SECUR-LINE PRODUCTS LICENSE AGREEMENT
Exhibit
10.25
FINAL
REDACTED
COPY
This
Secur-Line Products License Agreement (the “Agreement”) is dated effective
as of October 1, 2008 (the “Effective Date”), by and
between, Proginet Corporation, a Delaware corporation (“Proginet”), and Beta Systems
Software of North America, Inc., a Delaware corporation (“Beta”). Proginet
and Beta may be referred to in this Agreement individually as a “Party” and together as the
“Parties.”
RECITALS
WHEREAS, contemporaneously
with the execution of this Agreement, Proginet and Beta and Beta Systems
Software of Canada, Ltd. have entered into an Asset Exchange Agreement (the
“AEA”) which, among
other things, provides for the transfer to Beta of certain Proginet customer
agreements related to the Secur-Line Products (as defined herein) (such
agreements, the “Secur-Line
Agreements”);
WHEREAS, pursuant to this
Agreement, Proginet desires to grant to Beta a non-exclusive license to the
Secur-Line Products (as defined herein) to allow Beta to service the Secur-Line
Agreements and further license the Secur-Line Products on its own
behalf;
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants set forth herein, and
intending to be legally bound, the Parties agree as follows:
ARTICLE
1
DEFINITIONS
AND INTERPRETATION
1.1 Definitions. In
this Agreement, the following terms will have the meanings set out below unless
the context requires otherwise.
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(a)
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“AAA” has the meaning set
forth in Section 11.2(b).
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(b)
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“AEA” has the meaning set
forth in the Recitals.
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(c)
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“Affiliate” means, in
respect of a Person, any other Person or group of Persons acting in
concert, directly or indirectly, that controls, is controlled by or under
common control with the first mentioned Person, and for the purposes of
this definition “control” means the
possession, directly or indirectly, by such Person or group of Persons
acting in concert of the power to direct or cause the direction of the
management and policies of the first mentioned Person, whether through the
ownership of voting securities or
otherwise.
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(d)
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“Agreement” means this
Agreement including the Schedules to this Agreement as it or they may be
amended or supplemented from time to time, and the expressions “hereof”,
“herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to
this Agreement and not to any particular Section or other portion of this
Agreement.
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(e)
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“Audit” has the meaning
set forth in Section 4.1.
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(f)
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“Beta Indemnified
Parties” has the meaning set forth in Section
7.1(a).
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(g)
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“Business Day” means any
day on which the commercial banks in New York, New York are open for
normal business transactions.
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(h)
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“Commission Amounts” has
the meaning set forth in Section
2.3(b).
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(i)
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“Documentation” means
documentation, manuals and other written materials, including
documentation that describes the functional and technical specifications
for, the operating environment for, installation of, functions of and use
of the Secur-Line Products.
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(j)
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“Effective Date” has the
meaning set forth in the Preamble.
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(k)
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“including” means
including without limitation, and “includes” means
includes, without limitation.
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(l)
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“Indemnified Party” has
the meaning set forth in Section
7.3.
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(m)
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“Indemnifying Party” has
the meaning set forth in Section
7.3.
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(n)
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“Infringement Exceptions”
means that Proginet shall have no obligation with respect to any claim
under, or with respect to, any representation, warranty, covenant or
indemnity to the extent such claim results from: (i) Beta’s
combination of the Secur-Line Products with items not provided, specified
or used by Proginet in combination with the Secur-Line Products
immediately prior to the Effective Date; (ii) enhancements, modifications
or derivative works of Secur-Line Products not made by Proginet after the
Effective Date; (iii) use of the Secur-Line Products in other than the
same or substantially similar Operating Environment used by Proginet
immediately prior to the Effective Date; or (iv) the distribution,
operation or use of the Secur-Line Products for the benefit of a third
party other than pursuant to a Secur-Line
Agreement.
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(o)
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“License” has the meaning
set forth in Section 2.1.
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(p)
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“Losses” means losses,
liabilities, damages, actions, claims, costs and expenses (including
reasonable attorney’s fees and
disbursements).
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(q)
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“Operating Environment”
means the entire computing environment in which a software product is
being used, including the computer operating system, hardware platform,
interpreter or compiler version, and the network architecture and
protocols implemented.
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(r)
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“Party” means a party to
this Agreement and any reference to a Party includes its successors and
permitted assigns; “Parties” means every
Party.
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(s)
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“Person” includes an
individual, a partnership (limited or general), a corporation, a limited
liability company, a trust, a joint venture, an unincorporated
organization, a union, a government or any department or agency thereof
and the heirs, executors, administrators or other legal representatives of
an individual.
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(t)
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“Proginet Confidential
Information” has the meaning set forth in Section
5.1.
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(u)
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“Proginet Indemnified
Parties” has the meaning set forth in Section
7.2.
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(v)
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“Royalty Fees” has the
meaning set forth in Section 2.3.
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(w)
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“SEC” has the meaning set
forth in Section 11.5.
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(x)
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“Secur-Line Agreements”
has the meaning set forth in the
Recitals.
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(y)
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“Secur-Line
Products” means the software
products and related materials identified on Schedule A, and
all Documentation and Source Materials related
thereto.
