Exhibit 10.1
LICENSE AGREEMENT
BY AND BETWEEN
UNILOC USA INC.
AND
MIDNET, INC.
This License Agreement (this "Agreement") is made as of May 27, 2005 (the
"Effective Date") by and between Uniloc USA Inc., a Rhode Island corporation
("Uniloc"), and MidNet, Inc., a Delaware corporation ("MidNet").
RECITALS
A. Uniloc has developed patented license management software with machine
locking functionality, which restricts the operation of software applications to
specific machines based on unique machine identifiers.
B. MidNet owns and operates The Middle Network(TM), a private
network-operating environment within a protected private network used by
telecommunications infrastructure companies, application service providers
("ASPs") and their corporate end-users to establish and maintain their own
private network connections (the "Middle Network").
C. MidNet desires to license Uniloc's technology to enable MidNet to offer
its Customers (as defined below) the ability to (i) identify and authenticate
all Devices (as defined below) on the Middle Network and (ii) securely limit
data and content transfer to only those Devices that are registered and
authenticated on the Middle Network, all for purposes of allowing or disallowing
secure communications from one Device to another on the Middle Network.
Accordingly, the parties agree as follows:
AGREEMENT
1. DEFINITIONS.
1.1 "Client Software" means Uniloc's proprietary software with the features
and functionality described on Schedule 1(a) hereto.
1.2 "Customers" means MidNet's customers using The Middle Network,
including telecommunications infrastructure companies, ASPs and their respective
corporate end-users.
1.3 "Devices" means all (i) personal computers utilizing Microsoft
Corporation's operating systems, (ii) personal computers utilizing Apple
operating systems, (iii) personal computers utilizing Unix operating systems,
(iv) personal computers utilizing Linux operating systems and (v) videophones
utilizing embedded operating systems of a type and version to be designated in
addendums to this Agreement.
1.4 "Documentation" means the technical documentation setting forth the
functionality of the Uniloc Software as delivered by Uniloc.
1.5 "First Level Support" means (i) all direct contact with Customers in
response to support requests regarding the Middle Network, netAnchor and/or the
Uniloc Software, (ii) logging of any Software Error and (iii) technical
diagnosis, verification, troubleshooting and remediation of any Software Error
to the extent possible based on MidNet's knowledge base.
1.6 "Intellectual Property" means all copyrights, patents, know-how, trade
secrets and other intellectual property rights, but excluding any trademark,
tradename, service ▇▇▇▇ or the like, underlying or encompassing the Uniloc
Software.
1.7 "netAnchor(TM)" means Uniloc's proprietary authentication system that
is comprised of the Uniloc Software and shall act as a gateway to the Middle
Network to allow or disallow secure communications from one Device to another,
by means of (i) the identification and authentication of all Devices (as defined
below) on the Middle Network and (ii) securely limiting data and content
transfer to only those Devices that are registered and authenticated on the
Middle Network.
1.8 "Secondary Support" means technical analysis of Software Errors
provided by Uniloc to MidNet to remediate Software Errors that cannot be solved
through First Level Support.
1.9 "Server Software" means Uniloc's proprietary software with the features
and functionality described on Schedule 1(b) hereto.
1.10 "Software Error" means any material failure of the Uniloc Software to
operate in accordance with the Documentation and the features and functionality
described on Schedule 1(a) and Schedule 1(b) hereto.
1.11 "Uniloc Software" means the Client Software and the Server Software.
