Joint Development and Marketing Agreement - CyberGuard Corp. and Information Resource Engineering Inc.
JOINT DEVELOPMENT AND MARKETING AGREEMENT
This Agreement, made and entered into as of the 6th day of August,
1996, by and between CyberGuard Corporation, a Florida corporation
("CyberGuard"), whose address is 2101 West Cypress Creek Road, Fort Lauderdale,
Florida 33309; and Information Resource Engineering, Inc., a Delaware
corporation ("IRE"), whose address is 8029 Corporate Drive, Baltimore, Maryland
21236:
WHEREAS, CyberGuard designs, manufactures and markets network security
products, including the CyberGuard(TM) Firewall, for Internet, intranet and
commercial networking environments;
WHEREAS, IRE has developed, manufactures and markets encrypting
modem-related hardware, software and documentation, and key management services
through its SafeNet Security Center ("S/SC")(TM);
WHEREAS, CyberGuard and IRE desire to jointly develop and market a
proposed product offering consisting of a combination of the CyberGuard
Firewall and IRE SafeNet(TM) products in an interoperable centrally managed
system configured for use with a virtual private network ("VPN") and in
applications that combine VPNs with public Internet access and/or legacy
network use;
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, CyberGuard
and IRE enter into this Agreement in order to provide for the initial phase of
joint development and marketing activities for the proposed joint product
offering.
1. Definitions
As used herein, the following words or phrases have the following
meanings:
1.1 "CyberGuard Products" shall mean the software and manuals to be
incorporated with an Intel-based personal computer to be supplied by a third
party vendor.
1.2 "CyberGuard Property" means any and all Intellectual Property owned by
CyberGuard as of the Effective Date or developed thereafter solely by or on
behalf of CyberGuard, and expressly excludes any IRE Property.
1.3 "CyberGuard Firewall" shall mean a product comprised of an Intel-based
personal computer to be supplied by a third party vendor and software and
manuals supplied by CyberGuard.
1.4 "Effective Date" means August 6th, 1996.
1.5 "Hereof," "herein, and "hereunder" when used in this Agreement shall
refer to the Agreement as a whole, unless the context otherwise requires.
1.6 "Intellectual Property" means any and all inventions, improvements,
enhancements, methods, designs, know-how, trade secrets, software, hardware,
circuits, products, documentation, mask works, layouts, ornamental designs,
trademarks, service marks, trade dress, company names, brand names, logos, and
fictitious names, together with any and all worldwide vested and/or inchoate
rights in and to any or all of the foregoing under any issued, pending and/or
later filed applications for patent or copyright registration, trademark and/or
service mark registration, utility models and/or any other form of protection
of various forms of intellectual and/or industrial
2
<PAGE> 2
property recognized anywhere in the world including any and all rights of
domestic and/or foreign priority, the right to sue and recover damages for
infringements including, without limitation, any past infringements.
1.7 "IRE Property" means any and all Intellectual Property owned by IRE as
of the Effective Date or developed thereafter solely by or on behalf of IRE, and
expressly excludes any CyberGuard Property.
1.8 "IRE/SafeNet Products" shall consist of the SafeNet/Dial, SafeNet/LAN,
SafeNet/Security Center and SafeNet/Security Services.
1.9 "Joint Developments" means any and all Intellectual Property written,
invented, developed or otherwise created jointly by CyberGuard and IRE in the
course of the Project during the Term of this Agreement. Joint Developments
shall not include any CyberGuard Property or any IRE Property.
1.10 "Prepaid License Fee" shall have the meaning as set forth in Section of
this Agreement.
1.11 "Product" or "Products" shall mean any combination of the CyberGuard
Firewall and IRE/SafeNet Products, developed in accordance with this Agreement,
having an interoperable centrally managed system configured for use with a VPN
and for use in applications that combine VPNs with public Internet access
and/or legacy network use and having the characteristics set forth in the
Specifications.
1.12 "Project" means all activity relating to the design, development,
implementation, testing, modification and/or improvement of any Product and/or
components thereof, whether hardware, software, electronic, mechanical or
otherwise.
