Exhibit 10.11
MASTER SOFTWARE LICENSE AGREEMENT
BETWEEN
ELECTRONIC DATA SYSTEMS CORPORATION
AND
NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
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EDS CONFIDENTIAL
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TABLE OF CONTENTS
FOR
MASTER SOFTWARE LICENSE AGREEMENT
ARTICLE I. AGREEMENT, TERM, AND DEFINITIONS
1.1 Agreement and Term......................................................................1
1.2 Certain Definitions.....................................................................1
ARTICLE II. PURCHASE ORDERS
2.1 Preparation of Purchase Orders..........................................................2
2.2 Issuance and Acceptance of Purchase Orders..............................................2
2.3 Purchase Order Alterations..............................................................3
2.4 Evaluation Purchase Orders..............................................................3
2.5 Cancellation of Purchase Orders.........................................................3
ARTICLE III. PROVISION OF LICENSED SOFTWARE AND SERVICES
3.1 General.................................................................................3
3.2 Transportation of Licensed Software.....................................................3
3.3 Risk of Loss............................................................................3
3.4 Installation of Licensed Software.......................................................4
3.5 Right to Cancel for Delays..............................................................4
3.6 Resale of Products by EDS...............................................................4
3.7 Time and Materials Services.............................................................5
3.8 Services in General.....................................................................6
3.9 Use of Existing Materials...............................................................7
3.10 Further Acts...........................................................................7
3.11 Time of Performance....................................................................7
3.12 EDS Business Practices.................................................................7
ARTICLE IV. PROVISION OF LICENSED SOFTWARE
4.1 Acceptance of Licensed Software.........................................................8
4.2 Grant of License........................................................................8
4.3 Transfer of Licensed Software...........................................................9
4.4 Ownership of Licensed Software and Modifications........................................9
4.5 Central Distribution....................................................................9
4.6 Proprietary Markings....................................................................10
4.7 Duplication of Documentation............................................................10
4.8 Non-Disclosure..........................................................................10
4.9 Licensed Software Support Services......................................................10
4.10 Licensed Software Support Services Options.............................................11
4.11 Provision of Source Code...............................................................12
4.12 Acquisition of Third Party Software....................................................13
4.13 Software from an Authorized Third Party................................................13
ARTICLE V. WARRANTIES, INDEMNITIES, AND LIABILITIES
5.1 Warranty................................................................................13
5.2 Proprietary Rights Indemnification......................................................14
5.3 Cross Indemnification...................................................................15
5.4 Limitation of Liability.................................................................15
5.5 Insurance...............................................................................15
5.6 Survival of Article V...................................................................15
ARTICLE VI. PAYMENTS TO SUPPLIER
6.1 Charges, Prices, and Fees for Licensed Software and Services............................16
6.2 Modifications to Charges................................................................16
6.3 Auto Payment............................................................................16
6.4 Payment Through Invoicing...............................................................17
6.5 Taxes...................................................................................17
ARTICLE VII. TERMINATION
7.1 Termination for Cause...................................................................18
7.2 Termination for Insolvency or Bankruptcy................................................18
7.3 Termination for Non-Payment.............................................................19
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7.4 Termination of Software License.........................................................19
7.5 Rights Upon Termination.................................................................19
ARTICLE VIII. MISCELLANEOUS
8.1 Binding Nature, Assignment, and Subcontracting..........................................19
8.2 Counterparts............................................................................19
8.3 Headings................................................................................19
8.4 Authorized Agency.......................................................................19
8.5 Relationship of Parties.................................................................20
8.6 Confidentiality.........................................................................20
8.7 Media Releases..........................................................................21
8.8 Dispute Resolution......................................................................21
8.9 Electronic Communications...............................................................21
8.10 Proposals and Special Projects.........................................................21
8.11 Governmental Customers.................................................................21
8.12 International Business.................................................................22
8.13 Compliance with Laws...................................................................22
8.14 Labor..................................................................................22
8.15 Export.................................................................................22
8.16 Notices................................................................................22
8.17 Force Majeure..........................................................................23
8.18 Severability...........................................................................23
8.19 Waiver.................................................................................23
8.20 Remedies...............................................................................23
8.21 Survival of Terms......................................................................23
8.22 Nonexclusive Market and Purchase Rights................................................24
8.23 GOVERNING LAW..........................................................................24
8.24 Entire Agreement.......................................................................24
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LIST OF EXHIBITS
EXHIBIT A
EDS BUSINESS PRACTICES
EXHIBIT B
CHARGES, PRICES, AND FEES
EXHIBIT C
THIRD PARTY SYSTEM ACCESS AGREEMENT
EXHIBIT D
NON-DISCLOSURE AGREEMENT
EXHIBIT E
RESELLER ACCESS AUTHORIZATION
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MASTER SOFTWARE LICENSE AGREEMENT
THIS MASTER SOFTWARE LICENSE AGREEMENT (the "Agreement"), dated November
10, 1997 (the "Effective Date"), is between NETWORK-1 SOFTWARE & TECHNOLOGY,
INC., a Delaware corporation ("Network-1"), and ELECTRONIC DATA SYSTEMS
CORPORATION, a Delaware corporation ("EDS").
W I T N E S S E T H:
WHEREAS, EDS desires to have the right to license computer software
programs and to obtain services from Network-1 from time to time; and
WHEREAS, Network-1 is willing to provide computer software programs and
services to EDS in accordance with the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration received and to be received, Network-1 and EDS agree as
follows:
ARTICLE I. AGREEMENT, TERM, AND DEFINITIONS
1.1 Agreement and Term. The parties agree that the terms and conditions of
this Agreement apply to the provision of licensed software programs and
related services to EDS by Network-1. The term of this Agreement
commences on the Effective Date and the Agreement shall continue to be in
effect until terminated by either party as set forth in this Agreement.
1.2 Certain Definitions. The following definitions apply to this Agreement:
(a) "Applicable Specifications" means the functional, performance,
operational, compatibility, and other specifications or
characteristics of a Product described in applicable Documentation
and such other specifications or characteristics of a Product agreed
upon in writing by the parties.
(b) "Documentation" means user guides, operating manuals, education
materials, product descriptions and specifications, technical
manuals, supporting materials, and other information relating to the
Products or used in conjunction with the Services, whether
distributed in print, magnetic, electronic, or video format, in
effect as of the date (i) a Product is shipped to or is accepted by
EDS, as applicable, or (ii) the Service is provided to EDS.
(c) "Employee" means those employees, agents, subcontractors,
consultants, and representatives of Network-1 provided or to be
provided by Network-1 to perform Services pursuant to this
Agreement.
(d) "Licensed Software" means computer programs in object code
(including micro code) and/or source code, as applicable, provided
or to be provided by Network-1 pursuant to this Agreement. The
definition of Licensed Software also includes any enhancements,
translations, modifications, updates, releases, or other changes to
Licensed Software which are provided or to be provided as part of
Network-1's performance of warranty Service obligations or pre-paid
support Services pursuant to this Agreement.
(e) "Products" means, individually or collectively as appropriate, any
hardware, Licensed Software, Documentation, and Work Products (as
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later defined in this Agreement) supplies, accessories, and other
commodities, provided or to be provided by Network-1 pursuant to
this Agreement.
(f) "Services" includes, but is not limited to, installation, education,
acceptance testing, support, development, warranty, and time and
materials services, provided or to be provided by Network-1 pursuant
to this Agreement.
(g) "Site" means geographically contiguous buildings, each of which, in
whole or in part, is occupied or accessed by EDS or a customer of
EDS. "Geographically contiguous" means adjacent tracts or parcels of
real property separated, if at all, only by publicly dedicated
rights of way or private easements.
(h) "Warranty Period" means the period specified in Section 5.1(e) of
this Agreement during which the Network-1 is obligated to perform
its warranty obligations.
ARTICLE II. PURCHASE ORDERS
2.1 Preparation of Purchase Orders. Network-1 agrees that licensed software
programs and related services which Network-1 generally makes available
to other customers shall be made available to EDS under the terms and
conditions of this Agreement. EDS may request information about licensed
software programs and related services in order to prepare purchase
orders and Network-1 shall promptly provide to EDS, at no charge,
sufficiently detailed information which is responsive to EDS' request.
From time to time and/or at EDS' request, Network-1 shall provide written
information to EDS about licensed software programs and related services,
and new releases, versions or options related thereto, available or to be
available from Network-1.
2.2 Issuance and Aceptance of Purchase Orders. References in this Section to
purchase orders also apply to alterations to Purchase Orders (as later
defined in this Section). The following governs the issuance and
acceptance of purchase orders under this Agreement:
(a) EDS may issue to Network-1 written purchase orders identifying the
Licensed Software and Services EDS desires to obtain from Network-1.
Each purchase order may include other terms and conditions
applicable to the Licensed Software and Services ordered; such other
terms shall be consistent with the terms and conditions of this
Agreement, or shall be necessary to place a purchase order, such as
billing and shipping information, required delivery dates,
installation locations, and Charges (as later defined in this
Agreement).
(b) Network-1 shall promptly accept purchase orders by providing to EDS
a written or an oral acceptance of such purchase order, or by
commencing performance pursuant to such purchase order. Network-1
shall accept purchase orders which do not establish new or
conflicting terms and conditions from those set forth in this
Agreement. Network-1 shall also accept purchase orders incorporating
terms and conditions which have been separately agreed upon in
writing by the parties.
(c) Network-1 may reject a purchase order which does not meet the
conditions described in subsection (b) above by promptly providing
to EDS a written explanation of the reasons for such rejection.
Network-1 shall accept an alteration to the originally issued
purchase order if such alteration remedies the items set forth in
Network-1's written rejection.
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Purchase orders accepted in accordance with this Section are referred to
as "Purchase Orders." EDS shall have no responsibility or liability for
Licensed Software or Services provided without a Purchase Order.
2.3 Purchase Order Alterations. EDS may issue an alteration to a Purchase
Order in order to, without limitation, (i) change a location for
delivery, (ii) modify the quantity or type of Licensed Software and
Services to be delivered or performed, (iii) implement any change or
modification as required by or permitted in this Agreement, (iv) correct
typographical or clerical errors, or (v) order Licensed Software or
Services which are of superior quality, or are enhancements to or are new
releases or new options of the Licensed Software or Services set forth in
the Purchase Order.
2.4 Evaluation Purchase Orders. EDS may issue a purchase order to Network-1
for Licensed Software evaluation by EDS at no charge for an evaluation
period agreed upon by the parties. Network-1 shall provide the Licensed
Software listed in the evaluation Purchase Order to EDS and shall pay all
related transportation and insurance costs. Such Licensed Software shall
be protected by EDS in accordance with the non-disclosure requirements
specified in this Agreement which are applicable to Licensed Software. At
the conclusion of the evaluation period, EDS shall have the option to
acquire such Licensed Software pursuant to this Agreement or to return
such Licensed Software to Network-1 at Network-1's expense without
obligation to Network-1. Licensed Software which Network-1 and EDS agree
to be the subject of beta testing by EDS shall be subject to a separate
agreement between the parties containing applicable beta test terms and
conditions.
2.5 Cancellation of Purchase Orders. Except as otherwise agreed upon by the
parties, EDS may cancel all or a portion of a Purchase Order relating to
Licensed Software, without charge or penalty at any time prior to the
scheduled delivery date of the affected Licensed Software. Purchase
Orders, or portions thereof, for Services may be canceled as specified in
the applicable sections of this Agreement.
