Sourcepro Software Escrow Agreement

SOURCEPRO
SOFTWARE SOURCE CODE ESCROW AGREEMENT
SOURCEFILE NUMBER: 7541


This Software Source Code Escrow Agreement, dated as of July 30, 1997, by and among SourceFile, a California limited liability partnership, located at 1350 West Grand Ave, Oakland, CA, 94607 ("SourceFile"), MMC Networks, Inc. a California corporation, with offices located at 1134 E. Arques Ave., Sunnyvale, CA 94086-4602, ("Depositor"), and ArrowPoint Communications a Delaware corporation with offices at 235 Littleton Road, Westford MA 01886, ("Beneficiary").


RECITALS:


WHEREAS, Depositor and Beneficiary from time to time conduct business pursuant to which Depositor supplies quantities of its ATM 2400 chip set as listed in exhibit A (the "Chip Set") to Beneficiary:


WHEREAS, Depositor desires to ensure the availability to Beneficiary of certain proprietary materials relating to the Chip Set (collectively the "Source Material") in the event certain conditions set forth in Section 3 of this Agreement should occur.


AGREEMENT:


1. DELIVERY OF SOURCE MATERIAL TO SOURCEFILE. Depositor shall deliver to SourceFile a parcel (the "Parcel"), sealed by Depositor, which Depositor represents and warrants contains the Source Material and any necessary proprietary information. SourceFile undertakes to perform only such duties as are expressly set forth herein. The Source Material shall be held by SourceFile. As of the date of this Agreement, Depositor shall complete a detailed description of the Source Material which is attached to this Agreement as EXHIBIT "A". The Depositor will keep the Parcel updated with supplemental or replacement materials ("Parcel Changes") to the extent of any supplements or modifications to the use of the Source Materials in Depositor's business. A "Supplemental Deposit" will include any materials added to the Parcel. "Replacement Materials" will include any materials intended to replace the existing all or part of the parcel. Within ten (10) days of acceptance by SourceFile of such Supplemental or Replacement Deposit, SourceFile Shall notify Depositor and Beneficiary and identifying the nature of the supplemental or replacement materials as the case may be. In addition, the parties acknowledge delivery of, and SourceFile acknowledges receipt of, a fully executed original license agreement (the "License Agreement") by and between Depositor and Beneficiary, a copy of which is attached as EXHIBIT "B", which SourceFile also shall maintain in escrow and only deliver to Beneficiary concurrent with delivery to Beneficiary of the Source Materials pursuant to Section 3 Below. Depositor agrees that is shall not at any time revoke the License Agreement or any rights, permissions or other authorizations issued or granted in the Source Materials, or attempt or assist others in any action to do so.


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2. ACKNOWLEDGEMENT OF RECEIPT BY SOURCEFILE. SourceFile shall promptly acknowledge Depositor and to Beneficiary the receipt of the Parcel and any supplements to the Source Material which are added to the Parcel. Depositor shall provide to SourceFile the latest version of the Software at least every six months as supplements to the Source Material without removing the Source Material. Depositor shall send to SourceFile a duplicate of the Source Material within three (3) days after receiving written notice from SourceFile that the Source Material has been destroyed or damaged. All supplements shall be subject to the terms and provisions of this Agreement. SourceFile will notify Beneficiary and Depositor of each update to the Source Material. Such notification will be sent via certified mail, return receipt required.


3. TERMS AND CONDITIONS OF THE SOURCE MATERIAL ESCROW. The Source Material shall be held by SourceFile (in the FileSafe underground vault, specifically designed for magnetic media storage), upon the following terms and conditions:


(i) In the event that (1) SourceFile is notified by Beneficiary that
Depositor, pursuant to a sale, merger, reorganization, license or other
transaction, either has or will imminently assign, transfer or delegate its
business or the ability to make or sell the chip set to a third party that
is a direct competitor of Beneficiary, that Beneficiary has given Depositor
written notice of such event, or received written notice of such event from
Depositor (hereinafter, a "Release Condition"), and (2) Beneficiary has
paid to SourceFile all fees and charges then due and owing, SourceFile
shall follow the following procedures set forth in Section 3, parts (ii),
(iii), (iv) and (v);


