, including a Business Plan, Hardware and Software

Training and Sell Through Reporting, all as set forth on Attachment E.




 




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4.12         To read and follow any additional

requirements for the distribution of Products as may be specified in the

applicable attachments hereto, distributor handbook or ongoing communications.




 




4.13         Not to purchase, design or develop for

sale any thin client device under the NCD or ThinStar brands, except for the

existing NCD NC900 thin client device, other than products purchased from

Neoware.




 




4.14         To purchase the Existing Inventory of

the Products in accordance with Section 8.3 of the Purchase Agreement.




 




5.             Warranty and Technical Support.




 




5.1             EXCEPT FOR THE WARRANTY ACCOMPANYING EACH PRODUCT, NO

OTHER WARRANTY OR CONDITION, EXPRESS OR IMPLIED, SHALL APPLY.  NEOWARE SPECIFICALLY DISCLAIMS THE IMPLIED

WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  NO REPRESENTATION, CONDITION OR WARRANTY,

INCLUDING BUT NOT LIMITED TO, STATEMENTS OF CAPACITY, SUITABILITY FOR USE, OR

PERFORMANCE, WHETHER MADE BY NEOWARE EMPLOYEES OR NCD PERSONNEL, SHALL BE

CONSIDERED TO BE A WARRANTY BY NEOWARE FOR ANY PURPOSE OR GIVE RISE TO ANY

LIABILITY OF NEOWARE WHATSOEVER. The above warranty does not extend

to any Product that (i) is modified or altered, (ii) is not maintained to

Neoware’s maintenance recommendations, (iii) is operated in a manner other than

that specified by Neoware, or (iv) is treated with abuse, negligence or other

improper treatment.  NCD is fully

responsible for satisfaction of its customers and will be responsible for all

claims, damages, settlements, expenses and attorneys’ fees incurred by Neoware

with respect to NCD’s customers or their claims beyond Neoware’s above warranty

obligation to NCD.  NCD’s sole remedy

with respect to any defect of the Products is as stated herein.




 




5.2           NCD may return Products found to be

defective within thirty (30) days of shipment for credit against replacement

Products, provided the amount for the credit shall be equal to, and shall not

exceed, the purchase price paid by NCD. 

All replaced parts or Products shall become the property of

Neoware.  NCD shall return all defective

parts or Products to Neoware in the United States, Taiwan or China, at

Neoware’s option, freight and duty prepaid. 

Replaced Products shall be shipped by Neoware freight prepaid.




 




5.3           Neoware shall provide technical

support to NCD as set forth in Attachment F.




 




6.             Indemnification.




 




6.1           Neoware will defend, indemnify and

hold NCD and its officers, directors, agents and employees harmless from

liability resulting from any claim of infringement by the Product of any

copyright, trade secret or patents, provided that NCD notifies Neoware within

ten (10) days of any such claim in writing and gives to Neoware information,

assistance and the sole authority to defend or settle such claim (at Neoware’s

expense).  Neoware will pay all damages

and costs finally awarded against NCD. 

If Neoware’s Product is held to infringe, and the use of 




 




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such Product is enjoined, or in

the case of settlement, Neoware will have the option either to procure for NCD

the right to continue using such Product or modify the Product so it becomes

non-infringing, or grant NCD a credit for the depreciated value of the Product

and accept return of the Product.




 




6.2           The foregoing indemnification does

not apply with respect to Products or portions of components thereof (i) used

in combination with products not supplied by Neoware, if such claim would have

been avoided but for such combination, (ii) made in accordance with NCD’s

specifications, designs or instructions, to the extent that such

specifications, designs or instructions caused such claim, (iii) which are

modified after shipment by Neoware, if such claim would have been avoided but

for such modification, (iv) combined with other products, processes or

materials, if such claim would have been avoided but for such combination, (v)

where NCD continues the allegedly infringing activity after being notified

thereof or after being informed of a modification that would have avoided the

alleged infringement, or (vi) where NCD’s use of the Product is not in

accordance with the terms of, or documentation or specifications provided by

Neoware in, this Agreement, if such claim would have been avoided but for such

use.  NCD will indemnify and hold

Neoware and its officers, directors, agents and employees harmless from all

damages, settlements, attorneys’ fees and expenses related to a claim of

infringement excluded from Neoware’s indemnification obligation under this

section.




 




The foregoing

states the entire liability of Neoware with respect to infringement of

intellectual property by the Products or any parts thereof.




 




7.             Limited Liability.




 




NOTWITHSTANDING

ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER PARTY WILL BE LIABLE WITH

RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE,

STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (1) ANY AMOUNTS IN

EXCESS IN THE AGGREGATE OF THE AMOUNTS PAID TO NEOWARE HEREUNDER DURING THE

TWELVE-MONTH PERIOD PRIOR TO THE DATE THE CAUSE OF ACTION AROSE OR (2) ANY

INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS OR LOST DATA OR (3) COST OF

PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES.  NEOWARE SHALL HAVE NO LIABILITY FOR ANY

FAILURE OR DELAY DUE TO MATTERS BEYOND ITS REASONABLE CONTROL.




 




8.             Title; License.




 




8.1           Upon delivery to the carrier, except

as set forth herein, title to the Products shall pass to NCD.




 




8.2           Title in and to the documentation for

such Products shall remain solely in Neoware.




 




8.3           Title in and to, and except as

expressly provided herein, all rights to all software Products, all copies and

derivative works thereof, and all related documentation and materials, shall

remain solely in Neoware.




 




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8.4           Title in and to, and except as

expressly provided herein, all rights to any and all service marks, trademarks,

trade names or other designations, copyrights, patent rights, trade secrets and

other proprietary rights in the Products shall remain solely in Neoware.

Neoware will provide NCD with advertising guidelines for Neoware’s logos, trade

and service marks, trade names, emblems, and titles (hereinafter

“Trademarks”).  Neoware will notify NCD

in writing of the Trademarks, if any, NCD is authorized to use.  NCD may use the Trademarks only as described

in such advertising guidelines and only in association with the Product(s) it

is authorized to market.