ARTICLE III. PROVISION OF LICENSED SOFTWARE AND SERVICES
3.1 General EDS is entitled to obtain Licensed Software and Services for the
benefit of and use by affiliates of EDS. Such affiliates and their
respective employees are entitled to use the Licensed Software and
Services in accordance with this Agreement and have and are entitled to
all rights, benefits, and protections granted to EDS pursuant to this
Agreement with respect to such Licensed Software and Services. However,
an affiliate of EDS shall only be entitled to obtain Licensed Software
and Services directly from Network-1 pursuant to this Agreement if EDS so
provides written notice to Network-1. EDS is responsible for compliance
by its affiliates with the terms and conditions set forth in this
Agreement. EDS and its affiliates have the right to transfer or remarket
the Licensed Software and Services to third parties.
3.2 Transportation of Lincensed Software. Network-1 shall deliver Licensed
Software to EDS on the delivery date set forth in the applicable Purchase
Order or as otherwise agreed upon by the parties. Charges for
transportation of Licensed Software shall be paid by Network-1. The
method and mode of all transportation shall be those selected by
Network-1.
3.3 Risk if Loss. All risk of loss of, or damage to, Licensed Software shall
be borne by Network-1 until receipt of delivery of such Licensed Software
by EDS. Network-1 agrees to insure Licensed Software until receipt of
delivery of such Licensed Software by EDS. If loss to or damage of
Licensed Software
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occurs prior to receipt of delivery by EDS, Network-1 shall immediately
provide a replacement item or, if Licensed Software is not immediately
replaceable, Network-1 shall give EDS highest priority for the provision
of replacement Licensed Software.
3.4 Installation of Licensed Software. If installation is set forth in the
governing Purchase Order or is included in the Charge for Licensed
Software, Network-1 shall install Licensed Software in good working order
at the designated location on or before the installation date set forth
in the applicable Purchase Order or as otherwise agreed upon by the
parties. Installation Services shall include performance of Network-1's
usual and customary diagnostic tests to determine the operational status
of the Licensed Software. Network-1 shall inform EDS of any education
Services which are included with installation, and such education may be
performed at a time mutually agreed upon by Network-1 and EDS.
3.5 Right to Cancel for Delays. In the event of a delay in delivery of all or
any portion of Licensed Software listed on a Purchase Order or Licensed
Software listed on a series of Purchase Orders which relate to a specific
project or request for proposal (the Licensed Software listed on such
series of Purchase Orders referred to as "Related Licensed Software"), or
in the event of a delay in the performance of Services which is not
excused in this Agreement, EDS may cancel without charge all or any
portion of the Licensed Software, Related Licensed Software or Services
for which delivery or performance has been so delayed. If, in EDS'
opinion, the delivered Licensed Software or Related Licensed Software are
not operable without the remaining undelivered Licensed Software or
Related Licensed Software, EDS may, at Network-1's expense, return any
delivered Licensed Software or Related Licensed Software to Network-1.
EDS shall not be liable for any expenses incurred by Network-1 for
canceled, undelivered, or returned Licensed Software or Related Licensed
Software. EDS shall receive a refund of all amounts paid to Network-1
with respect to the canceled and/or returned Licensed Software, Related
Licensed Software and Services.
3.6 Resale of Products by EDS. During the term of this Agreement, EDS may
promote and resell Products, in conjunction with EDS providing systems
integration, outsourcing or facilities management services to a customer
of EDS ("ITS Customer"), in accordance with the following terms and
conditions:
(a) Charges for Purchase Orders identified for resale shall be as set
forth in Exhibit B.
(b) For a Purchase Order not identified as subject to Auto Payment as
defined in Section 6.3, Network-1 may invoice EDS for resale
products upon delivery and payment will be made in accordance with
the provisions of Section 6.4, Payment Through Invoicing.
(c) Network-1 shall extend the same warranties and indemnifications,
with respect to Products resold by EDS hereunder, as Network-1
extends to other end user customers.
(d) The term of agreements, warranties and indemnities extended by
Network-1 to an ITS Customer shall commence upon delivery of a
Product to an ITS Customer and the ITS Customer shall be governed by
Network-1's then current End User Software License Agreement from
the delivery date to such ITS Customer.
(e) Network-1 shall make available to ITS Customers all training,
technical support and other services related to the Products, on the
same terms and conditions, that are currently generally available or
that may be generally available by Network-1 to other end user
customers.
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(f) During the term that EDS is providing services to an ITS Customer,
EDS shall have authorized access to Licensed Software acquired under
this Section 3.6, in accordance with the provisions of Exhibit E,
titled "Reseller Access Authorization".
3.7 Time and Matericals Services. If available from Network-1 (to be
determined at the sole discretion of Network-1), EDS may obtain on a time
and materials basis from Network-1 consulting, development and other
Services (excluding support Services which are provided pursuant to other
sections of this Agreement) agreed upon by the parties in accordance with
the terms and conditions set forth below.
(a) EDS may specify on a purchase order the names, required number and
skill levels of Employees to perform Services.
(b) During the course of performance of Services, EDS may request
replacement of an Employee or a proposed Employee. In such event,
Network-1 shall, within five (5) working days of receipt of such
request from EDS, provide a substitute Employee of sufficient skill,
knowledge, and training to perform the applicable Services. If,
within the first thirty (30) days after an Employee's commencement
of Services, EDS notifies Network-1 (i) such Employee's level of
performance is unacceptable, (ii) such Employee has failed to
perform as required, or (iii) such Employee, in EDS' sole opinion,
lacks the skill, knowledge or training to perform at the required
level, then EDS shall not be required to pay for Services provided
by such Employee during such period and Network-1 shall refund to
EDS all amounts paid for such Employee's Services. If EDS requests
replacement of an Employee for the above-referenced reasons after
such thirty (30) day time period, or at any time for a reason other
than the reasons indicated above, EDS shall not be required to pay
for, and shall be entitled to a refund of, any sums paid to
Network-1 for such Employee's Services after the date of EDS'
requested replacement of such Employee.
(c) Network-1 shall not replace, without EDS' consent, an Employee then
currently performing Services until the governing Purchase Order
expires or is terminated; however, Network-1 may replace, without
EDS' consent, an Employee for reasons relating to the Employee's
termination with Network-1, promotion, illness, death, or causes
beyond Network-1's control.
(d) EDS shall reimburse Network-1 for reasonable expenses incurred by
Employees in the performance of Services (if requested by Network-1
in advance and approved by EDS) which are related to travel,
lodging, and meals; such expenses shall be reimbursed in accordance
with EDS' guidelines for its own employees.
(e) Network-1 shall establish and shall retain, for a period of three
(3) years following the performance of time and materials Services,
records which adequately substantiate the applicability and accuracy
of Charges for such Services and related expenses to EDS. Upon
receipt of reasonable advance notice from EDS, Network-1 shall
produce such records for audit by EDS.
(f) Purchase Orders for Services provided or to be provided under this
Section may be canceled at any time without charge or penalty, upon
written notice to Network-1.
(g) The parties agree that the ownership of any Work Product created by
or on behalf of Network-1 in its performance of time and material
Service shall be negotiated in good faith by the parties and
documented in a separate agreement supplemental to this Agreement.
Such separate
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agreement shall be signed prior to commencement of Services. In the
event that an agreement is not signed and Network-1 commences
performance of Services, then the parties agree that EDS shall own
any Work Product created by or on behalf of Network-1 in the
performance of such Services.
3.8 Service in General. In connection with the performance of any Services
pursuant to this Agreement:
(a) For purposes of this Agreement, the following definition applies:
"Work Product(s)" means (in any form including source code) any and
all ideas, processes, methods, programming aids, formulas,
manufacturing techniques, mask works, reports, programs, manuals,
tapes, card decks, listings, software, flowcharts and systems and
any improvements, enhancements, or modifications to any of the
foregoing, which are developed, prepared, conceived, made, or
suggested by any Employee or by Network-1 as part of, in connection
with, or in relationship to the performance of Services (except in
connection with Network-1's performance of warranty Service
obligations or pre-paid support Services) pursuant to this
Agreement. Work Products also means all such developments as are
originated or conceived during the term of this Agreement but are
completed or reduced to practice thereafter.
(b) Unless a specific number of Employees is set forth in the governing
Purchase Order, Network-1 warrants it will provide sufficient
Employees to complete the Services ordered within the applicable
time frames established pursuant to this Agreement or as set forth
in such Purchase Order.
(c) Network-1 warrants that Employees shall have sufficient skill,
knowledge, and training to perform Services and that the Services
shall be performed in a professional and workmanlike manner.
(d) Employees performing Services in the United States must be United
States citizens or lawfully admitted in the United States for
permanent residence or lawfully admitted in the United States
holding a visa authorizing the performance of Services on behalf of
Network-1.
(e) Network-1 warrants that all Employees utilized by Network-1 in
performing Services are under a written obligation to Network-1
requiring Employee: (i) to maintain the confidentiality of
information of Network-1's customers, and (ii) if such Employee is
not a full-time employee whose work is considered a "work for hire"
under Section 101 of the United States Copyright Code, to assign all
of Employee's right, title, and interest to Network-1 in and to any
Work Product which is developed, prepared, conceived, made, or
suggested by such Employee while providing Services on behalf of
Network-1.
(f) Network-1 shall require Employees providing Services at an EDS
location to comply with applicable EDS security and safety
regulations and policies.
(g) Network-1 shall provide for and pay the compensation of Employees
and shall pay all taxes, contributions, and benefits (such as, but
not limited to, workers' compensation benefits) which an employer is
required to pay relating to the employment of employees. EDS shall
not be liable to Network-1 or to any Employee for Network-1's
failure to perform its compensation, benefit, or tax obligations.
Network-1 shall indemnify, defend and hold EDS harmless from and
against all such taxes, contributions and benefits and will comply
with all associated governmental regulations, including the filing
of all necessary reports and returns.
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(h) Network-1 shall allow EDS or its designated third party to conduct a
background investigation and drug screening ("Investigation") of any
Employee performing Services in the United States, Canada and Mexico
if EDS intends to provide the Employee with unescorted access to an
EDS location. In connection with such Investigation EDS shall
provide to Network-1 a standard form authorizing the Investigation
and Network-1 shall promptly secure the completion of such form by
the Employee. Any and all information obtained in connection with an
Investigation of any Employee or acquired or made known during such
Investigation shall be deemed confidential and shall not be revealed
to persons without a bona fide need to know. If, after reviewing the
results of an Investigation, EDS elects not to accept an Employee
for performance of Services under this Agreement, Network-1 agrees
to not utilize such Employee in the performance of Services. EDS
shall waive the Investigation for an Employee if Network-1 provides
EDS with written confirmation that: (i) Network-1 has conducted a
background and drug screening investigation of such Employee with
satisfactory results, or (ii) the Employee has been employed with
Network-1 for at least five (5) years in good standing.
