Software License And Distribution Agreement

SOFTWARE LICENSE AND DISTRIBUTION AGREEMENT


THIS SOFTWARE LICENSE AND DISTRIBUTION AGREEMENT ("Agreement") is entered, effective as of June 18, 1998, by and between INTELISPAN VENTURES, INC., an Arizona corporation ("IVI"), and CYCLONE SOFTWARE CORPORATION, an Arizona corporation ("CSC"). IVI and CSC are at times individually referred to as "Party" or collectively as "Parties." All capitalized words constitute defined terms listed in Section I of this Agreement.


RECITALS


A. CSC is the owner of certain software providing among other features, interconnectivity and data exchange capabilities, and as further defined as "Software" below.


B. IVI is maintaining a computer communications network as further defined as "Network" below and is or may be providing certain Services (as defined below).


C. The Parties wish to enter into an agreement whereby IVI would receive the following non-exclusive licenses regarding the Software:


1. SERVICE LICENSE. To use the Software resident on the Network and third party networks in connection with "Services" as defined below.


2. INTERNAL DISTRIBUTION LICENSE. To sublicense and distribute the Software to IVI's "Customers" as defined below for Customers' use on the Network.


3. EXTERNAL DISTRIBUTION LICENSE. To sublicense and distribute the Software to Customers for use on TCP/IP networks other than the Network.


COVENANTS


In consideration of the foregoing Recitals and the mutual promises, terms, and conditions contained in this Agreement, and for other good and valuable consideration, receipt of which is hereby acknowledged, the Parties hereby agree as follows:


1. DEFINITIONS.


1.1 AFFILIATE. "Affiliate" shall mean any corporation or business entity controlled by, controlling, or under common control with a named person or entity.


1.2 CYCLONE INTERCHANGE. "Cyclone Interchange" shall mean CSC's commercial computer software product known as Cyclone Interchange, licensed to operate with Cyclone Interchange Solo or other compatible third party software products.


1.3 CUSTOMERS. "Customers" means end-users of Cyclone Interchange sublicensed under this Agreement. 2
1.4 CYCLONE INTERCHANGE SOL. "Cyclone Interchange Solo" shall mean Cyclone Interchange configured and licensed to provide connectivity and data exchange with one Cyclone Interchange customer.


1.5 DOCUMENTATION. "Documentation" means the manuals, guides, online help, readme files, training materials, tutorials, job aids, quick references, and other technical documentation, provided in any media, which CSC generally makes available for use with a particular Software product


1.6 EFFECTIVE DATE. The "Effective Date" is June 18, 1998.


1.7 EXECUTABLE CODE. "Executable Code" means a form of computer program or portion thereof which can be executed by a computer without further modification. Examples include binary code and code which can be directly executed by an interpreter.


1.8 EXTERNAL DISTRIBUTION LICENSE. "External Distribution License" has the meaning defined in Section 3.3.


1.9 FIRST LEVEL SUPPORT. "First Level Support" means the following steps: Call acceptance and contact with the customer until resolution. Gather problem information and determine the level of the problem. Search knowledge base and deliver known solutions to customer. Dispatch IVI support personnel as appropriate. Escalate to Second Level Support as required.


1.10 INTERNAL DISTRIBUTION LICENSE. "Internal Distribution License" has the meaning defined in Section 3.2.


1.11 IMPROVEMENTS. "Improvements" means all corrections, updates, upgrades and all new releases of the Software which CSC may generally make available to end-users of the Software at any time after the date of delivery as specified in Section 5.1 who have executed maintenance agreements with CSC.


1.12 MAINTENANCE. "Maintenance" shall have the meaning set forth in Section 6.6.


1.13 LICENSE. "License" means the license of the Software set forth in Section 3 below.


1.14 NETWORK. The "Network" shall be IVI's permitted use of the Worldcom Advanced Network's Virtual Private Network.


1.15 PERMITTED TRADING PARTNERS. "Permitted Trading Partners" shall mean the maximum number of Solo Customer Profiles, as defined in the Documentation, permitted for use under this Agreement.


