Sample Business Contracts

Master Development and License Agreement - Security Dynamics Technologies Inc. and VeriSign Inc.

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between Security Dynamics Technologies, Inc., a Delaware corporation having its
principal place of business at 20 Crosby Drive, Bedford, Massachusetts 01730
("SDTI"), and VeriSign, Inc., a Delaware corporation having its principal place
of business at 1390 Shorebird Avenue, Mountain View, California 94043
("VERISIGN"), and is effective as of September 30, 1997 (the "EFFECTIVE DATE").

     WHEREAS, VeriSign has developed and owns certain computer software relating
to digital certificate authentication and local registration authority; and

     WHEREAS, SDTI desires to engage VeriSign to customize such software to
SDTI's specifications and to obtain from VeriSign a license to distribute the
software in conjunction with other SDTI products, and VeriSign desires to accept
such engagement and grant such licenses on the terms set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
promises and undertakings set forth herein, and for other good and valuable
consideration, SDTI and VeriSign agree as follows:


     1.1   "ACCEPTANCE CRITERIA" means the criteria for the acceptance of the
           Developed Technology set forth in the Specifications.

     1.2   "DELIVERABLE" means any of the deliverable items set forth on the
           Statement of Work.

     1.3   "DEVELOPED TECHNOLOGY" means the work product, including the
           Technology and Documentation, to be developed by either party
           hereunder, as more fully set forth in the Specifications.

     1.4   "DEVELOPMENT EQUIPMENT" means the development hardware, software and
           other equipment and supplies provided to VeriSign by SDTI hereunder,
           if any, as more particularly described in Exhibit A attached hereto
           and incorporated herein by this reference.

     1.5   "DEVELOPMENT PERIOD" means the period commencing on the Effective
           Date and ending on the date of acceptance by SDTI of the last
           Deliverable under a Statement of Work.

     1.6   "DOCUMENTATION" means the documentation necessary to use and support
           the Developed Technology, together, in each case, with any
           modifications or enhancements thereto.

     1.7   "END-USER" The ultimate user of the Developed Technology who
           purchases or licenses the Product for use in the regular course of
           such customer's business and not for resale or further sublicensing
           by such customer.

     1.8   "ERROR CORRECTION" means a modification to VeriSign's Pre-Existing
           Technology, the Developed Technology or a Deliverable that
           establishes material conformity to the current Specifications and
           Documentation or eliminates the adverse effect of a Non-Conformance
           in the operation of the Developed Technology or Deliverable,
           including but not limited to bug fixes and work-arounds.

     1.9   "INTELLECTUAL PROPERTY RIGHTS" means all worldwide: (a) patents,
           patent applications and other patent rights; (b) rights associated
           with works of authorship, including copyrights, copyright
           applications, copyright restrictions, Trademarks, registrations and
           applications for registration of Trademarks, mask work rights, mask
           work applications and mask work registrations; (c) rights relating to
           the protection of trade secrets and confidential information; (d)
           rights analogous to those set forth herein and any other proprietary
           rights relating to intangible property; and (e) divisions,
           continuations, renewals, reissues and extensions of the foregoing (as
           applicable) now existing or hereafter filed, issued, or acquired.

     1.10  "NON-CONFORMANCE" means a failure of the Developed Technology to
           conform materially to the Specifications or to materially perform
           correctly when measured against the Specifications.

     1.11  "OBJECT CODE FORM" means a form of software code resulting from the
           translation or processing of Source Code by a computer into machine
           language or intermediate code, which thus is in a form which would
           not be convenient for human understanding of the program logic, but
           which is appropriate for execution or interpretation by a computer.

     1.12  "PRE-EXISTING TECHNOLOGY" means Technology owned by either party
           prior to the Development Period, as identified in the applicable
           Statement of Work. Any and all Pre-Existing Technology may be
           incorporated into the Developed Technology will still be "Pre-
           Existing Technology."

     1.13  "PRODUCT" means any product developed, manufactured, marketed, sold
           or distributed by SDTI which consists of or incorporates any
           Developed Technology.

     1.14  "SOURCE CODE FORM" means a form in which a computer program's logic
           is easily deduced by a human being with skill in the art, such as a
           printed listing of the program or a form from which a printed listing
           can be generated.

     1.15  "SPECIFICATIONS" means the document or documents that characterize
           and define the logical, functional, performance and operational
           aspects of the Developed Technology, as initially set forth on
           Exhibit B attached hereto and incorporated herein by this reference.