3.9 Use of Existing Materials. For purposes of this Agreement, "Existing
Materials" means any confidential or proprietary materials which belong
to third parties or in which Network-1 has a pre-existing intellectual
property interest. To the extent that Work Product(s) under development
may incorporate or require the use of Existing Materials, or to the
extent Network-1 intends, in its performance of Services, to utilize any
such Existing Materials (except as such are utilized by Network-1 in the
performance of warranty Service obligations or pre-paid support
Services), Network-1 shall: (i) notify EDS of such intent prior to
commencement of performance of Services; (ii) identify to EDS the
ownership of such Existing Materials; (iii) describe the use to which
Network-1 intends to put such Existing Materials; and (iv) explain
Network-1's ability to proceed with performance of the Services without
the use of such Existing Materials. EDS may require that Network-1
perform Services without the use of such Existing Materials. If any such
Existing Material is owned by a third party and/or is used in the
performance of Services, Network-1 warrants that it has acquired all
licenses and authorizations necessary to utilize the Existing Material in
the manner and for the purpose intended by Network-1 in its actual use of
such Existing Material in the performance of Services. To the extent that
Existing Materials are incorporated in Work Products, Network-1 grants to
EDS and its affiliates a royalty-free, irrevocable, worldwide,
non-exclusive, perpetual right to use the Work Product together with the
Licensed Software in accordance with the terms and conditions of this
Agreement or in a separate agreement supplemental to this Agreement.
3.10 Further Acts. During and subsequent to the term of this Agreement,
Network-1 shall do, or cause to be done, all such further acts and shall
execute, acknowledge, and deliver, or cause to be executed, acknowledged,
and delivered, any and all further documentation or assignments as EDS
may reasonably require to evidence EDS' right to use the Licensed
Software or Work Products, in accordance with this Agreement.
3.11 Time of Performance. Time is expressly made of the essence with respect
to each and every term and provision of this Article.
3.12 EDS Business Practices. Network-1 shall comply with the EDS Business
Practices set forth in Exhibit A.
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ARTICLE IV. PROVISION OF LICENSED SOFTWARE
4.1 Acceptance of Licensed Software. EDS shall accept delivered copy(ies) of
Licensed Software on the date (the "Acceptance Date") when all necessary
Documentation has been received and the Licensed Software performs in
accordance with and/or conforms to its Applicable Specifications. In the
event Licensed Software does not so perform, EDS may (i) continue to test
the Licensed Software with the assistance of Network-1, (ii) permit
Network-1 to repair or replace the Licensed Software at no additional
expense to EDS, or (iii) return the Licensed Software and Documentation
to Network-1, at Network-1's expense and without liability to Network-1,
and any amounts paid by EDS for the Licensed Software and Documentation
shall be refunded by Network-1 to EDS. Acceptance of Licensed Software
does not waive any warranty rights provided in this Agreement for the
Licensed Software.
4.2 Grant of License. For each item of Licensed Software received by EDS,
Network-1 grants EDS and EDS has a worldwide, nonexclusive, irrevocable,
perpetual license to use, execute, store, and display the object code
version of the Licensed Software, on behalf of EDS and customers of EDS
(a "License") in accordance with the type of License selected and in
accordance with the terms and conditions of this Agreement. A Purchase
Order shall designate the type of License which is selected; if a
Purchase Order fails to designate the type of License desired, then such
License shall be deemed to be a Network Software License (as later
defined in this Section).
(a) A "CPU Software License" permits EDS to use the Licensed Software on
any single computer (which may include more than one central
processing unit) or item of equipment ("CPU") and to copy the
Licensed Software as necessary for archival, maintenance, disaster
recovery testing, or back-up purposes. If EDS desires to run
parallel operations in the process of conducting a disaster recovery
test or transferring operations from one CPU to another CPU, EDS may
operate the Licensed Software on two (2) CPUs for the period of time
reasonably necessary to complete the disaster recovery test or
transfer.
(b) A "Site Software License" permits EDS to use the Licensed Software
at the Site designated in the Purchase Order and to copy the
Licensed Software as necessary for dissemination at the Site and for
archival, maintenance, disaster recovery testing, or back-up
purposes. Notwithstanding the foregoing, the Licensed Software may
be used at other than the designated Site, if (i) the designated
Site cannot be used, (ii) the designated Site is replaced or changed
by EDS, or (iii) EDS provides Network-1 with prior written notice.
If EDS desires to run parallel operations in the process of
conducting a disaster recovery test or transferring operations from
one Site to another Site, EDS may operate the Licensed Software at
two (2) Sites for the period of time reasonably necessary to
complete the disaster recovery test or transfer.
(c) A "Network Software License" permits EDS to use the Licensed
Software on any single computer, file server, or item of equipment
which may be accessed by multiple, networked devices (collectively
hereinafter referred to as the "Network"). Portions of the Licensed
Software may be downloaded as appropriate for use by the devices on
the Network. If EDS desires to run parallel operations in the
process of conducting a disaster recovery test or transferring
operations from one Network to another Network, EDS may operate the
Licensed Software on two (2) Networks for the period of time
reasonably necessary to complete the disaster recovery test or
transfer.
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(d) A "Corporate Software License" permits EDS to use the Licensed
Software at any EDS or EDS customer location and on any items of
equipment and to make and use unlimited copies of the Licensed
Software.
(e) Any License granted under this Agreement permits EDS to (i) use
Licensed Software for its corporate purposes including, but not
limited to, providing services to or processing data of customers of
EDS, providing remote access to the Licensed Software, and
performing disaster recovery, disaster testing, and backup as EDS
deems necessary, and (ii) use and copy Licensed Software and
Documentation for the purpose of creating and using training
materials relating to the Licensed Software, which training
materials may include flow diagrams, system operation schematics, or
screen prints from operation of the Licensed Software. Access to and
use of the Licensed Software by customers of EDS shall be considered
authorized use under this Section so long as such use is in
conjunction with EDS' provision of services to, or EDS' processing
the data of, such customers, and so long as any such customers are
bound by obligations of confidentiality.
(f) EDS shall not disassemble, de-compile, or reverse engineer the
Licensed Software.
The governing License also includes the right to use the source code
version of Licensed Software solely in accordance with the terms and
conditions of the Section of this Agreement titled "Provision of Source
Code."
4.3 Transfer of Licensed Software. During the performance or upon termination
of a contract with an EDS customer or upon any transfer of equipment
incorporating Licensed Software to a third party (such customers and
third parties referred to as "Transferee"), (i) the applicable License
may be assigned to such Transferee, or (ii) upon request by EDS, the
Licensed Software will be licensed directly by Network-1 to such
Transferee. Any assignment of Licensed Software in accordance with this
Section shall be in accordance with the terms and conditions of
Network-1's standard software license agreement or as agreed upon by
Network-1 and Transferee at no additional charge to EDS or Transferee,
and EDS shall have no further liability or responsibility with respect to
Licensed Software.
4.4 Ownership of Licensed Software and Modifications. The Licensed Software
shall be and remain the property of Network-1 or third parties which have
granted Network-1 the right to license the Licensed Software and EDS
shall have no rights or interests therein except as set forth in this
Agreement. EDS shall be entitled to develop interfaces to the Licensed
Software and all such software interfaces to the Licensed Software
developed by EDS shall be and remain the property of EDS, and Network-1
and its Employees shall have no rights or interests therein. Except with
respect to software interfaces to the Licensed Software developed by EDS
as provided above, or pursuant to ss.4.11(c) Provision of Source Code of
this Agreement, EDS may not modify, enhance or otherwise change the
Licensed Software. Except in connection with Network-1's performance of
warranty Service obligations or pre-paid support Services, all
modifications of and software derivative of the Licensed Software
developed at EDS' expense by Network-1 and its Employees shall be
considered Work Product, the ownership of which shall be determined as
set forth in ss.3.7(g) Time and Materials Services.
4.5 Central Distribution. EDS may centrally distribute Licensed Software,
including Corrections, Improvements, and Updates thereto, and related
Documentation to end users of the Licensed Software by copying the
Licensed Software onto EDS supplied disks and physically distributing the
Licensed Software, or by electronically transmitting the Licensed
Software directly from a host computer to the hard disk of one or more
central processing
9
units. Network-1 shall provide to EDS, as part of Network-1's price for
Licensed Software, a master disk or disks of the applicable Licensed
Software and one copy of all Documentation relating thereto which EDS
shall be entitled to copy for such distribution. As part of Network-1's
price for Updates for Licensed Software, Network-1 shall update master
disks and the then current documentation related thereto. EDS shall keep
records of such electronic distribution and shall provide a report of
sales to Network-1 in monthly Purchase Orders. EDS shall also provide,
upon Network-1's reasonable request from time to time, a written report
setting forth the total number of copies distributed. If the foregoing
monthly Purchase Order is not identified as being subject to automatic
payment then Network-1 shall invoice EDS for such centrally distributed
Licensed Software and Documentation based on EDS' written report of sales
in accordance with the applicable per copy Charge for copies of Licensed
Software.
4.6 Proprietary Markings. EDS shall not remove or destroy any proprietary
markings or proprietary legends placed upon or contained within the
Licensed Software.
4.7 Duplication of Documentation. EDS may duplicate Licensed Software
Documentation, at no additional charge, for EDS' use or for use by a
customer of EDS in connection with the provision of Licensed Software so
long as all required proprietary markings are retained on all duplicated
copies.
4.8 Non-Disclosure. During the term of a License, EDS will treat the Licensed
Software with the same degree of care and confidentiality which EDS
provides for similar information belonging to EDS which EDS does not wish
disclosed to the public, but not less than reasonable care. This
provision shall not apply to Licensed Software, or any portion thereof,
which is (i) already known by EDS without an obligation of
confidentiality, (ii) publicly known or becomes publicly known through no
unauthorized act of EDS, (iii) rightfully received from a third party
without obligation of confidentiality, (iv) disclosed without similar
restrictions by Network-1 to a third party, (v) approved by Network-1 for
disclosure, or (vi) required to be disclosed pursuant to a requirement of
a governmental agency or law so long as EDS provides Network-1 with
timely prior written notice of such requirement. It will not be a
violation of this Section if (A) EDS provides access to and the use of
the Licensed Software to third parties providing services to EDS so long
as EDS secures execution by such third parties of a confidentiality
agreement as would normally be required by EDS, or (B) EDS independently
develops software which is similar to Licensed Software, so long as such
independent development is substantiated by written documentation.
4.9 Licensed Software Support Services. The support Services set forth below
for the Licensed Software shall be provided by Network-1 to EDS during
the Warranty Period at no charge to EDS. Thereafter, such support
Services shall be provided by Network-1, upon EDS' request, for either a
fixed or open-ended term, at the applicable Charges set forth in Exhibit
B, upon the terms contained in the next Section. EDS may discontinue such
support Services at any time by providing thirty (30) days' advance
written notice to Network-1. If such support Services were provided by
Network-1 for an open-ended term, EDS shall promptly receive a refund of
pre-paid support Charges which reflects the amount for discontinued
support Services after the effective date of the notice.
(a) Network-1 shall promptly notify EDS of any defects, errors or
malfunctions ("Defects") in the Licensed Software or Documentation
of which Network-1 becomes aware from any source and shall promptly
provide to EDS modified versions of Licensed Software or
Documentation which incorporate corrections of any Defects
("Corrections"). Network-1 shall also provide to EDS all operational
and support
10
assistance necessary to cause Licensed Software to perform in
accordance with its Applicable Specifications and remedial support
designed to provide a by-pass or temporary fix to a Defect until the
Defect can be permanently corrected. Network-1 shall use its best
efforts to respond to requests from EDS for Licensed Software
support in a manner and time frame which are reasonably responsive
considering the nature and severity of the Defect which gave rise to
such request.