1.16 SECOND LEVEL SUPPORT. "Second Level Support" means the following steps:


Respond to First Level Support escalations with a higher level of expertise in a specific technology area. Develop and gain customer agreement for problem isolation, solution creation and solution implementation plan. Provide an existing fix, work-around solution, or if not available, escalate to CSC for assistance.


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1.17 SERVICE LICENSE. "Service License" has the meaning defined in Section 3. 1.


1.18 SERVICES. The "Services" are the following services of IVI: (a) Validate, which is individual background information or investigation reports; (b) Medical Data Mining; (c) Computer Code Correction, which is the provision of -fixes for problems such as those related to the year 2000, Dow 10,000 and Eurocurrency. The Services may include additional services as mutually agreed by the Parties.


1.19 SOFTWARE. "Software" means Cyclone Interchange and Cyclone Interchange Solo and any accompanying Documentation, including any corrections, updates, upgrades and enhancements ("Updates") thereto made available by CSC to IVI pursuant to the terms of this Agreement.


1.20 SOLO CUSTOMER. "Solo Customer" shall mean a Customer licensed to use Cyclone Interchange Solo in accordance with the terms of this Agreement.


1.21 SOURCE CODE. "Source Code" means a form of computer program or portion thereof written in a programming language employed by computer programmers which must be translated into the language of a machine before it can be executed.


1.22 SUBDISTRIBUTOR. "Subdistributor" means any person or organization authorized by Licensee to sublicense any Software licensed in this Agreement.


1.23 TERM. "Term" shall have the meaning defined in Section 2.


1.24 THIRD LEVEL SUPPORT. "Third Level Support" means help, support, and assistance pertaining to the technical aspects of the Software necessary to the extent that IVI has exhausted First Level Support and Second Level Support to resolve a problem.


2. TERM. The Term of this Agreement shall be five (5) years from the Effective Date and shall automatically renew for consecutive one (1) year terms unless either party provides written notice of non-renewal at least one hundred eighty (180) days before the end of the original five-year term or any one-year extension term.


3. SOFTWARE LICENSES. CSC hereby grants to IVI the following nonexclusive, nontransferable, and worldwide licenses as follows:


3.1 SERVICE LICENSE. IVI shall have a Service License to (a) use one (1) copy (or more, if reasonably approved by CSC) of Cyclone Interchange located at 8220 East Gelding Drive, Scottsdale Arizona 85260 (or such other location as notified in advance to CSC) (the "IVI Operations Center") for the sole purpose of marketing and promoting the Services on the Network, and (b) copy and distribute any number of Cyclone Interchange Solo to Solo Customers for use on or off the Network, in connection with IVI's offering of the Services.


3.2 INTERNAL DISTRIBUTION LICENSE. IVI shall have an Internal Distribution License to market, promote, sublicense and distribute Software to Customers only for Customers' use on the Network.


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3.3 EXTERNAL DISTRIBUTION LICENSE. IVI shall have an External Distribution License to market, promote, sublicense and distribute the Software to other customers for general use within or without the Network.


4. CONDITIONS COMMON TO ALL LICENSES.


4.1 IVI TRADEMARK USE. The Parties agree that IVI may market, promote, use, sublicense, and distribute the Software under its own trademarks and/or trade names, and with its own appropriate proprietary notices.


4.2 DISPLAY OF CSC TRADEMARKS. IVI shall not delete or remove any of CSC's trademarks or proprietary notices from the Software, but shall have the right to reasonably move or adjust marks for product packaging or co-branding purposes. Further, IVI shall prominently display "Cyclone Powered" or an equivalent thereof on all product sheets, splash screens and other locations that include other IVI marks related to the Software.


4.3 RSA LICENSES. IVI agrees to license any RSA Data Security, Inc. ("RSA") software modules required for the Software directly from RSA, and IVI shall be responsible for an fees or royalties requested by RSA in connection with any Software licensed to or by IVI.