2. DEVELOPMENT FEES; IMPLEMENTATION OF UNILOC SOFTWARE.
2.1 DEVELOPMENT FEES. Within five working days of the execution of this
Agreement, MidNet shall pay to Uniloc a nonrefundable development fee in the
amount of Seventy Five Thousand Dollars ($75,000). This initial fee will be for
the development cost related to integrating the Microsoft Windows operating
system and the Apple OSX operating system. Within five working days of the
successful testing of the trial version of the Uniloc Software, as mutually
agreed to between Uniloc and MidNet, MidNet shall pay to Uniloc a nonrefundable
development fee in the amount of Forty Thousand Dollars ($40,000). This
secondary fee will be for the development cost related to integrating the Unix
and Linux operating systems. Within five working days of a formal request by
MidNet to integrate a videophone (the make, model and operating system of which
is to be specified by MidNet and agreed to by Uniloc), MidNet shall pay to
Uniloc a nonrefundable development fee in the amount of Thirty Five Thousand
Dollars ($35,000) for each make and model of videophone. All development fees
are to be paid by delivery of a check or a wire transfer to an account
designated by Uniloc.
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2.2 DEVELOPMENT. Upon execution of this Agreement and payment of the fees
referenced in Section 2.1 above, Uniloc shall commence development and
modification of the Uniloc Software to achieve the functionality described in
Schedule 1(a) and Schedule 1(b), as provided on Schedule 2 attached hereto. In
connection with the foregoing, MidNet will provide Uniloc with adequate access
to MidNet personnel and such other resources as may be reasonably requested by
Uniloc from time to time.
3. LICENSE OF UNILOC SOFTWARE. Subject to the terms and conditions of this
Agreement, Uniloc hereby grants to MidNet, under the Intellectual Property and
only for the Term (as defined below in Section 10), a nonexclusive license
(except as set forth below) to use, and to sublicense the use of, the Uniloc
Software in object code form only to Customers solely as part of netAnchor in
connection with their use of the Middle Network. Notwithstanding anything to the
contrary herein, none of the rights granted under this Section 3 shall be
transferable without the prior written approval of Uniloc. Notwithstanding the
foregoing, the license granted hereunder shall be exclusive during the
"Exclusivity Period" (as defined below) within MidNet's company field of
Internet service providers and specialty network service providers, with respect
to (i) videophones (for all markets except the financial and banking markets)
and (ii) video/web cameras which are registered through personal computers
utilizing the Microsoft, Apple, Linux, and Unix operating systems (for the
purposes of videoconferencing only, for all markets except the financial and
banking markets). For purposes hereof, the "Exclusivity Period" shall mean the
period commencing on the date hereof and ending on December 31, 2006; provided,
however, that if MidNet fails to achieve the interim sales targets set forth on
Exhibit B hereto in any of the calendar quarters described on Exhibit B, then
the Exclusivity Period shall terminate (and the licenses granted hereunder with
respect to videophones and video/web cameras shall automatically and immediately
become non-exclusive); provided, further, that if MidNet maintains its exclusive
license with respect to videophones and video/web cameras during the entire
Exclusivity Period, then the parties shall, in good faith, negotiate the terms
(which shall be reasonable and comparable relative to other Uniloc opportunities
within MidNet's field of exclusivity) upon which the Exclusivity Period may be
extended for the entire Term of this Agreement.
4. OWNERSHIP AND RESTRICTIONS.
4.1 UNILOC SOFTWARE. Title to and ownership of the Uniloc Software,
Intellectual Property, Documentation and any underlying or accompanying
proprietary information delivered by Uniloc to MidNet, as between MidNet and
Uniloc, shall be and at all times remain with Uniloc or its designees, as
applicable. Any corrections, bug fixes, enhancements, updates and modifications
to the Uniloc Software, Intellectual Property or Documentation shall be owned by
Uniloc. MidNet hereby acknowledges that this Agreement is a license agreement
and not an agreement for sale.
4.2 RESTRICTIONS. All rights not expressly licensed herein are reserved to
Uniloc. Without limiting the generality of the foregoing sentence and other than
as expressly permitted in this Agreement, MidNet is prohibited from doing, or
permitting or causing others (including, without limitation, its Customers) to
do, any of the following:
(i) alter or modify the Uniloc Software or Documentation; or
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(ii) publish, rent, sell, loan, lease, distribute, redistribute,
transmit, license, sublicense, use, perform, display or otherwise transfer,
assign or exploit the Uniloc Software or Documentation whether by operation of
law or otherwise, with or without consideration, and through any means, except
as part of netAnchor used in connection with the Middle Network.