(b) Network-1 shall provide to EDS all upgrades, modifications,
improvements, enhancements, extensions, and other changes to
Licensed Software developed by Network-1 ("Improvements") and all
updates to the Licensed Software necessary to cause the Licensed
Software to operate under new versions or releases of the Licensed
Software's current operating system(s) ("Updates") which are
generally made available to other customers of Network-1. EDS shall
have the option to implement any Improvement or Update and any
failure by EDS to so implement shall not affect EDS' right to
continue to receive support and maintenance Services.
(c) Network-1 shall provide telephone hot-line support between 8:00 a.m.
and 5:00 p.m. at the applicable maintenance location. In addition,
Network-1 shall provide to EDS, at the request of EDS and at
Network-1's then current established charges therefor, additional
telephone hot-line support for up to twenty-four (24) hours per day,
seven (7) days per week.
(d) Network-1 shall provide to EDS any revisions to the existing
Documentation developed for the Licensed Software or necessary to
reflect all Corrections, Improvements, or Updates.
(e) Network-1 shall make Licensed Software training available to persons
designated by EDS to the extent agreed upon by the parties.
(f) If the applicable Charge for Licensed Software is payable on a
periodic basis, and such Charge includes provision of support
Services, then if an Event of Default as described in the Section of
this Agreement titled "Provision of Source Code" occurs or an event
described in the Section of this Agreement titled "Termination for
Insolvency or Bankruptcy" occurs and if Network-1 fails to provide
the support Services described above, then EDS' Charge for the
affected Licensed Software shall be immediately reduced to reflect
such failure by subtracting that portion of the Charge allocable to
the provision of support Services.
4.10 Licensed Software Support Services Options. EDS may obtain the support
Services described in the previous Section for Licensed Software on a
central site support basis and/or on an individual site support basis. In
the absence of a designation of central or individual site support in a
Purchase Order, such support shall be deemed to be individual site
support. The Charges for each option shall be as set forth in Exhibit B
or as otherwise agreed upon by the parties. Where "central site support"
is requested, support Services shall be provided by Network-1 to and
shall be requested by EDS through a single point of contact identified by
EDS on a Purchase Order. To the extent necessitated by geographic
diversity or where required in order to support multiple time zones, EDS
may designate multiple central site support locations. With respect to
central site support, Network-1 shall provide to EDS one master disk and
one copy of all Documentation relating to each Correction, Improvement,
or Update. EDS shall be entitled to copy the disk and Documentation and
distribute the copies or electronically transmit the copied information
to each location supported by the central site. A designation of central
site support shall not prevent an individual user of Licensed Software
from contacting Network-1 in the event of an emergency. Where "individual
site support" is
11
requested, support Services shall be provided by Network-1 to the
applicable licensed CPU, Site, or Network, or, in the case of a Corporate
Software License, to a licensed user.
4.11 Provision of Source Code. EDS' ability to utilize adequately Licensed
Software will be seriously jeopardized if Network-1 fails to maintain or
support such Licensed Software unless complete Licensed Software source
code and related Documentation is made available to EDS for EDS' use in
satisfying EDS' maintenance and support requirements. Therefore,
Network-1 agrees that if an "Event of Default" occurs, then Network-1
will provide to EDS one copy of the most current version of the source
code for the affected Licensed Software and associated Documentation in
accordance with the following:
(a) An Event of Default shall be deemed to have occurred if Network-1:
(i) ceases to market or make available maintenance or support
Services for the Licensed Software during a period in which EDS is
entitled to receive or to purchase, or is receiving or purchasing,
such maintenance and support and Network-1 has not promptly cured
such failure within thirty (30) days after receipt of EDS' written
demand that Network-1 make available or perform such maintenance and
support, (ii) becomes insolvent, executes an assignment for the
benefit of creditors, or becomes subject to bankruptcy or
receivership proceedings, (iii) ceases business operations generally
or (iv) has transferred all or substantially all of its assets or
obligations set forth in this Agreement to a third party which has
not assumed all of the obligations of Network-1 set forth in this
Agreement.
(b) Network-1 will promptly and continuously update and supplement the
source code as necessary with all revisions, Corrections,
enhancements, and other changes developed for the Licensed Software
and Documentation. Such source code shall be in a form suitable for
reproduction and use by computer and photocopy equipment, and shall
consist of a full source language statement of the program or
programs comprising the Licensed Software and complete program
maintenance Documentation which comprise the pre-coding detail
design specifications, and all other material necessary to allow a
reasonably skilled programmer or analyst to maintain and enhance the
Licensed Software without the assistance of Network-1 or reference
to any other materials.
(c) The governing License for the Licensed Software includes the right
to use source code received under this Section as necessary to
modify, maintain, and update the Licensed Software solely for
purposes of providing support for EDS and customers of EDS that,
absent the Event of Default, would have been provided by Network-1
under this Agreement, and for no other purpose whatsoever. EDS shall
not distribute the Licensed Software source code received under this
Section to any third party and such source code shall remain subject
to the terms and provisions of this Agreement.
(d) Upon request by EDS, Network-1 will deposit in escrow with an escrow
agent acceptable to EDS and pursuant to a mutually acceptable escrow
agreement supplemental to this Agreement, a copy of the source code
which corresponds to the most current version of the Licensed
Software in use by EDS. EDS shall pay all fees of the escrow agent
for services provided. At a minimum, the terms and conditions of
such mutually acceptable escrow agreement supplemental to this
Agreement shall allow EDS to conduct an audit of, or shall require
that the escrow agent conduct an audit of, the copy of source code
in escrow to ensure that such copy meets the requirements
established in this Section. Network-1's entry into, or failure to
enter into, an agreement with an escrow agent or to deposit the
described materials
12
in escrow shall not relieve Network-1 of its obligations to EDS
described in this Section.
(e) If, as a result of an Event of Default, Network-1 fails to provide
required support Services, then any periodic license fee which EDS
is required to pay under this Agreement for Licensed Software shall
be reduced to reflect such lack of support Services. At such time as
Network-1 commences offering the support Services described in this
Agreement for Licensed Software, EDS may obtain such support
Services as provided for elsewhere in this Agreement.
4.12 Acquisition of Third Party Software. If EDS has acquired software
products from a third party and rights to such software products are
subsequently acquired by Network-1 (whether through purchase of the third
party in whole or in part, through purchase of the software products,
through acquisition of the rights to market the software, or through any
other means), then EDS shall have the option of (i) continuing to use the
software products under the original license agreement with such third
party at no additional charge to EDS other than applicable fees
identified in such license agreement, or (ii) using the software products
under the terms and conditions of this Agreement.
4.13 Software from an Authorized Third Party. If EDS acquires Network-1's
software products from a value added reseller, dealer, distributor, or
other Network-1 authorized third party provider or if the Licensed
Software is embedded in software products acquired from a third party,
Network-1 agrees that, at EDS' option, such software products shall be
deemed to have been acquired under this Agreement.
ARTICLE V. WARRANTIES, INDEMNITIES, AND LIABILITIES
5.1 Warranty. Network-1 represents and warrants that:
(a) Network-1 has not and will not enter into agreements or commitments
which are inconsistent with or conflict with the rights granted to
EDS in this Agreement;
(b) The Products are and shall be free and clear of all liens and
encumbrances, and EDS shall be entitled to use the Products without
disturbance;
(c) No portion of the Products contain, at the time of delivery, any
"back door," "time bomb," "Trojan horse," "worm," "drop dead
device," "virus," or other computer software routines or hardware
components designed to (i) permit access or use of either the
Products or EDS' computer systems by Network-1 or a third party not
authorized by this Agreement, (ii) disable, damage or erase the
Products or data, or (iii) perform any other such actions;
(d) The Products and the design thereof shall not contain preprogrammed
preventative routines or similar devices which prevent EDS from
exercising the rights set forth in Article IV of this Agreement or
from utilizing the Products for the purpose for which they were
designed;
(e) Each Product and its media (i) shall be new and shall be free from
defects in manufacture, materials, and design, (ii) shall be
manufactured in a good and workmanlike manner using a skilled staff
fully qualified to perform their respective duties, and (iii) shall
function properly under ordinary use and operate in conformance with
13
its Applicable Specifications and Documentation from the date of
receipt until the date ninety (90) days after EDS requests, and
Network-1 provides, the pass-key necessary for installation and
activation of the Licensed Software.
(f) The Products are, and shall continue to be, data, program, and
upward compatible with any other Products available or to be
available from Network-1 so that data files created for a Product
can be utilized without adaptation with other Products and Products
will operate with other Products and will not result in the need for
alteration, emulation, or other loss of efficiency. Network-1 shall
provide to EDS at least ninety (90) days prior written notice to
discontinue any Product.
(g) Neither the performance nor the functionality of the Products will
be affected by any changes to the date format or date calculations
within any part of the Product either before, during or after the
year 2000.
During the Warranty Period, Network-1 will provide warranty Service to
EDS at no additional cost and will include all Services or replacement
Products or Product media necessary to enable Network-1 to comply with
the warranties set forth in this Agreement. Network-1 shall pass through
to EDS any manufacturers' warranties which Network-1 receives on the
Products and, at EDS' request, Network-1 shall enforce such warranties on
EDS' behalf. Network-1 agrees that EDS shall be entitled to pass through
to Product end users any warranties received from Network-1 for such
Products pursuant to this Agreement.
5.2 Proprietary Rights Indemnification. Network-1 represents and warrants
that (i) at the time of delivery to EDS, no Product provided under this
Agreement is the subject of any litigation ("Litigation"), and (ii)
Network-1 has all right, title, ownership interest, and/or marketing
rights necessary to provide the Products to EDS and that each License,
the Products and their sale, license, and use hereunder do not and shall
not directly or indirectly violate or infringe upon any copyright,
patent, trade secret, or other proprietary or intellectual property right
of any third party or contribute to such violation or infringement
("Infringement"). Network-1 shall indemnify and hold EDS and Product end
users and their respective successors, officers, directors, employees,
and agents harmless from and against any and all actions, claims, losses,
damages, liabilities, awards, costs, and expenses (including legal fees)
resulting from or arising out of any Litigation, any breach or claimed
breach of the foregoing warranties, or which is based on a claim of an
Infringement and Network-1 shall defend and settle, at its expense, all
suits or proceedings arising therefrom. EDS shall inform Network-1 of any
such suit or proceeding against EDS and shall have the right to
participate in the defense of any such suit or proceeding at its expense
and through counsel of its choosing. Network-1 shall notify EDS of any
actions, claims, or suits against Network-1 based on an alleged
Infringement of any party's intellectual property rights in and to the
Products. In the event a permanent injunction is obtained against use of
the Products by EDS or customers of EDS, Network-1 shall promptly, at its
option and expense, either (A) procure for EDS and Product end users the
right to continue to use the infringing Product as set forth in this
Agreement, or (B) replace or modify the infringing Products to make its
use non-infringing while being capable of performing the same function
without degradation of performance. If, after the use of best efforts,
neither option (A) or (B) is accomplished by Network-1 within thirty (30)
days of the effective date of such permanent injunction, then: (i) the
applicable Purchase Order may be immediately terminated by EDS, (ii)
Network-1 shall promptly refund to EDS a pro rata amount of any prepaid
Charges for maintenance and support Services related thereto, and (iii)
Network-1 shall promptly refund to EDS all prepaid fees or Charges, less
depreciation based on a five (5) year straight line basis, for Product(s)
subject to such
14
permanent injunction which cannot be used by EDS or customers of EDS and
which have been paid by EDS to Network-1 pursuant to such Purchase Order.