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(z)
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“Source Materials” means
all source code, including (i) all human readable statements which, when
processed by a compiler, assembler or interpreter become a computer
executable version of the Secur-Line Products, and (ii) any build scripts
and ancillary files required to transform those human readable statements
into the computer executable version of the Secur-Line Products, and (iii)
all technical design and development documentation for the Secur-Line
Products thereto supplied to Beta. For greater certainty,
Source Materials includes, with respect to the Secur-Line Products
thereto, (i) a copy of all compiler(s), development tools, build scripts,
and compilation instructions necessary to build, execute and operate the
Secur-Line Products in executable form; (ii) a copy of all means technical
documentation describing the procedures for building, compiling, and
executing the Secur-Line Products in sufficient detail to enable a typical
software programmer to be able to build, compile and execute them from the
Source Code provided in connection with the Secur-Line Products thereto;
and (iii) all passwords, decryption tools, decryption keys and the like
necessary to access and utilize any of the
foregoing.
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(aa)
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“Survival Period” has the
meaning set forth in Section 6.3.
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(bb)
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“Term” has the meaning
set forth in Section 10.1.
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(cc)
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“Trade-Marks” means
Proginet’s trade-marks identified in Schedule B that
relate to the Secur-Line Products.
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1.2 Headings and Table of
Contents. The division of this Agreement into Articles and
Sections, the insertion of headings, and the provision of any table of contents
are for convenience of reference only and will not affect the construction or
interpretation of this Agreement.
1.3 Number and
Gender. Unless the context requires otherwise, words importing
the singular include the plural and vice versa and words importing gender
include all genders.
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1.4 Statute
References. Any reference in this Agreement to any statute or
any section thereof will, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted from
time to time.
1.5 Section and Schedule
References. Unless the context requires otherwise, references
in this Agreement to Sections or Schedules are to Sections or Schedules of this
Agreement.
1.6 SchedulesError! Bookmark not
defined.. The following
schedules form part of this Agreement:
Schedule
A - Secur-Line
Products
Schedule
B - Trade-Marks
ARTICLE
2
LICENSE
GRANT
2.1 Grant of
License. Subject to the terms and conditions of this
agreement, and in consideration for the trade accounts receivable retained by
Proginet pursuant to Section 2.4 of the AEA, Proginet hereby grants to Beta a
perpetual (subject to Section 10.1), irrevocable (subject to Section 10.1),
world-wide, royalty-bearing, non-exclusive, and transferable (subject to Section
9.1) right and license (the “License”) to:
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(a)
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license,
sublicense to Beta’s Affiliates and its and their customers, market, sell,
install and use the Secur-Line Products (including by embedding the
Secur-Line Products in Beta’s own products and
services);
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(b)
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use
the Source Materials to maintain, modify and create derivative works from
the Secur-Line Products; and
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(c)
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use
the Trade-Marks solely (1) in connection with Beta’s exercise of its
rights under subparagraphs (a) and (b) above, and (2) pursuant to
Proginet’s then-current Trade-▇▇▇▇ usage guidelines as communicated to
Beta from time to time.
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2.2 Additional Trade-▇▇▇▇
Terms. In addition to the rights provided in Section 2.1(c)
above, Beta may also use its own trade-marks and brand names in connection with
the Secur-Line Products. Beta acknowledges that it can represent
itself only as an authorized user or licensee of the Trade-Marks and shall not
hold itself as being the owner of the Trade-Marks or as the agent or legal
representative of Proginet with respect to the Secur-Line Products and
Trade-Marks.
2.3 Royalty
Fees.
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(a)
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As
consideration for Proginet’s transfer of the Secur-Line Agreements to Beta
pursuant to the AEA, Beta shall, in accordance with this Section 2.3,
remit to Proginet [***]% of the gross revenue (net of any third-party
royalties payable in respect of the Secur-Line Products) received by Beta
during the Term (i) under the Secur-Line Agreements (including any
amendments thereto or renewals or extensions thereof); (ii)
under any subsequent agreement between Beta or one of its Affiliates (or
any transferees thereof) on the one hand, and any customer who was such on
the date hereof under any Secur-Line Agreement on the other hand, where
such customer is receiving the same or similar functionality (in whole or
in part) as that provided by the Secur-Line Products whether by extension,
modification, renewal or replacement of a Secur-Line Agreement or
otherwise; and (iii) from any upgrade fees received in connection with any
Secur-Line Agreement (collectively, the “Royalty
Fees”).
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(b)
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Proginet
shall remit to Beta as commissions [***] % of the aggregate Royalty Fees
collected by Proginet (collectively, the “Commission
Amounts”).
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(c)
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The
Royalty Fees and Commission Amounts shall be invoiced and paid as
follows:
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(i)
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At
the same time that Beta invoices a customer for any amounts for which
Royalty Fees shall be due and payable to Proginet, Beta shall invoice
Proginet for the Commission Amounts due in respect of such Royalty
Fees. Beta shall provide such information as reasonably
requested by Proginet to document and verify the applicable Royalty Fees
due and owing.
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(ii)
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Within
five working days of Beta receiving payment by a customer pursuant to an
invoice referenced by subparagraph (i) above, Beta shall remit the full
amount of Royalty Fees due in respect of such payment. At the
end of each calendar month, Proginet shall remit to Beta the Commission
Amounts applicable to the Royalty Fees received in the prior calendar
month.
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(d)
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Proginet
shall remit all Commission Amounts to Beta to the following account: [***]
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(e)
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Each
Party acknowledges and agrees that it may not withhold or dispute payment
of any amounts due to the other Party under this Agreement for any
reason.
