Exhibit 10.13
Software Distribution Agreement
This Software Distribution Agreement (the "Agreement") is made and
entered into this 26th day of September, 1997 by and between Trusted
Information Systems, Inc., a Delaware corporation with offices at 00000 Xxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("TIS") and Network-1 Software & Technology,
Inc., a Delaware corporation with its principal offices at 000 Xxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Network-1").
1. Definitions. As used in this Agreement:
(a) "Confidential Information" shall mean confidential or other
proprietary information that is disclosed by either party to the other under
this Agreement including, without limitation, software, code and designs,
product specifications and other confidential business information.
Confidential information shall not include information which (i) is or
becomes public knowledge without any action by or involvement of a party;
(ii) has been independently developed other than pursuant to this Agreement;
(iii) constitutes residuals (the "Residuals") as such term is defined in
paragraph 6 of the Non-Disclosure Agreement, dated April 7, 1997, between
Network-1 and TIS; (iv) is disclosed by a party with the prior written
approval of the other party; or (v) is disclosed pursuant to any judicial or
government order provided that such party gives the other party sufficient
prior notice to contest such order.
(b) "Derivative Work" means any work which is based upon one or
more pre-existing works such as a revision, modification, translation,
abridgement, condensation, expansion, collection, compilation or any other
form in which such pre-existing work may be recast, transformed or adopted,
and which, in the absence of this Agreement or other authorizations by the
owner of the pre-existing work, would constitute a copyright infringement.
Derivative Work does not include Residuals.
(c) "Effective Date" shall mean the date identified on the
signature page of this Agreement as the effective date.
(d) "End User(s)" means any person or entity which is granted a
sublicense by Network-1, in accordance with this Agreement, to use the
Licensed Product as a component of the Network-1 FireWall/Plus Product.
(e) "Network-1 FireWall/Plus Product" shall mean the firewall
software product(s) and other software products developed by and for and
owned by Network-1 for use on Microsoft based operating systems (including
Windows/NT and Windows 95) as set forth on Exhibit A (including any
unilateral amendments provided by Network-1 to TIS) and any Updates or
Upgrades relating to such products.
(f) "Network-1 FireWall/Licensed Product" shall mean the Network-1
FireWall/Plus Product which includes the Licensed Product as a component.
(g) "Intellectual Property Rights" shall mean all forms of
intellectual property rights and protections that may be obtained for or may
pertain to, the Licensed Product, Confidential Information and marks and may
include without limitation:
(i) all right, title and interest in and to all Letters Patent
and all filed, pending or potential applications for Letters Patent,
including any reissue, reexamination, division, continuation or
continuations-in-part applications throughout the world now or
hereafter filed;
(ii) all right, title and interest in and to all trade secret
rights and equivalent rights arising under the common law, state law,
federal law and laws of foreign countries;
(iii) all right, title and interest in and to all mask works,
copyrights, other literary property or authors rights, whether or not
protected by copyright or as a mask work, under common law, state law,
federal law and laws of foreign countries; and
(iv) all right, title and interest in and to all proprietary
indicia, trademarks, tradenames, symbols, logos and/or brand names
under common law, state law, federal law and laws of foreign
countries.
(h) "Licensed Product" means TIS' software proxies for Enterprise
Firewall platform and associated software as defined in Exhibit B, as it may
be amended from time to time by mutual agreement of the parties.
(i) "Net Receipts" shall mean the actual gross receipts less
sales, use, excise, value added or other similar taxes and allowances for
returns, defects and replacements received by Network-1 from distribution of
the Network-1 FireWall/Licensed Product. If the Network-1 FireWall/Licensed
Product is distributed with other products that do not contain the Network-1
FireWall/Licensed Product in a bundle for a single price, the Net Receipts
attributable to the Network-1 FireWall/Licensed Product will be determined by
pro rating the receipts from the sale or license of the package according to
the suggested retail prices, or if no suggested retail price is announced,
the values established by Network-1 for the separate works contained in the
package, whether or not such products are distributed separately, provided
that such values are reasonably related to the values or cost of the separate
products. Net Receipts will not include any receipts from copies of the
Network-1 FireWall/Licensed Product which are distributed by Network-1 to
previous purchasers of the Network-1 FireWall/Licensed Product as back-up,
replacement or update copies for which Network-1 does not receive its
standard payment. No Royalties will be credited or paid to TIS with respect
to any receipts from copies of the Network-1 FireWall/Licensed Product
supplied for promotional purposes (as well as evaluation purposes) to the
press, trade, sales representatives or potential customers for the Network-1
FireWall/Licensed Product. Amounts received by Network-1 as deposits or
advances will not be deemed to have been received until shipment of the
Network-1 FireWall/Licensed Product to the End User making the deposit or
advance has been made against such deposit or advance.
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Partial payment of an invoice will be pro-rated over all products included in
the invoice. Amounts received by Network-1 in foreign currencies will be
deemed converted into U.S. dollars at the exchange rate on the date of actual
payment.
(j) "Royalties" shall mean the royalties payable with respect to
distribution of the Network-1 FireWall/Licensed Product as described in
Section 6 hereof.
(k) "Source Code" shall mean program code applicable to the
Licensed Product, expressed in the form suitable for modification by humans
as well as any Updates and Upgrades as defined herein and any and all
applicable related documentation.
(l) "Specifications" shall mean the published Specifications
applicable to the Licensed Product that are in effect as of the date the
Licensed Product is delivered to Network-1. During the term, if TIS
substantially amends its specifications, TIS shall inform Network-1 of the
revised Specifications.