 




8.5           Subject to the terms and conditions

set forth in the Neoware License Agreement between Neoware and NCD, the form of

which is attached hereto as Attachment G, Neoware shall grant to NCD an

exclusive license to distribute the Products in the Territory.




 




9.             Relationship of Parties.




 




The parties

hereto are independent contractors. 

Neither party is a legal representative, legal partner, franchisee or

agent of the other, and neither party has authority to act for, bind or make

commitments for the other.  Each party

shall be free to establish its own prices.




 




10.           Assignment.




 




This Agreement

and the rights hereunder are not transferable or assignable without the prior

written consent of the parties hereto, except for rights to payment.




 




11.                                 Option to

Purchase; Right of First Refusal.




 




11.1         Option to Purchase.      Neoware may purchase from NCD, at any

time prior to December 31, 2003, substantially all of the EMEA Assets and

Liabilities (as defined herein) of NCD’s EMEA Operations (as defined

herein).  Neoware shall furnish a notice

to NCD of its intent to exercise its option to purchase.  Neoware will pay NCD an amount equal to the

“Value” (as defined herein) of the EMEA Assets.  The closing of the purchase of the EMEA Assets will occur as soon

as practicable after receipt by Neoware of all customary materials required to

be delivered to Neoware in connection with the closing. Upon closing of the

purchase of the EMEA Assets, this Agreement will be deemed terminated.




 




11.1.1      For purposes of Section 11.1, “EMEA

Operations” means NCD’s operations in Europe, the Middle East and Africa.




 




11.1.2      For purposes of this Section 11.1, the

“EMEA Assets” means substantially all of the assets owned or used or useful by

NCD in connection with the EMEA Operations, at the time of the purchase,

including, but not limited to, personal property, contract rights, intellectual

property, governmental licenses and books and records, and substantially all of

the liabilities of the EMEA Operations.




 




11.1.3      For purposes of this Section 11.1, “Value”

shall be calculated as a percentage of the revenues for the EMEA Operations for

the six months ending on the last day of the calendar month preceding the date

of Neoware’s notice to NCD to exercise its option to purchase, multiplied by

two. If the profits of the EMEA Operations for such period, calculated as 




 




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EBITDA, is 1% or less of revenues,

Value shall equal 25% of revenues for such period, with each additional full

one percent of profit , as a percentage of revenues, resulting in an increase

in Value in an amount equal to 5% of revenues, up to a maximum of 60% of

revenues, multiplied by two.  The

purchase price shall be paid in unregistered shares of Neoware’s common stock,

subject to applicable securities laws, provided that Seller shall have the

right to demand that up to 30% of the shares be registered for resale.




 




11.2         Right of First Refusal. Notwithstanding

any other provision in this Agreement to the contrary, in the event NCD

receives a bona fide offer (“Offer”) to purchase the EMEA Assets at any time

prior to December 31, 2004, Neoware shall have a right of first refusal to purchase

the EMEA Assets, as described herein. Upon receiving an Offer, NCD agrees to

promptly deliver to Neoware a notice setting forth the terms of the Offer

(“Offer Notice”). The Offer Notice shall be deemed to constitute an offer to

sell to Neoware the EMEA Assets, on the terms set forth in the Offer. Neoware

will have a period of thirty (30) days from the date of the Offer Notice to

notify NCD that it agrees to purchase the EMEA Assets on such terms as set

forth in the Offer. If Neoware timely agrees in writing to purchase the EMEA

Assets, the parties will proceed to consummate the purchase of the EMEA Assets

not later than the ninetieth day after the date of the Offer Notice. If Neoware

does not agree within such thirty-day period to purchase the EMEA Assets, NCD

will have the right, for a period of ninety (90) days after such thirtieth day,

to sell to the person or entity (the “Offeror”) identified in the Offer Notice

the EMEA Assets on terms and conditions no less favorable to NCD than those set

forth in the Offer.  If NCD fails to

sell the EMEA Assets to the Offeror on such terms and conditions within such

ninety-day period, NCD will again be subject to the provisions of this Section

11.2 with respect to subsequent Offers to purchase the EMEA Assets. Upon

closing of the purchase of the EMEA Assets, this Agreement will be deemed

terminated.




 




11.3         Neoware Election.     In the event NCD receives an Offer under

Section 11.2, Neoware shall be entitled to elect whether to have the provisions

of Section 11.1 or 11.2 apply to its purchase of the EMEA Assets.




 




12.           Rescheduling and Cancellation.




 




12.1         NCD may increase, decrease or

reschedule Products previously released for production on agreed terms and

costs (if any) mutually agreed to by the parties.




 




12.2         NCD may not cancel production of

Products within thirty (30) days of their scheduled ship dates.  NCD may reschedule production of Products

within thirty (30) days of ship date as mutually agreed upon by the parties.  NCD may cancel Purchase Orders outside the thirty

(30) day production period but will be responsible for the Termination

Inventory as set forth in Section 13.




 




13.           Inventory Indemnification.




 




13.1         Upon cancellation of a Purchase Order,

or upon expiration of this Agreement or termination of this Agreement for any

reason, NCD shall be responsible for:




 




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(a)           all finished Products scheduled for

shipment within the thirty (30) days immediately following Neoware’s receipt of

the cancellation or termination notice (the “Notice”);




 




(b)           all work-in-process at receipt of the

Notice; and




 




(c)           all components, subassemblies and

other material purchased to fill a Purchase Order or authorized to be purchased

by Neoware which are on hand or on order at the time of receipt of the Notice,

including, without limitation, any parts of the Products made obsolete due to

changes to the Products and the quantity of Products ordered, provided that

such components, subassemblies or other materials cannot be used in other products

by Neoware on a current basis.




 




Items (a) through (c) above are

referred to as the “Termination Inventory.” 

In calculating the quantity of finished Products under (a) above,

Products rescheduled for manufacture and shipment during the forty-five (45) days

immediately prior to receipt of the Notice may be counted by Neoware.




