ASSIGNMENT, SOFTWARE DEVELOPMENT AND LICENSE

ASSIGNMENT, SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT





NYSERNET.ORG, INC.





APPLIEDTHEORY COMMUNICATIONS, INC.











OCTOBER 1, 1996



TABLE OF CONTENTS

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---- I. DEFINITIONS

A. Assignment

B. Consideration

C. Representations, Warranties and Indemnification

D. Delivery of AJB Software



II. SOFTWARE DEVELOPMENT

A. Development

B. Progress Reports and Acceptance

C. Deficiency Letter

D. User Documentation

E. Payment

F. Transfer of the New AJB Software

G. Term

H. Termination

I. Noninfringement Warranty

J. Software Warranty

K. Year 2000 Standards

L. No Undocumented Features



III. LICENSE

A. Grant

B. Ownership of Derivatives Works

C. Indemnification



IV. MISCELLANEOUS PROVISIONS

A. Indemnification

B. Notices

C. Disputes, Choice of Law

D. Independent Contractor Status

E. Security, No Conflicts

F. Insurance, Indemnity

G. Miscellaneous



LIST OF SCHEDULES

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Schedule A List of AJB Software by Module or File Schedule B America's Job Bank Contract Amendment with NYSDOL Schedule C Software Development Specifications Schedule D Software Development Fees



This Agreement is made as of October 1, 1996 by and between NYSERNet.org, Inc., a not-for-profit corporation organized and existing under the laws of the State of New York, with its principal offices at 125 Elwood Davis Road, Syracuse, New York 13212, hereinafter referred to as "NYSERNet," and AppliedTheory Communications, Inc., with its principal office at 40 Cuttermill Road, Great Neck, New York 11201, hereinafter referred to as "AppliedTheory."



W I T N E S S E T H:



WHEREAS, NYSERNet has developed and authored the original and later versions of the proprietary software known as RDBMS.a; and



WHEREAS, NYSERNet has developed and authored the original and later versions of the proprietary software known as AJB WWW SERVER SOFTWARE and AJB WWW SERVER/AGENT SOFTWARE including the additional modules listed on Schedule A for the non-profit purpose of working with the New York State Department of Labor ("NYSDOL") to establish a world wide web version of the America's Job Bank system; and



WHEREAS, NYSERNet has entered into a further agreement with NYSDOL to modify and update the AJB Software (as defined below), pursuant to America's Job Bank Contract Amendment #3 dated October 25, 1996 that is attached as Schedule B ("NYSDOL AMENDMENT"), under which NYSDOL agreed to pay NYSERNet $446,600 for software development services; and



WHEREAS, NYSERNet must seek experienced personnel to aid in fulfilling its obligations under the NYSDOL AMENDMENT; and



WHEREAS, NYSERNet is further interested in generating for its non-profit purposes a stream of income from the AJB Software and later versions, but does not want to spend its own funds to commercialize the AJB Software; and



WHEREAS, AppliedTheory wishes to acquire the AJB Software for the purpose of modifying the AJB Software for commercialization in other markets; and



WHEREAS, AppliedTheory has developed expertise relating to the AJB Software and has experienced personnel capable of aiding NYSERNet to fulfill NYSERNet's obligations under the NYSDOL AMENDMENT; and



WHEREAS, AppliedTheory will have to expend a considerable amount of its own financial and time resources to commercialize the AJB Software to suit the needs of other markets;



-Page 1- NOW THEREFORE in consideration of the promises and the mutual covenants herein contained, and for good and valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:





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A. AJB SOFTWARE means the software application originally written by NYSERNet that consists, as of October 1, 1996, of the files and modules identified on Schedule A.



B. EFFECTIVE DATE - The effective date of this Assignment, Software Development and License Agreement (this "Agreement") shall be October 1, 1996.



C. MATERIAL DEVIATION means a failure of the New AJB Software to perform a function on Schedule B or C, such as to cause one or more of its functional components not to perform or cause an important system not to work, or to fail to adequately perform repetitively on a variety of data, or to reflect inaccurate data.