4.4 SUBLICENSES. IVI and its Subdistributors shall license the Software licensed pursuant to Section 3 pursuant to sublicense agreements substantially in the form attached as Exhibit B, which protect CSC's rights, and limit CSC's liability consistently with the terms of this Agreement, as well as other terms and conditions as may be agreed to by CSC and IVI from time to time.


4.5 CODE DISTRIBUTION. IVI may distribute the Software in Executable Code only.


4.6 LIMITATION ON IVI'S USE. As between IVI and CSC, CSC holds all right, title, and interest in and to all copyrights, trade secrets, and other proprietary rights in the Software, including any modifications or derivations of the Software, including those developed by or for IVI. Notwithstanding the foregoing, IVI shall have the right to develop separate software modules using APIs provided by CSC which IVI shall own to the extent such modules do not contain proprietary intellectual property of CSC. IVI shall not sell or otherwise transfer the Software except as provided in Section 3.


4.7 SUBDISTRIBUTORS. IVI may appoint Subdistributors at its sole discretion. In all cases, however, IVI shall require, by written contract, that each of its Subdistributors comply with IVI's obligations hereunder as if such Subdistributor stood in the position of IVI hereunder, except that IVI shall be solely responsible for making all payments to CSC hereunder. IVI shall promptly notify CSC of the appointment of all Subdistributors, and shall be responsible for all acts of such Subdistributors.


Each agreement with a Subdistributor shall provide that CSC is an intended third party beneficiary with the right to enforce such agreement against the Subdistributor. CSC shall have the right to cause IVI to audit Subdistributors and provide relevant information from such audits with CSC.


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4.8 COPIES OF SOFTWARE. IVI may create duplicate and backup copies of the Software for IVI's and Customers' use within the parameters of the Internal and External Service License. All versions of Software to be distributed under the Internal and External Distribution Licenses shall. be provided by CSC to IVI for copying and redistribution by IVI. The Software and all related materials, including any original or complete or partial copies thereof, are and remain the property of CSC, whether or not the copies are made by IVI, and irrespective of the ownership of the -media on which the software or related materials. are contained.


4.9 DEMONSTRATION COPIES OF CYCLONE INTERCHANGE. IVI shall have the right to license up to five (5) customers at any time, demonstration copies of Cyclone Interchange for use on the Network for a ninety (90) day trial period. If a customer does not return a demonstration copy within such ninety (90) day period, the appropriate fee under Section 7.2 below shall be immediately due to CSC.


4.10 PAPAGO PRODUCT. CSC may, at its discretion complete development of its Papago Product. In the event that CSC completes its Papago Product, such product shall be included as "Software" under this Agreement, provided that the only additional payment due for the Papago Product shall be the payments due for individual Papago Product licenses for use in accordance with Section 7.2 and 7.3 below.


5. DELIVERY. IVI hereby acknowledges that CSC has made delivery of one (1) copy of the Software on or before June __, 1998, and IVI has accepted the Software.


6. SUPPORT.


6.1 CSC END-USER SUPPORT OBLIGATIONS. CSC will. provide Maintenance to IVI and, as requested by IVI, Third Level Support, throughout the term of this Agreement and the additional term of any Customer license hereunder, provided CSC is receiving payment pursuant to Section 6.5 below.


6.2 CSC TRAINING AND SUPPORT. Upon request by IVI and as mutually agreed by the parties, including any financial compensation, if any, CSC will provide the training and support services to IVI and to its Customers throughout the term of this Agreement.


6.3 IVI CUSTOMER SUPPORT OBLIGATIONS. Throughout the term of this Agreement and the additional term of any Customer license hereunder, IVI will provide First and Second Level Support to its Customers.


6.4 ADDITIONAL CSC SUPPORT. CSC consulting and support services for IVI, or Customers in addition to those described in Sections 6.1 and 6.2 above ("Additional Support") may be requested by IVI at any time, whereupon CSC may provide a cost estimate and proposed timetable. Any such Additional Support shall only be provided pursuant to a written amendment to this Agreement, and/or a written agreement between IVI and CSC.