(m) "Term" shall mean the period beginning on the Effective Date
and terminating on the date this Agreement is terminated under Section 13
hereof.
(n) "Update" means the release of the Licensed Product which is a
minor release or bug fix or an error correction.
(o) "Upgrade" means a new revision of the Licensed Product that
includes enhancements which increase performance or increase functionality
for which TIS charges a license fee.
2. Grant of License.
(a) Subject to the terms and conditions set forth in this
Agreement, TIS hereby grants to Network-1 a worldwide, perpetual (subject to
termination as provided in Section 13), non-exclusive license to (i)
incorporate and/or bundle the Licensed Product only with the Network-1
FireWall/Plus Product and to market, distribute, and sublicense the Licensed
Product solely as a component of the Network-1 FireWall/Plus Product; and
(ii) to use the License Product for testing, demonstration, training,
promotional and evaluation purposes by its personnel, end users, resellers
and distributors.
(b) If TIS should make any Updates or Upgrades to the Licensed
Product, TIS shall make (at no additional cost to Network-1) the same
available to Network-1 under the terms and conditions of this Agreement.
(c) Network-1 may not modify, enhance or otherwise change the
Licensed Product except to the extent required to integrate the Licensed
Product with the Network-1 FireWall/Plus Product. Any such permissible
modification, enhancement or change to the Licensed Product by Network-1
shall be the exclusive property of Network-1 (the "Network-1 Modifications")
and Network-1 will automatically grant TIS, a worldwide, fully paid-up, non-
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exclusive, perpetual, irrevocable license to market, sublicense, use and
distribute the Network-1 Modifications except that TIS may not sublicense,
distribute or otherwise provide the Network-1 Modifications to direct
competitors of Network-1 as listed on Exhibit C hereto (Exhibit C may be
amended by Network-1 upon consent of TIS which shall not be unreasonably
withheld).
(d) Network-1 agrees to allow TIS to enforce its rights under any
agreement Network-1 may have with any third party or End User to protect any
confidentiality and proprietary property of TIS included in the Licensed
Product.
(e) Network-1 shall not market, distribute or sublicense the
Licensed Product to any party deemed a competitor of TIS as set forth on
Exhibit D hereto (the "TIS Competitor"). In the event of a merger or sale of
substantially all of the assets of Network-1 with or to any TIS Competitor,
TIS shall have the right to terminate this Agreement upon six (6) months
notice. In addition, at no time shall any TIS Competitor have access to the
Source Code as provided in Section 3 hereof without the express written
consent of TIS.
(f) Network-1 shall not market, distribute or sublease the
Licensed Product to any Original Equipment Manufacturer without first
obtaining the written consent of TIS.
(g) Except as otherwise provided herein, Network-1 shall not copy
the Licensed Product in whole or in part, except as reasonably necessary for
archival backup purposes and for use by Network-1 of the Licensed Product as
permitted under this Agreement. Network-1 agrees to reproduce on all
documentation relating to the Network-1 FireWall/Licensed Product,
proprietary trademark or copyright markings as follows: "The
[Describe proxies actually used from Exhibit B] Software Proxies are a
product of Trusted Information Systems, Inc."
(h) TIS, at its sole discretion, shall have the right to modify
the Licensed Product at any time during the Term provided that TIS provides
Network-1 with Beta source code relating to such modification as soon as it
is available and gives Network-1 thirty (30) days prior notice of such
change, including any revised or additional Specifications.
(i) All licenses to End Users, whether granted by Network-1
directly or through a distributor, shall contain Network-1's standard
license, a copy of which is attached hereto as Exhibit E.
(j) Nothing in this Agreement shall obligate Network-1 to
incorporate the Licensed Product with the Network-1 FireWall/Plus Product and
Network-1 may offer its Network-1 FireWall/Plus Product without the Licensed
Product at anytime hereafter subject to Network-1's obligation to pay TIS the
Minimum Royalty Payment set forth in paragraph 6(b) herein and TIS' right of
termination as provided in paragraph 13(b) hereof.
3. Source Code Escrow.
TIS has deposited in escrow with Network-1 the Source Code which
shall be maintained in escrow by Network-1 in a secure environment at its
office location at 878
0
Xxxxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxx 00000 (or such other location Network-1
provides TIS upon 30 days prior notice). Network-1 shall employ such
procedures with respect to the Source Code that are no less restrictive than
the strictest procedures used by it to protect its own confidential and
proprietary source code which procedures shall be no less than reasonable
care. Network-1 shall allow a limited number of its employees and
consultants (a list of consultants who have had access to the Source Code as
of the date hereof is attached hereto as Schedule 1 and after the date hereof
a list of consultants will be provided to TIS prior to access) to have access
to the Source Code provided such employees or consultants execute
confidentiality agreements in the form annexed hereto as Exhibit F, and only
for the following purposes: (i) integrating the Licensed Product with
Network-1 FireWall/Plus Product and (ii) maintenance and bug fixes.
4. Marketing and Distribution of the Licensed Product.
Network-1 will be responsible for and have sole discretion (except
as otherwise expressly provided herein) with respect to determining and
implementing all or any marketing strategies, policies or programs relating
to the distribution of the Licensed Product by Network-1 as provided herein,
including, without limitation, methods of marketing, pricing, packaging,
labeling and identification, protection, advertising, terms and conditions of
sale and/or license, collection of end users' names, scope and expense of
marketing, and use of warranty or user registration procedures. Network-1
shall have the right to distribute the Licensed Product in accordance with
the terms of this Agreement in a variety of forms, and by any variety of
methods, in its sole discretion.