1.13 "Proprietary Information" means proprietary rights in, and to, all
computer programs, source code, algorithms, software routines, microcode and
other similar data pertaining to CyberGuard Products, the IRE/SafeNet Products,
or the Product, as the case may be.
1.14 "Specifications" means the criteria for and description of the Product
set forth on Exhibit A hereto.
1.15 "Term" means the period from the Effective Date through the Termination
Date.
1.16 "Termination Date" means any date upon which this Agreement shall
terminate in accordance with the terms hereof, or two years from the Effective
Date, whichever is earlier.
2. Joint Development; Prepaid License
2.1 Development of the Product. Subject to the terms and conditions of
this Agreement, CyberGuard and IRE agree to cooperate with and assist each
other in the joint design and development of the Product. The Product is
intended to address the markets and include the functionalities in accordance
with Exhibits A and B attached hereto.
2.2 Enhancements to the Product. IRE and CyberGuard each acknowledge that
from time to time it may be advantageous to develop enhancements to their
respective product offerings that are components of the Product. Each of the
parties hereto agrees that, at the request of the other party, it will work
with the other party to jointly develop enhancements or revisions to the
CyberGuard Firewall and/or the IRE SafeNet products. In the event that the
parties hereto fail to agree on the timing, extent or nature of such
enhancements and/or revisions, or on the sharing of expense with respect to
such enhancements and/or revisions, the party that does not wish to proceed
with such enhancements and/or revisions shall provide to the other party a price
quotation (on an actual time and materials basis) and schedule for implementing
such enhancements or revision. Such enhancements and/or revisions shall be
effectuated upon acceptance of such proposal by the party requesting the
enhancements and/or revisions. In the event that such enhancements and/or
revisions result in any new Intellectual Property, such Intellectual Property
shall become the property of the party or parties which fund(s) the
enhancements and/or revisions.
2
<PAGE> 3
2.3 Prepaid License. CyberGuard acknowledges that IRE, on the Effective
Date, has paid to CyberGuard a prepaid license fee in the amount of $1 million
("Prepaid License Fee"). The Prepaid License Fee shall represent a prepayment
of the amounts that will become due under Section hereof, and shall be
credited to the account of IRE on a dollar-for-dollar basis against such
amounts that otherwise would become due to CyberGuard under Section hereof.
In the event that this Agreement is terminated prior to such credit aggregating
the $1 million, then CyberGuard shall repay to IRE the balance of the $1
million prepaid license fee within one year of the date of such termination,
with interest at the prime rate of interest as is in effect as of the date of
such termination and announced by The Chase Bank, N.A.
3. Manufacture and Assembly
3.1 Delivery of CyberGuard Products to IRE.
3.1.1 Subject to the terms and conditions hereof, CyberGuard shall use
commercially reasonable efforts to supply to IRE such number of
CyberGuard Products as may be required during the term of this
Agreement to fill orders for the Product.
3.1.2 CyberGuard shall sell CyberGuard Products, F.O.B. CyberGuard's
place of business in Fort Lauderdale, Florida, at the prices set forth
on Exhibit C. Payment terms are net 30 days from the date of IRE
shipment to its customers for CyberGuard Products sold.
3.1.3 All prices quoted by CyberGuard are exclusive of all excise,
sales and similar taxes of whatever jurisdiction and of any other
taxes, customs, duties, fees or charges that may be imposed on the
sale of CyberGuard Products to IRE.
3.2 Manufacture of the Product. IRE shall assemble and configure the
Product by integrating the CyberGuard Firewall and IRE/SafeNet Products in
accordance with the Specifications, as such Specifications may be modified or
supplemented in a writing agreed to by the parties hereto from time to time.
The parties agree that the PC platform and the vendor that will supply the
platform will be selected by IRE, from time to time, so long as such selection
meets the technical requirements of CyberGuard. The parties agree that for
this purpose the Intel-based PC platform manufactured by Advanced Logic
Research, Inc. is acceptable to both IRE and CyberGuard.
3.3 Costs of Manufacture. All costs and expenses, including taxes, related
to the assembly and configuration as described in Section of the Product shall
be borne solely by IRE.