 




13.2         Within thirty (30) days from the date

of termination or cancellation, Neoware will invoice, and NCD will purchase,

the Termination Inventory, at the purchase price in effect as of the date of

termination or cancellation, as applicable.




 




14.           Term and Termination.




 




14.1         The term of the Agreement shall

commence on the date hereof (the “Effective Date”) and shall continue until

December 31, 2004, or until it is otherwise terminated pursuant to the terms

hereof.




 




14.2         This Agreement may be terminated by

either party if the other party materially breaches this Agreement and fails to

cure the default within thirty (30) days after receipt of written notice of

termination from the other party specifying such breach, or fails to reach

agreement with the party providing notice within such thirty (30) day period to

cure the breach in accordance with such agreement.




 




14.3         If either party becomes insolvent or

seeks protection under, or becomes the subject of, any bankruptcy,

receivership, creditor’s arrangement or comparable proceeding, the other party

may at its option, by written notice, immediately terminate this Agreement.




 




14.4         If either party ceases to do business,

or otherwise terminates its business operations, the other party may at its

option immediately terminate this Agreement.




 




14.5         Termination of this Agreement shall not

affect Neoware’s right to be repaid for undisputed invoices for Products

already shipped and accepted by NCD or Neoware’s rights to any credits or

payments owed or accrued to the date of termination, or NCD’s rights to receive

Products under Purchase Orders accepted by Neoware, provided that such Purchase

Orders are for a maximum quantity representing sixty (60) days of supply based

upon the prior six months’ deliveries.




 




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14.6         The following sections shall survive

termination of this Agreement: Sections 5, 6, 7, 8, 10, 11, 12 and 15.




 




15.           General.




 




15.1         Except as otherwise expressly provided

herein, any provision of this Agreement may be amended and the observance of

any provision of this Agreement may be waived (either generally or any

particular instance and either retroactively or prospectively) only with the

written consent of the parties. 

However, it is the intention of the parties that this Agreement be

controlling over additional or different terms of any order, confirmation,

invoice or similar document, even if accepted in writing by both parties, and

that waivers and amendments shall be effective only if made by non-preprinted

agreements clearly understood by both parties to be an amendment or waiver.




 




15.2         This Agreement shall be governed by and

construed under the laws of the Commonwealth of Pennsylvania and the United

States without regard to conflicts of laws provisions thereof and without

regard to the United Nations Convention on Contracts for the International Sale

of Goods.  Unless waived by Neoware in

writing for the particular instance, the sole jurisdiction and venue for

actions related to the subject matter hereof shall be the Pennsylvania state

and federal courts having within their jurisdiction the location of Neoware’s

principal place of business.




 




15.3         Headings and captions are for

convenience only and are not to be used in the interpretation of this

Agreement.




 




15.4         Any notices, consents, waivers or other

communications required or permitted to be given under the terms of this

Agreement must be in writing and will be deemed to have been delivered (i) upon

receipt, when delivered personally, (ii) upon receipt, when sent by

facsimile, provided confirmation of transmission is mechanically or

electronically generated and kept on file by the sending party or

(iii) one (1) business day after deposit with a nationally recognized

overnight courier.  The addresses for

such communications shall be the addresses first set forth herein or as amended

by notice pursuant to this section.




 




15.5         This Agreement supersedes all

proposals, oral or written, all negotiations, conversations, or discussions

between or among parties relating to the subject matter of this Agreement and

all past dealings or industry custom.




 




15.6         If any provisions of this Agreement is

held by a court of competent jurisdiction to be illegal, invalid or

unenforceable, that provision shall be limited or eliminated to the minimum

extent necessary so that this Agreement shall otherwise remain in full force

and effect and enforceable.




 




15.7         Neoware and NCD agree to be bound by

the terms of the Confidentiality and Non-Disclosure Agreement dated March 22,

2002, between Neoware and NCD, with regard to the terms of this Agreement or

any attachment hereto, and to any information disclosed by either party to the

other relating to this Agreement.




 




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15.8         Neither party shall be liable for

damages and costs to the other party arising out of delays or failures to

perform under this Agreement if such delays or failures result from causes

beyond the reasonable control of a party, and are not caused by an act or

omission of such party.  Notice of any

such delays or failures and explanation of their causes must be given to the

other party within five (5) days of the occurrence.  As soon as it is reasonably apparent that the occurrence will

likely cause a delay of more than sixty (60) days, the party against whom this

section is invoked shall have the right to terminate the affected installments

under any Purchase Order.  If NCD is the

party claiming the force majeure event, NCD shall be liable for any applicable

cancellation charges and be responsible for termination obligations as detailed

within Section 13.  This force majeure

provision may not be invoked for failure or inability to make a payment under

this Agreement.




 




15.9         This Agreement shall be binding upon

and inure to the benefit of Neoware and NCD and their respective successors,

heirs and assigns; provided, however, that, except as provided in this Section

15.9, NCD shall not directly or indirectly transfer or assign this Agreement or

any part hereof without the prior written consent of Neoware. Subject to the

foregoing, this Agreement is not intended to benefit, and shall not run to the

benefit of or be enforceable by, any other person or entity other than the parties

hereto and their permitted successors and assigns.




 




IN WITNESS WHEREOF,

the undersigned have caused this Agreement to be duly executed as of the date

first above written.




 




	

   


  	

  NETWORK COMPUTING DEVICES, INC.


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Guenther

  Pfaff


  
	

   


  	

  Name: 


  	

  Guenther

  Pfaff


  
	

   


  	

  Title: 


  	

   Chief Executive Officer


  
	

   


  	

  Date: 


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  NEOWARE SYSTEMS, INC.