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(f)
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For
the avoidance of doubt and subject to Section 2.3(a)(ii), Beta shall not
be obligated to pay Royalty Fees under this Section 2.3 in respect of ay
Secur-Line Agreements that terminate for any reason or expire following
the Effective Date.
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2.4 Taxes. The
Parties will use commercially reasonable efforts to cooperate with each other to
enable each to more accurately determine its own tax liability and to minimize
such liability to the extent legally permissible.
2.5 No Transfer of
Ownership. Beta acknowledges and agrees that the Secur-Line
Products are and shall remain the sole property of and proprietary to
Proginet. Nothing in this Agreement shall alter such rights of
Proginet and no title to or ownership of the Secur-Line Products is transferred
to Beta pursuant to this Agreement.
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2.6 Documentation. Proginet
shall deliver to Beta such records, documentation and other collateral materials
as Beta should reasonably request to enable Beta to make full use of the
Secur-Line Products under the License.
2.7 Proprietary
Rights. All rights, title and interest to any modifications,
enhancements or derivative works (but only as to the incremental portion of the
derivative work) of the Secur-Line Products made by Beta shall be owned
exclusively by Beta.
2.8 Source Code
Escrow. By December 31, 2008, Proginet shall deposit a copy of
the Source Materials into a source code escrow established with Iron Mountain as
escrow agent. Proginet shall have no obligation to support or update
the source materials escrowed thereby. Pursuant to the escrow
agreement entered into by and among the Parties and Iron Mountain, (i) Beta
shall be named as beneficiary, and (ii) the escrow agent shall release the
Source Materials directly to Beta if Proginet (1) files a voluntary petition of
bankruptcy, (2) suffers or permits the appointment of a receiver for its
business or assets, or (3) becomes subject to any proceeding under, or case in,
any bankruptcy or insolvency law.
ARTICLE
3
NON-SOLICIT
3.1 Customer
Non-Solicit. During the term of the License, Proginet
covenants not to offer to sell, or sell, the Secur-Line Products or maintenance
services in respect of the Secur-Line Products to the customers that are parties
to the Secure-Line Agreements. In addition, Proginet covenants to
include the foregoing restriction in any subsequent license of the Secur-Line
Products to any third party.
ARTICLE
4
AUDIT
AND ACCOUNTING RIGHTS
4.1 Audit Rights. Beta
shall maintain complete and accurate records of, and supporting documentation
for, all amounts due to Proginet pursuant to Section 2.3. Proginet
and its auditors, at Proginet’s expense, shall have the right to conduct an
annual financial audit of such Beta financial records, Secur-Line Product
agreements and supporting data as may be reasonably necessary to verify the that
the Royalty Fees paid to Proginet are in accordance with this Agreement (each,
an “Audit”). If, as a
result of any such Audit, Beta owes Proginet additional, unpaid Royalty Fees,
Beta shall pay such additional Royalty Fees plus interest at a rate equal to the
then-applicable Prime Rate as published in the Wall Street Journal from the
date owed to Proginet (as determined pursuant to the Audit) until the date
repaid. If the amount of such unpaid Royalty Fees concerning the
Audit period equals or exceeds 10% of the amount that should have been remitted
by Beta, Beta shall reimburse Proginet for all reasonable out-of-pocket costs
and expenses (other than travel expenses) incurred for such Audit.
4.2 Conduct of
Audit. If not conducted by Proginet, each Audit shall be
conducted by an independent audit company which provides services of such a
nature and which has been approved in writing by both Proginet and
Beta. With respect to each Audit, Beta shall provide all assistance
that may be reasonably required in connection with such
Audit. Proginet (or the external auditor, as applicable) shall comply
with Beta’s standard policies, including security policies, and shall execute
Beta’s standard non-disclosure agreement.
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4.3 Calling for Audit; Consenting to
Audit. Proginet shall provide Beta with at least ten (10)
business days prior written notice of any such Audit. The Audit shall
be conducted during Beta’s regular working hours and shall not unreasonably
disrupt the business of Beta. If not conducted by Proginet, the
consent of Beta to the choice of the auditor contemplated in
Section 4.2 shall not be
unreasonably withheld, delayed or conditioned.
ARTICLE
5
CONFIDENTIALITY
5.1 Confidentiality. Pursuant
to this Agreement, Beta shall be given access to information (in hardcopy or
electronic form) that relates to Proginet’s past, present or future research,
development, strategy, business activities, customers, products, services or
technical knowledge, pricing, or pricing discounts, which is identified by the
discloser as confidential (the “Proginet Confidential
Information”). Without limiting the foregoing, Proginet
Confidential Information shall include all information disclosed by Proginet to
Beta in connection with the Secur-Line Products and the License that is (i)
identified by Proginet as confidential, or (ii) would be understood to be
confidential by a reasonable person. In connection with Proginet
Confidential Information, the following provisions will apply:
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(a)
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The
Proginet Confidential Information may be used by Beta only in connection
with the exercise of Beta’s rights under the
License.
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(b)
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Beta
agrees to protect the confidentiality of the Proginet Confidential
Information in the same manner that it protects the confidentiality of its
own proprietary and confidential information of like kind, but in no event
will Beta exercise less than reasonable care in protecting such Proginet
Confidential Information.