4.3 CUSTOMER RIGHTS. MidNet shall have the responsibility for contracting
with Customers in connection with their right to use the Uniloc Software as part
of netAnchor in connection with their use of the Middle Network. In doing so,
MidNet shall require its Customers to sign a document that contains provisions
that are as protective of Uniloc's rights in the Uniloc Software as are
contained herein and that names Uniloc as a third party beneficiary of such
provisions, with right of enforcement. Without limiting the foregoing, Uniloc
shall not be liable to any Customer for any representations, warranties or
agreements made by MidNet to any Customer (even if Uniloc is aware of such
representation, warranty or agreement). The parties acknowledge and agree that
Uniloc's obligations and liabilities with respect to the Uniloc Software
provided pursuant to this Agreement are contained solely in this Agreement.
5. SUPPORT. MidNet shall have sole responsibility to provide all First
Level Support to Customers. MidNet shall maintain such staffing and other
operational capacity as reasonably necessary to perform such First Level
Support. In the event that a Software Error cannot be corrected through such
First Level Support, MidNet shall promptly refer the Software Error to Uniloc
for Secondary Support. In no event shall Uniloc be obligated to contact
Customers directly to provide support. MidNet shall provide Uniloc with a
monthly summary report of all customer service and technical support requests
received by MidNet.
6. PAYMENTS AND ROYALTIES.
6.1 UNILOC SOFTWARE LICENSE FEES. For each Device authenticated on behalf
of a Customer via netAnchor in connection with the Customer's use of the Middle
Network, MidNet shall pay a royalty to Uniloc, as calculated in the manner
described on Exhibit A hereto (each, a "License Fee"). License Fees shall be
remitted to Uniloc on a monthly basis, within 30 days after the end of each
month during the Term hereof. The License Fees paid to Uniloc in a given month
shall include the License Fees earned during the prior thirty (30) days. MidNet
shall also submit reports to Uniloc within fifteen (15) days after the end of
each month, which report shall state the total amount of License Fees earned by
Uniloc from each Customer during the prior thirty (30) days, together with a
calculation upon which such license fees were based. MidNet's report is subject
to Uniloc's right to audit pursuant to Section 6.3 below. Notwithstanding the
foregoing, MidNet shall be obligated to pay all unpaid License Fees to Uniloc on
or prior to the date of termination of this Agreement.
6.2 BILLING; COLLECTIONS. MidNet will be solely responsible for all
Customer billing and collections associated with their use of the Middle
Network, including the authentication of Devices on the Middle Network. Without
limiting the foregoing, MidNet shall be obligated to pay the License Fee with
respect to each Device authenticated on the Middle Network, regardless of
whether it bills and/or collects fees from the Customer with respect to such
authentication.
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6.3 AUDIT RIGHTS. MidNet shall maintain records and accounts sufficient to
verify the accuracy of the Customer License Fees required to be paid to Uniloc
pursuant to Section 6.1 and shall maintain such records and accounts for a
period of at least two (2) years after the period to which the records and
accounts relate. MidNet shall permit an independent auditor under
confidentiality obligations, at Uniloc's sole expense and upon prior written
notice, to examine relevant MidNet records and accounts to determine whether the
amounts reflected on the reports delivered by MidNet under Section 6.1 are
accurate; provided, however, that any such examination may occur no more
frequently than once per calendar year, shall be conducted during regular
business hours in such a manner as not to unreasonably interfere with MidNet's
business activity. The auditor shall be limited to reporting to Uniloc the
amount, if any, of any underpayment or overpayment of the amounts due to Uniloc
pursuant to this Agreement. In the event that any errors in payment shall be
determined, such errors shall be corrected by appropriate adjustment in payment.