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Michael

  Kantrowitz


  
	

   


  	

  Name:  


  	

   Michael Kantrowitz


  
	

   


  	

  Title: 


  	

   Chief Executive Officer


  
	

   


  	

  Date: 


  	

  3-22-02


  
								





 




11





























 




ATTACHMENT A




 




PRODUCTS




 




	

  NCD ThinSTAR 332


  
	

   


  
	

  NCD ThinSTAR 332Web


  
	

   


  
	

  NCD ThinSTAR 500


  
	

   


  
	

  NCD ThinSTAR 550


  
	

   


  
	

  NCD ThinSTAR Voyager


  





 





























 




ATTACHMENT B




 




PRODUCT LEAD TIME AND PRICE LIST




 




	

  Model


  	

   


  	

  P/N


  	

   


  	

  Description


  	

   


  	

  Price (1)(4)


  	

   


  	

  Lead time


  
	

  NCD ThinStar 332


  	

   


  	

   


  	

   


  	

  Existing NCD ThinSTAR 332


  	

   


  	

  $


  	

  ***


  	

   


  	

  4 WEEKS


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  NCDThinSTAR 332


  	

   


  	

   


  	

   


  	

  Existing NCDThinSTAR 332Web


  	

   


  	

  $


  	

  ***


  	

   


  	

  4 WEEKS


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  NCD ThinSTAR 500


  	

   


  	

   


  	

   


  	

  Existing NCD ThinSTAR 500


  	

   


  	

  $


  	

  ***


  	

   


  	

  4 WEEKS


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  NCD ThinSTAR 550 (5)


  	

   


  	

  TSB55 


  0-1


  	

   


  	

  ThinSTAR 550 CE.NET 16MB FLASH 32MB RAM MOUSE EURO CORD (NO KBD)


  	

   


  	

  $


  	

  ***


  	

   


  	

  4 WEEKS (2)


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  NCD ThinSTAR Voyager


  	

   


  	

   


  	

   


  	

  (6)


  	

   


  	

  (6)


  	

   


  	

  (6)


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Customization Charge


  	

   


  	

   


  	

   


  	

  Rating Label, Packaging, Bezel Silkscreen, Manual.


  	

   


  	

  $


  	

  ***


  	

   


  	

  6 WEEKS (3)


  





 






















Notes:




(1).  Price based upon minimum

500 units per shipment.




(2). 

Standard leadtime based upon accurate rolling forecast, otherwise 8

weeks.




(3).  Customization leadtime is from receipt of

NCD artworks to availability in mass production.  




(4).  Excluding the ThinSTAR Voyager, the purchase

price shall be *** of the above prices for the ThinSTAR 550, and *** of the

above prices for the ThinSTAR 332, ThinSTAR 332Web and ThinSTAR 500 after ***

of combined shipments per quarter.  




(5).  The ThinSTAR 550 will be

made available only after Neoware’s obligation to purchase up to a maximum of 10,000 existing ThinSTAR units under

Section 8.3 of the Purchase Agreement has been satisfied.  




(6).  The description, price and

lead time applicable to the NCD ThinSTAR Voyager will be subject to the OEM

Purchase and Development Agreement between NCD and Airspeak, Incorporated,

dated December 20, 2001, which agreement will be assigned to Neoware.




 





























 




ATTACHMENT C




 




PRODUCT ORDERS




 




 




1.0           To place an order,

purchase orders should be sent by fax/mail to:




 




Neoware Systems, Inc.




400 Feheley Drive




King of Prussia, Pa 19406




ATTN: Order Administration




Email:  orders@neoware.com




Phone: 610-277-8300 Ext. 184




Fax: 610-275-5739




 




The signed purchase order should include:




Agreement number




Purchase order number




Bill to name and address




Ship to name(s) and address(es)




Part number of each Product ordered




Quantity of each Product ordered




Price of each Product ordered




Desired delivery date(s)




Preferred carrier and forwarding agent




Special shipping instructions, if appropriate




 




Delivery Date(s) shall mean the

date(s) Neoware shall deliver the Product(s) to a freight carrier as specified

in NCD’s purchase order.  Neoware shall

incur no shipping costs unless expressly agreed to in writing.




 





























 




ATTACHMENT D




 




PRODUCT RETURNS




 




Section I.               Product Returns: (DOA/RMA- Return

Merchandise Authorization)




 




1.0           NCD may return

Product without penalty under the following conditions:




 




Over-shipment

by Neoware.




Incorrect

Product shipped.




Product

received was Dead On Arrival (D.O.A.), damaged or defective unless such damage

was caused by NCD’s freight carrier.




 




NOTE

1:                         Product

may only be returned under this process if they have been in NCD’s possession

no longer than thirty (30) calendar days. NCD may be asked to provide the

serial number(s) as proof of the 30-day possession.  For all repairs, please see Product Returns as set forth

in Section II of this Attachment.




 




2.0           Process:




 




2.1)          Contact 610-277-8300 to request RMA.




 




2.2)          Upon request provide:




 




Product part number(s)




Quantity




Product serial number(s)




Reason for return or the specific failure experienced




Replacement P.O. and ship-to address




 




2.3)          Customer Support will:




 




 




Provide RMA number and Neoware shipping address to return Product.




Fax RMA label to requestor; such label MUST be attached to all Product

cartons to be returned to Neoware.




 




NOTE 2:  RMA number MUST be visible on EACH

carton.  NCD may use the RMA label

provided, or may prominently note RMA number on shipping label.  PROPER CREDIT CANNOT BE ISSUED WITHOUT THE

RMA NUMBER.




 




The return shipping expense will be incurred by Neoware.




 




NOTE 3:  Please note that

replacement orders must be made by NCD, not the end-user.  If the return has been in NCD’s possession

more than 30 days, the customer should follow the warranty policy for the

units. (See the related Repair Procedure.)




 





























 




Section II:   Product Returns: (For All Repairs)




 




1.0         Policy




 




During the three-year return to

depot warranty applicable for the hardware, the warranty will be fulfilled by

Neoware in Europe, the United States, Taiwan, China, or other location, at

Neoware’s sole option.




 




2.0         Process




 




Contact 610-277-8300 to request RMA.




 




Caller must

have the following information available when placing a service call:




 




Unit Model

Number




Unit serial

Number




Description of

Problem




 




Upon supplying this information

you will be given a repair authorization as well as shipping information.




 




Customer pays for all shipping

costs. Neoware pays return shipping from the repair depot.




Upon receiving a unit, the average turn around time is 30 days.