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(c)
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If
Beta receives a subpoena or other validly issued administrative or
judicial process demanding Proginet Confidential Information, it will
promptly notify Proginet of such receipt and tender it to the defense of
such demand. After providing such notification, Beta will be
entitled to comply with such subpoena or other process to the extent
permitted by law; provided that Beta shall disclose only such information
as, in the opinion of its counsel, is necessary to comply with the
subpoena and provided further, Beta shall use reasonable efforts to ensure
that such information is given confidential
treatment.
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(d)
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For
the avoidance of doubt, the terms and conditions of this Agreement,
including without limitation the provisions herein with respect to Royalty
Fees, will be deemed to be Proginet Confidential
Information. Notwithstanding anything to the contrary in this
Section, Proginet Confidential Information will not include specific
information that was: (i) available to the public at the time
of disclosure to Beta through no fault of Beta; (ii) published or
otherwise made a part of the public domain through no fault of Beta; (iii)
already in the possession of Beta, without Beta being under any obligation
of confidentiality with respect thereto, at the time of disclosure by
Proginet; (iv) received or obtained by Beta, without Beta assuming any
obligations of confidentiality with respect thereto, from a third party
which had a lawful right to disclose such Proginet Confidential
Information to Beta; (v) independently developed by Beta without reference
to any Proginet Confidential Information; or (vi) required to be disclosed
or made publicly available by applicable law or
order.
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5.2 Injunctive
Relief. The Parties acknowledge that any breach of any
provision of this Article by a Party may cause immediate and irreparable injury
to the other Party that cannot be adequately compensated for by
damages. Consequently, in the event of any such breach and in
addition to all other remedies available at law or in equity, the injured Party
will be entitled to seek injunctive relief from any court of competent
jurisdiction, without bond or other security.
ARTICLE
6
REPRESENTATIONS
AND WARRANTIES
6.1 Representations and Warranties of
Both Parties. Each Party represents and warrants to the other
Party as of the Effective Date that: (i) such Party is duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
organization; (ii) such Party has all requisite corporate or other power and
authority to enter into this Agreement and to perform its obligations hereunder;
(iii) the execution, delivery and performance of this Agreement by such Party
have been duly authorized by all requisite corporate or other action on the part
of such Party; (iv) this Agreement has been duly executed and delivered by such
Party and (assuming the due authorization, execution and delivery hereof by the
other Party) is a valid and binding obligation of such Party, enforceable
against such Party in accordance with its terms; and (v) the execution, delivery
and performance of this Agreement by such Party will not: (a) conflict with or
result in a violation or breach of any of the charter, bylaws or other
organizational documents of such Party; (b) conflict with or result in a
violation or breach of any law or order applicable to such Party; or (c)
conflict with or result in a violation or breach of any contract to which such
Party is a party.
6.2 Additional Representations and
Warranties of Proginet. Proginet further represents and
warrants to Beta as of the Effective Date:
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(a)
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Proginet
is owner of the Secur-Line Products and is entitled to uninterrupted use
of the Secur-Line Products without payment of any royalty or other fees.
No shareholder, officer, director or employee of Proginet or any third
party has any right, title or interest in any of the Secur-Line Products.
Proginet has exercised good judgment in order to protect its legal rights
to the exclusive use of the Secur-Line
Products.
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(b)
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There
is no current litigation relating to the Secur-Line
Products.
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(c)
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No
Person has challenged (i) the validity of any registrations of the
Secur-Line Products or (ii) Proginet's rights to any of the Secur-Line
Products.
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(d)
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Proginet
has the right:
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(i)
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to
use, sell, license, modify, copy, distribute and dispose of the Secur-Line
Products; and
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(ii)
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bring
actions for infringement or other misuse of the Secur-Line
Products.
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(e)
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All
employees of Proginet involved in the development of the Secur-Line
Products have entered into nondisclosure agreements pursuant to which they
have agreed to maintain the confidentiality of Secur-Line Products and
have assigned all rights they may have in the Secur-Line Products to
Proginet, and have waived any moral rights they may have for the benefit
of Proginet and anyone claiming through Proginet, no shareholder, officer,
partner, director or employee of Proginet or any third party has any
right, title or interest in any of the Secur-Line
Products.
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The
Parties acknowledge and agree that Proginet’s material breach of any
representation and warranty set forth in this Section 6.2 shall not be deemed a
material breach of this Agreement.
6.3 Survival of Representations and
Warranties. The representations and warranties set forth in
this Article 6 shall survive for a period of two years following the Effective
Date (the “Survival
Period”). For the avoidance of doubt, neither Party shall be
liable to the other Party for any breach or misrepresentation of any of the
representations and warranties contained in this Article 6 after a period of two
years following the Effective Date
6.4 DISCLAIMER OF
WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, PROGINET MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING ANY MATTER, INCLUDING FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, INFORMATIONAL CONTENT, SYSTEMS, INTEGRATION, NON-INFRINGEMENT,
INTERFERENCE WITH ENJOYMENT, OR RESULTS TO BE DERIVED FROM THE USE OF ANY
SERVICE, SOFTWARE, HARDWARE, DELIVERABLES, WORK PRODUCT OR OTHER MATERIALS
PROVIDED UNDER THIS AGREEMENT. THE SECUR-LINE PRODUCTS ARE PROVIDED
TO BETA UNDER THE LICENSE ON AN “AS IS” BASIS.
ARTICLE
7
LIABILITY
AND INDEMNIFICATION
7.1 Indemnification of
Beta.