In the event of underpayment of more than five percent (5%) of the amount due
for the audited period, MidNet shall reimburse Uniloc the reasonable charges of
the audit that identified the underpayment.
6.4 PAYMENTS. All payments made hereunder (including the development fee
referenced in Section 2.1 above) shall be made in United States currency. 7.
WARRANTIES; DISCLAIMER OF WARRANTIES; LIMITATION OF LIABILITY.
7.1 WARRANTIES.
(a) Each party hereby represents and warrants to the other party that it
has the power and authority to enter into this Agreement.
(b) Uniloc hereby warrants to MidNet that it has all necessary rights,
title and interest to grant to MidNet the licenses set forth in this Agreement
and that the exercise of such licenses by MidNet shall not violate or infringe
the intellectual property rights of any third party or conflict with any other
agreement or arrangement to which Uniloc is bound.
7.2 DISCLAIMER OF WARRANTIES. OTHER THAN THE WARRANTIES SET FORTH IN
SECTION 7.1 ABOVE, THE UNILOC SOFTWARE, DOCUMENTATION AND ANY OTHER ACCOMPANYING
MATERIALS ARE PROVIDED BY UNILOC UNDER THIS AGREEMENT ON AN "AS IS" BASIS.
UNILOC SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
EVEN IF IT HAS BEEN APPRISED OF SUCH PURPOSE.
7.3 LIMITATION OF LIABILITY. NEITHER PARTY WILL, UNDER ANY CIRCUMSTANCES,
BE LIABLE TO THE OTHER PARTY FOR LOSS OF PROFITS, LOSS OF REVENUE, OR ANY
EXEMPLARY, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF WHATEVER
NATURE ARISING FROM OR RELATING TO THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES, PROVIDED THAT THIS LIMITATION OF
LIABILITY WILL NOT APPLY TO A BREACH OF SECTION 9 BELOW. NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN, IN NO EVENT SHALL UNILOC'S LIABILITY UNDER THIS
AGREEMENT EXCEED THE AMOUNT OF FEES RECEIVED BY UNILOC UNDER SECTION 6 ABOVE.
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8. INDEMNIFICATION.
8.1 UNILOC OBLIGATIONS. Subject to Section 7.3 above, Uniloc shall
indemnify, hold harmless and defend MidNet against any claim, suit or proceeding
and any damages or liability therefrom or settlement thereof (including
reasonable fees of attorneys and related costs) based upon a breach of the
obligations, covenants, warranties and terms and conditions of this Agreement by
Uniloc. In the event that any claim, suit or proceeding arises in connection
with a claim that the Uniloc Software violates or infringes the intellectual
property rights of any third party, then, without limiting its obligations under
this Section 8.1, Uniloc shall have the option of taking any of the following
actions: (i) obtaining a license for MidNet and its Customers to continue the
use of or to sell the infringing Uniloc Software, (ii) replacing or modifying
the infringing Uniloc Software so as to be substantially equal to the
functionality of the Uniloc Software but non-infringing or (iii) terminating
this Agreement effective immediately upon MidNet's receipt of Uniloc's written
notice thereof. Notwithstanding the foregoing, Uniloc shall have no liability
for any costs, damages or liability to the extent resulting from (and MidNet
shall indemnify, hold harmless and defend Uniloc against any claim, suit or
proceeding and any damages or liability to the extent resulting from): (i) the
use of the Uniloc Software in combination with the Middle Network, in cases
where such damages or liability would not have resulted from the use of the
Uniloc Software by itself; (ii) the use of any software not furnished by Uniloc,
or (iii) the use of the Uniloc Software in a manner for which it was not
designed.
8.2 MIDNET OBLIGATIONS. Subject to Section 7.3 above and in addition to the
matters specified in Section 8.1 above, MidNet will indemnify, hold harmless and
defend Uniloc against any claim, suit or proceeding and any damages or liability
therefrom or settlement thereof (including reasonable fees of attorneys and
related costs) based upon any breach of the obligations, covenants, warranties
and terms and conditions of this Agreement by MidNet.