3.4 No License Fee. Except for the Prepaid License Fee, the fees payable
in accordance with Section 3.1.2 hereof and a fee payable under the license
described in Exhibit D hereto, no license fee under this Agreement shall be
payable by either IRE or CyberGuard with respect to CyberGuard Products or
IRE/SafeNet Products incorporated into the Product for sale in accordance with
this Agreement.
4. Marketing and Sales
4.1 Terms and Conditions of Sales. The parties agree to negotiate in good
faith and to reach agreement on the following matters within 15 days after the
Effective Date: the initial List Prices for the Product, the discounts that
will be available to the various sales channels, the other terms and conditions
of the sales of the Product to third parties, and the terms, conditions and
pricing under which CyberGuard will act as reseller of the Product. IRE and
CyberGuard agree to cooperate in the future to establish different List Prices
and discounts as needed to address cost changes or market conditions. All
other terms and conditions of sales of the Product that are not addressed in
the mutually agreed-to terms shall be set by IRE.
4.2 Marketing Assistance/Assignment of Sales Personnel. IRE and CyberGuard
shall cooperate in marketing and selling the Product. For each sales lead
generated by or becoming known to a party hereto, the parties agree that for a
preliminary time period to be agreed upon by IRE and CyberGuard, each of them
will use reasonable best efforts to jointly assign a sales team consisting of a
representative from each corporation (consisting of a sales representative from
one corporation and a customer support representative from the other) to pursue
such leads
3
<PAGE> 4
with a view toward generating a sale.
4.3 Marketing Fees. In consideration of the sales support to be provided
by CyberGuard under Section hereof, for each Product sold, in addition to the
payment for CyberGuard Products as set forth in Section hereof, IRE shall pay
CyberGuard a marketing fee as set forth in Exhibit C hereto. The marketing fee
shall be paid monthly based upon payments received by IRE from the purchasers
of the Product during the previous month.
4.4 Order Flow and Fulfillment. Orders for the Product, whether generated
by CyberGuard or IRE, shall be submitted to IRE for fulfillment. IRE shall have
the sole discretion to determine whether to extend credit to any potential
purchaser of a Product. IRE shall process orders for shipment in accordance
with commercially reasonable standards. IRE shall submit invoices to
purchasers for products shipped and shall be responsible for collection of such
invoices. IRE shall provide to CyberGuard written monthly reports that describe
the identity of the purchasers, the Products sold, quantities, discounts and
prices for all sales of Products. Revenue from sales of Product shall be
considered solely the revenue of IRE for all accounting and other purposes.
4.5 Compliance With Laws and Business Practices. It is expressly
understood and agreed that this Agreement, and any exports, sales, transfers, or
any other disposition of CyberGuard Products or IRE/SafeNet Products, to the
extent incorporated in the Product, are subject to the laws and regulations of
the United States. Specifically, contracts and orders placed for the Product
may require advance U.S. Government Export approval or licensing, and, therefore
all such contracts and orders are subject to the receipt of any necessary
approvals and licenses. The parties hereto agree to solicit orders, and IRE
agrees to process and ship orders, in accordance with all applicable laws and
regulations.
5. Customer Support
5.1 Initial Contact. IRE shall be the initial point of contact for
customer support of the Product and shall establish and maintain support
facilities sufficient to provide primary support for the Product. Primary
support requires that IRE provide all necessary resources to provide initial
diagnosis of both hardware and software problems and providing reasonable
assistance to purchasers to resolve problems with the Product.
5.2 Maintenance. Following receipt of support requests from a customer
and an assessment by IRE of the customer's additional support requirements, if
it is determined that the customer requires maintenance services, CyberGuard
shall provide such maintenance for CyberGuard Products and IRE shall provide
such maintenance in all other instances. Each party hereto agrees to maintain
support services sufficient to discharge the duty set forth in the preceding
sentence, and shall provide such services in its usual and customary manner, and
at customary rates, as provided to other customers (which, in all cases, shall
be a commercially reasonable manner and rate). Each party agrees to maintain
the availability of support services for a period of at least two years after
the termination of this Agreement. The term "support," for purposes of this
section , means verifying, diagnosing and resolving hardware and software
problems and delivery of software patches and applicable release notes.