(ii) SourceFile shall with in five days notify Depositor of the
occurrence of the Release Condition and shall provide to Depositor the
License Agreement and a copy of Beneficiary's notice to SourceFile;


(iii) If SourceFile does not receive Contrary Instructions, as defined
below, from Depositor within thirty (30) days following SourceFile's
delivery of a copy of such notice to Depositor, SourceFile shall deliver
the Source Material to Beneficiary within (30) days of the date of
Beneficiary's original notice to Depositor. "Contrary Instructions" for the
purposes of this Section 3 shall mean the filing of written notice with
SourceFile by Depositor, with a copy to Beneficiary demanding delivery,
stating that the Release Condition has not occurred or has been cured;


(iv) If SourceFile receives Contrary Instructions from Depositor
within thirty (30) days of the giving of such notice to Depositor,
SourceFile shall not deliver the Source Material to Beneficiary, but shall
continue to store the Source Material until: (1) otherwise directed by the
Depositor and Beneficiary jointly; (2) SourceFile has received a copy of an
order of a court of competent jurisdiction directing SourceFile as to the
disposition of the Source Material; or (3) SourceFile has deposited the
Parcel with a court of competent


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jurisdiction or a Trustee or receiver selected by such court pursuant to
Section 3, subpart (v) below;


(v) Upon receipt of Contrary Instructions from Depositor, SourceFile
shall have the absolute right, at SourceFile's election to file an action
in interpleader requiring the Depositor and Beneficiary to answer and
litigate their several claims and rights among themselves. SourceFile is
hereby authorized to comply with the applicable interpleader statutes of
the State of California or the Federal Courts of San Francisco in this
regard.


4. TERM OF AGREEMENT. This Agreement shall have an initial term of three (3) years. The term shall be automatically renewed on a yearly basis thereafter, unless Beneficiary, Depositor or SourceFile notifies the other parties in writing at least forty-five (45) days prior to the end of the then current term of its intention to terminate this Agreement.


5. COMPENSATION OF SOURCEFILE. Beneficiary agrees to pay SourceFile reasonable compensation for the services to be rendered hereunder in accordance with SourceFile's then current schedule of fees, and will pay or reimburse SourceFile upon request for all reasonable expenses, disbursements and advances, including software duplication charges and reasonable attorneys' fees, incurred or made by it in connection with carrying out its duties hereunder. SourceFile's schedule of fees for the initial term of this Agreement is attached to this Agreement as EXHIBIT "B".


6. LIMITATION OF LIABILITY OF SOURCEFILE. SourceFile may rely on and shall suffer no liability as a result of acting or refraining from acting upon any written notice, instruction or request furnished to SourceFile hereunder which is reasonably believed by SourceFile to be genuine and to have been signed or presented by a person reasonably believed by SourceFile to be authorized to act on behalf of the parties hereto. SourceFile shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement. SourceFile may consult with counsel of its own choice, and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.


7. INDEMNIFICATION OF SOURCEFILE. Depositor and Beneficiary jointly agree to indemnify and defend SourceFile and to hold it harmless from and against, any loss, liability or expense incurred by SourceFile, arising out of or in connection with this Agreement, carrying out its duties hereunder, and any other claim of liability with respect to the Source Material. In the event suit is brought by any party to this Agreement, or any other party, as against any other party, including SourceFile, claiming any right they may have as against each other or against SourceFile, then in that event the parties hereto, agree to pay to SourceFile any attorney's fees and cost incurred by SourceFile in connection therewith.


8. RECORD KEEPING INSPECTION OF SOFTWARE. SourceFile shall maintain complete


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written records of all materials deposited by Depositor pursuant to this Agreement. During the term of this Agreement, Depositor shall be entitled at reasonable times during normal business hours and upon reasonable notice to SourceFile to inspect the records of SourceFile maintained pursuant to this Agreement and to inspect the facilities of SourceFile and the physical condition of the Source Material.


9. TECHNICAL VERIFICATION. Beneficiary reserves the option to request SourceFile to verify the Source Material for completeness and accuracy. SourceFile may elect to perform the verification at its site or at Depositor's site. Depos ...