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(a)
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Proginet
shall indemnify, defend and hold harmless Beta, its directors, officers,
employees, agents, and Affiliates and their respective directors,
officers, employees and agents (the “Beta Indemnified
Parties”) from and against all Losses arising out of or resulting
from (i) Proginet’s material breach of any representation and warranty in
Sections 6.1 and 6.2 (subject to the limitation provided in Section 6.3),
or (ii) claims by third parties that the Secur-Line Products (1) infringe
any intellectual property rights, including patents or copyrights of any
third parties, or (2) constitute misappropriation or unlawful disclosure
or use of a third party’s trade secrets. Proginet’s obligation
pursuant to this Section 7.1(a) shall expire automatically upon the
conclusion of the Survival Period.
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(b)
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Proginet
shall have no liability or obligation to the Beta Indemnified Parties to
the extent based upon any of the Infringement
Exceptions.
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7.2 Indemnification of
Proginet. Beta shall indemnify, defend and hold harmless
Proginet, its directors, officers, employees, agents, and affiliates and their
respective directors, officers, employees and agents (the “Proginet Indemnified Parties”) from and
against all Losses arising out of or resulting from (i) Beta’s breach of its
obligations regarding Proginet Confidential Information, (ii) any claim
resulting from the breach of Beta’s representations and warranties in Section
6.1, or (iii) infringement or misappropriation claims by third parties where one
or more of the Infringement Exceptions are present.
7.3 Third Party Claim
Procedures. A Beta Systems Indemnified Party or Proginet
Indemnified Party (in either case, an “Indemnified Party”) seeking
indemnification from Beta Systems or Proginet (in either case, an “Indemnifying Party”) with
respect to a third party claim will give the Indemnifying Party prompt written
notice of such third party claim. Failure to give such notice will
not reduce the obligations of the Indemnifying Party under this Article, except
to the extent that the Indemnifying Party is prejudiced
thereby. After such notice, if the Indemnifying Party acknowledges in
writing to such Indemnified Party that the right of indemnification under this
Agreement applies with respect to such third party claim, then the Indemnifying
Party may, if it elects in a written notice delivered to the Indemnified Party
no later than 14 calendar days prior to the date on which a response to such
third party claim is due or 14 calendar days after receipt of the written notice
(whichever is sooner), take control of the defense of such third party
claim. In such case, the Indemnifying Party will select and engage
attorneys at the expense of the Indemnifying Party. The Indemnified
Party will reasonably cooperate with the Indemnifying Party and its attorneys in
the investigation, trial and defense of such third party claim and any appeal
arising therefrom and the Indemnified Party may, at its own expense,
participate, through its attorneys or otherwise, in such investigation, trial
and defense of such third party claim and any appeal arising
therefrom. The Indemnifying Party will not enter into any settlement
that involves any action, admission, or liability of the Indemnified Party
without the prior written consent of the Indemnified Party, which consent will
not be unreasonably withheld or delayed. After notice by the
Indemnifying Party of its election to take control of the defense of any such
third party claim, the Indemnifying Party will not be liable to the Indemnified
Party for any legal expenses incurred thereafter by such Indemnified Party in
connection with such defense, and all costs associated with the third party
claim shall be borne by the Indemnifying Party. If the Indemnifying
Party does not take control of the defense of such third party claim, the
Indemnifying Party may participate in such defense, at its expense, and the
Indemnified Party may reasonably defend and settle such third party claim in its
discretion, at the expense of the Indemnifying Party.
7.4 Limitation
on Damages.
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(a)
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SUBJECT
TO THE EXCLUSIONS SET FORTH IN SECTION 7.4(b) BELOW, IF EITHER PARTY SHALL
BE LIABLE TO THE OTHER FOR ANY MATTER RELATING TO OR ARISING FROM THIS
AGREEMENT, WHETHER BASED UPON AN ACTION OR A CLAIM IN CONTRACT, WARRANTY,
EQUITY, TORT, NEGLIGENCE, INTENDED CONDUCT OR OTHERWISE (INCLUDING ANY
ACTION OR CLAIM ARISING FROM THE ACTS OR OMISSIONS, NEGLIGENT OR
OTHERWISE, OF THE LIABLE PARTY), THE AGGREGATE AMOUNT OF DAMAGES
RECOVERABLE AGAINST THE LIABLE PARTY WITH RESPECT TO ANY AND ALL BREACHES,
PERFORMANCE, NONPERFORMANCE, ACTS OR OMISSIONS HEREUNDER WILL NOT EXCEED
AN AMOUNT EQUAL TO $500,000.
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(b)
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The
liability limitations in Sections 7.4(a) above or 7.5 below will not apply
to (1) any Losses arising from a breach of Article 5, (2) Proginet’s
obligations under Section 7.1, or (3) Beta’s obligations under Sections
2.3 or 7.2.
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7.5 Limitation on Category of
Liability. IN NO EVENT WILL THE MEASURE OF DAMAGES PAYABLE BY
EITHER PARTY INCLUDE, NOR WILL EITHER PARTY BE LIABLE FOR, ANY CONSEQUENTIAL,
INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING DAMAGES
DUE TO BUSINESS INTERRUPTION OR LOST PROFITS, SAVINGS, COMPETITIVE ADVANTAGE OR
GOODWILL) ARISING FROM OR RELATED TO THIS AGREEMENT, REGARDLESS OF THE TYPE OF
CLAIM, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY, WHETHER OR NOT FORESEEABLE, AND REGARDLESS OF THE CAUSE OF
SUCH DAMAGES EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES IN ADVANCE.