6.5 REIMBURSEMENT OF EXPENSES. CSC shall furnish Maintenance and Third Level Support for the Software to IVI for a period of one (1) year from the Effective Date without any charge or fee. Thereafter, IVI shall pay CSC as follows:


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(a) $40,000.00 per year within thirty (30) days after the start of each year for Maintenance of IVI's copy of Cyclone Interchange used to provide Services.


(b) An amount equal to ten percent (10%) of all fees payable to CSC during the first year of this Agreement pursuant to Sections 7.2 and 7.3 for Maintenance of Customer licenses granted during the first year of this Agreement. This amount would be paid during the first month of the second year of this Agreement. This payment is for the second year of support of such licenses.


(c) An amount equal to ten percent (10%) of all fees payable to CSC during each month of this Agreement pursuant to Sections 7.2 and 7.3. These amounts would be payable monthly. This is for the first year of support of licenses granted.


(d) An amount equal to ten percent (10%) of all fees paid for a license pursuant to Sections 7.2 and 7.3, upon each anniversary of each such license These amounts would be payable monthly. This payment shall not be made for the second year of support for licenses granted in the first year of this Agreement.


For all other expenses incurred by CSC in providing the training and support services described in this Article 6, CSC shall be reimbursed as specifically agreed by CSC and IVI in writing.


6.6 MAINTENANCE. CSC will maintain the Software in an operable condition in accordance with the specifications contained in the Documentation supplied with the Software during the term of this Agreement. CSC shall also provide IVI without charge such corrections and improvements as CSC may make generally available to its Software licensees as part of standard maintenance service. All such services shall be referred to as "Maintenance" and shall be provided according to CSC's then-current Maintenance Policy.


7. LICENSE PAYMENTS. In consideration for the rights and Licenses granted in this Agreement, and subject to the conditions set forth in this Agreement, IVI shall pay the following license fees:


7.1 SERVICE LICENSE. For the Service License the Software will be priced at a one-time payment of $400,000 payable upon invoice by CSC. The license fees stated in this Section 7.1 include all fees for an unlimited number of Cyclone Interchange Solo licenses for Customers on the Network.


7.2 INTERNAL DISTRIBUTION LICENSE. For purposes of the Internal Distribution License, the license fee for the Software payable to CSC will be $25,000.00 for each Customer sublicense of Cyclone Interchange to be installed at a Customer facility, and $10,000 for each Customer sublicense to be installed at the IVI Operations Center. These sublicenses shall be reassignable by IVI from time to time pursuant to contracts with Customers. The license fees stated in this Section 7.2 include all fees for an unlimited number of Cyclone Interchange Solo licenses for Customers on the Network. Payment to CSC shall be made within ninety (90) days of the delivery of the Software to the Customer or receipt of the Customer's payment therefor, whichever is sooner.


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7.3 EXTERNAL DISTRIBUTION LICENSE. For purposes of the External Distribution License, the license fee payable by IVI to CSC shall be at a discount of fifty percent (50%) off CSC's regular retail price list for sales inside of the territory and possessions of Canada, the U.S.A, and Mexico, and at a discount of sixty percent (60%) off CSC's regular retail price list for sales outside of the territory and possessions of Canada, the U.S.A, and Mexico. Payment to CSC shall be made within ninety (90) days of the delivery of the Software or receipt of the Customer's payment therefor, whichever is sooner. CSC shall provide IVI with any modifications of its retail Price list at least thirty (30) days before such modifications become effective.