5. Delivery and Acceptance.
(a) Delivery. TIS has delivered the Licensed Product to Network-1
and will provide all Updates and Upgrades to Network-1's designated
representatives of which Network-1 will advise TIS in writing. Network-1 has
evaluated the Licensed Product and the Licensed Product is hereby deemed
accepted by Network. Except as set forth in Section 6 hereof, Network-1
shall not be required to make any payments to TIS with respect to the
Licensed Product.
6. Royalty Payments.
(a) Royalty Payments. Network-1 shall pay to TIS Royalties of *%
of the Net Receipts derived from distribution of the Network-1
FireWall/Licensed Product. Network-1 agrees that in no event shall the
Royalties payable to TIS hereunder be less than $* per unit of Network-1
FireWall/Licensed Product sold by Network-1 in accordance with the terms of
this Agreement. The Royalties shall be paid to TIS by Network-1 on a
quarterly basis, within thirty (30) days following the end of each calendar
quarter.
* This material has been omitted pursuant to a request for confidential
treatment and has been filed separately with the Securities and Exchange
Commission.
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(b) Minimum Royalty Payment. For the period ending March 30,
1999, Network-1 agrees to pay to TIS total Royalties of a minimum of $100,000
pursuant to Section 6(a) herein (the "Minimum Royalty Payment") regardless of
the Net Receipts derived from distribution of Network 1 FireWall/Licensed
Product. In the event the Minimum Royalty Payment has not been paid by April
30, 1999 (for the period ending March 30, 1999), Network-1 shall be obligated
to make an additional payment to TIS by May 15, 1999 in an amount equal to
the difference between the Minimum Royalty Payment and the Royalties paid to
TIS for the period ending March 30, 1999. In the event the Minimum Royalty
Payment is not paid by Network-1 as provided herein, Network-1 shall be in
breach of this Agreement and TIS shall have the right to terminate this
Agreement in accordance with Section 13(c) hereof. Any such termination
shall not relieve Network-1 of its obligation to pay TIS the Minimum Royalty
Payment.
(c) Reports of Royalties. Network-1 shall deliver to TIS, along
with its payment of Royalties due for each quarter, a written report showing,
in reasonable detail, its calculation of Royalties payable with respect to
such calendar quarter. Network-1 shall maintain such books and records as are
necessary to properly calculate the amount of Royalties to be paid pursuant
to this Agreement. A certified public accountant to be chosen by TIS, and
approved by Network-1 (which approval shall not be unreasonably withheld),
may, upon reasonable notice and during normal business hours, but no more
often than once each year, inspect the records of Network-1 on which such
reports are based. Any information revealed in such inspections shall be
confidential and not disclosed to anyone, except to the extent necessary to
identify to TIS, Network-1 or any fact finder in any action instituted to
enforce the terms of this Agreement, any inaccuracy which may be found in the
amount of Royalties due to TIS or except as otherwise provided by law. The
fees and expenses of the independent certified public accountant shall be
paid by TIS, unless the inspection uncovers an underpayment for the
evaluation period in question in excess of 5% of the amount actually paid by
Network-1 during the period of the audit, in which case the fees and expenses
of the certified public accountant shall be paid by Network-1.
7. Support. TIS shall provide Network-1 with technical support
in connection with integration of the Licensed Product with the Network-1
FireWall/Plus Product which shall include (i) up to one (1) week on-site
support for purposes of integration of the Licensed Product with the
Network-1 FireWall/Plus Product, (ii) support for bug fixes related to the
Licensed Product and (iii) support for modifications to the Licensed Product
caused by operating system changes provided that the Licensed Product is then
currently offered by TIS on such operating system. Except as otherwise
provided herein, following Network-1's release of the Network-1
FireWall/Licensed Product, any technical support provided by TIS to Network-1
on site shall be billed at TIS's standard rates of $2,000 per day.
8. Intellectual Property Rights. Except as otherwise
specifically provided in this Agreement, Network-1 hereby acknowledges that
TIS and its licensors (as their interests may appear) retain all Intellectual
Property Rights (including, without limitation, any and all related patents,
trademarks, copyrights or proprietary or trade secret rights) in the Licensed
Product and Confidential Information, including, without limitation, all
corrections, modifications and other
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Derivative Works to the Licensed Product. Except for the Network-1
Modifications, Network-1 hereby assigns to TIS all Intellectual Property
Rights it may hereafter possess in the Licensed Product and Confidential
Information and all Derivative Works and agrees (i) to execute all documents,
and take all actions, that may be necessary to confirm such rights, and (ii)
to retain all proprietary marks, legends and patent and copyright notices
that appear on the Licensed Product or Confidential Information delivered to
Network-1 by TIS and all whole or partial copies thereof.
9. Confidentiality. Network-1 agrees to observe complete
confidentiality with respect to the Confidential Information, not to disclose
or permit any third party or entity access to, the Confidential Information
(or any portion thereof) without the prior written approval of TIS (except
such disclosure which is required to perform any obligations under this
Agreement) and to insure that any employees, or any third parties who receive
access to the Confidential Information, are advised of the confidential and
proprietary nature thereof and are prohibited from copying, utilizing or
otherwise revealing the Confidential Information in any manner not already
permitted under this Agreement or the Non-Disclosure Agreement between the
parties, dated April 7, 1997. Without limiting the foregoing, Network-1
agrees to employ with regard to the Confidential Information, procedures no
less restrictive than the strictest procedures used by it to protect its own
confidential and proprietary information which procedures shall be no less
than reasonable care.