6. Intellectual Property Rights
6.1 Ownership of Intellectual Property; Property Tradename.
6.1.1 CyberGuard Property. Subject to the provisions of Section , the
parties acknowledge and agree that all CyberGuard Property is and shall
remain at all times the exclusive property of CyberGuard, its
successors and assigns.
6.1.2 IRE Property. Subject to the provisions of Section , the
parties acknowledge and agree that all IRE Property is and shall
remain at all times the exclusive property of IRE, its successors and
assigns.
6.1.3 Joint Developments. Joint Developments shall be owned jointly
by CyberGuard and IRE, their successors and assigns, as tenants in
common.
4
<PAGE> 5
6.1.4 Property Tradename. CyberGuard and IRE agree that the Product
shall be branded with a name or names and marks that are acceptable to
both IRE and CyberGuard (the "Product Tradename"). The Product
Tradename shall be used only for purposes of marketing and selling the
Product. Notwithstanding the foregoing, there shall be no restriction
with respect to IRE's use of the "SafeNet" mark for any and all
purposes. The parties agree that the Product Tradename shall be
solely and exclusively IRE Property; provided, however, that
CyberGuard shall have the right to use the Product Tradename to the
limited extent necessary to act as a seller of the Product.
6.2 Cross License. Subject to the terms and conditions contained herein,
CyberGuard hereby grants to IRE a nontransferable, non-exclusive license to use
the CyberGuard Property solely to the extent as is required to develop,
manufacture and market the Product. Subject to the terms and conditions
contained herein, IRE hereby grants to CyberGuard a nontransferable,
non-exclusive license to use the IRE/SafeNet Property solely to the extent as
is required to develop, manufacture and market the Product. Each party hereto
acknowledges and agrees that the other has expended considerable time, effort
and funds in developing and generating the Intellectual Property owned by it,
and has and will continue to have a substantial proprietary interest and
valuable trade secret therein. The license granted by each party to the other
herein is granted as part of the consideration of entering into this Agreement.
6.3 Limitation. CyberGuard shall have no interest in any of the trademarks,
service marks, trade dress, company names, or logos of IRE or the Product;
without limiting the generality of the foregoing clause of this sentence,
CyberGuard shall have no rights with respect to the tradename "SafeNet" and
related tradenames, except to the limited extent necessary to act as a seller
of the Product. IRE shall have no interest in any of the trademarks, service
marks, trade dress, company names, or logos of CyberGuard; without limiting the
generality of the foregoing clause of this sentence, IRE shall have no rights
with respect to the tradename "CyberGuard" and related tradenames, except to
the limited extent necessary to act as a seller of the Product.
6.4 Protection of Intellectual Property.
6.4.1 Each of the parties hereto agrees to make full and complete
disclosure to the other of all Joint Developments it believes may be
copyrightable, patentable or of commercial value.
6.4.2 With respect to all Joint Developments believed by either party
to be copyrightable, patentable or of commercial value, the parties
agree to decide jointly whether and where to apply for copyright,
patent or other appropriate forms of protection. To the extent the
parties agree to protect a Joint Development, the parties shall do so
at their joint expense using counsel as mutually agreed.
6.4.3 In the event the parties elect not to jointly pursue protection
of any Joint Development, either party (the "Electing Party") may seek
such protection in its own name and at its sole expense using counsel
of its choice. As to Joint Developments with respect to which the
Electing Party elects to seek protection, the non-electing party shall
assign its intellectual property rights in and to such Joint
Development to the Electing Party and the Electing Party shall grant
to the non-electing party a fully paid-up, worldwide, extendible,
non-exclusive perpetual license to use the Joint Development and any
and all Intellectual Property therein for any and all purposes.
6.4.4 All expenses of renewing and or maintaining intellectual
property protection of any Joint Development shall be borne by the
party seeking protection, or, in the case of protection sought jointly
by the parties hereto, by both parties sharing equally in such
expenses.
6.5 Enforcement of Intellectual Property Rights.
6.5.1 CyberGuard shall be solely responsible for enforcing any and all
CyberGuard Property, and IRE shall be solely responsible for enforcing
any and all IRE Property, whether or not such CyberGuard Property or
IRE Property is incorporated into the Product. In the event that it is
unclear whether CyberGuard Property or IRE Property is being infringed
upon, the parties shall treat such infringement as if the infringement
were on a Joint Development in accordance with the provisions below.