7.4 CUSTOMER IDENTIFICATION. Each payment shall be accompanied by a report setting, forth the amount of fees paid, how such fees have been calculated and the identities of customers upon which reported fees are based, date of delivery and date of payment, if received. Further, IVI and its Subdistributors agree to make and to maintain until the expiration of two (2) years after the last payment under this Agreement is due, complete books, records and accounts to verify IVI's copies of the Software and the payments due CSC hereunder. CSC shall have the right to examine such books, records and accounts during IVI's normal business hours to verify IVI's reports on the amount of payments made to CSC under this Agreement. If any such examination discloses a shortfall in payment to CSC of more than five percent (5%) for any month, IVI agrees to pay or reimburse CSC for that auditing expense upon written request by CSC.


8. OWNERSHIP; CONFIDENTIALITY.


8.1 CSC OWNERSHIP RIGHTS. Except for the licenses granted hereunder, all rights, title and interests, including, without limitation, intellectual property rights, in and to the Software are retained by CSC. IVI shall execute all such documents that may be required to vest in CSC, or otherwise confirm, such ownership rights.


8.2 NO DECOMPILATION. IVI shall not attempt to obtain or permit others to obtain the Source Code of any Software supplied to IVI in compiled form through decompilation, disassembly or other means.


8.3 IVI OWNERSHIP RIGHTS. Except as other-wise set forth herein, all rights, title and interests, including, without limitation, all intellectual property rights in and to the IVI Services and Network, are retained by IVI. CSC shall execute all such documents that may be required to vest in IVI, or otherwise confirm, such ownership rights.


8.4 CONFIDENTIALITY.


(a) SECRECY DUTIES. Any non-public information or documentation provided by the Parties or their representatives, agents, and employees to each other in the context of this Agreement ("Information") shall be kept strictly confidential. The Parties each agree that the amount of license or other fees payable hereunder, and the payment terms, shall be deemed Information of the other for purposes of this Section 8.4. Access to such Information shall be restricted to the Parties' representatives and agents as is reasonably required for purposes of effecting the purposes of this Agreement ("Authorized Representatives"). IVI and CSC shall inform such Authorized Representatives of their limitations, duties and obligations hereunder. Each of the Parties shall be liable for any breach of this Agreement by, their respective employ-


7 8 ees or agents. The Parties and their Authorized Representatives shall safeguard the Information against unauthorized disclosure, use, appropriation, or access by others, shall not disclose or permit access to Information to others without the express written permission of the Party to which the Information pertains, and shall not use, not allow the use of, or disclose or allow Information for any purpose unrelated to the consummation of the transactions contemplated by this Agreement. If this Agreement is terminated or expires, all Information except as required for the maintenance of continuing Customer obligations, shall be immediately returned to the respective Party. Notwithstanding the foregoing, each Party shall have the right to disclose the existence and nature of this Agreement to third parties. Further, within ten (10) days after the Effective Date, the Parties will issue as mutually agreed press release regarding this Agreement.


(b) EXCEPTION TO SECRECY DUTIES. A Party shall not be bound to its above-stated secrecy duties as to such Information or part thereof, (a) which such Party can demonstrate was known to it before disclosure by the other Party or its Agents; (b) which is now, or becomes in the future, public knowledge other than through acts or omissions of such Party or its representatives or agents gents; or (c) which is lawfully obtained by a Party from sources independent of the other Party.


(c) REMEDIES. The Parties understand that dissemination of the Information would be detrimental to the other, and that the Information is the exclusive property of the other. The confidentiality clauses contained in this Section 8.4 are reasonable and necessary to protect the legitimate interests of the Parties and any violation thereof will result in an irreparable injury to the other Party. The Parties agree that in the event of any violation of this Section by one Party, the other shall be entitled to injunctive relief and damages, which remedies shall be cumulative and in addition to any other rights or remedies to which such other shall be entitled. The Parties declare that it is impossible to measure in money the damages that will accrue if a Party should fail to perform any of the obligations contained in this Section. Therefore, the terms and provisions of this Section may be specifically enforced in equity. The Parties waive the claim or defense that the remedy at law is adequate for a breach of the terms and provisions of this Section.