 





























 




ATTACHMENT E




 




BUSINESS PLAN,

HARDWARE AND SOFTWARE TRAINING


AND SELL THROUGH REPORTING REQUIREMENTS




 




 




Section I.               Business Plan – Elements of the

Business Plan should include the following:




 




1.0           Business

Plan:




 




1.1)          ***.




 




1.2)          ***.




 




1.3)          ***.




 




1.4)          ***.




 




1.5)          ***.




 




Section II.              Neoware

Hardware and Software Training




 




2.0           Training




 




2.1)          To ensure that

resellers can properly support Neoware Products and customers, Neoware requires

that distributors receive training on Neoware’s Products.  It is required that at least two (2) of

NCD’s employees be trained by Neoware.




 




2.2)          NCD must be trained

on Windows NT prior to being authorized to sell Neoware’s Products.  Neoware will not authorize any distributor

who has not been trained on Windows NT. 

Potential distributors may be trained on Citrix products after having

been signed by Neoware at Neoware’s discretion.




 




Section III.            Sell Through Reporting




 




3.0           Reporting




 




3.1)          NCD must provide Neoware with

Point-of-Sale (“POS”) reports for each month by the 7th of the

following month.




 




3.2)          POS should be sent in a Microsoft

Excel format.  Columns should be listed

as follows:




 





























 




XYZ COMPANY POS

REPORT: JAN 1 - JAN 31, 2001




 




	

  ORDER DATE


  	

   


  	

  CUSTOMER

  NAME


  	

   


  	

  SALES REP.


  	

   


  	

  PART#


  	

   


  	

  QTY


  	

   


  	

  COST


  	

   


  	

  EXT COST


  	

   


  	

  SHIP TO

  CITY


  	

   


  	

  SHIP

  TO  COUNTRY


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




POS report

should be e-mailed to orders@neoware.com.




 




Section IV.            Inventory

Reporting




 




4.0           Reporting




 




4.1)                             Distributor must provide

Neoware with an inventory report for each month by the 7th of the

following month.  Inventory Reports

should be e-mailed to orders@neoware.com.




 




4.2)                             Inventory Reports should

be sent in a Microsoft Excel format. 

Columns should be listed as follows:




 




	

  Vendor Part#


  	

   


  	

  Description


  	

   


  	

  Inventory

  Status Code


  	

   


  	

  Back

  Orders


  	

   


  	

  Qty

  Available


  	

   


  	

  In Transit


  	

   


  	

  On Order


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 





























 




ATTACHMENT F




 




NEOWARE

TECHNICAL SUPPORT RESPONSIBILITIES




 




1.0           Neoware

Technical Support Responsibilities:




 




1.1)          Technical Support




1.1.1)                                  Neoware will provide

the following support service options for NCD that will allow it to fulfill its

end-user technical support responsibilities:




 




	

  1.1.1.1)


  	

  NCD will provide Level 1 with Neoware “back-up” Level 2 support


  
	

  1.1.1.2)


  	

  Neoware may make available, to NCD, Level 2 support as required (for

  a fee), to support end-user.  Level 2

  support can be purchased from Neoware at the prices listed on Neoware’s

  published price list.


  
	

  1.1.1.3)


  	

  Neoware may make available, to NCD, Level 2 support on an annual

  technical support contract basis at the price listed in the Neoware published

  price list.  Agreements will be

  between Neoware and NCD, on a per end-user account basis.  A Level 2 support agreement (Neoware

  Technical Support Agreement) will provide NCD with technical support services

  necessary to offer Level 2 support to their end-user accounts.


  
	

  * Level 1 support refers to initial call taking and routine technical

  support


  
	

  ** Level 2 support refers to advanced technical support (i.e.:

  troubleshooting, debugging, etc.)


  





 




1.2)          Contacting Technical

Support




 




Technical Support

Response Center




 




By phone

number: +1-610-277-8300




	

   


  
	

   


  	

  U.S. East Coast Time


  
	

   


  	

  8:30 a.m. – 5:30 p.m. (Monday - Friday); Immediate response


  
	

   


  	

  - 7 x 24 hr.; Voice mail


  
	

   


  	

   


  
	

  By E-mail:


  	

  support@neoware.com - response within 1 business day


  
	

  By Internet:


  	

  http://www.neoware.com/


  
			





 




1.3)          Product Maintenance




 




1.3.1)                    Should

Neoware determine that there is a defect in its product, Neoware will use its

commercially reasonable efforts to provide an avoidance procedure for and/ or a

correction of such defect through off-site telephone support of NCD.  Neoware shall have sole discretion as to the

method and manner of maintenance and support efforts.




 




1.4)          Software Updates




 




1.4.1)                    As

solutions are developed for known errors in the software, they may be

incorporated from time to time in updates to the software (“Software

Updates”).  Neoware will notify NCD of

such updates on an as needed basis and will make Software Updates available to

NCD at then current prices when updates are developed.  However, Neoware is under no obligation to

provide software updates for the Products.




 




 





























 




1.5)          Enhancements




 




1.5.1)       On an as needed

basis, Neoware will inform NCD of new features (“Enhancements”) which NCD may

acquire at its option, at Neoware’s then current prices.




 




Section II.              Neoware Hardware and Software

Training




 




2.0           Partner

Technical Support Responsibilities




 




2.1)          Marketing Efforts

& Restrictions




 




2.1.1)       NCD will understand and agree to instruct

customers on technical support options.




2.1.2)       NCD shall leave all technical support information

shipped with the unit intact.




 




2.2)          Training




 




2.2.1)                    NCD agrees to maintain a staff

having the technical knowledge and training necessary to inform customers of

Neoware Product features and capabilities.




 




2.3)          Technical Support




 




2.3.1)                    NCD will provide technical support

to meet the needs of their customers (Level 1 & Level 2 support), either

directly providing technical services or indirectly through Neoware or any

combination thereof.  For customers that

are directly supported by NCD (NCD providing Level 1 support), it will be the

responsibility of NCD to inform these end-users of updates and enhancements to

the Product.