5.3 Cross Indemnification. In the event any act or omission of a party or its
employees, servants, agents, or representatives causes or results in (i)
damage to or destruction of property of the other party or third parties,
and/or (ii) death or injury to persons including, but not limited to,
employees or invitees of either party, then such party shall indemnify,
defend, and hold the other party harmless from and against any and all
claims, actions, damages, demands, liabilities, costs, and expenses,
including reasonable attorneys' fees and expenses, resulting therefrom.
The indemnifying party shall pay or reimburse the other party promptly
for all such damage, destruction, death, or injury.
5.4 Limitation of Liability. Neither party shall be liable to the other
pursuant to this Agreement for any amounts representing loss of profits,
loss of business or indirect, consequential, exemplary, or punitive
damages of the other party. The foregoing shall not limit the
indemnification, defense and hold harmless obligations set forth in this
Agreement.
5.5 Insurance. Network-1 shall, at Network-1's sole expense, maintain the
following insurance:
a) Commercial General Liability Insurance including contractual
coverage: The limits of this insurance for bodily injury and
property damage combined shall be at least:
Each Occurrence Limit $1,000,000
General Aggregate Limit $1,000,000
Products-Completed Operations Limit $1,000,000
Personal and Advertising injury Limit $1,000,000
c) Workers' Compensation Insurance: Such insurance shall provide
coverage in amounts not less than the statutory requirements in the
state where the work is performed, even if such coverage is elective
in that state.
d) Employers Liability Insurance: Such insurance shall provide limits
of not less than $1,000,000 per occurrence.
The insurance specified in (a) and (b) above shall: (i) name EDS, its
directors, officers, employees and agents as additional insureds, and,
(ii) provide that such insurance is primary coverage with respect to all
insureds and additional insureds.
The above insurance coverages may be obtained through any combination of
primary and excess or umbrella liability insurance. EDS may require
higher limits or other types of insurance coverage(s) as necessary and
appropriate under the applicable purchase order.
Network-1 shall provide at EDS' request certificates evidencing the
coverages, limits and provisions specified above on or before the
execution of the Agreement and thereafter upon the renewal of any of the
policies. Network-1 shall require all insurers to provide EDS with a
thirty (30) day advanced written notice of any cancellation, nonrenewal
or material change in any of the policies maintained in accordance with
this Agreement.
5.6 Survival of Article V. The provisions of this Article V, excluding ss.5.5
Insurance, shall survive the term or termination of this Agreement for
any reason.
15
ARTICLE VI. PAYMENTS TO SUPPLIER
6.1 Charges, Prices, and Fees for Licensed Software and Services. Charges,
prices, and fees ("Charges") and discounts, if any, for Licensed Software
and Services shall be determined as set forth in Exhibit B, in a Purchase
Order, or as otherwise agreed upon by the parties, unless modified as set
forth in this Agreement. Upon EDS' request, Network-1 shall: (i) provide
to EDS current copies of Network-1's standard published prices, and (ii)
records which substantiate that EDS has received the Charges and
discounts to which EDS is entitled to under this Agreement. In no event
shall Charges exceed Network-1's then current established charges, prices
and fees. If promotional discounts or programs are extended to other
customers, dealers, or distributors of Network-1, EDS shall be entitled
to participate in such promotional discounts or programs. All purchases
which utilize any such discounts shall be deemed for all purposes
including, without limitation, for purposes of calculating accumulated
purchases and any discounts hereunder, to have been purchased or licensed
under this Agreement.
6.2 Modifications to Charges. Where a change in an established Charge for
Licensed Software or Services is provided for in this Agreement,
Network-1 shall give to EDS at least forty-five (45) days' prior written
notice of such change.
(a) Any increase in a Charge for Services shall not occur during the
first twelve (12) months of this Agreement, during the term of the
applicable Purchase Order or during the specified period for
performance of Services, whichever period is longer. Thereafter, any
increase in a Charge for Services shall not exceed five percent (5%)
of such Charge.
(b) All purchase orders issued by EDS prior to the end of the required
notice period will be honored at the then current Charges so long as
the scheduled delivery date of the applicable Licensed Software or
Services is within forty-five (45) days after the effective date of
the increase.
(c) If Network-1's established Charge, less any applicable discount or
promotion, on the scheduled delivery date is lower than the
established Charge for such Licensed Software or Service stated in
the applicable Purchase Order, then EDS shall be entitled to obtain
such Licensed Software or Service at such lower Charge, less any
applicable discount or promotion.
6.3 Auto Payment. This Section shall apply to Purchase Orders identified as
being subject to automatic payment by EDS.
(a) Single Payment for Recurring Charges. All Charges which are due and
payable on a monthly, annual or other periodic basis for Products
and Services ("Recurring Charges") shall be paid by EDS on the same
date of the month for each month that such Charges are due (the
"Remit Date"). The initial payment for a Recurring Charge shall be
made on the first Remit Date after the Applicable Event provided
that such Applicable Event occurs at least five (5) days prior to
the first Remit Date. An "Applicable Event" is the event set forth
in a Purchase Order that initiates payment of Charges (such as the
installation, receipt, or acceptance of the Product; or the
commencement or completion of Services). If the Applicable Event
occurs less than five (5) days prior to the first Remit Date, the
initial payment for such Recurring Charge shall be made on the
following Remit Date, and EDS shall not be subject to interest or
penalties as a result of such late payment.
16
(b) Payment for Other Charges. Except for Recurring Charges, or unless
otherwise agreed to by the parties in writing, all payments due
Network-1 for Products and Services shall be paid within thirty (30)
days after the date of the Applicable Event.
(c) Invoices Required Under Auto Payment. Network-1 must send EDS an
invoice to receive payment for any amounts due for any Charges which
are payable and have not been identified on the applicable Purchase
Order which is subject to automatic payment.
(d) Reconciliation. From time to time, at either party's request, the
other party shall assist with the reconciliation of the payments
made by EDS to Network-1.
(e) Taxing Jurisdictions. Network-1 shall provide EDS with the list of
states and taxing jurisdictions, and their respective registration
numbers where Network-1 is qualified and registered to collect
sales/use taxes in all of the taxing jurisdictions within that
state. If such written notification is not received by EDS from
Network-1, then EDS shall remit the appropriate tax directly to the
taxing authority. Network-1 shall promptly notify EDS of any
additional jurisdictions to which Network-1 may qualify and register
to collect sales/use taxes.
6.4 Payment Through Invoicing. This Section applies to Purchase Orders issued
by EDS which are not identified as being subject to automatic payment or
to any invoice received by EDS from Network-1 as permitted by this
Agreement.
(a) Except as otherwise set forth in this Agreement, any undisputed sum
due to Network-1 pursuant to this Agreement shall be payable within
thirty (30) days after receipt by EDS of a correct invoice therefor
from Network-1. Network-1 shall invoice EDS on or after the
applicable Acceptance Date for the Licensed Software covered by such
invoice. Periodic payments, if any, due to Network-1 pursuant to
this Agreement shall be invoiced at the beginning of the period to
which they apply. Payment for any other Services shall be invoiced
as agreed upon by the parties or, in the absence of an agreement,
upon completion of such Services.
(b) A "correct" invoice shall contain (i) Network-1's name and invoice
date, (ii) the specific Purchase Order number if applicable, (iii)
description including serial number as applicable, price, and
quantity of the Licensed Software or Services actually delivered or
rendered, (iv) credits (if applicable), (v) name (where applicable),
title, phone number, and complete mailing address of responsible
official to whom payment is to be sent, and (vi) other
substantiating documentation or information as may reasonably be
required by EDS from time to time. A correct invoice must be
submitted to the appropriate invoice address listed on the
applicable Purchase Order.
6.5 Taxes.
(a) Unless EDS provides evidence of exemption, EDS shall pay or
reimburse Network-1, where EDS is liable under applicable tax
statute, amounts equal to taxes which are imposed upon EDS'
acquisition of Products or Services including federal excise taxes,
or sales or use taxes; provided, however, EDS shall not be obligated
to pay or reimburse Network-1 for any taxes attributable to the sale
of any Products or Services which are imposed on or measured by net
or gross income, capital, net worth, franchise, privilege, any other
taxes, or assessments, nor any of the foregoing imposed on or
payable by Network-1.
17
(b) Network-1 agrees to reasonably cooperate with EDS in the audit or
minimization of any applicable tax and shall make available to EDS,
and any taxing authority, all information, records, or documents
relating to any audits or assessments attributable to or resulting
from the payment process under this Agreement, and the filing of any
tax returns or the contesting of any tax.
EDS shall not be obligated to pay or reimburse Network-1 for
additions to taxes, penalties, interest, fees, or other expenses or
costs, if any, incurred by EDS as a result of, or attributable to,
(i) Network-1's failure to verify taxability of a purchase, (ii)
Network-1's failure to correctly calculate or remit taxes in a
timely manner, or (iii) Network-1's negligence, misconduct or
failure to file properly any required returns or reports, or other
required documents.
(c) Upon written notification by EDS and subsequent verification by
Network-1, Network-1 shall reimburse or credit, as applicable, EDS
in a timely manner, for any and all taxes erroneously paid by EDS.
(d) EDS shall provide Network-1 with, and Network-1 shall accept in good
faith, resale, direct pay, or other exemption certificates, as
applicable. Network-1 agrees to separately identify on the invoice
the taxable and non-taxable purchases, the types of tax and the
taxing authorities.
(e) Where Products are destined or Services are performed
internationally, then at EDS' direction, payment may be made by EDS
or its affiliate (i) in country to the local affiliate, (ii) in the
United States, or (iii) in a country mutually agreed upon by the
parties.
(f) If EDS or an affiliate of EDS is required by law to make any
deduction or to withhold from any sum payable hereunder, then the
sum payable by EDS or such affiliate of EDS upon which the deduction
is based shall be paid to Network-1 net of such deduction or
withholding. EDS or such affiliate of EDS shall pay the applicable
tax authorities any such required deduction or withholding.
ARTICLE VII. TERMINATION
7.1 Termination for Cause. Except as provided below by the section of this
Agreement titled "Termination for Non-Payment," in the event that either
party materially or repeatedly defaults in the performance of any of its
duties or obligations set forth in this Agreement, and such default is
not substantially cured within thirty (30) days after written notice is
given to the defaulting party specifying the default, then the party not
in default may, by giving written notice thereof to the defaulting party,
terminate the applicable License or Purchase Order relating to such
default as of a date specified in such notice of termination.
7.2 Termination for Insolvency of Bankruptcy. Either party may immediately
terminate this Agreement and any Purchase Order by giving written notice
to the other party in the event of (i) the liquidation or insolvency of
the other party, (ii) the appointment of a receiver or similar officer
for the other party, (iii) an assignment by the other party for the
benefit of all or substantially all of its creditors, (iv) entry by the
other party into an agreement for the composition, extension, or
readjustment of all or substantially all of its obligations, or (v) the
filing of a meritorious petition in bankruptcy by or against the other
party under any bankruptcy or debtors' law for its relief or
reorganization.
