Patent And Software License Agreement

PATENT AND SOFTWARE LICENSE AGREEMENT


THIS PATENT AND SOFTWARE LICENSE AGREEMENT ("Agreement") is made, entered into and effective as of the latter date of execution ("Effective Date") at Glenwood, Maryland, between Trusted Information Systems, Inc. a Delaware corporation ("TIS"), having its principal mailing address at 3060 Washington Road (Rt. 97), Glenwood, Maryland 21738, and International Business Machines Corporation, a New York corporation ("IBM"), having a mailing address at 500 Columbus Avenue, Thornwood, New York 10594.


RECITALS


A. TIS is the owner of and holds exclusive rights to certain technology that
is the subject of certain copyrights and pending and issued U.S. and
foreign patent applications relating to cryptographic information recovery.


B. IBM desires to have access to use such technology and/or patents and/or
copyrights to develop and distribute Licensed Products and TIS is prepared
to grant IBM such access and license in accordance with the terms and
subject to the conditions hereinafter set forth.


AGREEMENT


NOW, THEREFORE, in reliance on the foregoing recitals and in consideration of the premises and mutual promises and covenants set forth herein, TIS and IBM agree as follows:


1. DEFINITIONS


The following terms when used in this Agreement, and in the exhibits hereto shall have the following meanings:


1.1. "Bundled Product" means the series or group of specific
computer programs, software, derivative works thereof,
firmware, or equivalent hardware functionality, identified in
Exhibit "A" which, on a non-exclusive basis, incorporates
either (a) any portion of the TIS Object Code or (b) any New
Software. The term Bundled Product excludes Toolkit, Toolkit
Derivative, KRC, and IBM Recovery Facility.


1.2. "Cryptographic Information Recovery Technology" means all
means, methods and processes related to the recovery of
encrypted information through key recovery and key escrow or
similar or replacement means and any functionality
incorporated into or practiced by RecoverKey,
RecoverKey-International, any derivative work thereof, or any
Key Recovery Center.


1.3. "Default Certificate" means a cryptographic certificate
provided by a KRC or IBM Recovery Facility that is the
property of the KRC or IBM Recovery Facility and licensed by
the KRC or IBM Recovery Facility to the End-User Customer. A
Default Certificate may be required before a Bundled Product's
or Toolkit Derivative's cryptographic capabilities will
function and such Default Certificate expires after a
specified period of time not to exceed one year.


1.4. "Distributor" means a person or entity in the business of
distributing and sublicensing Licensed Products by authority
granted by IBM, including, but not limited to OEMs, resellers,
value added remarketers, dealers, and sales representatives.


1.5. "Documentation" means hardcopy and/or softcopy versions of
printed materials and any updates thereto which TIS provides
for use with any TIS Software licensed under this Agreement.


1.6. "End-User Customer" means a person or entity having license
rights to a Bundled Product or a Toolkit Derivative, KRC, or
IBM Recovery Facility from IBM, its Subsidiaries,
Distributors, or Toolkit Licensees


1.7. "IBM Recovery Facility" means a facility designed or
manufactured, other than by TIS, by or for IBM or its
Subsidiaries and identified in Exhibit "A" that may: (i)
provide a series or group of specific computer programs,
software, derivative works thereof, firmware, or equivalent
hardware functionality, which, on a non-exclusive basis,
incorporates either (a) any TIS Software or (b) any New
Software to permit users of Licensed Products to register,
receive KRC Certificates, or obtain information in various
contingencies; and (ii) provide consulting and support
services ancillary thereto. It is contemplated that this
Agreement may encompass additional IBM Recovery Facilities at
some future date. IBM may add or delete IBM Recovery
Facilities to or from Exhibit "A" by providing written notice
to TIS of such additions and such additional IBM Recovery
Facilities shall be automatically licensed pursuant to the
terms and conditions of this Agreement.


1.8. "IBM Recovery Facility Licensee" means any third party which
licenses an IBM Recovery Facility from IBM, its Subsidiaries,
or Distributors.


1.9. "IBM Recovery Field Format" means a field in a Bundled Product
or Toolkit Derivative to store recovery information that is
used by a Toolkit Licensee or IBM Recovery Facility.


1.10. "Interface Modifications" shall have the meaning set forth in
Section 2.4.1.


1.11. "Key Recovery Center(TM)" or "KRC(TM)" means: a recovery
facility that is either manufactured by TIS or a licensee of
TIS and: (i) provides software, hardware and/or other
technology resources to permit users to register their use of
RecoverKey(TM) and/or RecoverKey-International(TM), as defined
in Exhibit "H", to receive KRC Certificates and to obtain
information in various contingencies, and (ii) may provide
consulting and support services ancillary thereto.