 




2.4)          Costs




 




2.4.1)                    Except as provided herein, NCD will

pay all costs and expenses incurred as part of its technical support responsibilities.




 





























 




ATTACHMENT G




 




NEOWARE

LICENSE AGREEMENT




 




NEOWARE LICENSE AGREEMENT




 




This License

Agreement (the “Agreement”) is entered into this 22nd day of March, 2002 (the

“Effective Date”), by and between NEOWARE SYSTEMS, INC. (“Neoware”), having its

principal place of business at 400 Feheley Drive, King of Prussia, Pennsylvania

19406, and NETWORK COMPUTING DEVICES, INC. (“NCD”), having its place of

business at 301 Ravendale Drive, Mountain

View, California 94043.




 




WHEREAS, NCD is presently engaged in the business of

designing, developing, manufacturing, distributing and selling server and thin

client management software marketed under the ThinPath and Thinfrastructure

brand names, and thin client products, including Network Computers marketed

under the NC900 brand name, and Windows-based thin client devices marketed

under the ThinStar brand name;




 




WHEREAS, contemporaneously with the execution and

delivery hereof, Neoware is acquiring the goodwill and certain assets used or

useful in NCD’s business of designing, developing, manufacturing, distributing

and selling the Windows-based thin client devices marketed under the ThinStar

brand name pursuant to an Asset Purchase Agreement, dated as of March 22, 2002,

to which Neoware and NCD are parties (the “Purchase Agreement”);




 




WHEREAS, contemporaneously with the execution and

delivery hereof, NCD has agreed to purchase ThinStar products from Neoware and

to distribute such products in Europe, the Middle East and Africa, and Neoware

is willing to supply NCD with such products, pursuant to an OEM Supply

Agreement, dated as of March 22, 2002, to which Neoware and NCD are parties

(the “OEM Supply Agreement”); and




 




WHEREAS, Neoware wishes to grant to NCD certain licenses

as set forth herein so that NCD may perform certain of its obligations under

the Purchase Agreement and the OEM Supply Agreement.   




 




NOW,

THEREFORE, in

consideration of the mutual promises contained herein, and intending to be

legally bound hereby, the parties agree to the following:




1.             DEFINITIONS.




(a)   “Intellectual Property Rights” means all

copyright, trademark, trade secret, trade name, know-how, mask work and moral

rights and all rights related to issued and pending patents and all patent

registrations and applications for registrations (including patent reissues,

divisions, continuations, continuations-in-part, renewals and extensions).




 




(b)   “Neoware Software” means those portions of

Neoware’s Windows CE, Windows NTe, Windows XPe and Linux software that Neoware

in its sole judgment deems necessary for NCD to fulfill its obligations under

Section 1.2 of the OEM Supply Agreement, as well as updates and enhancements

thereto, in source code form, and the related documentation.




 




 





























 




(c)   “ThinStar Software” means the ThinStar

Software acquired from NCD pursuant to the Purchase Agreement, and products

incorporating all of the ThinStar Software, as well as updates and enhancements

thereto, as described in Exhibit A, in source code and object code form,

and the related documentation.




2.             LICENSE &

OWNERSHIP.




(a)   Nonexclusive License to ThinStar Software.

Neoware grants to NCD a nonexclusive, non-transferable, worldwide, fully-paid

license to use, reproduce, modify and create derivative works of the ThinStar

Software for the purposes of (i) complying with its warranty and support

obligations as set forth in Sections 8.1 (“Seller-Assumed Warranty

Obligations”) and 8.4 (“Seller-Assumed Support Service Obligations”) of the

Purchase Agreement, and (ii) developing the “Products” defined in Section 1.2

of the OEM Supply Agreement. This license shall terminate upon the later

of  (i) the date that NCD has fulfilled

its obligations as set forth in Sections 8.1 and 8.4 of the Purchase Agreement,

or (ii) the termination date of the OEM Supply Agreement.  Notwithstanding the foregoing, this license

shall be terminable by Neoware, in its sole discretion, in the event of NCD’s

continued material breach of its obligations under Sections 8.1 or 8.4 of the

Purchase Agreement.




 




(b)   Nonexclusive License to Neoware Software.  Neoware grants to NCD a nonexclusive,

non-transferable, fully-paid license to use and reproduce the Neoware Software

for the sole purpose of developing client-side management software for

Neoware’s Windows CE, NTe, XPe and Linux products, as referred to in Section

1.2 of the OEM Supply Agreement, for use on products provided by Neoware under

the OEM Supply Agreement.  This license

shall be terminable by Neoware, in its sole discretion, in the event NCD fails

to develop such software by September 30, 2002. 

This license shall terminate on the termination date of the

OEM Supply Agreement. Notwithstanding the foregoing, this license shall be

terminable by Neoware, in its sole discretion, in the event of NCD’s continued material breach of  its

obligations under Sections 8.1 or 8.4 of the Purchase Agreement.




 




(c)   Exclusive License to Distribute ThinStar

Brand in EMEA.  Subject to

NCD’s  timely payment of the price (as

set forth in the OEM Supply Agreement) and compliance by NCD with each of the

terms and provisions of the OEM Supply Agreement, Neoware grants to NCD an

exclusive, non-transferable, fully-paid license to sell and distribute the

ThinStar  branded products set forth in Exhibit

B to NCD’s customers in Europe, the Middle East and Africa (“EMEA”),

provided that such products are purchased from Neoware in accordance with the

terms of the OEM Supply Agreement.  This

license shall be terminable by Neoware, in its sole discretion, in the event

NCD fails to perform its obligations under the OEM Supply Agreement.  This license shall terminate on the

termination date of the OEM Supply Agreement. This license grants exclusive use

of the ThinStar brand only, and does not grant any exclusive or non-exclusive

use of the ThinStar Software or the Neoware Software.




 




(d)   Restrictions.  NCD shall not license, sublicense,

distribute or release the Neoware Software (or any derivative works thereof) or

the ThinStar Software (or any derivative works thereof) alone or with any

software, product or service, or otherwise use the Neoware Software or the

ThinStar Software other than as set forth in this Agreement.