5
<PAGE> 6
6.5.2 Each party agrees promptly to advise the other of suspected or
known infringements on any Joint Development.
6.5.3 The parties agree to consult as to the appropriate action to be
taken with respect to any infringement of any Joint Development. If
the parties agree to settle or jointly prosecute any claim for
misappropriation and/or infringement, the parties shall share equally
in the costs and expenses, including attorney's fees, incurred in
connection with such prosecution and shall share equally in any
settlements or other recoveries thereon.
6.5.4 If one of the parties hereto does not agree to be responsible
for its full share of the costs and expenses of prosecuting an
infringement claim jointly, then either party may sue it its own name
and at its sole expense and, in such case, the other party agrees to
be joined as a plaintiff for standing purposes and to cooperate as
reasonably requested in prosecuting such action (subject to
reimbursement for reasonable costs, expenses, and attorneys' fees).
In such event, any recovery shall inure to the party prosecuting the
infringement and not to the other, whether or not such other party
joins as a plaintiff as provided herein.
6.6 Defense of Intellectual Property.
6.6.1 CyberGuard shall be solely responsible for defending any and all
claims of third parties against CyberGuard Products for infringement,
and IRE shall be solely responsible for defending any and all claims
of third parties against IRE/SafeNet Products for infringement,
whether or not the CyberGuard Product or IRE/SafeNet Product at issue
in any claim is incorporated into the Product.
6.6.2 Each party agrees promptly to advise the other of claims of
infringement brought or threatened against any Joint Development.
6.6.3 The parties agree to consult as to the appropriate action to be
taken with respect to any claims of infringement by any Joint
Development. If the parties agree to jointly defend any claim for
misappropriation and/or infringement, the parties shall share equally
in the costs and expenses, including attorney's fees, incurred in
connection with such defense. Each party shall bear only such damages
as are awarded against it.
6.6.4 If one of the parties hereto does not agree to be responsible
for its full share of the costs and expenses of defending an
infringement claim jointly, then the other party may defend at its
sole expense and the defending party shall have a lien upon the
Intellectual Property of the other in the full amount of damages and
costs and expenses of defense.
7. Warranties of the Parties to the Other
7.1 Ownership of CyberGuard Products. CyberGuard warrants to IRE that it owns
or otherwise holds all rights necessary to make, use, sell, offer for sale,
advertise and distribute the CyberGuard Products free and clear from all
claims, liens and encumbrances of third parties, except for the obligations
under those agreements and licenses listed on Exhibit D hereto.
7.2 Ownership of IRE Products. IRE warrants to CyberGuard that it owns or
otherwise holds all rights necessary to make, use, sell, offer for sale,
advertise and distribute the IRE/SafeNet Products free and clear from all
claims, liens and encumbrances of third parties.
7.3 Warranty. CyberGuard hereby warrants to IRE that under normal use and
service, CyberGuard Products are free from defects in design and workmanship.
IRE hereby warrants to CyberGuard that under normal use and service,
IRE/SafeNet Products are free from defects in design and workmanship. Each
party warrants to the other that the products delivered by such party for use
in connection with the Product will be complete and in conformity with the
products regularly supplied by each to purchasers and lessees of its products.
CyberGuard's warranty under this Section shall not include a warranty for the
Intel-based PC that is a component of the CyberGuard
6
<PAGE> 7
Firewall and is supplied by a third party vendor.
7.4 Product Warranty. The Product shall be sold with a warranty to be agreed
upon between the parties hereto, essentially to the effect that the Product
will be free from defects in design, workmanship and material, with a time
period (not to exceed one year) and on such other terms and conditions as are
to be agreed upon between the parties. Subject to the limitations on warranty
contained in this Agreement, CyberGuard agrees to assume all liability for
breach of such warranty to the extent that a breach of warranty relates solely
to CyberGuard Products incorporated into the Product. Subject to the
limitations on warranty contained in this Agreement, IRE agrees to assume all
liability for breach of such warranty to the extent that such breach relates to
the assembly or configuration of the Product or solely to IRE/SafeNet Products.