8.3 INDEMNIFICATION PROCEDURES. A party ("indemnifying party") will not be
obligated to indemnify, hold harmless or defend the other party ("indemnified
party") unless the indemnified party (a) provides prompt notice of the
commencement of the claim, suit or proceeding for which indemnification is
sought (except that the indemnifying party will still be obligated to provide
such indemnification to the extent that the indemnifying party is not prejudiced
by indemnified party's failure to give such prompt notice), (b) cooperates with
the indemnifying party, and (c) allows the indemnifying party to control the
defense, provided that (i) the indemnified party may, at its option and expense,
participate and appear on an equal footing with the indemnifying party in the
claim, suit or proceeding and (ii) neither party may settle a claim, suit or
proceeding without approval of the other party, which approval will not be
unreasonably withheld or delayed.
9. CONFIDENTIAL INFORMATION. "Confidential Information" of each party means
information that is disclosed by such party to the other party in connection
with this Agreement and conveyed (a) in written, graphic, machine-readable or
other tangible form and conspicuously marked "confidential," "proprietary" or in
some other manner to indicate its confidential nature; or (b) orally, provided
that such information is designated as confidential or proprietary at the time
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of such oral disclosure and is confirmed in writing as confidential within ten
(10) days after the oral disclosure (collectively, "Confidential Information").
Confidential Information includes, without limitation, the existence and terms
and conditions of this Agreement, the Uniloc Software and the Documentation. A
party will not use, or disclose to a third party, the Confidential Information
of the other party, except for the purposes contemplated by, or in exercise of
the rights and licenses granted under, this Agreement and in all cases on a need
to know basis only. Notwithstanding the above, information will not be deemed
Confidential Information if the information (i) is or becomes generally known to
the public through no fault of the recipient; (ii) was known to the recipient at
the time of disclosure, as reasonably evidenced by the recipient's written
records; (iii) was independently developed by the recipient, as reasonably
evidenced by the recipient's written records; or (iv) becomes known to the
recipient from a source other than the disclosing party without breach of the
disclosing party's rights. A party may also disclose Confidential Information of
the other party to the extent (A) authorized in writing by the other party, or
(B) required by applicable law or a court of competent jurisdiction provided
that the other party shall be notified so as to provide such party with every
available opportunity to challenge such disclosure. Each party agrees that a
breach by the other party of Section 9 may cause the non-breaching party
irreparable damage, for which the award of damages would not be adequate
compensation. Consequently, the non-breaching party is entitled to injunctive
and other relief in equity to prevent or terminate a breach or threatened breach
of Section 9, in addition to any other relief available at law or in equity.
10. TERM AND TERMINATION.
10.1 TERM. This Agreement shall be effective as of the Effective Date and
shall expire on the fifth (5th) anniversary of the Effective Date of this
Agreement (the "Term"); provided, however, that this Agreement shall
automatically renew for successive one (1) year terms unless either party
provides to the other party written notice of nonrenewal no less than sixty (60)
days prior to the expiration of the then current term.
10.2 TERMINATION. This Agreement may be terminated prior to the end of the
then current term as follows: (i) by either party upon thirty (30) days written
notice to other party of a breach of this Agreement and such breach is not cured
within such notice period, (ii) immediately upon written notice in the event of
the other party's breach of Section 9 above or insolvency, bankruptcy,
suspension of business, assignment of assets for the benefit of creditors,
voluntary dissolution, or appointment of a trustee for all or any substantial
portion of its assets or (iii) immediately by Uniloc upon written notice in the
event of MidNet's breach of the provisions of Section 4.2 or Section 2.1 above.