     1.16  "STATEMENT OF WORK" or "SOW" means a written instrument that meets
           the following requirements:

           (a)  Includes substantially the following statement: "This is a
                Statement of Work under the Master Development and License
                Agreement between SDTI Systems, Inc. and VeriSign, Inc., dated
                effective ____ , 1997;"

           (b)  Is signed on behalf of both parties by their authorized

           (c)  Contains the following five mandatory items:

                    (i)    Description and/or Specifications of the services to
                           be performed and the Deliverables to be delivered to
                    (ii)   The name and address of a Project Manager for each of
                           SDTI and VeriSign;
                    (iii)  The amount, schedule, and method of payment to be
                           made to VeriSign, including NRE fees, license fees,
                           and royalties, if any;
                    (iv)   The time schedule, framework or dates for performance
                           and for delivery of the Deliverables (the
                           "MILESTONES"); and
                    (v)    Completion and Acceptance Criteria for the
                           Deliverables; and

           (d)  When applicable, includes:

                    (i)    Provisions for written and/or oral progress reports
                           by VeriSign;

                    (ii)   Detailed functional and technical specifications and
                           standards for all services and Deliverables,
                           including quality standards, overall systems
                           architecture, project plan, identified dependencies
                           or contingencies and critical path issues;
                    (iii)  Documentation standards;
                    (iv)   Lists of any special equipment, including Development
                           Equipment, to be procured by VeriSign or provided by
                           SDTI for use in performance of the work;
                    (v)    Identification of Pre-Existing Technology; and
                    (vi)   Such other terms and conditions as may be mutually
                           agreeable between the parties.

     1.17  "TECHNOLOGY" means technical information, knowledge, ideas, concepts,
           processes, procedures, designs, schematics, works of authorship,
           inventions and discoveries owned by or licensed to a party hereto and
           subject to intellectual property protection and any and all
           Intellectual Property Rights pertaining thereto.

     1.18  "THIRD PARTY TECHNOLOGY" means software or other Technology owned by
           a third party and used in connection with the Developed Technology as
           set forth in Exhibit D attached hereto and incorporated herein by
           this reference.

     1.19  "DERIVATIVE" means, as applicable: (a) any computer software (whether
           in source or object code form) port, work, product, service,
           improvement, modification, alteration, enhancement, new version,
           translation, adaptation, design, concept, materials and
           documentation, in any medium, format or form whatsoever, that is
           derived in any manner, directly or indirectly, from a pre-existing
           work or any part or aspect thereof or that utilizes or incorporates
           such a pre-existing work or any part or aspect thereof; (b) all
           "derivative works," as defined in the copyright law of the United
           States and (c) all materials and documentation related to each of the

     1.20  "TRADEMARKS" means trademarks, service marks, trade names, trade
           dress and logos.

     1.21  "UPDATE" means a new revision of the Developed Technology that
           includes bug fixes, corrections and minor modifications.

     1.22  "ENHANCEMENT" means a new revision of the Developed Technology that
           includes enhancements and new functionalities.


     2.1   ISSUANCE OF STATEMENTS OF WORK. The initial Statement(s) of Work
           agreed to by both parties is attached to this Agreement. Additional
           Statements of Work, regardless of whether they relate to the same
           subject matter as the initial Statement of Work, shall become
           effective upon execution by authorized representatives of both
           parties and shall then also be attached to this Agreement.

     2.2   CHANGES TO STATEMENTS OF WORK. Changes in any Statement of Work or in
           any of the Specifications or Deliverables under any Statement of Work
           shall become effective only when a written change request is executed
           by authorized representatives of both parties. All change requests
           with respect to this Agreement, any Statement of Work, or any
           Specifications or Deliverables must be accepted by both parties.

     2.3   DEVELOPMENT EFFORT. Each party agrees to use commercially reasonable
           efforts to undertake and complete development of the Deliverables in
           accordance with the Milestone Schedule and to timely deliver all the
           Deliverables. Certain tasks to be undertaken by a party may require
           information from the other party or completion of certain tasks by
           the other party prior to a party undertaking its tasks. Each party
           agrees that any delay in a party meeting the Milestones that is
           caused by the failure of the other party to timely provide such
           required information or complete performance shall not constitute a
           default under this Agreement.