 




2





























 




(e)   Trademarks & Copyrights.  NCD is not granted any right or license to

display or otherwise use Neoware’s trademarks under this Agreement.  NCD shall, however, display the following

language in connection with the ThinStar Software :




“Includes

Neoware thin client appliance technology, under license from Neoware Systems,

Inc.




©2002 Neoware

Systems, Inc.  All Rights Reserved.”




in all copyright notices in product labels,

source code, help screens, manuals and all other documentation and in the

“about” window that may be activated on a user’s computer screen when using the

ThinStar Software or the Neoware Software.




(f)            Ownership.  Neoware retains all right, title and

interest, including all Intellectual Property Rights, in the ThinStar Software

and the Neoware Software and any part thereof as well as in any derivative

works of, and any updates and enhancements to, the ThinStar Software and the

Neoware Software, whether created or developed by Neoware or NCD, and NCD shall

have no rights thereto other than as set forth in Section 2 hereof.




 




3.     INDEMNIFICATION.  NCD shall indemnify, defend and hold Neoware

harmless from any and all liability, loss, cost, damage, judgment or expense

(including reasonable attorneys’ and expert witnesses’ fees and costs)

resulting from or arising out of (i) any material breach by NCD of any of the

terms of this Agreement, or (ii) any use or modification of the Neoware

Software or the ThinStar Software other than as permitted in this Agreement

which causes damage or liability to Neoware or results in infringement of any

third party’s Intellectual Property Rights. 

This obligation is subject to Neoware notifying NCD promptly in writing

of the claim.




 




4.     NO WARRANTY; DISCLAIMER.  THE NEOWARE SOFTWARE AND THE THINSTAR

SOFTWARE IS PROVIDED “AS IS” AND WITHOUT WARRANTY OF ANY KIND.  NEOWARE DOES NOT WARRANT THE PERFORMANCE OR

RESULTS FROM ANY USE OF THE NEOWARE SOFTWARE OR THE THINSTAR SOFTWARE.   NEOWARE MAKES NO WARRANTIES, EXPRESS OR

IMPLIED, AND EXPRESSLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY OR

FITNESS FOR A PARTICULAR PURPOSE.




 




5.     LIMITATION OF LIABILITY.  To the maximum extent permitted by law, in

no event shall Neoware be liable to NCD or its customers for any consequential

or incidental damages, including any lost profits or lost savings arising out

of the subject matter of this Agreement, even if Neoware has been advised of

the possibility of such damages, or any claim against NCD by any third

party.  In no event will Neoware be

liable for any representation or warranty made by NCD to any third party or for

the failure of the NCD Software or the ThinStar Software to perform.  In no event shall Neoware’s total liability

to NCD for all damages, losses, attorneys’ fees and court costs, and causes of

action in any way related to the subject matter of this Agreement (whether in

contract, tort including negligence or otherwise) exceed twenty thousand

dollars ($20,000).  Except for a breach

of any of the terms of this Agreement by NCD,




 




3





























 




 which are excluded from this limitation of liability, NCD’s total

liability to Neoware for third party claims in any way related to the subject

matter of this Agreement (whether in contract, tort including negligence or

otherwise) shall not exceed twenty thousand dollars ($20,000).




 




6.     INJUNCTIVE RELIEF.  Neoware and NCD each acknowledges and agrees

that a breach of the confidentiality restrictions contained in Section 8 shall

cause irreparable injury to the aggrieved party for which such party shall not

have an adequate remedy at law.  In

addition to any other relief to which the aggrieved party might be entitled, the

party shall be entitled to equitable relief in court, including, but not

limited to, temporary restraining orders, preliminary injunctions, and

permanent injunctions.  NCD and Neoware

hereby expressly waive any requirement that the aggrieved party first post a

bond or security before obtaining such relief.




 




7.     PUBLICITY.  Neither party may disclose the terms of this Agreement or the

subject matter thereof without the prior written consent of the other party,

unless required by law.




 




                8.             CONFIDENTIAL

INFORMATION.




(a)   Confidential Information.  By virtue of this Agreement, either party

may have access to the other party’s Confidential Information (as defined

below).  Each party agrees to use the

other party’s Confidential Information solely for purposes of this Agreement

and will hold the other party’s Confidential Information in confidence during

the term of this Agreement and after termination.  Each party further agrees that, unless required by law, it will

not make the other party’s Confidential Information available in any form to

any third party for a period of five (5) years following termination of this

Agreement other than (i) its own employees and/or contractors who need to know

or use such Confidential Information for purposes of implementing this Agreement,  (ii) its licensees as limited in Section 2

of this Agreement, or (iii) pursuant to a valid court order provided the

disclosing party provides the other party with prompt written notice of such

requirement so that the other party may seek a protective order or other

appropriate remedy. Each party shall take all reasonable precautions to prevent

the disclosure, distribution or use of the Confidential Information of the

other party by its employees, agents, or contractors in violation of the terms of

this Agreement.




(b)   Definition.  “Confidential Information” means the Neoware Software, the

ThinStar Software, the terms and conditions of this Agreement, and non-public

information provided by one party to the other under this Agreement that is

identified in writing as confidential.




(c)   Exclusions.  Confidential Information does not include information that (i) is

or becomes publicly available through no act or omission of the receiving

party; (ii) is rightfully received by the receiving party from a third party

without restriction on disclosure and without breach of a nondisclosure

obligation; or (iii) is previously rightfully known to the receiving party.




 




4





























 




                9.             TERM

& TERMINATION.




(a) Term.  This Agreement begins on the Effective Date

and continues unless and until it is terminated pursuant to Section 9(b).  Each license shall terminate as set forth in

Section 2.




(b)   Termination.  Either party may terminate this Agreement upon thirty (30) days

written notice of a material breach of this Agreement by the other party if

such breach is not cured within such thirty (30) day period.  In addition, each license may be terminated

by Neoware as set forth in Section 2.