18
7.3 Termination for Non-Payment. Network-1 may terminate a Purchase Order, or
any portion thereof, if EDS fails to pay when due any undisputed amounts
due pursuant to such Purchase Order and such failure continues for a
period of sixty (60) days after the last day payment is due, so long as
Network-1 gives EDS written notice of the expiration date of the
aforementioned sixty (60) day period at least thirty (30) days prior to
the expiration date.
7.4 Termination of Software License. EDS may terminate any License for any
reason by providing written notice to Network-1. If EDS elects to so
terminate a License, EDS shall return to Network-1 or, at EDS' option,
destroy, all copies of the Licensed Software and Documentation in EDS'
possession which are the subject of the terminated License, except as may
be necessary for archival purposes.
7.5 Rights Upon Termination. Unless specifically terminated as set forth in
this Article, all Licenses (and EDS' right to use the Licensed Software
in accordance with such Licenses) and Purchase Orders which require
performance or extend beyond the term of this Agreement shall, at EDS'
option, be so performed and extended and shall continue to be subject to
the terms and conditions of this Agreement.
ARTICLE VIII. MISCELLANEOUS
8.1 Binding Nature, Assignment, and Subcontracting. This Agreement shall be
binding on the parties and their respective successors in interest and
assigns. Neither party shall have the power to assign this Agreement
without the prior written consent of the other party, which consent shall
not be unreasonably withheld. If Network-1 subcontracts or delegates any
of its duties or obligations of performance in this Agreement or in a
Purchase Order to any third party, Network-1 shall remain fully
responsible for complete performance of all of Network-1's obligations
set forth in this Agreement or in such Purchase Order and for any such
third party's compliance with the non-disclosure and confidentiality
provisions set forth in this Agreement.
For purposes of this Agreement, the following transactions relating to
the parties shall not be deemed an assignment of this Agreement and shall
not give rise to any requirement of approval or consent by any party to
this Agreement, nor result in any right to terminate of alter this
Agreement: any merger (including, without limitation, a reincorporation
merger), consolidation, reorganization, stock exchange, sale of stock or
substantially all of the assets or other similar or related transaction
in which EDS or Network-1, as applicable, is the surviving entity or, if
not the surviving entity, the surviving entity continues to conduct the
business conducted by such party prior to consummation of the
transaction.
8.2 Counterparts. This Agreement may be executed in several counterparts, all
of which taken together shall constitute one single agreement between the
parties.
8.3 Headings. The Article and Section headings used in this Agreement are for
reference and convenience only and shall not enter into the
interpretation hereof.
8.4 Authorized Agency. From time to time and at any time, EDS may assume
operational responsibility for computer software programs acquired
directly or indirectly from Network-1 by third parties which become
customers or affiliates, or which are acquired by EDS, after the
Effective Date.
(a) With respect to such customers, and immediately upon execution of a
contract between EDS and a customer, the computer software programs
19
acquired from Network-1 by such customer shall be governed by the
terms and conditions of this Agreement and EDS may use such computer
software programs in accordance with this Agreement at no additional
charge to EDS or its customer, provided, however, that such computer
software programs may only be used by EDS on behalf of that
customer. With respect to each such customer, Network-1, EDS and the
customer shall execute an access agreement authorizing EDS' use of
the computer software programs. Such access agreement shall be in a
form substantially similar to the Third Party System Access
Agreement attached to this Agreement as Exhibit C.
(b) With respect to any such affiliate, and upon Network-1's receipt of
written notice from EDS and such affiliate, the license or other
agreement governing the use and support of such computer software
programs shall automatically be deemed to have been assigned to EDS,
provided, however, that such assigned license or other agreement
shall be superseded by, and the use and support of the computer
software programs shall be governed by, the terms and conditions of
this Agreement.
(c) With respect to any third party with which EDS either (i) buys,
leases, or otherwise acquires all or a substantial part of the
assets or business of such third party, or (ii) consolidates with or
merges with said third party, the license or other agreement
governing the use and support of such computer software programs
shall automatically be deemed to have been assigned to EDS. At that
time, EDS may supersede such assigned license or other agreement
with the terms and conditions of this Agreement, in which case the
use and support of such computer software programs shall be governed
by the terms and conditions of this Agreement, or EDS may elect to
have the assigned license or other agreement continue to govern the
use of such computer software programs.
8.5 Relationship of Parties. Network-1 is performing pursuant to this
Agreement only as an independent contractor. Network-1 has the sole
obligation to supervise, manage, contract, direct, procure, perform or
cause to be performed its obligations set forth in this Agreement, except
as otherwise agreed upon by the parties. Nothing set forth in this
Agreement shall be construed to create the relationship of principal and
agent between Network-1 and EDS. Network-1 shall not act or attempt to
act or represent itself, directly or by implication, as an agent of EDS
or its affiliates or in any manner assume or create, or attempt to assume
or create, any obligation on behalf of, or in the name of, EDS or its
affiliates.
8.6 Confidentiality. Network-1 acknowledges that in the course of performance
of its obligations pursuant to this Agreement, Network-1 may obtain
confidential and/or proprietary information of EDS or its affiliates or
customers. "Confidential Information" includes: information relating to
development plans, costs, finances, marketing plans, equipment
configurations, data, access or security codes or procedures utilized or
acquired, business opportunities, names of customers, research, and
development; the terms, conditions and existence of this Agreement; any
information designated as confidential in writing or identified as
confidential at the time of disclosure if such disclosure is verbal or
visual; and any copies of the prior categories or excerpts included in
other materials created by the recipient party. Network-1 hereby agrees
that all Confidential Information communicated to it by EDS, its
affiliates, or customers, whether before or after the Effective Date,
shall be and was received in strict confidence, shall be used only for
purposes of this Agreement, and shall not be disclosed by Network-1, its
agents or employees without the prior written consent of EDS. This
provision shall not apply to Confidential Information which is (i)
already known by Network-1 without an obligation of confidentiality, (ii)
publicly known or becomes publicly known
20
through no unauthorized act of Network-1, (iii) rightfully received from
a third party (other than an EDS customer or an EDS affiliate) without
obligation of confidentiality, (iv) disclosed without similar
restrictions by EDS to a third party (other than an EDS customer or an
EDS affiliate), (v) approved by EDS for disclosure, or (vi) required to
be disclosed pursuant to a requirement of a governmental agency or law so
long as Network-1 provides EDS with timely prior written notice of such
requirement. Except with respect to Licensed Software, which shall be
governed by the section of this Agreement titled "Non-Disclosure,"
information received by EDS from Network-1 shall only be considered
proprietary and/or confidential after a separate agreement in the form of
Exhibit D, attached hereto, has been executed by a duly authorized
representative of each party for the specific purpose of disclosing such
information. The provisions of this Section shall survive the term or
termination of this Agreement for any reason.
8.7 Media Release. Except for any announcement intended solely for internal
distribution by Network-1 or any disclosure required by legal,
accounting, or regulatory requirements beyond the reasonable control of
Network-1, all media releases, public announcements, or public
disclosures (including, but not limited to, promotional or marketing
material) by Network-1 or its employees or agents relating to this
Agreement or its subject matter, or including the name, trade name, trade
mark, or symbol of EDS or any affiliate of EDS, shall be coordinated with
and approved in writing by EDS prior to the release thereof. Network-1
shall not represent directly or indirectly that any Licensed Software or
Service provided by Network-1 to EDS has been approved or endorsed by EDS
or include the name, trade name, trade mark, or symbol of EDS or any
affiliate of EDS on a list of Network-1's customers without EDS' express
written consent.
8.8 Media Releases. In the event of any disagreement regarding performance
under or interpretation of this Agreement and prior to the commencement
of any formal proceedings, the parties shall continue performance as set
forth in this Agreement and shall attempt in good faith to reach a
negotiated resolution by designating a representative of appropriate
authority to resolve the dispute.
8.9 Electronic Communications. If Network-1 and EDS mutually agree, business
communications between the parties, including, but not limited to,
purchase orders, invoices, and payment may be submitted electronically.
In such case, the parties shall mutually agree in writing upon
supplemental terms and conditions, including technical standards, for the
electronic exchange of such items.
8.10 Proposals and Special Projects. EDS may request a written proposal,
quote, or bid from Network-1 for the provision of Licensed Software
and/or Services for a specific EDS project which may be governed by
separately negotiated terms and conditions. In such event, any Licensed
Software and Services obtained for such project shall be deemed for
purposes of calculating accumulated purchases and any discounts set forth
in this Agreement, to have been obtained pursuant to this Agreement.
8.11 Governmental Customers. This Agreement shall apply to the acquisition of
Licensed Software or Services for use in or in support of the performance
of, or resale under, a contract with a federal, state, county, or local
governmental entity (a "Governmental Customer"). Network-1 and EDS may
negotiate in good faith a supplemental agreement incorporating required
flow-down provisions or other provisions relating to, applicable to, or
required by such Governmental Customer or the proposed contract between
EDS and such Governmental Customer. All Licensed Software and Services
obtained pursuant to this Section shall be deemed for purposes of
calculating accumulated purchases and any discounts set forth in this
Agreement, to have been obtained pursuant to this Agreement.
21
8.12 International Business. This Agreement shall apply to the acquisition of
Licensed Software and Services for use in or in support of the
performance or remarketing of Licensed Software and Services in countries
outside the United States and its territories. Network-1 and EDS and/or
their respective agents, distributors, or affiliates authorized to
conduct business in such countries may negotiate in good faith
supplemental agreements incorporating further terms and conditions
required by local law. All Licensed Software and Services obtained
pursuant to this Section shall be deemed for purposes of calculating
accumulated purchases and any discounts set forth in this Agreement, to
have been obtained pursuant to this Agreement.
8.13 Compliance with Laws. In the performance of Services or the provision of
Products pursuant to this Agreement, Network-1 shall comply with the
requirements of all applicable laws, ordinances, and regulations of the
United States or any state, country, or other governmental entity. In
particular, Network-1 agrees to comply with the United States Export
Administration Act; with Executive Order No. 11246, as amended by
Executive Order No. 11375; the Vietnam Era Veterans Readjustment
Assistance Act of 1974; the Rehabilitation Act of 1973; the Immigration
Reform and Control Act of 1986; and the Americans With Disabilities Act.
This Section incorporates by reference all provisions required by such
laws, orders, rules, regulations, and ordinances. Network-1 shall
indemnify, defend, and hold EDS harmless from and against any and all
claims, actions, or damages arising from or caused by Network-1's failure
to comply with the foregoing.
8.14 Labor. Network-1 shall comply with any labor jurisdictions applicable to
Network-1's performance pursuant to this Agreement and shall cooperate
with EDS in resolving any disputes resulting from any jurisdictional or
labor claims or stoppages. Upon request by Network-1, EDS shall provide
to Network-1 clarification and guidelines regarding relationships with
labor and Network-1's responsibilities with respect thereto.
8.15 Exports. Neither party shall export any Licensed Software or information
protected hereunder by an obligation of confidentiality from the United
States, either directly or indirectly, without first obtaining a license
or clearance as required from the U.S. Department of Commerce or other
agency or department of the United States Government.