1.12. "KRC Certificate" means a cryptographic public key certificate
provided by a Key Recovery Center or an IBM Recovery Facility,
including but not limited to a Default Certificate, that
permits key recovery by End-User Customers or other authorized
users.


1.13. "Key Recovery Center Licensee" means any third party that
sublicenses a KRC from IBM, its Subsidiaries, or Distributors.


1.14. "Key Recovery Field" or "KRF" or "Key Recovery Field Format"
means the technical means by which Bundled Products or Toolkit
Derivatives will generate a field containing information
described in Exhibit "B". At a minimum, such field would
contain information or an encryption key encrypted using a
public key that was issued by a KRC or an IBM Recovery
Facility.


1.15. "KRF Requirement Mechanism" means a technical method for
requiring the inclusion of KRF(s) upon encryption of
information.


1.16. "KRF Tamper-Detection Mechanism" means a technical method
which prevents the encryption of encrypted information upon
detection of an altered or missing KRF.


1.17. "Key Recovery Technology(TM) " or "KRT(TM) " means technology
comprising RecoverKey(TM) and/or RecoverKey-International(TM)
implementations that permits End-Users Customers to register
their use of KRTenabled Licensed products and receive KRC
Certificates, and also permits users, their organizations and
government agencies to recover a user information in the event
the user's normal means of obtaining such user information are
unavailable. It includes the TIS Software, TIS Object Code,
TIS Source Code, the Patent Rights, and/or the TIS Key
Recovery Field Format.
1.18. "License Fees" shall have the meaning set forth in Section
3.1.


1.19. "Licensed Product" means: a Bundled Product, Toolkit, Toolkit
Derivative, KRC, and/or IBM Recovery Facility.


1.20. "Net Revenue" for Bundled Products, Toolkits, KRCs and IBM
Recovery Facilities means the gross revenue amount recorded by
IBM or its Subsidiaries (except as otherwise provided in
Exhibit "D") at any time in consideration of the licensing or
other permitted transfer of Bundled Product Toolkits, KRCs,
and IBM Recovery Facilities excluding any amounts received by
IBM or its Subsidiaries for sales and use taxes, shipping,
insurance and duties, and reduced by all discounts, rebates,
refunds or allowances granted to Distributors, or End-User
Customers in the ordinary course of IBM's or its Subsidiaries'
business.


Net Revenue for Toolkit Derivatives means the gross revenue
amount recorded by Toolkit Licensees at any time in
consideration of the licensing or other permitted transfer of
the Toolkit Derivatives, respectively, excluding any amounts
received by Toolkit Licensees for sales and use taxes,
shipping, insurance and duties, and reduced by all discounts,
rebates, refunds or allowances granted to Distributors, or
End-User Customers in the ordinary course of any Toolkit
Licensee's business.


Net Revenue for KRC's and IBM Recovery Facilities, for the
purpose of Section III(B) of Exhibit "D" hereto means the
gross revenue amount recorded by KRC or IBM Recovery Facility
Licensees, as applicable, at any time in consideration of the
issuance of Default Certificates, the collection of User
Registration Fees and User Recovery Fees, excluding any
amounts received by KRC or IBM Recovery Facility Licensees, as
applicable, for sales and use taxes, shipping, insurance and
duties, and reduced by all discounts, rebates, refunds or
allowances granted to Distributors, or End-User Customers in
the ordinary course of any KRC or IBM Recovery Facility
Licensees, as applicable, business.


In computing Net Revenue in any of the forgoing situations,
credit for returns actually made or allowed to End-User
Customers, or Distributors may be deducted but no such
deductions shall be permitted for estimates or amounts
accumulated for future settlement with purchasers. With
respect to a Licensed Product that is licensed or otherwise
distributed by IBM, a Subsidiary, a Distributor or Toolkit
Licensee as part of a larger group of products, a License Fee
shall be due as set forth above as though the Licensed Product
had been licensed or distributed separately by IBM, a
Subsidiary, a Distributor or Toolkit Licensee; provided,
however, that the amount used by IBM, a Subsidiary, a
Distributor or Toolkit Licensee as the base net revenue for
the Licensed Product when licensed or distributed in this
manner shall not be less than the pro rata proportion of the
sum of each component's price if sold separately.


1.21. "New Software" means any computer program, software, firmware
or equivalent hardware functionality, developed by or for IBM
or its Subsidiaries which is covered by any claim of the
Patent Rights or which is manufactured using or incorporating
a process which is covered by any of the Patent Rights.


1.22. "Other Products" means a product manufactured by or for IBM,
its Subsidiaries, Toolkit Licensees and sublicensees that
incorporates a Key Recovery Field Format but does not include
TIS Software and is not otherwise covered by the Patent
Rights.