10. Warranties. TIS represents and warrants that (i) the Licensed
Product is, and the Upgrades and Updates will be, the original creation of
TIS, TIS is the sole and exclusive owner of the Licensed Product, and will be
the sole and exclusive owner of the Upgrades and Updates (except as otherwise
disclosed to Network-1) and, TIS has the rights to grant licenses therefor as
granted to TIS under this Agreement, (ii) the grant to and the exercise by
Network-1 of any and all rights set forth in this Agreement and TIS's
disclosures to Network-1 pursuant to this Agreement do not, and will not,
violate the U.S. patent rights, copyrights, trade secret rights, trademark
rights or other proprietary contractual or other rights of any third party,
(iii) for a period of ninety (90) days following the first use of the
Licensed Product by an End User, the Licensed Product and Upgrades will
substantially conform to and operate as described in applicable
Specifications, and (iv) TIS has full power and authority to enter into this
Agreement and to grant the rights and obligations set forth herein and this
Agreement is enforceable in accordance with its terms.
11. Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES STATED IN
SECTION 10 HEREIN, TIS DISCLAIM(S) ALL EXPRESS OR IMPLIED WARRANTIES WITH
RESPECT TO THE LICENSED PRODUCT FURNISHED HEREUNDER, INCLUDING, WITHOUT
LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
12. Indemnification.
(a) By TIS. TIS agrees to indemnify, hold harmless and defend
Network-1, its officers, directors, employees, contractors, licensors and
agents, from any claims, liabilities,
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damages, costs and expenses (including reasonable attorneys' fees and costs
of suit) to the extent they arise out of (i) a material breach of this
Agreement by TIS, (ii) a breach of any of the representations and warranties
set forth in Section 10 hereof or any other representations set forth in this
Agreement and (iii) any claims of infringement of any U.S. copyright, patent
or trade secret or other proprietary rights, arising from the Licensed
Product and any modification, enhancement or misuse of the Licensed Product
by TIS. If TIS receives notice of an alleged infringement, TIS shall use its
best efforts, subject to commercial reasonableness, to either obtain the
right to continued use of the Licensed Product, or to modify the Licensed
Product so that it is no longer infringing.
(b) By Network-1. Network-1 agrees to indemnify, hold harmless
and defend TIS, its officers, directors, employees, contractors, licensors
and agents, from any claims, liabilities, damages, costs and expenses
(including reasonable attorneys' fees and costs of suit) to the extent they
arise out of (i) a material breach by Network-1 of the terms and provisions
of this Agreement, and (ii) any claim of infringement of any U.S. copyright,
patent or trade secret or other proprietary rights relating to the Network-1
FireWall/Plus Product excluding any such claim relating to the Licensed
Product.
(c) Indemnification Conditions. Promptly after receipt by TIS or
Network-1 of notice of any claim that may affect the Licensed Product or the
commencement of any action, proceeding, or investigation in respect of which
indemnity or reimbursement may be sought as provided above, such party (the
"Indemnitee") shall notify the party from whom indemnification is claimed
(the "Indemnitor"), but the failure of such Indemnitee to notify the
Indemnitor with respect to a particular action, proceeding or investigation
shall not relieve the Indemnitor from any obligation or liability (i) which
it may have pursuant to this Agreement if the Indemnitor is not substantially
prejudiced by the failure to notify or (ii) which it may have otherwise than
pursuant to this Agreement. The Indemnitor shall promptly assume the defense
of the Indemnitee with counsel reasonably satisfactory to the Indemnitee, and
the fees and expenses of such counsel shall be at the sole cost and expense
of the Indemnitor. The Indemnitee will cooperate with the Indemnitor in the
defense of any action, proceeding or investigation for which the Indemnitor
assumes the defense. Notwithstanding the foregoing, the Indemnitee shall
have the right to employ separate counsel in any action, proceeding, or
investigation and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnitee unless (i)
the Indemnitor has agreed to pay such fees and expenses, (ii) the Indemnitor
shall have failed promptly to assume the defense of such action, proceeding
or investigation and employ counsel reasonably satisfactory to the
Indemnitee, or (iii) in the reasonable judgment of the Indemnitee there may
be one or more defenses available to the Indemnitee which are not available
to the Indemnitor with respect to such action, claim, or proceeding, in which
case the Indemnitor shall not have the right to assume the defense of such
action, proceeding or investigation on behalf of the Indemnitee. The
Indemnitor shall not be liable for the settlement by the Indemnitee of any
action, proceeding or investigation effected without its consent, which
consent shall not be unreasonably withheld. The Indemnitor shall not enter
into any settlement in any action, suit or proceeding to which the Indemnitee
is a party, unless such settlement includes a general release of the
Indemnitee with no payment by the Indemnitee of consideration.
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13. Term and Termination.
(a) Term of Agreement. Subject to the foregoing limitation, this
Agreement shall continue perpetually, unless terminated in accordance with
the provisions of Section 13 below.