     3.1   PRE-EXISTING TECHNOLOGY. Each party acknowledges and agrees that, as
           between the parties, each party is and shall remain the sole and
           exclusive owner of all right, title, and interest in and to its Pre-
           Existing Technology, and all associated Intellectual Property Rights,
           and that this Agreement does not affect such ownership. Each party
           acknowledges that it acquires no rights under this Agreement to the
           other party's Pre-Existing Technology other than the limited rights
           specifically granted in this Agreement.

           acknowledges and agrees that, as between the parties, each party is
           and shall remain the sole and exclusive owner of all right, title,
           and interest in and to any Derivatives to its Pre-Existing Technology
           regardless of who created such Derivatives, and all associated
           Intellectual Property Rights therein and thereto. Each party
           acknowledges that it acquires no rights under this Agreement to the
           Derivatives of the other party's Pre-Existing Technology other than
           the limited rights specifically granted in this Agreement.

     3.3   DEVELOPED TECHNOLOGY. Subject to the ownership rights specified in
           Sections 3.1 and 3.2 above, each party shall own that portion of the
           Developed Technology that it solely created. Except in the event that
           portions of the Developed Technology (a) constitute Derivatives of
           SDTI Pre-Existing Technology, or (b) are solely created by SDTI, then
           VeriSign shall be the sole and exclusive owner of the Developed
           Technology. To the extent that the items in (a) and (b) above are
           incorporated into the Developed Technology, SDTI shall grant, and
           hereby does grant, to VeriSign a royalty-free, perpetual and
           irrevocable, worldwide, non-exclusive license to use, reproduce and
           distribute such code as part of the Developed Technology.
           Notwithstanding anything else in this Section 3.3, SDTI acknowledges
           and agrees that all Developed Technology created by the SDTI
           personnel on site at VeriSign, as set forth in the initial Statement
           of Work, and all Intellectual Property Rights therein, shall be owned
           solely and exclusively by VeriSign.

     3.4   PORTS. In the event that SDTI creates ports of the Developed
           Technology to new platforms pursuant to SDTI's license rights under
           Section 4.2(a) ("PORTS") and VeriSign agrees to support the Port,
           then SDTI will promptly provide the Ports to VeriSign in Source Code
           and Object Code form, and SDTI hereby assigns all Intellectual
           Property Rights in the Ports to VeriSign.

     3.5   ASSIGNMENT AND FURTHER ASSURANCES. Each party agrees to cooperate
           with the other party and take all reasonable actions required to vest
           and secure in such party all ownership rights, including all
           Intellectual Property Rights, as specified in this Section 3.


     4.1   SDTI PRE-EXISTING TECHNOLOGY. On the terms and subject to the
           conditions set forth herein, for the period necessary for VeriSign to
           have access to SDTI's Pre-Existing Technology in order to accomplish
           its obligations under this Agreement, SDTI grants to VeriSign a
           nonexclusive, nontransferable, royalty-free, limited license under
           SDTI's Intellectual Property Rights in the SDTI Pre-Existing
           Technology to:

           (a)  use, copy and modify SDTI Pre-Existing Technology for internal
                purposes only and solely to the extent necessary to develop the
                Developed Technology; and

           (b)  incorporate SDTI Pre-Existing Technology to the extent necessary
                into the Developed Technology for use and distribution by SDTI.

     4.2   DEVELOPED TECHNOLOGY. On the terms and subject to the conditions set
           forth herein, VeriSign grants to SDTI a non-exclusive, royalty-free,
           perpetual, worldwide license, under VeriSign's Intellectual Property
           Rights in its Pre-Existing Technology to the extent that it is
           incorporated in the Developed Technology and the Developed Technology
           to: (a) use, copy, modify, and prepare derivative works of the
           Developed Technology in Source Code form and Object Code; and (b)
           copy and distribute the Developed Technology solely in Object Code
           Form to End-Users in combination with substantial added value in the
           form of the Products. Except as expressly permitted herein, SDTI may
           not (i) disassemble, decompile or reverse engineer the Developed
           Technology, (ii) use the Developed Technology in any manner to
           perform service bureau, time sharing, certification authority, or
           other computer services to third parties or permit End Users to do
           the same, or (iv) perform or permit any sublicensing or other
           distribution of the Developed Technology in Source Code form. SDTI's
           rights in the Developed Technology licensed hereunder shall be
           limited to those expressly granted in this Agreement.