CyberGuard and IRE agree to jointly assume all liability for breach of such
warranty to the extent that a breach of warranty relates to the design of the
Product or other matters that are not covered by either of the two preceding
sentences.
7.5 Limitation on Warranty. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN AND
EXCEPT FOR WARRANTY OF TITLE, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS
OR IMPLIED TO THE OTHER WITH RESPECT TO ITS PRODUCTS. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH HEREIN, THERE ARE NO WARRANTIES OR ANY AFFIRMATIONS OF FACT
OR PROMISES BY EITHER PARTY HERETO AS TO MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, INFRINGEMENT OR OTHERWISE. USE OF SUCH PRODUCTS
CONSTITUTES THE CONSENT OF THE OTHER PARTY HERETO TO ASSUME ALL RISKS OF SUCH
USE AND TO HOLD THE OTHER HARMLESS FOR ANY DAMAGES OR CLAIM OF DAMAGES ARISING
IN ANY MANNER FROM SUCH USE. THE EMPLOYEES OR AGENTS OF NEITHER PARTY HAVE ANY
AUTHORITY TO MAKE ANY WARRANTY OR REPRESENTATION REGARDING THE MANNER OR
BENEFITS OF USE OF ANY PRODUCT OTHER THAN THOSE EXPRESSLY SET FORTH IN THE
SPECIFICATION FOR SUCH PRODUCT.
8. Termination
8.1 Conditions for Termination. This Agreement shall terminate upon any of the
conditions contained in this Section .
8.1.1 This Agreement shall terminate upon the occurrence of a
material breach of this Agreement by either party hereto, provided:
8.1.1.1 The breaching party is given notice by the other party
hereto containing a claim of breach and setting forth the
nature of the breach and circumstances giving rise to such a
claim; and
8.1.1.2 The party to whom notice is given fails to remedy such
circumstances within sixty days after receipt of the notice.
8.1.2 This Agreement shall terminate upon the written notice of either
party to the other that such party is unable to perform as provided
hereunder due to labor disputes, fire, casualties and accidents, acts
of the elements, acts of a public enemy, sovereign acts or regulations
and any other causes beyond the control of such party, its agents,
employees or officers.
8.1.3 This Agreement shall terminate if any of the following events
occur as to one party hereto and the other party does not provide
written notice within thirty days after it becomes aware of such event
that it intends to waive termination of this Agreement: a party makes
an assignment for the benefit of its creditors, requests or permits a
proposal, arrangement or reorganization under or, as an insolvent
debtor, takes the benefit of any legislation now or hereafter in force
for bankrupt or insolvent debtors; a receiver or other officer with
like powers is appointed for a party for a substantial part of its
assets; a lienholder takes possession of a substantial part of a
party's property; or an order is made for the winding up, liquidation,
revocation, or cancellation of incorporation of a party; or a party
ceases carrying on its business as a going concern.
7
<PAGE> 8
8.1.4 This Agreement shall terminate at the expiration of two years
from its Effective Date.
8.2 Effects of Termination/Liability.
8.2.1 If this Agreement is terminated for reasons set forth in
Section 8.1, then a breaching party shall indemnify the non-breaching
party from and against all actual costs and expenses incurred or
resulting from the breach, including reasonable attorneys' fees and
costs of dispute resolution (collectively "Damages"); provided,
however, that neither party hereto shall be liable under any
circumstances, for indirect, special, incidental or consequential
damages; and provided further that the amount of Damages payable by
either party hereto to the other shall be limited to the amount that
the party entitled to such Damages has incurred in connection with the
performance of its obligations under this Agreement or to enforce the
obligations of the other party hereunder.
8.2.2 Except as set forth herein, neither party shall be liable to
the other for any claims, damages, costs, expenses or other charges
incurred in connection with the entering into, performance, breach, or
termination of this Agreement unless specifically provided for herein.