(b) Termination. Network-1 may terminate this Agreement effective
at the end of any calendar year beginning with the year ended December 31,
1998 by giving TIS prior written notice at any-time during the month of
October preceding such year end. TIS may terminate this Agreement upon
thirty (30) days prior notice if for any two consecutive calendar quarters
after December 31, 1998, Network-1 does not pay TIS minimum Royalties of $*
per quarter, payment to be provided in accordance with the terms of this
Agreement. In addition, if at any time after December 31, 1998, Network-1
does not offer the Licensed Product as part of any Network-1
FireWall/Licensed Plus Product for any ninety (90) day period, TIS shall have
the right to terminate this Agreement upon thirty (30) days prior notice.
(c) Termination Upon Breach. Each party shall have the right to
terminate this Agreement provided (i) such party provides thirty (30) days
prior notice to the other party; (ii) the other party is in a material breach
of any of the terms of this Agreement; and (iii) the prior breach is not
cured within such thirty (30) day period. Any such notice shall provide, in
reasonable detail, a description of the alleged breach and the requested cure
of that breach.
(d) Effect of Termination. In the event of a termination of this
Agreement pursuant to this Section 13, Network-1 shall have the right, for a
period of 180 days, to distribute its existing inventory of the Network-1
FireWall/Licensed Product pursuant to the terms of this Agreement. Any such
termination shall not affect the rights of any End User that has purchased
the Network-1 FireWall/Licensed Product from Network-1 in accordance with the
terms of this Agreement prior to its termination. Upon termination of this
Agreement, for any reason, Network-1 will return to TIS all copies of the
Licensed Product or certify to TIS that Network-1 has destroyed all such
copies, except that Network-1 may retain one (1) copy of the object code for
the Licensed Product solely for the purpose of supporting its existing
licensees.
14. Limitation of Liability. EXCEPT FOR PAYMENTS DUE PURSUANT TO
SECTION 6 HEREIN AND THE INDEMNIFICATION PROVISIONS OF SECTION 12 HEREOF, IN
NO EVENT SHALL EITHER PARTY (OR ITS LICENSORS) BE LIABLE FOR ANY LOSS
REVENUES OR PROFITS OR OTHER SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
ARISING OUT OF THIS AGREEMENT OR RELATED TO THE LICENSED PRODUCT, EVEN IF THE
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
15. General Provisions.
* This material has been omitted pursuant to a request for confidential
treatment and has been filed separately with the Securities and Exchange
Commission.
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(a) Export Compliance. The rights and obligations of Network-1
shall be subject to such United States laws and regulations as shall from
time to time govern the license and delivery of technology abroad by persons
subject to the jurisdiction of the United States, including the Export
Administration Act of 1979, as amended, any successor legislation to the
Export Administration Act of 1979, and the Export Administration regulations
issued by the Department of Commerce, International Trade Administration,
Office of Export Administration. Network-1 agrees that it shall not,
directly or indirectly, export, reexport or transship the Licensed Product or
any parts or copies thereof in such manner as to violate such laws and
regulations in effect from time to time.
(b) Publicity. Neither party shall, without first obtaining the
written consent of the other party, which consent shall not be unreasonably
withheld, announce this Agreement in a press release or other promotional
material. In addition, neither party shall disclose the terms and conditions
of this Agreement to any third party, except as may be required (i) to
implement and enforce the terms of this Agreement, or (ii) by legal procedure
or by law or (iii) by Network-1 in connection with an Initial Public Offering
("IPO"). In the case of clause (iii) above, Network-1 may, for the sole
purpose of initiating or affecting its IPO, disclose the full terms and
conditions of this Agreement only to its legal counsel, its investment
bankers, its investment bankers' legal counsel, securities regulatory
authorities and potential investors who are bound by a confidentiality
agreement covering the terms and conditions of this Agreement as Confidential
Information of Network-1 and TIS. In addition, Network-1 may disclose in a
prospectus for an IPO such material information concerning this Agreement as
the attorneys who advise Network-1 on matters relating to the Securities Act
of 1933, as amended, shall advise is necessary to be disclosed in such
prospectus. A copy of the proposed IPO prospectus disclosure shall be
provided to TIS and TIS shall not unreasonably withhold its consent to such
disclosure.
(c) Equitable Relief. Each party acknowledges that any breach of
its obligations under this Agreement with respect to the grant of the license
hereunder, Intellectual Proprietary Rights or Confidential Information will
cause the other party irreparable injury for which there are inadequate
remedies at law, and that such party will be entitled to seek equitable
relief with respect to any such breach in addition to all other remedies
provided by this Agreement or available at law.
(d) Successors and Assigns. Except as otherwise provided herein,
this Agreement may not be assigned in whole or in part by either party
without the prior written consent of the other party, except either party may
assign this Agreement without the other's prior written consent to an
Affiliated Entity, or in the event of a merger or other reorganization
involving such party, or sale of all or substantially all of such party's
assets. For purposes hereof, Affiliated Entity shall be defined as an entity
controlled by, or under common control with, such party. This Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties hereto and their successors and assigns.
(e) Governing Law. This Agreement will be governed and
interpreted in accordance with the laws of the State of New York without
reference to conflicts of law principles.
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(f) Relationship of Parties. Neither party will have and will not
represent that it has, any power, right or authority to bind the other party
or to assume or create any obligation or responsibility, express or implied,
on behalf of the other party or in the other party's name, except as herein
expressly provided. Nothing stated in this Agreement shall be construed as
constituting Network-1 and TIS as partners or as creating the relationship of
principal/agent, employer/employee or franchise/franchisee between the
parties.
(g) Attorneys' Fees. In the event that any legal action is
required in order to enforce or interpret any of the provisions of this
Agreement, the prevailing party in such action shall recover all reasonable
costs and expenses, including attorneys' fees, incurred in connection
therewith.