1.23. "Patent Rights" means all of the following intellectual
property owned, licensable to IBM by TIS, or controlled by
TIS, or its Subsidiaries for so long as the term of such
intellectual property, if any, has not expired by its terms or
been rendered invalid or unenforceable by a tribunal of
competent jurisdiction from which no further appeal was or can
be taken:


a) All patents having claims covering Cryptographic
Information Recovery Technology issued or issuing on
patent applications entitled to an effective filing date
prior to ***, under which patents or the applications
therefor TIS or any of its Subsidiaries now has, or
hereafter obtains, the right to grant licenses to IBM
including, but not limited to the patents identified in
Exhibit "I" and any patents issuing from patent
applications identified in Exhibit "I"; and
_______
*** Confidential Information has been omitted and filed
separately with the Commission.


b) Any divisionals, continuations or continuation in parts or
extensions of any of the aforesaid applications and any
patent reissuing of any of the aforesaid patents.


1.24. "RecoverKey(TM)" means TIS's implementation of KRT which
permits the decryption of an encrypted user information by a
KRC, which does not include KRF Tamper-Detection or KRF
Requirement Mechanisms.


1.25. "RecoverKey-International(TM)" means TIS's implementation of
KRT incorporating: (i) a KRF Requirement Mechanism which
permits a KRF Tamper-Detection Mechanism to function; and/or
(ii) a KRF Tamper Detection Mechanism which enables the
decryption of user information encrypted by TIS Software or
derivative work thereof containing a KRF Requirement
Mechanism.


1.26. "Subsidiary" means a corporation, company or other entity:
more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, now or hereafter,
owned or controlled, directly or indirectly, by a party
hereto, but such corporation, company or other entity shall be
deemed to be a Subsidiary only so long as such ownership or
control exits; or which does not have outstanding shares or
securities, as may be the case in a partnership, joint venture
or unincorporated association, but more than fifty percent
(50%) of whose ownership interest representing the right to
make the decisions for such corporation, company or other
entity is now or hereafter, owned or controlled, directly or
indirectly, by a party hereto, but such corporation, company
or other entity shall be deemed to be a Subsidiary only so
long as such ownership or control exists.


1.27. "TIS Object Code" means the TIS Software in machine-readable
object code form, either in the form provided to IBM by TIS,
or in the form that results from recompiling in whole or in
part of the TIS Source Code after modification thereof.


1.28. "TIS Software" means the software computer program(s)
described as such in Exhibit "H" and the TIS Documentation
associated therewith, if any, including both the TIS Object
Code and TIS Source Code. "TIS Software" shall also include
any modifications, upgrades, and enhancements to such programs
as may be provided by TIS to IBM pursuant to the Maintenance
and Support terms (attached hereto as Exhibit "C"), and
Exhibit "H" shall be updated to reflect such modifications,
upgrades and enhancements.


1.29. "TIS Source Code" means the human-readable, high level
statement versions of the TIS Software written in a source
language used by programmers.


1.30. "Toolkit" means the series or group of specific computer
programs, software, firmware, or equivalent hardware
functionality, identified in Exhibit "A" which, on a
non-exclusive basis, incorporates either (a) TIS Software or
(b) any New Software either of which performs key or
information recovery functions and which is packaged, marketed
and licensed to be used by product developers who incorporate
the key or information recovery functions into such product
developer's products for redistribution, which Toolkit is not
itself permitted or intended for use by End-User Customers. It
is contemplated that this Agreement may encompass additional
Toolkits at some future date. IBM may add or delete Toolkits
to or from Exhibit "A" by providing written notice to TIS and
such additional Toolkits shall be automatically licensed
pursuant to the terms and conditions of this Agreement.


1.31. "Toolkit Derivative" means a derivative work of a Toolkit
compiled into object code that incorporates either (a) any
portion of the TIS Object Code or (b) any New Software.


1.32. "Toolkit Licensee" means any third party which licenses a
Toolkit from IBM, its Subsidiaries, or its Distributors.


2. GRANT OF LICENSES


2.1. Bundled Product Licenses. Without limiting IBM's rights to
bundle its products with software provided by any other
vendor, TIS hereby grants IBM, a non-exclusive,
non-transferable, perpetual and irrevocable (each except and
IBM hereby accepts as provided in Section 10), non-assignable
(except as provided in Section 10.4), worldwide license under
the copyrights and other intellectual property rights related
to the TIS Software, and under all Patent Rights to make, have
made modify, use, import, lease, sell, offer for sale,
license, sublicense and otherwise transfer Bundled Products
and execute, copy, reproduce, have reproduced, perform, and
display Bundled Products and distribute and transmit Bundled
Products, and to practice any method or process involved in
the use or manufacture of such Bundled Products.