     4.3   ACCESS TO TECHNOLOGY. VeriSign will provide SDTI first-to-market
           access to new technologies which it develops that, in VeriSign's
           reasonable discretion, have relevant impact to SDTI's business.
           Similarly, SDTI will provide VeriSign with advanced notification of
           security products and services it intends to launch and will make
           reasonable efforts to utilize VeriSign technology, products and
           services where appropriate. SDTI understands that VeriSign has a
           similar arrangement with the following companies listed: Microsoft,
           Netscape and Cisco Systems. VeriSign will notify and provide access
           to these new technologies to SDTI and the above companies at the same
           time. Any such disclosure by VeriSign to SDTI shall be subject to the
           provisions of Section 10 of this Agreement.
     4.4   TRADEMARKS.

           (a)  TRADEMARK LICENSE. During the term of this Agreement, VeriSign
                hereby grants to SDTI a nonexclusive, nontransferable license to
                advertise the Product and Developed Technology under the
                VeriSign trademarks, trade names, logos and/or slogans listed on
                Exhibit G ("TRADEMARKS") as updated by VeriSign and agreed to in
                writing by SDTI from time to time. Such use must reference the
                Trademarks as being owned by VeriSign. The rights granted to
                SDTI in this license will terminate upon any termination or
                expiration of this Agreement. Upon such termination or
                expiration, SDTI will no longer make any use of any Trademarks.

           (b)  TRADEMARK OWNERSHIP. SDTI recognizes that VeriSign is the owner
                of all right, title and interest in the Trademarks. SDTI's use
                of the Trademarks shall inure to the benefit of VeriSign. SDTI
                shall not at any time acquire any rights in the Trademarks by
                virtue of any use it may make of the Trademarks. SDTI shall not
                during the term of this Agreement, or thereafter, attack the
                title or any rights of VeriSign in and to the Trademarks or
                attack the validity of the Trademarks. SDTI shall not register
                in any country any name or mark resembling or confusingly
                similar to any of the Trademarks.

           (c)  QUALITY STANDARDS. SDTI shall use the Trademarks in accordance
                with VeriSign's trademark usage guidelines specified in Exhibit
                G, as amended by VeriSign from time to time and agreed to by
                SDTI in writing. Upon VeriSign's request, SDTI shall furnish to
                VeriSign free of cost a reasonable number of each printed item
                of advertising, packaging, or other promotional material bearing
                the Trademarks so that VeriSign may monitor SDTI's compliance
                with the trademark usage guidelines set forth in Exhibit G, as
                amended by VeriSign from time to time. If any of VeriSign's
                Trademarks are to be used in conjunction with SDTI's or another
                party's trademarks, on or in relation to the Product or
                Developed Technology, then VeriSign's Trademarks shall be
                presented legibly, but nevertheless separated from the other, so
                that each appears to be a trademark in its own right, distinct
                from the other mark.


     4.5   OTHER AGREEMENTS BY SDTI.. SDTI may not distribute the Developed
           Technology to any End User unless such End User is subject to an end
           user license agreement with SDTI that: (i) protects VeriSign's
           proprietary rights in the Developed Technology to at least the same
           degree as the terms and conditions of this Agreement; (ii) requires
           that such End User not reverse engineer, reverse compile or
           disassemble the object code for the Developed Technology; (iii)
           requires such End User to comply fully with all applicable laws and
           regulations in any of its dealings with respect to the Developed
           Technology; (iv) makes no representations or warranties on behalf of
           VeriSign; and (v) does not grant any rights to such End User beyond
           the scope of this Agreement. SDTI will promptly provide VeriSign with
           reasonable access to such agreements following VeriSign's request.

     4.6   U.S. GOVERNMENT AGENCIES. If SDTI distributes the Developed
           Technology to any agency of the United States government, SDTI shall
           require the government to agree that the Developed Technology is
           "commercial computer software" or "commercial computer software
           documentation" and that, absent written agreement to the contrary,
           the government's rights with respect to the Developed Technology are
           limited by the term of the End User license agreement, pursuant to
           FAR Section 12.212(a) and/or DFARS Section 27.702-1(a) as applicable.