(h) Further Actions. At any time and from time to time, each
party agrees without further consideration, to take such action and to
execute and deliver such documents as may be reasonably necessary to
effectuate the purposes of this Agreement.
(i) Waiver. The failure of either party to enforce any provision
of this Agreement shall not be deemed a waiver of that or any other provision
of this Agreement.
(j) Force Majeure. Except for the obligation to make payments as
provided herein, nonperformance of either party shall be excused to the
extent the performance is rendered impossible by strike, fire, flood,
governmental acts or orders or restrictions, failure of suppliers, or any
other reason where failure to perform is beyond the reasonable control of and
is not caused by the negligence of the nonperforming party.
(k) Severability. If any of the provisions of this Agreement are
found or deemed by a court of competent jurisdiction to be invalid or
unenforceable, they shall be severable from the remainder of the Agreement
and shall not cause the invalidity or unenforceability of the Agreement.
(l) Notices. Notices to either party shall be in writing and
shall be deemed delivered when served in person or three business days after
being deposited in the United States mail, first-class certified mail,
postage prepaid, return receipt requested, or one business day after being
dispatched by a nationally recognized one-day express courier service
addressed as follows:
To TIS: Trusted Information Systems, Inc.
00000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
with a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Trusted Information Systems
0000 Xxxxxxxxxx Xxxx
(Xxxxx 00)
Xxxxxxxxx, Xxxxxxxx 00000
11
To Network-1: Network-1 Software & Technology, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx, President
with a copy to: Xxxxx Xxxxxx & Xxxx, LLP
1350 Avenue of the Xxxxxxxx,
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxxx, Esq.
(m) Entire Agreement. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof, and,
with the exception of the Non-Disclosure Agreement, dated April 7, 1997,
between the parties, supersedes in its entirety any and all written or oral
agreements or understandings previously existing between the parties with
respect to such subject matter. Each party acknowledges that it is not
entering into this Agreement on the basis of any representations not
expressly contained herein. Any amendments or modifications of this
Agreement must be in writing and signed by both parties hereto.
(n) All section headings herein are inserted for convenience only
and shall not modify or affect the construction or interpretation of any
provision of this Agreement.
(o) Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed an original, and
all of which together shall constitute one and the same instrument.
12
IN WITNESS WHEREOF the parties have entered into this Agreement as
of the date first set forth above.
Trusted Information Systems, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Printed Name: Xxxxxxx X. Xxxxxxxxx
------------------------
Title: Director of Contracts
-----------------------------------
Network-1 Software & Technology, Inc.
By: /s/ Xxxxxx Xxxxx
------------------------------
Printed Name: Xxxxxx Xxxxx
--------------------
Title: President
-----------------------------------
Effective Date: September 26, 1997
13
EXHIBIT A
FireWall/Plus Enterprise
EXHIBIT B
LICENSED PRODUCTS
The following proxies and libraries have been provided by TIS to Network-1:
Proxies
o http,
o ahttp,
o ftp,
o authserver,
o logserver
Libraries
o the authentication libraries
o firewall library
o the NT-specific firewall library, and
o the Unix emulation library
EXHIBIT C
NETWORK-1 COMPETITORS
In addition to entities which sell/license a generic firewall, the following is
a list of competitors of Network-1:
1. Altivista Internet Software Inc.
2. ANS Communications
3. Border Network Technologies Inc.
4. Check Point Software Technology Inc.
5. Cisco Systems, Inc.
6. Digital Equipment Corporation
7. Cyberguard Corp.
8. Cycon Technologies
9. Global Internet Software Group Inc.
10. Global Technology Associates Inc.
11. IBM
12. Microsoft Corporation
13. Milkyway Networks Corp.
14. Network Systems Corporation
15. NEC Technologies
16. Netguard Ltd.
17. Raptor Systems Inc.
18. Seattle Software Labs Inc.
19. Secure Computing Corp.
20. Sidewinder
21. Sun Microsystems Inc.
22. Technologies Inc.
23. Ukiah Software Inc.
24. Data General
25. Hewlett Packard
26. Radguard
27. V-One Corp.
EXHIBIT D
TIS COMPETITORS
In addition to entities which sell/license a generic firewall, the following is
a list of TIS' competitors:
1. Altivista Internet Software Inc.
2. ANS Communications
3. Boarderware
4. Check Point Software Technologies Inc.
5. Cyberguard Corp.
6. Cycon Technologies
7. Global Internet Software Group Inc.
8. Global Technology Associates Inc.
9. IBM
10. Milkyway Networks Corp.
11. NEC Technologies Inc.
12. Netguard Ltd.
13. Raptor Systems Inc.
14. Seattle Software Labs Inc.
15. Secure Computing Corp.
16. Sidewinder
17. Sun Microsystems Inc.
18. Technologies Inc.
19. Ukiah Software Inc.
20. Data General
21. Digital Equipment Corp.
22. Hewlett Packard
23. Radguard
24. V-One Corp.
NETWORK-1 SOFTWARE AND TECHNOLOGY, INC. SOFTWARE LICENSE AGREEMENT
BEFORE OPENING THIS CD JEWEL CASE, PLEASE READ THE FOLLOWING TERMS AND
CONDITIONS OF THIS AGREEMENT CAREFULLY. THIS IS A LEGAL AGREEMENT BETWEEN
YOU AND NETWORK-1 SOFTWARE AND TECHNOLOGY, INC. ("NETWORK-1") AND THE
TERMS OF THIS AGREEMENT GOVERN YOUR USE OF THIS SOFTWARE. OPENING THIS
JEWEL CASE OR USE OF THE ENCLOSED MATERIALS WILL CONSTITUTE YOUR
ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AGREEMENT. IF YOU DO NOT
AGREE TO THE TERMS OF THIS LICENSE, PROMPTLY RETURN THE UNOPENED JEWEL
CASE CONTAINING THE SOFTWARE TO THE PLACE WHERE YOU OBTAINED IT.