2.2 TIS grants to IBM a non-exclusive, non-transferable, perpetual
and irrevocable (each except as provided in Section 10),
nonassignable (except as provided in Section 10.4), worldwide,
royalty free right and license to use and incorporate Key
Recovery Field Formats in any Licensed Products or Other
Products and to distribute and transmit such Licensed
Products, or Other Products and sublicense others to do any of
the foregoing all subject to the limitations on sublicensing
set forth in this Section 2.2 and for Toolkit Licensees,
subject to the limitations in Section 2.11 including the right
of Toolkit Licensees to use and incorporate such Key Recovery
Field Formats in Toolkit Derivatives and to distribute and
transfer such Toolkit Derivatives. Such Key Recovery Field
Formats shall not be considered to be TIS Object Code even if
such TIS Object Code incorporates or uses such formats and
mere use, reproduction and distribution of such Key Recovery
Field Formats does not create a Licensed Product and,
therefore, does not create a corresponding royalty obligation.


2.3. ***


2.4 TIS Source Code License. Subject to the restrictions specified
in Sections 11.13, 2.10 and 2.11, TIS hereby grants IBM, and
IBM hereby accepts for the purpose of creating Licensed
Products, a non-exclusive, perpetual and irrevocable (each
except as provided in Section 10), non-transferable, and
non-assignable (each except as provided in Section 10.4),
worldwide license under the copyrights and other intellectual
property rights (including patents) related to the TIS Source
Code to:


2.4.1. Access, make, have made, execute, modify, use,
reproduce, display, perform, prepare and have
prepared derivative works of TIS Source Code and to
a) compile, and b) develop interfaces and other
software (all such modifications to the TIS Source
Code, interfaces and such other software are referred
to collectively as "Interface Modifications");


2.4.2. Access and review the TIS Source Code in support of
End-User Customers, Distributors, Toolkit Licensees,
KRC Licensees and IBM Recovery Facility Licensees;


2.4.3. Compile the TIS Source Code to create Licensed
Products; and


2.4.4. Maintain Licensed Products and support Distributors,
Toolkit Licensees, KRC Licensees, IBM Recovery
Facility Licensees and End-User Customers.


2.5. Limitations On Source Code Licenses. The limitations set forth
in Section 2.3 shall also be limitations of the license rights
granted in Section 2.4, and IBM shall have no right to use the
TIS Source Code except as expressly set forth under this
Agreement; provided further that IBM, its Subsidiaries and
Distributors are not permitted to sublicense TIS Source Code
to End-User Customers.


2.6. Documentation Licenses. TIS hereby grants to IBM, a worldwide,
non-exclusive, non-transferable, perpetual and irrevocable
(each except as provided for in Section 10), fully paid up
license with respect to the Licensed Products: (i) to use,
display, access, perform, transmit, distribute, execute and
reproduce copies of Documentation, (ii) to prepare or have
prepared derivative works thereof and (iii) to distribute
copies of such unmodified and modified Documentation.


2.7. Title.


2.7.1. Subject to the license rights granted herein, TIS
shall at all times retain full and exclusive right,
title and ownership interest in and to the Patent
Rights and the TIS Software, including in and to any
and all of its patent, trademark, copyright, trade
secret or other proprietary rights therein.


2.7.2. Subject to the license rights granted by TIS herein,
IBM shall retain full and exclusive right, title and
ownership interest in and to any New Software and any
Interface Modifications developed by IBM and any
other products of IBM and in and to any and all of
its patent, trademark, copyright, trade secret or
other proprietary rights therein.
_______
*** Confidential Information has been omitted and filed
separately with the Commission.


2.8. Retained Rights. All rights of TIS not expressly granted to
IBM herein are retained by TIS. There are no implied rights of
TIS related to the New Software or the products owned by IBM.
TIS shall have no implied rights to any portion of the New
Software, a Licensed Product or any other product
independently developed by IBM or licensed by IBM from a
source other than TIS, rights in which are not otherwise
retained by TIS through its ownership of the Patent Rights
and/or the TIS Software.


2.9. Immunity from Suit. TIS hereby grants to End-User Customers
and Distributors of any Bundled Products or any derivative
work thereof and Toolkits a non-exclusive, worldwide,
non-transferable, perpetual and irrevocable (each except as
provided in Section 10), non-assignable (except as provided in
Section 10.4), immunity from suit, and freedom from
infringement liability under the Patent Rights for making,
having made, using, selling, offering for sale, licensing,
leasing or otherwise transferring Bundled Products and
Toolkits either alone or in combination with other products or
apparatus and to practice any method or process involved in
the use of such Bundled Products and derivative works thereof
and Toolkits provided; however that the f ...