8.16 Notices. Wherever one party is required or permitted to give notice to
the other pursuant to this Agreement, such notice shall be deemed given
when delivered in hand, when mailed by registered or certified mail,
return receipt requested, postage prepaid, or when sent by a third party
courier service where receipt is verified by the receiving party's
acknowledgment, and addressed as follows:
In the case of EDS:
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024
Attn: Manager, Contracts Administration
In the case of Network-1:
NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
909 Third Ave.
9th Floor
New York, NY 10022
Attn: Robert Russo, President
22
Either party may from time to time change its address for notification
purposes by giving the other party written notice of the new address and
the date upon which it will become effective; first class, postage
prepaid, mail shall be acceptable for provision of change of address
notices.
8.17 Force Majeure. The term "Force Majeure" shall be defined to include fires
or other casualties or accidents, acts of God, severe weather conditions,
strikes or labor disputes, war or other violence, or any law, order,
proclamation, regulation, ordinance, demand, or requirement of any
governmental agency.
(a) A party whose performance is prevented, restricted, or interfered
with by reason of a Force Majeure condition shall be excused from
such performance to the extent of such Force Majeure condition so
long as such party provides the other party with prompt written
notice describing the Force Majeure condition and takes all
reasonable steps to avoid or remove such causes of nonperformance
and immediately continues performance whenever and to the extent
such causes are removed.
(b) If, due to a Force Majeure condition, the scheduled time of delivery
or performance is or will be delayed for more than thirty (30) days
after the scheduled date, the party not relying upon the Force
Majeure condition may terminate, without liability to the other
party, the Purchase Order or any portion thereof covering the
delayed Products or Services.
(c) If a Force Majeure condition or other delay by Network-1 causes EDS
to terminate its business relationship with a third party for whom
delayed Products were ordered and EDS has no alternative use for the
Products after using reasonable efforts to relocate or otherwise
utilize the Products, then EDS may terminate the applicable Purchase
Order and Network-1 shall refund to EDS all amounts paid thereunder.
8.18 Severability. If, but only to the extent that, any provision of this
Agreement is declared or found to be illegal, unenforceable, or void,
then both parties shall be relieved of all obligations arising under such
provision, it being the intent and agreement of the parties that this
Agreement shall be deemed amended by modifying such provision to the
extent necessary to make it legal and enforceable while preserving its
intent. If that is not possible, another provision that is legal and
enforceable and achieves the same objective shall be substituted. If the
remainder of this Agreement is not affected by such declaration or
finding and is capable of substantial performance, then the remainder
shall be enforced to the extent permitted by law.
8.19 Waiver. Any waiver of this Agreement or of any covenant, condition, or
agreement to be performed by a party under this Agreement shall (i) only
be valid if the waiver is in writing and signed by an authorized
representative of the party against which such waiver is sought to be
enforced, and (ii) apply only to the specific covenant, condition or
agreement to be performed, the specific instance or specific breach
thereof and not to any other instance or breach thereof or subsequent
instance or breach.
8.20 Remedies. All remedies set forth in this Agreement, or available by law
or equity shall be cumulative and not alternative, and may be enforced
concurrently or from time to time.
8.21 Survival of Terms. Termination or expiration of this Agreement for any
reason shall not release either party from any liabilities or obligations
set forth in this Agreement which (i) the parties have expressly agreed
shall survive any such termination or expiration, or (ii) remain to be
23
performed or by their nature would be intended to be applicable following
any such termination or expiration.
8.22 Nonexclusive Market and Purchase Rights. It is expressly understood and
agreed that this Agreement does not grant to Network-1 an exclusive right
to provide to EDS any or all of the Licensed Software and Services and
shall not prevent EDS from developing or acquiring from other suppliers
computer software programs or services similar to the Licensed Software
and Services. Network-1 agrees that acquisitions by EDS pursuant to this
Agreement shall neither restrict the right of EDS to cease acquiring nor
require EDS to continue any level of such acquisitions. Estimates or
forecasts furnished by EDS to Network-1 prior to or during the term of
this Agreement shall not constitute commitments.
8.23 GOVERNING LAW. THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL NOT BE GOVERNED BY THE PROVISIONS OF THE 1980 UNITED
NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.
RATHER THESE RIGHTS AND OBLIGATIONS SHALL BE GOVERNED BY THE LAWS, OTHER
THAN CHOICE OF LAW RULES, OF THE STATE OF NEW YORK.
8.24 Entire Agreement. This Agreement constitutes the entire and exclusive
statement of the agreement between the parties with respect to its
subject matter and there are no oral or written representations,
understandings or agreements relating to this Agreement which are not
fully expressed in the Agreement. This Agreement shall not be amended
except by a written agreement signed by both parties. All exhibits,
documents, and schedules referenced in this Agreement or attached to this
Agreement, and each Purchase Order are an integral part of this
Agreement. In the event of any conflict between the terms and conditions
of this Agreement and any such exhibits, documents, or schedules, the
terms of this Agreement shall be controlling unless otherwise stated or
agreed. In the event of a conflict between the terms and conditions of
this Agreement and a Purchase Order issued in accordance with Article II,
the Purchase Order shall be controlling with respect to those
transactions covered by that Purchase Order. Any other terms or
conditions included in any shrink-wrap license agreements, quotes,
invoices, acknowledgments, bills of lading, or other forms utilized or
exchanged by the parties shall not be incorporated in this Agreement or
be binding upon the parties unless the parties expressly agree in writing
or unless otherwise provided for in this Agreement.
IN WITNESS WHEREOF, Network-1 and EDS acknowledge that each of the
provisions of this Agreement were expressly agreed to and have each caused this
Agreement to be signed and delivered by its duly authorized officer or
representative as of the Effective Date.
ELECTRONIC DATA SYSTEMS CORPORATION NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
By: /s/ Joe B. Dorfmeister By: /s/ Robert Russo
- ----------------------------------- ------------------------------------
Printed Name: Joe B. Dorfmeister Printed Name: Robert Russo
- ----------------------------------- ------------------------------------
Title: Contract Manager Title: President
- ----------------------------------- ------------------------------------
Date: 11/18/97 Date: 11/18/97
- ----------------------------------- ------------------------------------
Fed. Tax ID #: 11 3027591
----------------------
24
EXHIBIT A
EDS BUSINESS PRACTICES
----------------------
EDS' suppliers have played a key role in our continuous growth and success.
We sincerely appreciate your support. In order to avoid any conflict of interest
between our suppliers and EDS employees and to keep business relationships on a
professional basis, EDS has established and briefed its employees on the
following business practices. Please review these business practices carefully
and give a copy of this Exhibit to any of your associates who have a need to
know.
1. EDS expects its suppliers to provide a quality product or service for which
they will be fairly paid.
2. In selecting suppliers, EDS will test the market to assure quality of
service and fairness of price.
3. No EDS employee is to ask for anything of value from a supplier. Gifts from
a supplier such as tickets to athletic events, concerts or the theater,
personal travel, or any type of personal item are discouraged by our
business practices.
4. If any EDS employee is offered or accepts an item of value from a supplier,
the employee is to report it to the appropriate EDS management.
5. If any EDS employee engages in any type of unethical behavior such as
requesting anything of value from a supplier, the supplier is requested to
report the incident to the Director of Purchasing or the General Counsel of
EDS.
6. Occasional meals during visits to a supplier's facilities or a customer's
location during which a supplier incurs normal and reasonable marketing
expenses are acceptable. The EDS employee is required to report such meal
expenses to their management.
EDS appreciates your cooperation in complying with these business
practices.
A-1
EXHIBIT B
CHARGES, PRICES, AND FEES
I. LICENSED SOFTWARE:
------------------
Product List Price EDS Discount
FireWall/Plus-NT(TM) Enterprise
Full Featured:
50 concurrent sessions $ 3,750.00 *%
100 concurrent sessions $ 5,750.00 *%
250 concurrent sessions $ 9,000.00 *%
Unlimited concurrent sessions - Intel Only $13,000.00 *%
Unlimited concurrent sessions - DEC Alpha Only $20,000.00 *%
FireWall/Plus-NT(TM) Server
Full Featured (Limited to an NT(TM) Server with only 1 Network Interface Card.)
Unlimited concurrent sessions $ 1,995.00 *%
FireWall/Plus-NT(TM)Workstation $ 995.00 *%
FireWall/Plus-NT(TM) Premiere As Negotiated NA
- --------------------------------------------------------------------------------------------------------------
EDS PRICE EDS Discount
V-ONE SmartGate(TM)
SmartGate Software Client Tokens
Model # (SG-000-0400) $ * N/A
SmartGate Server (Unix)
Model # (SS-000-0400) $ * N/A
II. DISCOUNTS:
EDS may obtain Product(s), other than V-ONE SmartGate Product(s), from Network-1
at a discount of * percent (*%) from the then current List Price, as determined
in accordance with ss. 6.2 Modifications to Charges. EDS may obtain V-ONE
SmartGate Product(s) at the EDS Price, as set forth above. EDS may obtain the
FireWall/Plus-NT(TM) Premiere Product at a price to be mutually agreed upon, and
no discount shall apply.
* This material has been omitted pursuant to a request for confidential
treatment and has been filed separately with the Securities and Exchange
Commission.
B-1
III. SERVICES:
A. Licensed Software Support Options (as set forth in ss. 4.9 Licensed
Software Support Options).
Annual Maintenance Fees shall be initially established as fifteen
percent (15%) of the List Price or EDS Price (as set forth in ss.
Exhibit B - Section I. LICENSED SOFTWARE) effective as of the issuance
of the applicable Purchase Order. Such Annual Maintenance Fee, once
initially established, is then subject to modification in accordance
with ss. 6.2 Modifications to Charges.
B. Upon issuance of a Purchase Order for * copies of the
"FireWall/Plus-NT(TM) Enterprise Unlimited concurrent sessions - Intel
Only" product, EDS shall also receive, at no additional Charge, one (1)
week of on-site installation assistance and training from Network-1 on
the Network-1 FireWall/Plus(TM) Product. This offer is only valid for
the EDS Plano facility located at 5400 Legacy Drive, Plano, Texas. The
class sizes and dates of such training shall be determined by EDS and
set forth on the Purchase Order, or communicated to Network-1 by EDS by
any other mutually agreeable means.
C. From time to time and at any time, EDS may request on-site
installation assistance and/or training at any EDS site. Such training
will be provided at locations and for class sizes and dates to be
mutually agreed upon by EDS and Network-1. The Charge for such training
shall be as follows:
(a) * for all training held at the EDS Plano facility located at 5400
Legacy Drive, Plano, Texas.
(b) After one (1) year from the Effective Date of this Agreement, or
for all training to be conducted at any site other than the EDS
Plano facility located at 5400 Legacy Drive, Plano, Texas: the
Charge shall be as mutually agreed upon by EDS and Network-1 and
set forth in the governing Purchase Order, such Charge not to
exceed Network-1's standard rate for similar training services.
EDS will be responsible for the travel and lodging expenses of EDS
students. EDS shall reimburse Network-1 for reasonable expenses incurred
by Employees in the performance of such training (if requested by
Network-1 in advance and approved by EDS) which are related to travel,
lodging, and meals; such expenses shall be reimbursed in accordance with
EDS' guidelines for its own employees.
* This material has been omitted pursuant to a request for confidential
treatment and has been filed separately with the Securities and Exchange
Commission.