D. NEW AJB SOFTWARE means the AJB Software plus any adaptations, derivatives, or original works authored by AppliedTheory based upon the AJB Software and any adaptations, derivatives, modifications and enhancements made by NYSERNet pursuant to the license contained in Article III.





I. ASSIGNMENT

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A. Assignment. Subject to the further provisions of this Agreement, NYSERNet hereby sells, assigns and transfers to AppliedTheory and its successors and assigns the entire right, title and interest of NYSERNet in and to all versions of the AJB Software, including but not limited to all rights in any and all original authorship, copyrights, trade secrets, inventions, ideas, concepts, algorithms, routines, screens, patentable ideas and information which relate to the AJB Software. This assignment includes the right to sue and collect for any and all past infringements of the AJB Software. NYSERNet hereby further agrees that: (i) it will not execute any writing or do any act whatsoever conflicting with these presents; (ii) NYSERNet and its assigns, successors and legal representatives will at any time upon request without additional consideration, but at the expense of AppliedTheory, execute any documents or applications that AppliedTheory may determine as necessary or desirable in the enjoyment of this grant; and (iii) NYSERNet will cooperate, at the expense of AppliedTheory, in any proceedings or transactions involving the assigned AJB Software.





-Page 2- B. Consideration.



1. In consideration of the above assignment, AppliedTheory agrees to pay NYSERNet two percent (2%) of all revenues derived from sales of licenses or sublicenses of the AJB Software, in whole or in part, as well as such licenses of the New AJB Software. AppliedTheory shall pay NYSERNet the required percentage thirty (30) days after AppliedTheory receives payment from a commercial corner. Payments shall cease when two (2) years have elapsed after AppliedTheory first licenses the AJB Software to a commercial customer. The revenues derived from sales, licenses or sublicenses of the AJB Software and the New AJB Software shall be the gross revenues to AppliedTheory from the sale or license of any product or service which includes the AJB Software or the New AJB Software, in whole or in part, determined in accordance with generally accepted accounting principles consistently applied; provided that the revenues from bundled transactions, including the sales or licenses of such products or services and other products or services, shall be prorated based upon the list price (or, if there is no list price, the fair value) of the products and services so bundled.



2. AppliedTheory is under no obligation to make any minimum payments. The parties agree that if AppliedTheory's efforts to commercialize the AJB Software fail to yield any license fees, then NYSERNet is not entitled to any additional payments under this Agreement. Further, NYSERNet is not entitled to any proceeds from the licensing of any AppliedTheory product that does not incorporate or use any AJB Software code.



3. The parties agree that nothing in this payment arrangement indicates a failure fully to assign all rights in the AJB Software or that NYSERNet has retained any interest in the assigned AJB Software, except those license rights set forth in Article III.



C. Representations, Warranties and Indemnification. NYSERNet represents and warrants that, to the best of its knowledge, it has all right, title and interest in the AJB Software, subject to the rights granted to the NYSDOL, and that it has authority to assign these rights. NYSERNet further represents and warrants that, to the best of its knowledge, the AJB Software does not infringe upon any third party's intellectual property rights including copyrights, trademarks, trade secrets or patents. NYSERNet shall have no liability under this Agreement, including but not limited to this Section I.C., in excess of the aggregate amounts paid to it by AppliedTheory under this Agreement.



-Page 3- D. Delivery of AJB Software. Upon execution of this Agreement, NYSERNet shall deliver to AppliedTheory copies of the source code and executable object code of the AJB Software on an appropriate medium, and a hard copy of each. NYSERNet shall also deliver copies of any documentation, notes, charts or other materials in its possession or under its control relating to or useful in connection with the programming, functionality or instructions for use of the AJB Software.



II. SOFTWARE DEVELOPMENT



A. Development. AppliedTheory agrees to develop and ...