10.3 EFFECT OF TERMINATION. Neither party shall be liable to the other
party for any damages arising out of the nonrenewal or termination of this
Agreement pursuant to this Section 10; provided, that the nonrenewal or
termination of this Agreement shall not effect the rights of either party
accruing hereunder pursuant to any breach of this Agreement by the other party
prior to such termination. The following provisions shall survive the expiration
or termination of this Agreement: Sections 4, 6, 7, 8, 9, 10 and 11. Upon
expiration or termination of this Agreement, MidNet will immediately destroy or
erase all copies of the Uniloc Software and Documentation and, upon Uniloc's
request, promptly confirm destruction of the same by signing and returning to
Uniloc an affidavit of destruction in a form acceptable to Uniloc.
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11. MISCELLANEOUS.
11.1 GOVERNING LAW. This Agreement will be interpreted according to the
laws of the State of California without regard to its choice-of-law rules.
11.2 RELATIONSHIP OF PARTIES. The relationship of the parties will be that
of independent contractors. Neither party will have the right to bind, represent
or act for the other party. The parties will have no agency, partnership, joint
venture or fiduciary duties to each other. Except as otherwise expressly
provided herein, each party will bear its own costs and expenses, including
travel expenses, in connection with performing its obligations and exercising
its rights in connection with this Agreement.
11.3 ASSIGNMENT. This Agreement may not be assigned or delegated by MidNet
without the prior written approval of Uniloc, which shall not be withheld
without reason. An assignment shall be deemed to occur, without limitation, upon
any merger, reorganization, sale of all or substantially all the assets or other
change in control of MidNet. Uniloc may assign this Agreement in its sole
discretion upon notice to MidNet. In the event of any merger, reorganization,
sale of all or substantially all of the assets or other change in control of
Uniloc, the parties shall negotiate in good faith the terms upon which MidNet
would obtain a blanket, long term MidNet license to the Uniloc Software,
provided, that, if the terms for such a license cannot be agreed upon by the
parties, this Agreement shall continue pursuant to its terms following any such
merger, reorganization, sale of substantially all of the assets or other change
in control of Uniloc. Subject to the foregoing, this Agreement is binding on the
parties and their successors and assigns.
11.4 ARBITRATION; ATTORNEYS FEES. Any disputes arising between the parties
relating to, arising out of or in any way connected with this Agreement or any
term or condition hereof, or the performance by either party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
promptly presented to the Chief Executive Officer of Uniloc and the Chief
Executive Officer of MidNet for resolution and in the event that such officers
cannot promptly resolve a dispute within ten (10) business days, then such
dispute shall be finally resolved by binding arbitration. Whenever a party shall
decide to institute arbitration proceedings, it shall give written notice to
that effect to the other party. Any arbitration hereunder shall be conducted
under the Commercial Arbitration Rules of the American Arbitration Association.
Each such arbitration shall be conducted by one arbitrator appointed in
accordance with such Rules. Any such arbitration shall be held in Orange County,
California, USA. The arbitrator shall have the authority to grant specific
performance. Judgment upon the award so rendered may be entered in any court
having jurisdiction or application may be made to such court for judicial
acceptance of any award and an order of enforcement, as the case may be. In any
action to enforce this Agreement, the prevailing party will be entitled to costs
and reasonable attorneys' fees.
11.5 WAIVER. Any waiver by either party of a breach by the other party of
any provision contained herein must be in writing. The waiver of a breach will
in no way be construed as a waiver of any succeeding breach of such provision or
a waiver of the provision itself.
11.6 SEVERABILITY. If any provision of this Agreement is unenforceable or
invalid under any applicable law or is so held by applicable court decision,
such unenforceability or invalidity will not render this Agreement unenforceable
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or invalid as a whole, and, in such event, such provision will be changed and
interpreted so as to best accomplish the objectives of such provision within the
limits of applicable law or applicable court decision.
11.7 FORCE MAJEURE. Non-performance of either party will be excused to the
extent that performance is rendered impossible by strike, fire, flood,
government act or similar causes, beyond the control, and not caused by the
negligence, of the non-performing party.