ARTICLE
8
ENFORCEMENT
OF RIGHTS
8.1 Enforcement.
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(a)
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If
during the Survival Period, Beta brings to the attention of Proginet any
unlicensed infringement of the Secur-Line Products (as they exist as of
the Effective Date and excluding any modifications or enhancements made by
Beta) that is affecting or could reasonably be expected to affect Beta’s
rights hereunder, including Beta’s rights to use the Secur-Line Products,
then Proginet will (i) use commercially reasonable efforts to secure
cessation of the infringement and (ii) if commercially reasonable under
the circumstances, bring and diligently prosecute a lawsuit against the
infringer. Proginet in its own name will bring and prosecute
such suit. Beta will join in such suit with Proginet to the
extent required by law, but may otherwise join in such suit at its
option. Each Party will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with any such
suits.
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(b)
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If
Beta joins in such suit with Proginet, the Parties shall jointly control
such suit and cooperate with each other with respect to such
suit. If either Beta or Proginet fails to jointly diligently
prosecute any such suit, the other Party shall solely prosecute such suit
and the Party failing to jointly bring or prosecute shall use commercially
reasonable efforts to cooperate with the other Party in such
suit.
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(c)
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Each
of Beta and Proginet will be entitled to any recoveries from such suit as
may be awarded to it.
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(d)
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If
Proginet fails to (i) secure cessation of the infringement or bring and
diligently prosecute suit against the infringer within 60 days after the
receipt by Proginet of Beta’s notice pursuant to paragraph (a) above, or
(ii) diligently prosecute any suit joined by Beta pursuant to paragraph
(a) above, then, subject to paragraph (c) above, Beta shall be entitled to
bring and prosecute actions or claims against such infringer on behalf of
Beta and Proginet.
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8.2 Cooperation. The
Parties agree to cooperate fully to the extent necessary to prosecute any
action.
ARTICLE
9
ASSIGNMENT
9.1 Assignment by Either
Party. Except as provided in the following sentence, neither
Party may assign this Agreement or any part hereof or any benefit or interest
herein without the prior written consent of the other Party. Upon 10
business days’ notice to the other Party (or, such shorter period as may be
practicable if confidentiality or other concerns prevent the giving of such
advance notice), either Party may assign this Agreement (and the rights and
obligations hereunder) to (i) any Affiliate of such Party that expressly assumes
the assigning Party’s obligations and responsibilities under this Agreement
(provided that the assigning Party shall remain fully liable for, and not be
relieved from, the full performance of all obligations under this Agreement),
(ii) any third party that acquires all or substantially all of the assigning
Party’s assets, or (iii) or the assigning Party’s successor by way of merger or
acquisition. Any attempted assignment that does not comply with the
terms of this Section 9.1 shall be null and void. Beta may not assign
its rights under the License independent from any assignment of the
Agreement. A transaction that does not cause this Agreement, or the
rights or obligations hereunder, to be transferred to a different entity shall
not be deemed an assignment.
ARTICLE
10
TERM
AND TERMINATION
10.1 Term. The term of
this Agreement shall commence on the Effective Date and continue until October
1, 2028 (the “Term”);
provided, however, that
the License shall continue beyond the Term pursuant to Section
2.1. On October 1, 2028 and unless the Agreement is earlier
terminated pursuant to Section 10.2, the License shall be deemed to be
fully-paid and royalty-free. During the Term, this Agreement can only
be terminated pursuant to Section 10.2.
10.2 Termination for
Cause. Proginet may, by giving notice to Beta identifying the
basis for such notice, terminate this Agreement (including the License) in its
entirety as of the date specified in the notice of termination if Beta commits a
material breach of this Agreement, which breach is not cured within 30 days
after receipt of the written notice of the breach by Beta.
10.3 Cumulative
Remedies. For greater certainty, it is expressly understood
and agreed that the rights and remedies of the Parties under this Agreement are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by law or equity.
10.4 Effect of
Termination. Upon any termination of this Agreement by
Proginet pursuant to Section 10.2, Beta shall:
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(a)
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immediately
cease to use, directly or indirectly, in any manner whatsoever, the
Trade-Marks and any name or ▇▇▇▇ similar to the
Trade-Marks. Without limiting the generality of the foregoing,
Beta shall immediately cease and desist from all uses of the Trade-Marks
whether on documentation, advertising, or otherwise;
and
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(b)
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cease
use of the Secur-Line Products.
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ARTICLE
11
GENERAL
MATTERS
11.1 Entire Agreement;
Amendment. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter contained herein, and
supersedes any prior understandings and agreements between them respecting such
subject matter. This Agreement may be amended, modified or
supplemented only by a writing executed and delivered by or on behalf of each
Party. Any term or condition of this Agreement may be waived at any
time by the Party that is entitled to the benefit thereof, but no such waiver
will be effective unless set forth in a written instrument duly executed by or
on behalf of the Party waiving such term or condition. No waiver by
either Party of any term or condition of this Agreement, in one or more
instances, will constitute a waiver of the same or any other term or condition
of this Agreement on any future occasion. No delay or omission by a
Party to exercise any right under this Agreement will impair or be construed as
a waiver of such right.
11.2 Dispute
Resolution.