9. IVI SERVICES. IVI shall provide CSC with favorable wholesale pricing for CSC's use of IVI Services and Network and CSC may private brand the IVI Services, all as to be further negotiated and determined by the Parties.


10. TERMINATION; EXPIRATION.


10.1 BREACH OF CONTRACT. The license granted in this Agreement may be terminated by the nondefaulting Party if either Party fails to substantially comply with the terms and conditions of this Agreement for more than thirty (30) days after receipt of notice to it from the nondefaulting Party specifically setting forth the nature of such failure or default, unless such failure or default could not be reasonably cured within thirty (30) days and the defaulting Party has made a reasonable attempt within such 30 days to commence to cure the noticed default. If any payment is not made within thirty (30) days of the due date thereof, such payment shall bear interest at the rate of one and one-half percent (1.5%) per month, or the highest legal rate, whichever is less, commencing as of the due date, until fully paid. Failure to make any payment within thirty (30) days of the due date thereof shall constitute a material breach of this Agreement. Notwithstand-


8 9 ing the foregoing, either Party may terminate this Agreement immediately in the event of a breach by the other party of its obligations under Section 8 or 11, and IVI may immediately terminate this Agreement upon CSC's breach of a warranty in Section 12 or upon any interruption of IVI's License rights under this Agreement due to an infringement claim.


10.2 CONTINUING CONTRACTUAL OBLIGATIONS. If the license granted by this Agreement is terminated by IVI for CSC's breach, or expires, CSC will permit IVI to complete performance of any existing contracts IVI has with its Customers involving the Software or any part thereof for a period not to exceed one (1) year following the effective date of the termination or expiration of this Agreement provided no new business will be solicited under any such existing contract, provided this shall not preclude the issuance of Cyclone Solo licenses as provided under this Agreement. In such event, the right of IVI to so complete performance of any existing contracts IVI has with its customers will be expressly conditioned upon the continued compliance by IVI with all terms and conditions of this Agreement.


10.3 IVI OBLIGATIONS ON TERMINATION. Except as necessary for continuing the obligations referenced in Section 10.2, upon termination or expiration of this Agreement, IVI shall destroy all Documentation and all copies of any Software, or portions thereof, in its possession or control. Termination shall not affect the rights of any Customers of the Software sublicensed under the External Distribution License to continue to use such programs; however, IVI shall not furnish further copies of the Software to any person after termination under such License. Upon termination or expiration, IVI shall immediately pay to CSC all license fees then outstanding.


11. NONCIRCUMVENTION; NONHIRE.


11.1 NONCIRCUMVENTION. CSC warrants and agrees that neither CSC nor any of its directors, officers, and employees shall attempt or undertake to circumvent IVI and shall not directly engage in any business negotiations, dealings, or transactions with Worldcom and/or Zergo, for one (1) year after the Effective Date or Worldcom Advanced Network for two (2) years' after the Effective Date without the express prior written consent of IVI (provided that if IVI and Worldcom Advanced Network enter into a written agreement, a copy of which is promptly provided to CSC, which agreement appoints Worldcom. Advanced Network as a Subdistributor of Services and Software, then the period of time with respect to WorldCom Advanced Network shall be five (5) years). IVI shall be under no duty or reasonability standard whatsoever with regard to giving such consent and may withhold consent in its sole discretion.


11.2 NONHIRE. Except as otherwise agreed to in writing, for the Term of this Agreement and for a period of two (2) years thereafter, the Parties shall not make or accept any offer regarding the employment or independent services of each other's employees (including employees terminated within ninety (90) days), unless the other Party becomes insolvent.


12. REPRESENTATIONS AND WARRANTIES


CSC warrants that it is the owner of the Software and/or has the right to grant IVI the rights set forth herein; provided that IVI's sole remedy, and CSC's sole obligation, with respect to such warranty shall be CSC's indemnification obligation set forth in Section 13 below. EXCEPT FOR THIS EXPRESS LIMITED WARRANTY, NEITHER CSC NOR ITS LICENSORS


9 10 MAKE ANY WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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