B-2
EXHIBIT C
THIRD PARTY SYSTEM ACCESS AGREEMENT
-----------------------------------
AMONG
{CUSTOMER},
NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
AND
ELECTRONIC DATA SYSTEMS CORPORATION
THIS Third Party System Access Agreement (the "Access Agreement") effective
as of {Effective Date}, is by and among {CUSTOMER LEGAL NAME} ("Customer"),
NETWORK-1 SOFTWARE & TECHNOLOGY, INC. ("Network-1") and ELECTRONIC DATA SYSTEMS
CORPORATION ("EDS").
W I T N E S S E T H:
WHEREAS, Network-1 owns certain software products (hereinafter referred to
as "Software") more specifically described in the {Network-1/Customer Agreement
Name}, dated {Network-1/Customer Agreement Date}, between Customer and Network-1
(the "License Agreement"); and
WHEREAS, Network-1 and EDS have entered into a {EDS/Network-1 Agreement
Name}, dated {EDS/Network-1 Agreement Date}, pursuant to which EDS may obtain
certain software products and services from Network-1 (the "Master Agreement");
WHEREAS, Customer and EDS have entered into an information technology
services agreement (the "ITS Agreement") pursuant to which EDS will provide data
processing and other services ("Services") requiring that EDS have access to the
Software; and
WHEREAS, the parties desire that EDS undertake appropriate contractual
commitments to assure that the Software will be used only in accordance with and
subject to the terms and conditions of the Master Agreement and this Access
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Customer, Network-1 and EDS hereby
agree as follows:
1. Network-1 hereby grants EDS the right to use, execute, store and display
(collectively "Access") the Software set forth in Attachment 1 to this
Access Agreement for the purpose of performing its obligations pursuant
to the ITS Agreement. The parties agree that EDS' Access of such
Software, and Network-1's support and maintenance obligations with
respect to the Software, shall be governed by the terms and conditions of
the Master Agreement; provided, however, EDS may Access the Software for
the sole and exclusive purpose of providing Services on behalf of
Customer.
2. Customer shall be entitled to all protections under the Master Agreement,
including, but not limited to, proprietary rights indemnification as
defined in the Master Agreement.
3. The parties agree that EDS shall be Customer's agent for payment of any
fees due to Network-1 under the Master Agreement from the date of this
Access Agreement until Network-1 is notified otherwise. In the event of a
conflict
C-1
between this Access Agreement and the License Agreement, this Access
Agreement will prevail.
4. This Access Agreement shall commence as of the date first set forth above
and shall continue in effect until the earlier of (i) the termination of
the ITS Agreement, (ii) Network-1's receipt of written notice from EDS
that EDS' need to Access the Software has ceased, or (iii) the
termination of the License Agreement. Upon termination of this Access
Agreement, EDS shall discontinue all use of the Software and; provided
that the License Agreement has not terminated, Customer's continued use
of and Network-1's support and maintenance obligations with respect to
the Software shall be governed by the terms and conditions of the License
Agreement. At such time, EDS shall have no further liability or
responsibility with respect to such Software.
IN WITNESS WHEREOF, the parties have caused this Access Agreement to be
executed as of the dates indicated.
NETWORK-1 SOFTWARE & TECHNOLOGY, INC. {CUSTOMER}
By: By:
----------------------------------- -------------------------------
Printed Name: Printed Name:
------------------------ ---------------------
Title: Title:
------------------------------- ----------------------------
Date: Date:
-------------------------------- -----------------------------
ELECTRONIC DATA SYSTEMS CORPORATION
By:
----------------------------------
Printed Name:
------------------------
Title:
-------------------------------
Date:
--------------------------------
C-2
ATTACHMENT 1
SOFTWARE
This Attachment 1 shall automatically be deemed to include any and all
software products obtained by Customer from Network-1 after the effective date
of the ITS Agreement.
C-3
EXHIBIT D
NON-DISCLOSURE AGREEMENT
------------------------
THIS NON-DISCLOSURE AGREEMENT, dated |D|, is between ELECTRONIC DATA
SYSTEMS CORPORATION ("EDS") and NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
("Network-1").
W I T N E S S E T H:
WHEREAS, Network-1 may provide information to EDS in connection with the
business purposes described in Schedule A, attached hereto, (the "Business
Purpose") and Network-1 desires EDS to keep certain of such information
confidential; and
WHEREAS, in consideration of the disclosure of such information to EDS, EDS
is willing to keep such information confidential in accordance with the terms
and conditions set forth in this Non-Disclosure Agreement;
NOW, THEREFORE, EDS and Network-1 hereby agree as follows:
1. Information. As used herein, "Information" shall mean both (i) written
information received by EDS from Network-1 which is marked or identified
as confidential, and (ii) oral or visual information identified as
confidential at the time of disclosure which is summarized in writing and
provided to EDS by Network-1 in such written form promptly after such
oral or visual disclosure.
2. Confidentiality. EDS may use Information received under this
Non-Disclosure Agreement, and may provide such Information to its
affiliates and their respective employees for their use, only in
connection with the Business Purpose. EDS agrees that, for a period of
one (1) year from receipt of Information, EDS will treat the Information
with the same degree of care and confidentiality which EDS provides for
similar information belonging to EDS which EDS does not wish disclosed to
the public, but not less than reasonable care. The foregoing shall not
prevent EDS from disclosing Information which is (i) already known by EDS
without an obligation of confidentiality, (ii) publicly known or becomes
publicly known through no unauthorized act of EDS, (iii) rightfully
received from a third party without obligation of confidentiality, (iv)
independently developed by EDS without use of the Information, (v)
disclosed without similar restrictions by Network-1 to a third party,
(vi) approved by Network-1 for disclosure, or (vii) required to be
disclosed pursuant to a requirement of a governmental agency or law so
long as EDS provides Network-1 with timely prior written notice of such
requirement.
3. Return of Information. Upon completion of the Business Purpose and upon
the written request of Network-1, EDS shall return all copies of the
Information to Network-1 or certify in writing that all copies of the
Information have been destroyed. EDS may return the Information, or any
part thereof, to Network-1 at any time.
4. Disclaimer of Warranty and Limitation of Liability. Network-1 makes no
warranty, express or implied, with respect to the Information. Neither
party shall be liable to the other hereunder for amounts representing
loss of profits, loss of business, or indirect, consequential, exemplary,
or punitive damages of the other party in connection with the provision
or use of the Information hereunder.
5. No Further Rights. Nothing contained in this Non-Disclosure Agreement
shall be construed as granting or conferring any rights by license or
otherwise in the Information except as provided hereunder.
D-1
6. No Commitment. The parties expressly agree that the provision of
Information under this Non-Disclosure Agreement and discussions held in
connection with the Business Purpose shall not prevent EDS from pursuing
similar discussions with third parties or obligate EDS to continue
discussions with Network-1 or to take, continue or forego any action
relating to the Business Purpose. Any estimates or forecasts provided by
EDS to Network-1 shall not constitute commitments.
7. Media Releases. All media releases and public announcements or
disclosures by Network-1 relating to this Non-Disclosure Agreement, its
subject matter or the Business Purpose shall be coordinated with and
approved by EDS in writing prior to the release thereof.
8. Miscellaneous. Any notices required by this Non-Disclosure Agreement
shall be given in hand or sent by first class mail to the applicable
address set forth in Schedule A. The parties agree that this
Non-Disclosure Agreement and any attachments hereto (i) are the complete
and exclusive statement between the parties with respect to the
protection of the confidentiality of the Information, (ii) supersede all
related discussions and other communications between the parties, (iii)
may only be modified in writing by authorized representatives of the
parties, and (iv) SHALL BE GOVERNED BY THE LAWS, OTHER THAN CHOICE OF LAW
RULES, OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, EDS and Network-1 have each caused this Non-Disclosure
Agreement to be signed and delivered by its duly authorized officer or
representative, all as of the date first set forth above.
ELECTRONIC DATA SYSTEMS CORPORATION NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
By: By:
-------------------------------- -----------------------------------
Printed Name: Printed Name:
---------------------- -------------------------
Title: Title:
----------------------------- --------------------------------
Date: Date:
------------------------------ ---------------------------------
D-2
SCHEDULE A
BUSINESS PURPOSE AND NOTICES
----------------------------
Business Purpose:
||
Addresses for Notices:
EDS:
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024
Attention: Manager, Contracts Administration
Network-1:
NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
909 Third Ave.
9th Floor
New York, NY 10022
Attention: Robert Russo, President
D-3
EXHIBIT E
RESELLER ACCESS AUTHORIZATION
-----------------------------
1. Network-1 hereby grants EDS the right to use, execute, store and display
(collectively "Access") the Products purchased for resale under Section
3.6 of this Agreement, for the purpose of performing its service
obligations to the ITS Customer.
2. EDS shall Access the Licensed Software in accordance with the terms and
restrictions of this Agreement.
3. Network-1 agrees that EDS shall be the ITS Customer's agent for payment
of any fees due to Network-1 for the Licensed Software from the date the
ITS Customer signs the Network-1 End User License Agreement ("Resale
Date"), until Network-1 is notified otherwise.
4. This Reseller Access Authorization shall commence as of the Resell Date
and shall continue in effect until the earlier of (i) Network-1's receipt
of written notice from EDS that EDS' need to Access the Licensed Software
has ceased, or (ii) the termination of the Network-1 End User License
Agreement. Upon termination of Access, EDS shall discontinue all use of
the Licensed Software. Provided that the End User License Agreement has
not terminated, the ITS Customer's continued use of and Network-1's
support and maintenance obligations with respect to the Licensed Software
shall be governed by the terms and conditions of the Network-1 End User
License Agreement. At such time, EDS shall have no further liability or
responsibility with respect to such Licensed Software.
5. During the period of EDS' Access, in the event of any conflict between
this Agreement and the Network-1 End User License Agreement with the ITS
Customer, this Agreement will prevail.
E-1
May 29, 1998
Electronic Data Systems Corporation
5400 Legacy Corporation
Plano, Texas 75024
Attention: Joe Dorfmeister, Software Contracting Manager
Re: EDS/Network-1
Master Software License Agreement
Dear Mr. Dorfmeister:
This letter shall serve to amend the Master Software License Agreement,
dated November 18, 1997, between Electronic Data Systems Corporation ("EDS") and
Network-1 Software & Technology, Inc. ("Network-1") (the "Agreement") as
follows:
Network-1 shall be authorized to grant licenses or distribution rights with
respect to the Products and the Licensed Software to third parties (the "Third
Party Distributors") on an exclusive basis in certain designated foreign
territories; provided, that, Network-1 warrants the Products and Licensed
Softward shall be made available to EDS in such territories by the Third Party
Distributors at the prices and terms set forth in Exhibit B to the Agreement.
All other terms and provisions of the Agreement shall remain in full force
and effect. Capitalized terms herein shall have the same meaning as set forth in
the Agreement.
If the foregoing confirms our understanding, kindly execute this letter at
the appropriate space provided below.
Very truly yours,
Network-1 Software & Technology, Inc.
By: /s/ Robert Russo
------------------------
Robert Russo, VP
Agreed and Accepted:
Electronic Data Systems Corporation
By: /s/ Joe B. Dorfmeister 5/29/98
-----------------------------------------------
Joe Dorfmeister, Software Contract Manager