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(a)
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The
Parties will make good faith efforts to first resolve internally any
dispute under this Agreement by escalating it to higher levels of
management. A request for arbitration under Section 11.2(b) may
not be filed until 30 days have elapsed from the initiation of such good
faith efforts.
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(b)
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Any
dispute, controversy, or claim arising out of, relating to, involving, or
having any connection with this Agreement or otherwise related to the
License or the Secur-Line Products, including any question regarding the
validity, interpretation, scope, performance, or enforceability of this
dispute resolution provision, shall be exclusively and finally settled by
binding arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the “AAA”) and the AAA
Optional Procedures for Large, Complex Commercial Disputes. Any
arbitration will be conducted on an individual, rather than a class-wide,
basis.
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(c)
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The
arbitration will be conducted in Herndon, Virginia unless the Parties
agree on another location.
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(d)
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The
arbitration will be conducted by three arbitrators. Each Party
will appoint an arbitrator, obtain its appointee’s acceptance of such
appointment, and deliver written notification of such appointment and
acceptance to the other Party within 15 days after the due date of the
respondent’s answering statement. The two Party-appointed
arbitrators will jointly agree upon and appoint a third arbitrator who
will serve as the chairperson of the arbitral panel. The
Party-appointed arbitrators will obtain the chairperson’s acceptance of
such appointment and notify the Parties in writing of said appointment and
acceptance within 30 days after their appointment and acceptance as
Party-appointed arbitrators. If the two Party-appointed
arbitrators are unable to agree upon the selection and appointment of the
chairperson within that time frame, they will so notify the Parties in
writing. Upon such notice, one or both of the Parties may
request in writing that the chairperson be appointed by the AAA in
accordance with the AAA Rules. The AAA will notify the Parties
in writing of the appointment and acceptance of the chairperson within 21
days after receiving such request.
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(e)
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The
Parties will be entitled to engage in reasonable discovery, including
requests for production of relevant non-privileged
documents. Depositions and interrogatories may be ordered by
the arbitral panel upon a showing of need. It is the Parties’
intent that the discovery proceedings be conducted in a cost-effective
manner.
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(f)
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All
decisions, rulings, and awards of the arbitral panel will be made pursuant
to majority vote of the three arbitrators. The award will be in
accordance with the applicable law, will be in writing, and will state the
reasons upon which it is based. The arbitrators will have no
power to modify or abridge the terms of this Agreement. The
award of the arbitrators will be final, and judgment on the award may be
entered by any court having jurisdiction to do
so.
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(g)
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Costs
incurred in the arbitration proceeding, including attorneys’ fees and
expenses, will be borne in the manner determined by the arbitral
panel.
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(h)
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Nothing
in this Agreement will prevent the Parties, prior to the formation of the
arbitral panel, from applying to a court of competent jurisdiction for
provisional or interim measures or injunctive relief as may be necessary
to safeguard the property or rights that are the subject matter of the
arbitration. Once the arbitral panel is in place, it will have
exclusive jurisdiction to hear applications for such relief, except that
any interim measures or injunctive relief ordered by the arbitral panel
may be immediately and specifically enforced by a court of competent
jurisdiction.
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(i)
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This
Section 11.2 will not apply to any claim arising from any patent or
registered trademark. Such claims will not be subject to
arbitration and instead will be subject to judicial
resolution. In addition, any issue regarding the enforceability
of the prohibition against class-wide arbitration will be decided by a
court of competent jurisdiction and not by an
arbitrator.
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(j)
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Unless
otherwise agreed by the Parties or required by law, the Parties, the
arbitrators, and the AAA will maintain the confidentiality of all
documents, communications, proceedings, and awards provided, produced or
exchanged pursuant to an arbitration conducted under this Section
11.2.
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11.3 Consent to Jurisdiction; Waiver of
Jury Trial. Subject to Section 11.2, each Party irrevocably
submits to the exclusive jurisdiction of the United States District Court for
the Eastern District of Virginia, or any court of the Commonwealth of Virginia
in any action or proceeding arising out of or relating to this Agreement or any
of the transactions contemplated hereby, and agrees that any such action or
proceeding will be brought only in such courts; provided, however, that such
consent to jurisdiction is solely for the purpose referred to in this Section
and will not be deemed to be a general submission to the jurisdiction of such
courts other than for such purpose. Subject to Section 11.2, each
Party irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such action
or proceeding brought in such courts and any claim that any such action or
proceeding brought in such courts has been brought in an inconvenient
forum. Subject to Section 11.2, nothing contained herein will
preclude a Party against which an action or proceeding is brought as aforesaid
in any court of the Commonwealth of Virginia from seeking to remove such action
or proceeding, pursuant to applicable Federal law, to the United States District
Court for the Eastern District of Virginia. Subject to Section 11.2,
nothing contained herein will preclude a Party from enforcing an order in the
courts of another jurisdiction. Each Party waives any right to a jury
trial in any action or proceeding arising out of or related to this
Agreement.
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11.4 Compliance with
Laws. The Parties shall comply at their expense with
applicable law. In addition, Beta and its Affiliates agree to comply
with U.S. export regulations regarding their use and distribution of the
Secur-Line Products. The Parties each agree to provide the other such
information and assistance as may reasonably be required by the other in
connection with securing export classifications and approvals of any type if
necessary, or confirming they are not necessary.