(c)   Rights Upon Termination.  Upon termination of this Agreement, all

licenses granted to NCD under this Agreement, except as described in this

Section, shall immediately terminate, NCD shall cease all use, reproduction and

distribution of the Neoware  Software

and the ThinStar Software and any part or derivative work thereof, and NCD will

destroy all copies of the Neoware Software and the ThinStar Software and any

part thereof in NCD’s possession or under its control within ten (10) days

following the termination date, except that NCD may retain one (1) copy of the

ThinStar Software to be used solely for end-user support purposes for up to two

(2) years after termination of this Agreement.




 




                10.           GOVERNMENT

RESTRICTIONS.  For Neoware Software

and ThinStar Software and documentation delivered to an agency or

instrumentality of the United States government, NCD shall identify the Neoware

Software and the ThinStar Software and documentation as “commercial computer

software” and “commercial computer software documentation” and, pursuant to FAR

12.212 and/or DFARS 227.7202 (and their successors, as applicable), shall

restrict the government’s right to use, reproduce and/or disclose such

Neoware  Software and ThinStar Software

and documentation in accordance with the terms of NCD’s then-current standard

end user license agreement.




 




                11.           GENERAL.




(a)   Notice.  Any notices to be given hereunder will be given in writing via

postage prepaid, return receipt requested certified mail (or an equivalent

method under the laws of the country where mailed), courier service or

facsimile transmission to the address of each party set forth in this Agreement

or to such other address as either party may substitute by written notice to

the other as provided herein.  Notices

shall be effective two (2) days after official confirmation of delivery to the

intended recipient by return receipt or the equivalent or, in the case of

facsimile, one (1) day after confirmation of transmission.




(b)   Waiver.  Failure by either party to exercise any of its rights hereunder

shall not constitute or be deemed a waiver or forfeiture of such rights.




(c)   Governing Law.  This Agreement shall be governed by and

construed in accordance with the internal laws of the Commonwealth of

Pennsylvania.  The United Nations

Convention on Contracts for the International Sale of Goods (1980) is

specifically excluded from application to this Agreement.




 




5





























 




                                (d)           Severability.  If any provision of this Agreement is

unenforceable or invalid under applicable law, such provision shall be changed

and interpreted to best accomplish the objectives of the original provision to

the fullest extent allowed by law and the remaining provisions of this

Agreement shall remain in full force and effect.




 




                        (e)           Export.  NCD shall be fully and solely responsible

for securing any and all permits and licenses in order to export the ThinStar

branded products set forth in Exhibit B.




(f)    Attorney’s Fees.  In the event any proceeding or lawsuit is

brought by either party to enforce its rights hereunder, the prevailing party

shall be entitled to recover its costs, including expert witness fees and

reasonable attorneys’ fees.




(g)   Headings.  Headings are used in this Agreement for convenience only and

shall not affect any construction or interpretation of this Agreement.




(h)   Assignment. This Agreement shall be

binding upon and inure to the benefit of Neoware and NCD and their respective

successors, heirs and assigns; provided, however, that NCD shall not directly

or indirectly transfer or assign this Agreement or any part hereof without the

prior written consent of Neoware.  Any

assignee of Neoware shall be obligated to perform all of Neoware’s obligations

hereunder.  Subject to the foregoing,

this Agreement is not intended to benefit, and shall not run to the benefit of

or be enforceable by, any other person or entity other than the parties hereto

and their permitted successors and assigns.




(i)    Entire Agreement.  This Agreement, including the exhibits

attached hereto, is the complete agreement between Neoware and NCD and

supersedes any prior agreements between Neoware and NCD relating to the subject

matter hereof.  This Agreement shall not

be modified except by a properly executed written agreement.




(j)    Survival.  The provisions of Sections 2 (“Ownership”), 3

(“Indemnification”), 4 (“No Warranty; Disclaimer”), 5 (“Limitation of

Liability”), 6 (“Injunctive Relief”), 7 (Publicity), 8 (“Confidential

Information”), 9(c) (“Rights Upon Termination”) and 11 (“General”) shall

survive termination or expiration of this Agreement or the licenses granted

hereunder.




(k)   Counterparts.  This Agreement may be executed

simultaneously in two or more counterparts, each of which will be considered an

original, but all of which together will constitute one and the same instrument.




 




6





























IN

WITNESS WHEREOF,

Neoware and NCD have caused this Agreement to be executed by their duly

authorized representatives as of the date first written above.




	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  NETWORK COMPUTING


  	

   


  	

   


  	

  NEOWARE SYSTEMS, INC.


  
	

   


  	

  DEVICES, INC.


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By


  	

  /s/ Guenther Pfaff


  	

   


  	

  By:


  	

  /s/ Michael Kantrowitz


  
	

  Name:


  	

  Guenther Pfaff


  	

   


  	

  Name:


  	

  Michael Kantrowitz


  
	

  Title:


  	

  Chief Executive Officer


  	

   


  	

  Title:


  	

  Chief Executive Officer


  
	

   


  	

   


  	

   


  	

   


  	

   


  





 




 




7





























 




Exhibit A




 




ThinSTAR Software: 




 




All software used in the NCD

ThinSTAR 200, 300, 400, and 500 Series product lines,     resident in the NCD ThinSTAR thin client flash PROM and BOOT

ROM.





Boot ROM validates integrity of the

file system and may initiate a reload of the software




System can be reinitialized by

the user.





The ThinSTAR can load in additional or

replacement software modules over the network


Modules have unique upgrade policies based on terminal model number.





Ability to delete options from the

terminal over the network or locally on the terminal.





Ability to customize the available

local printers.





Local LPD for ability to print to

terminal from Unix host.





Ability to control disability setting

to enable keyboard audio confirmation.




 




All enhancements to Microsoft’s

Windows CE operating system designed and developed by NCD for use in the

ThinSTAR product line.













Exhibit B




 




Products:




 




 




	

  NCD ThinSTAR

  332


  
	

  NCD ThinSTAR

  332Web


  
	

  NCD ThinSTAR

  500


  
	

  NCD ThinSTAR

  550


  
	

  NCD ThinSTAR

  Voyager