11.8 NOTICES. Any notices required or permitted to be sent hereunder shall
be deemed delivered if hand delivered, or if mailed, postage prepaid, by
registered or certified mail, return receipt requested, by an overnight delivery
service, or by facsimile or other electronic means and shall be addressed as
follows:
if to MidNet: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
if to Uniloc: Uniloc USA Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
A party may designate a new address to which notices required or permitted
to be given pursuant to this Agreement shall thereafter be transmitted by giving
written notice to the other party as provided herein. Each notice transmitted in
the manner described in this Section 11.8 shall be deemed to have been given,
received, and become effective for all purposes at the time it shall have been
(i) delivered to the addressee as indicated by the return receipt (if
transmitted by mail), the affidavit of the messenger (if transmitted by personal
delivery), the records of the overnight delivery service (if transmitted by such
service) or the answer back or call back (if transmitted by telecopier or other
electronic means) or (ii) presented for delivery to the addressee as so
indicated during normal business hours, if such delivery shall have been refused
for any reason.
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11.9 ENTIRE AGREEMENT; COUNTERPARTS. This Agreement constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all prior or contemporaneous representations, discussions,
negotiations, conditions and agreements, whether written or oral. This Agreement
may be amended only by a writing signed by an authorized representative of the
party against which enforcement is sought. This Agreement may be executed in one
or more counterparts, each deemed an original and together one and the same
instrument.
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The foregoing Agreement is hereby executed as of the date first written
above.
MidNet, Inc. Uniloc USA Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------ ------------------------
Title: President/Chief Executive Officer Title: Chief Operating Officer
Attention: ▇▇▇▇ ▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
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SCHEDULE 1(A)
CLIENT SOFTWARE
The Client Software will be downloaded as part of MidNet's software upgrade and
patching cycle, and will run on the Microsoft Windows, Apple OSX, Unix and Linux
operating systems, and embedded-system videophones (makes and models to be
specified by MidNet and agreed to by Uniloc) utilizing the pSOS operating system
(or a similar dedicated videophone operating system).
The Client Software will have the following capabilities:
* The ability to sample a minimum of 10 Device parameters (SAMPLE SET) that
can be used to produce a uniquely identifiable hardware fingerprint (or
machine ID) of the Device for use in an authentication process.
* This strategy will be used to ensure that no single device parameter
can be used as a target for hacking and resulting spoofing of Device
identity.
* The ability to send this fingerprint in a form that changes with each query
for verification from the Server Software.
* The communications will also be small in size (i.e. less than three
times the description of the sample set).
* The communications will also use customized scrambling.
* SSL communications may be required.
* The Client Software itself will be encrypted and contain anti tampering and
anti reverse engineering measures to ensure code integrity.
* The code will be developed into as small and as compact an install image as
possible to facilitate the memory restrictions of the Device and to ensure
minimal communications traffic during initial distribution or subsequent
upgrade.
* The Client Software will also have the ability to digitally query any
Device connected to the videophone via its network pass through connection
to allow the Middle Network to disallow connection if there is suspicion
that a computing device is attached to the phone for the purpose of copying
the communications.
* The ability to detect and report a set of tampering attempts in the form of
digital tripwires that can be used to alert MidNet to hacking activity.
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SCHEDULE 1(B)
SERVER SOFTWARE
The Server Software will be supplied with SQL tables and commands using a
platform to be negotiated and will have the following capabilities:
* The ability to receive and decipher secure data from the Client Software
and use it along with a set of usage rules to determine if communications
will be allowed from a specific Device or not.
* The ability to make decisions relating to changes to the client Device that
will be allowed without triggering an authentication failure. This logic is
called "tolerance" and can be set by MidNet as part of server settings.
Tolerance can be set to soft, for example where one or two components of
the Device can be replaced without triggering a failure (i.e. due to
servicing or hardware upgrade of the Device) or can be set to hard where
any changes to the Device triggers a failure or any variation in between.
* The ability to receive and interpret hacking activity flags to alert MidNet
of tampering of the Client Software on a specific Device.