1. Grant of License. The application, demonstration, system and other
software accompanying this License, whether on disk, in read only memory
or on any other media (the "Software") and the related documentation are
licensed to you by Network-1. In consideration of payment of the license
fee, Network-1 as Licensor, grants to you, as Licensee, a non-exclusive
right to use and display this copy of the Software on a single computer
(i.e., a single CPU) only at one location at any time. To "use" the
Software means that the Software is either loaded in the temporary memory
(i.e., RAM) of a computer or installed on the permanent memory of a
computer (i.e., hard disk, CD ROM, etc.). You may use at one time as many
copies of the Software as you have licenses for. You may install the
Software on a common storage device shared by multiple computers, provided
that if you have more computers having access to the common storage device
than the number of licensed copies of the Software, you must have some
software mechanism which locks-out any concurrent users in excess of the
number of licensed copies of the Software (an additional license is not
needed for the one copy of Software stored on the common storage device
accessed by multiple computers).
2. Ownership of Software. As Licensee, you own the disk or other physical
media on which the Software is originally or subsequently recorded or
fixed, but Network-1 retains title and ownership of the Software, both as
originally recorded and all subsequent copies made of the Software
regardless of the form or media in or on which the original or copies may
exist. This License does not constitute a sale of the original Software or
any copy.
3. Restrictions. The Software contains copyrighted material, trade secrets,
and other proprietary material. Except as permitted by applicable
legislation, you may not decompile, reverse engineer, disassemble or
otherwise reduce the Software to a human-perceivable form. You may not
modify, network, rent, lease, loan, distribute or create derivative works
based on the Software in whole or in part.
4. Transfer Restrictions. This Software is licensed to only you, the
Licensee, and may not be transferred to anyone else without the prior
written consent of Network-1. Any authorized transferee of the Software
shall be bound by the terms and conditions of this Agreement. In no event
may you transfer, assign, rent, lease, sell or otherwise dispose of the
Software on a temporary or permanent basis except as expressly provided
herein.
5. Export Law Assurances. You agree and certify that neither the Software nor
any other technical data received from Network-1, nor the direct product
thereof, will be exported outside the United States except as authorized
and as permitted by the laws and regulations of the United States and the
laws and regulations of the jurisdiction in which you obtained the
Software.
6. Termination. This License is effective until terminated. This License will
terminate automatically without notice from Network-1 if you fail to
comply with any provision of this License. Upon termination you shall
destroy the written materials and all copies of the Software, including
modified copies, if any.
7. Government End Users. If the Software is supplied to the United States
Government, the Software is classified as "restricted computer software"
as defined in the clause 52.227-19 of the Federal Acquisition Regulations
System ("FAR"). The United States Government's rights to the Software are
as provided in Clause 52.227-19 of the FAR.
8. Limited Warranty on Media. Network-1 warrants the media on which the
Software is recorded to be free from defects in materials and workmanship
under normal use for a period of ninety (90) days from the date of
purchase as evidenced by a copy of the receipt. The entire liability of
Network-1 and your exclusive remedy will be replacement of the media not
meeting Network-l's limited warranty and which is returned to Network-1 or
a Network-1 authorized representative with a copy of the receipt.
Network-1 will have no responsibility to replace media damaged by
accident, abuse or misapplication. ANY IMPLIED WARRANTIES ON THE MEDIA,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE LIMITED IN DURATION TO NINETY (90) DAYS FROM THE
DATE OF DELIVERY. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS AND YOU
MAY ALSO HAVE OTHER RIGHTS WHICH VARY BY JURISDICTION. THE TERMS OF THIS
DISCLAIMER DO NOT LIMIT OR EXCLUDE ANY LIABILITY FOR DEATH OR PERSONAL
INJURY CAUSED BY NETWORK-1'S NEGLIGENCE.
VI.B.2
9. Disclaimer of Warranty on Software (for the purposes of paragraphs 9 and
10 hereof, Network-1, the directors, officers, employees, agents and
representatives of Network-1, and Network-1's Licensors are collectively
referred to as "Network-1"). You expressly acknowledge and agree that use
of the Software is at your sole risk. The Software and related
documentation are provided "AS IS" and without warranty of any kind.