8.2.3 Notwithstanding the Termination Date of this Agreement, the
provisions of Sections 5.2, 6.1, and 9.2 shall survive the Termination
Date indefinitely, and the provisions of Article and Section shall
survive until the second anniversary of the Termination Date. Without
limiting the generality of the foregoing sentence, for two years after
the Termination Date, CyberGuard shall continue to use commercially
reasonable efforts to supply to IRE such number of CyberGuard Products
as may be required for IRE to fulfill its orders for the Product and
IRE shall continue to use commercially reasonable efforts to assemble
and configure the number of Products as may be required for CyberGuard
to fulfill its orders for the Product. The prices to be charged by IRE
and CyberGuard to the other in fulfillment of the obligations stated in
the foregoing sentence are described in Exhibit C and Section hereto.
8.2.4 The parties hereto agree to deposit with mutually agreeable
escrow agents in the case of (i) CyberGuard, a current version of its
software source code which incorporates all necessary and appropriate
improvements, revisions, enhancements, or updates for the source code
for the CyberGuard Products so that at all times, such source code will
correspond with the software actually in use by CyberGuard (subject to
the rights of Santa Cruz Operation, Inc. as set forth in the licenses
and agreements described in Exhibit D hereto); (ii) IRE, all necessary
schematics, diagrams and source code for the IRE/SafeNet Products
(excluding SafeNet/Services) and all documentation reasonably necessary
to manufacture the Product so that at all times, the source code,
schematics and diagrams will correspond with the products and software
actually in use by IRE. The parties hereto agree to negotiate and
enter into escrow agreements to effectuate the purposes of the
foregoing and to place the source codes and, as the case may be,
schematics and diagrams for the CyberGuard Products and IRE/SafeNet
Products in escrow so as to provide each party with access to such
information in the event that the other party does not perform its
obligations under this Agreement.
9. Miscellaneous Provisions
9.1 Assignment. Neither party shall assign this Agreement or any interest
therein without the prior written consent of the other party.
9.2 Confidentiality. Neither party hereto shall, without the express written
consent of the other, provide, disclose, transfer or otherwise make available
any Proprietary Information, or parts or copies thereof, to any third party.
Each party shall ensure that it, its employees and third party agents having
access to any Proprietary Information, or to the CyberGuard Products or
IRE/SafeNet Products of the other, will restrict and control the use, copying,
modification, disclosure, transfer, protection and security of such items, in
accordance with these provisions. Each party hereto agrees to protect all
Proprietary Information with the same standard of care that it uses to protect
its own like information.
8
<PAGE> 9
9.3 Nonsolicitation. The parties hereto agree that they will not, at any time
during the term this Agreement and for a period of one year thereafter,
directly or indirectly, for itself or for any other person, firm, corporation,
partnership, association or other entity, attempt to employ, employ or enter
into any contractual arrangement with any employee or former employee of the
other party, its subsidiaries or predecessors in interest, unless such employee
or former employee has not been employed by the other party, its subsidiaries
or its predecessors in interest, for a period in excess of six months.
9.4 Publicity. The parties hereto agree to cooperate in the drafting of any
press releases or other public disclosure that relates to the Project. Neither
shall make any public disclosure relating to the Project or the other party
without the consent of such other party. Notwithstanding the foregoing, in the
event that a party hereto (the "Disclosing Party") is advised by counsel that
public disclosure relating to the Project or the other party is required, the
Disclosing Party shall provide to the other party a copy of the proposed
disclosure in advance of its public release and shall use all reasonable
efforts to seek the comments of the other party prior to its publication.
9.5 Notices. All notices permitted or required hereunder shall be effective:
upon receipt if delivered personally; on the third business after sending if
sent via registered or certified U.S. mail, return receipt requested; on the
second business day after sending, charges prepaid for next day delivery, via a
nationally recognized overnight delivery service (Federal Express, Purolator
Courier, DHL and UPS are acceptable for these purposes); and upon
acknowledgment of receipt by the party to be charged with notice if sent via
any other means. Notice shall be given to the following address or to such
other address as to which a party shall give notice:
If to CyberGuard:
CyberGuard Corporation
2101 W. Cypress Creek Road
Ft. Lauderdale, FL 33309
Attention: President
If to IRE:
Information Resource Engineering, Inc.
8029 Corporate Drive
Baltimore, MD 21236
Attention: Chairman
9.6 Disputes.
9.6.1 Any controversy or claim related to or arising out of this
Agreement shall be settled by binding arbitration conducted under the
Commercial Arbitration Rules of the American Arbitration Association.