11.5 Public
Announcements. Except to the extent otherwise required by law
or with the prior consent of the other Party, neither Party shall make any
public announcement regarding this Agreement or the transactions contemplated by
this Agreement. Notwithstanding the foregoing, Beta shall be able to
conduct marketing campaigns with respect to the Secur-Line Products, in whole or
in part, without the prior consent of Proginet.
The
Parties acknowledge that this Agreement, or portions thereof, and schedules
thereto, and descriptions of any of the foregoing, may be required under
applicable law to be disclosed in required public disclosure documents, or
exhibits thereto, of Proginet filed with the United States Securities and
Exchange Commission (the “SEC”) or any securities
exchange on which its securities are listed for trading. Prior to
such disclosure, and subject to the next sentence, Proginet will inform Beta and
will use commercially reasonable efforts to seek approval from the SEC or other
applicable regulatory authority for the confidential treatment of certain
confidential information identified by the Parties. Prior to such
disclosure, Proginet shall request redaction of such portions of the Agreement
or disclosure that Beta reasonably requests to be redacted, unless, in
Proginet’s judgment based on the advice of counsel, Proginet concludes that such
redaction request is inconsistent with Proginet’s obligations under applicable
law.
11.6 Notices. Any
notice, certificate, consent, determination or other communication required or
permitted to be given or made under this Agreement will be in writing and will
be effectively given and made if i) delivered personally, ii) sent by prepaid
courier service or mail, or iii) sent prepaid by fax or other similar means of
electronic communication, in each case to the applicable address set out
below:
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(i)
|
if
to Proginet, to:
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Proginet Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
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(ii)
|
if
to Beta, to:
|
Beta Systems Software of North America
Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Any such
communication so given or made will be deemed to have been given or made and to
have been received on the day of delivery if delivered, or on the day of faxing
or sending by other means of recorded electronic communication, provided that
such day in either event is a Business Day and the communication is so
delivered, faxed or sent prior to 4:30 p.m. on such day. Otherwise,
such communication will be deemed to have been given and made and to have been
received on the next following Business Day. Any such communication
sent by mail will be deemed to have been given and made and to have been
received on the fifth Business Day following the mailing thereof; provided
however that no such communication will be mailed during any actual or
apprehended disruption of postal services. Any such communication
given or made in any other manner will be deemed to have been given or made and
to have been received only upon actual receipt.
Any Party
may from time to time change its address under this Section 11.6 by notice to
the other Party given in the manner provided by this Section.
11.7 Time of
Essence. Time will be of the essence of this Agreement in all
respects.
11.8 Further
Assurances. Each Party will promptly do, execute, deliver or
cause to be done, executed and delivered all further acts, documents and things
in connection with this Agreement that the other Party may reasonably require,
for the purposes of giving effect to this Agreement.
11.9 Amendment. No
amendment of this Agreement will be effective unless made in writing and signed
by the Parties.
11.10 Waiver. A waiver of
any default, breach or non-compliance under this Agreement is not effective
unless in writing and signed by the Party to be bound by the
waiver. No waiver will be inferred from or implied by any failure to
act or delay in acting by a Party in respect of any default, breach or
non-observance or by anything done or omitted to be done by the other
Party. The waiver by a Party of any default, breach or non-compliance
under this Agreement will not operate as a waiver of that Party’s rights under
this Agreement in respect of any continuing or subsequent default, breach or
non-observance (whether of the same or any other nature).
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11.11 Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction will, as to that jurisdiction, be ineffective to the extent of such
prohibition or unenforceability and will be severed from the balance of this
Agreement, all without affecting the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
11.12 Counterparts. This
Agreement may be executed in any number of counterparts, each of which will be
deemed to be an original and all of which taken together will be deemed to
constitute one and the same instrument. Counterparts may be executed
either in original or faxed form and the Parties adopt any signatures received
by a receiving fax machine as original signatures of the Parties; provided, however, that any
Party providing its signature in such manner will promptly forward to the other
Party an original of the signed copy of this Agreement which was so
faxed.
11.13 Governing Law. This Agreement will be
governed by the laws of the United States and the Commonwealth of Virginia,
without giving effect to principles of conflicts of law thereof; provided, however, that the
Parties agree that the Uniform Computer Information Transactions Act (UCITA) as
adopted by the Commonwealth of Virginia or as otherwise applicable shall not
apply to this Agreement or any of the transactions contemplated
hereby. In addition, this Agreement shall not be governed by the
United Nations Convention on Contracts for the International Sale of
Goods.
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IN
WITNESS WHEREOF the Parties have executed this Agreement as of the date set
forth upon each signature block below.
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PROGINET
CORPORATION
|
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By:________________________
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Name:
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▇▇▇▇▇
▇▇▇▇
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||
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Title:
|
President
& CEO
|
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Date:
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October
31, 2008
|
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BETA
SYSTEMS SOFTWARE
OF
NORTH AMERICA, INC.
|
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By:
________________________
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Name:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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||
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Title:
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Member
of Board of Directors
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Date:
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October
31, 2008
|
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By:
________________________
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Name:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Title:
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Member
of Board of Directors
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Date:
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October
31, 2008
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SCHEDULE
A
SECUR-LINE
PRODUCTS [***- omitted 2 pages]
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Ver.
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OS
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Product
No.
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SecurAccess
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SCHEDULE
B
SECUR-LINE
TRADE-MARKS
SecurAccess
SecurForce
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