NETWORK-1 EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE. NETWORK-1 DOES NOT WARRANT THAT THE
FUNCTIONS CONTAINED IN THE SOFTWARE WILL MEET YOUR REQUIREMENTS, OR THAT
THE OPERATION OF THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT
DEFECTS IN THE SOFTWARE WILL BE CORRECTED. FURTHERMORE, NETWORK-1 DOES NOT
WARRANT OR MAKE ANY REPRESENTATIONS REGARDING THE USE OR THE RESULTS OF
THE USE OF THE SOFTWARE OR RELATED DOCUMENTATION IN TERMS OF THEIR
CORRECTNESS, ACCURACY, RELIABILITY OR OTHERWISE. NO ORAL OR WRITTEN
INFORMATION OR ADVICE GIVEN BY NETWORK-1 OR A NETWORK-1 AUTHORIZED
REPRESENTATIVE SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF
THIS WARRANTY. SHOULD THE SOFTWARE PROVE DEFECTIVE, YOU (AND NOT NETWORK-1
OR A NETWORK-1 AUTHORIZED REPRESENTATIVE) ASSUME THE ENTIRE COST OF ALL
NECESSARY SERVICING, REPAIR OR CORRECTION. SOME JURISDICTIONS DO NOT ALLOW
THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY
TO YOU. THE TERMS OF THIS DISCLAIMER AND) THE LIMITED WARRANTY IN
PARAGRAPH 8 DO NOT LIMIT OR EXCLUDE ANY LIABILITY FOR DEATH OR PERSONAL
INJURY CAUSED BY NETWORK-1'S NEGLIGENCE.
10. Limitations of Liability. UNDER NO CIRCUMSTANCE INCLUDING NEGLIGENCE,
SHALL NETWORK-1 BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES THAT RESULT FROM THE USE OR INABILITY TO USE THE SOFTWARE OR
RELATED DOCUMENTATION, EVEN IF NETWORK-1 OR A NETWORK-1 AUTHORIZED
REPRESENTATIVE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME
JURISDICTIONS DO NOT ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE ABOVE LIMITATION OR EXCLUSION
MAY NOT APPLY TO YOU. In no event shall Network-1's total liability to you
for all damages, losses and causes of action (whether in contract, tort
(including negligence) or otherwise) exceed the amount paid by you for the
Software.
11. Controlling Law and Severability. This License shall be governed by and
construed in accordance with the laws of the United States and the State
of New York, as applied to agreements entered into and to be performed
entirely within New York between New York residents. Each party hereto
irrevocably agrees that the New York State Supreme Court, County of New
York and the United States District Court for the Southern District of New
York shall have exclusive jurisdiction to settle any dispute and/or
controversy of whatever nature arising out of or relating to the
Licensee's use of the Software and/or related documentation, and that
accordingly any suit, act or proceeding arising out of or relating to such
matters shall be brought in such courts and, to this end, each party
hereto irrevocably agrees to submit to the jurisdiction of such courts and
irrevocably waives any objection which it may have now or hereafter to
such exclusive jurisdiction. If for any reason a court of competent
jurisdiction finds any provision of this License, or portion thereof, to
be unenforceable, that provision of this License shall be enforced to the
maximum extend permissible so as to effect the intent of the parties, and
the remainder of this License shall continue in full force and effect.
12. Complete Agreement. This License constitutes the entire agreement between
the parties with respect to the use of the Software and related
documentation, and supersedes all prior or contemporaneous understandings
or agreements, written or oral, regarding such subject matter. No
amendment to or modification of this License will be binding unless in
writing and signed by a duly authorized representative of Network-l.
EXHIBIT F
CONFIDENTIALITY AGREEMENT
This Agreement is intended to set forth in writing my responsibility
to NETWORK-1 Software & Technology Inc. ("Network-1") in connection with certain
confidential and proprietary information provided to NETWORK-1 by Trusted
Information Systems, Inc. ("TIS"), as follows:
1. As a condition to my having access to source code (the "Source
Code") relating to certain software proxies provided by TIS to Network-1, in
accordance with the Software Distribution Agreement, dated September, 1997,
I agree that I will observe complete confidentiality with respect to the Source
Code, and will not disclose the Source Code or any information related thereto
to any third party except to the extent required to perform duties on behalf of
Network-1.
2. Upon termination of my employment or consulting relationship with
Network-1, I will deliver to NETWORK-1 all written and tangible materials in my
possession relating to the Source Code or any other proprietary information
relating to Network-1's business.
3. I acknowledge that irreparable injury would be sustained by
NETWORK-1 in the event of a violation by me of this Agreement and by reason
therefore, I agree that if I violate this Agreement, the Company shall be
entitled, in addition to all other legal and equitable remedies available to the
Company, to an injunction to be issued by any Court of competent jurisdiction
restraining me from committing or continuing any violation of this Agreement.
4. This Agreement will be deemed to have been made and delivered in
New York City and will be governed as to validity, interpretation, construction,
effect and in all other
respects by the internal laws of the State of New York without giving effect to
conflict of laws. In addition, I (i) agree that any legal suit, action, or
proceeding arising out of or relating to this Agreement shall be instituted
exclusively in New York State Supreme Court, County of New York, or the United
States District Court for the Southern District of New York, (ii) waive any
objection to the venue of any such suit, action, or proceeding and the right to
assert that such forum is not a convenient forum, (iii) irrevocably consent to
the jurisdiction of the New York State Supreme Court, County of New York, or the
United States District Court for the Southern District of New York in any suit,
action, or proceeding. I further agree to accept or acknowledge the service of
any and all process which may be served in any such suit, action, or proceeding
brought in New York Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York and agree that service of
process upon me by certified mail to my address shall be deemed in every respect
effective service of process upon me or in any suit action or proceeding.
This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof and supercedes all prior understandings,
whether written or oral, with respect to the subject matter hereof. This
Agreement shall only be amended by written agreement duly executed by the
parties hereto.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first written above.
-------------------------------------
Employee/Consultant
Address
------------------------------
NETWORK-1 SOFTWARE & TECHNOLOGY INC.
By:
----------------------------------
2
SCHEDULE 1
CONSULTANTS
Xxxx Xxxxxx
Xxx Xxxxx