Judgment on the arbitrator's award may be entered and enforced in any
court of competent jurisdiction. Neither party will be precluded from
seeking provisional remedies in the courts including, but not limited
to, temporary restraining orders and preliminary injunctions, to
protect its rights and interests, but such relief will not be sought
as a means to avoid or stay arbitration.
9.6.2 This Section provides the sole recourse for the settlement of
any dispute arising under or in connection with this Agreement. In any
arbitration between the parties, the prevailing party shall be entitled
to reasonable attorneys' fees and all costs of proceedings incurred in
enforcing this Agreement in addition to any other amount of recovery
ordered in such arbitration.
9.6.3 IRE and CyberGuard each agree that if either of them determine
to begin an arbitration action, then such action may be brought only
in the city or county in which the corporate headquarters of the
defendant to such action is located, and each agree that venue is
proper in such location.
9.7 Relationship of the Parties. The parties hereto agree that no agency,
employment, partnership, joint venture or franchise relationship is created or
shall be deemed to be created hereunder. Neither party shall have, and
9
<PAGE> 10
neither shall represent to have, any power, right or authority to bind the other
or to assume or create any obligation or responsibility, express or implied, on
behalf of the other party or in the other party's name, except as herein
expressly permitted.
9.8 Entire Agreement. This Agreement constitutes the entire agreement and
supersedes any prior agreements or understandings between the parties hereto
regarding the subject matter hereof, and no amendment, alteration or waiver of
this Agreement shall be valid or binding unless made in writing and signed by
both parties.
9.9 Governing Law. This Agreement shall be governed by, and interpreted and
construed in accordance with the laws of the State of New York.
9.10 Further Agreements. The parties hereto agree to enter into good faith
negotiations for the purposes of executing and delivering an appropriate
agreement or agreements providing for CyberGuard's ability to resell the IRE
SafeNet family of products and for IRE's ability to resell the CyberGuard
Firewall family of products, now or hereafter developed during the term of this
Agreement.
9.11 Severability. Any provision in this Agreement found to be void, voidable
or unenforceable shall not affect the validity or enforceability of any other
provision in this Agreement. In the event that any provision of this Agreement
shall be declared void, voidable or unenforceable by a court of competent
jurisdiction, said provision shall be deemed to be amended to provide the party
seeking to enforce this Agreement the greatest protection available under law.
10
<PAGE> 11
IN WITNESS WHEREOF the undersigned have executed and delivered this
Agreement as of the date and year first above written.
INFORMATION RESOURCE CYBERGUARD CORPORATION
ENGINEERING, INC.
By: By:
------------------------------ ----------------------------------
Anthony A. Caputo Robert L. Carberry
Its: Chairman, Chief Executive Its: Chairman, President
Officer and President and Chief Executive Officer
EXHIBIT C
PRICING
TO BE AGREED UPON
11
<PAGE> 12
EXHIBIT D
THIRD PARTY AGREEMENTS/LICENSES
CyberGuard's rights to its secure operating system are subject to a
license from Santa Cruz Operation, Inc. ("SCO"), which is the successor to
Novell, Inc. with respect to the operating system. The principal licenses and
agreements under which CyberGuard's rights arise are the following (although
there are 41 supplements to these agreements spanning a 12-year period
concerning the procurement and license of various versions of the operating
system):
License Transfer Agreement between Novell, Inc. and Harris Computer
Systems Corporation dated September 15, 1995.
Software Agreement No. SOFT-000173 between AT&T Technologies, Inc. and
Harris Corporation signed by the parties on October 31, 1984 and October 11,
1984, respectively.
Software Agreement Supplements to Software Agreement No. SOFT-000173
between Harris Corporation and UNIX Systems Laboratories, Inc.
Software Cooperation Agreement between Novell, Inc. and Harris dated
November 30,1994.
12
<PAGE> 13
LIST OF EXHIBITS
EXHIBIT A Product Specifications
EXHIBIT B Joint Marketing Plan
EXHIBIT C CyberGuard Products Price List and Marketing Fees
EXHIBIT D Third Party Agreements/Licenses
13