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SCHEDULE 2
DEVELOPMENT
Trial Edition:
a. Uniloc shall develop a trial edition of the Uniloc Software that will be
designed to handle up to 100 client devices (which, for this purpose, shall be
personal computers utilizing Microsoft Corporation's Windows operating system
only) from a standalone server to be plugged into a closed network for testing
purposes. The server will be designed as a core component of a database schema
that will allow scaling to support partial or full network usage based on a roll
out of 500,000+ Devices over a year.
b. For the limited trial, unless SSL is used, Uniloc will not implement
full encryption and anti-piracy measures to facilitate evaluation, monitoring
and testing by MidNet prior to and in anticipation of producing a fully
protected locked-down version of the Client Software and communications that
would otherwise preclude ability to be assessed and evaluated. If SSL is
determined to be required for the limited trial, evaluation tools will be
provided to facilitate evaluation, monitoring and testing by MidNet.
c. Upon completion of the trial edition of the Uniloc Software (which is
anticipated to occur within four (4) weeks from the date of execution of this
Agreement, assuming MidNet provides access to the personnel and resources
referenced in Section 2.2 of the Agreement in a timely manner), Uniloc and
MidNet will test the trial version of the Uniloc Software.
Production Version:
Upon successful testing of the trial version of the Uniloc Software, as
mutually agreed to between Uniloc and MidNet, Uniloc will develop a production
version of the Uniloc Software which will handle personal computers utilizing
either Microsoft Corporation's Windows or Apple OSX operating systems (which is
anticipated to occur within six (6) weeks from approval by MidNet of the trial
edition), which production version will implement full encryption and
anti-piracy measures and will allow scaling to support 500,000+ Devices.
Additional Devices:
Upon approval by MidNet of the production version of the Uniloc Software
supporting personal computers utilizing Microsoft Corporation's Windows
operating system and Apple's OSX operating system, Uniloc will subsequently
develop production client software to support personal computers utilizing Unix
and Linux operating systems, and embedded-system videophones (makes and models
to be specified by MidNet and agreed to by Uniloc) utilizing the pSOS operating
system (or a similar dedicated videophone operating system). These subsequent
developments will be executed serially (with exception to the dedicated
videophone development which may be initiated by MidNet at any time) and are
anticipated to be delivered according to the following schedule:
Unix: Week 6
14
Linux: Week 10
Videophones For each make and model of videophone to be supported: 6 weeks
from mutual agreement in writing between the parties of the
make and model of the videophone and receipt by Uniloc of the
$35,000 development fee.
15
EXHIBIT A
LICENSE FEES
a. License Fees shall be calculated as follows:
Total Number of Devices License Fee Payable
Authenticated on Middle Network With Respect to Each Device
During the Term Authenticated
--------------- -------------
Fewer than 3,000,000 Devices $1.50 per Device
3,0000,000 - 5,999,999 Devices $0.50 per Device
More than 5,999,999 Devices $1.00 per Device
b. The License Fees set forth above are based on the assumption that MidNet will
charge its Customers $4.00 per each Device authenticated via netAnchor in
connection with the Customer's use of the Middle Network. In the event that
MidNet charges its Customers a fee greater than $4.00 per each Device so
authenticated, then the rates set forth above shall be increased
proportionately. Any such increases shall be reflected in the reports submitted
to Uniloc pursuant to Section 6.1. In no event shall the rates set forth above
be decreased.
c. The parties agree to review the License Fee rates and pricing structure set
forth above on a yearly basis, commencing on the two (2) year anniversary of the
Effective Date of this Agreement.
16
EXHIBIT B
EXCLUSIVITY REQUIREMENTS
a. Exclusivity shall be maintained during the Exclusivity Period subject to
MidNet achieving the following number of Device Authentications:
Period Devices Authenticated
------ ---------------------
2005 500,000 units
January through March, 2006 500,000 units
April through June, 2006 500,000 units
July through September, 2006 500,000 units
October through December, 2006 1,000,000 units
17