     5.1   PROJECT MANAGERS. Each party will appoint a single project manager
           ("PROJECT MANAGER") and will promptly provide written notification to
           the other party of the name and contact information for its Project
           Manager. Each Project Manager will act as the principal liaison
           between the parties with respect to his or her party's respective
           performance under this Agreement and will identify to the other
           party, and provide contact information for, the other individuals
           responsible for specific tasks hereunder.
     5.2   DELIVERY OF DELIVERABLES ON TARGET DATES. VeriSign shall use its
           commercially reasonable efforts to deliver to SDTI the Deliverables
           in accordance with the Milestones set forth on the Statement of Work.

     5.3   DELIVERY OF ERROR CORRECTIONS. During the term of this Agreement and
           for the period of VeriSign's warranty set forth in Section 13.1
           below, VeriSign shall deliver to SDTI any Error Corrections for the
           Developed Technology promptly upon their development.

     5.4   DELIVERY OF DEVELOPED TECHNOLOGY. Upon completion of the Developed
           Technology, VeriSign shall deliver it to SDTI for final evaluation
           and testing pursuant to Section 8.

     6.1   USE OF DEVELOPMENT EQUIPMENT. VeriSign shall not use or permit use of
           the Development Equipment for any purpose other than development of
           the Developed Technology. The Development Equipment shall: (i) remain
           the personal property of SDTI; (ii) be subject to inspection by SDTI
           upon reasonable notice and during VeriSign's normal business hours;
           and (iii) be kept free and clear of liens and encumbrances. VeriSign
           shall use and maintain the Development Equipment in a careful and
           proper manner and shall be responsible for all loss or damage which
           occurs while the Development Equipment is in its possession. Upon the
           termination of the Development Period, VeriSign shall return the
           Development Equipment to SDTI in good condition, reasonable wear and
           tear excepted, as may be directed by SDTI (and SDTI shall bear the
           corresponding freight costs).

     6.2   THIRD PARTY TECHNOLOGY. VeriSign shall obtain and secure the
           worldwide rights to use and distribute any Third Party Technology
           that is necessary for the Developed Technology to operate 

           without Non-Conformance and to be used, manufactured and distributed
           by SDTI pursuant to the terms of this Agreement.

     6.3   TESTING. For so long as VeriSign provides maintenance services
           pursuant to Section 12.2, VeriSign shall perform and be responsible
           for the testing and debugging of all releases of the Developed
           Technology and shall provide to SDTI at no charge all Error
           Corrections to the Developed Technology. VeriSign shall provide all
           assistance necessary for SDTI fully to test and evaluate the
           Developed Technology and each Deliverable to determine whether it
           substantially conforms to the Specifications, including the
           Acceptance Criteria.

     6.4   SCHEDULE CHANGES. In the event VeriSign determines that a particular
           Milestone will likely be missed, it promptly shall give notice to
           SDTI setting forth in reasonable detail the reason for the
           anticipated delay, any corrective measures VeriSign intends to
           undertake and the estimated revised Milestone.


     7.1   SUPPORT AND INFORMATION. SDTI will provide any engineering support,
           technical training and other resources, including SDTI Pre-Existing
           Technology, reasonably requested by VeriSign to assist VeriSign with
           a Statement of Work ("RESOURCES"). SDTI shall not be obligated to
           provide specific Resources or specific levels of any Resource unless
           agreed in writing by SDTI.

     7.2   DEVELOPMENT EQUIPMENT. SDTI shall provide to VeriSign the Development
           Equipment listed in Exhibit A. The Development Equipment shall be
           shipped to VeriSign freight prepaid.

     7.3   SDTI UPDATES. SDTI may, in its sole discretion, update the SDTI Pre-
           Existing Technology, if any, provided to VeriSign if a new release
           becomes available during the Development Period, subject to
           VeriSign's written agreement to any modification to the
           Specifications necessitated by such new release.

     7.4   CHANGES. If, at any time, SDTI desires to modify the Specifications
           or the Statement of Work, SDTISDTI shall present a written request to
           VeriSign describing such modifications using VeriSign's standard
           Project Change Request Form (each such request is a "CHANGE ORDER"),
           which VeriSign may approve in its sole discretion. VeriSign will
           promptly review each such Change Order and determine, in VeriSign's
           reasonable discretion, whether such Change Order can be accomplished
           by VeriSign, and whether the performance of such Change Order will
           increase the costs and/or delay the original schedule for creating
           the Deliverables. If the parties agree to the Change Order (including
           without limitation any such increased costs and/or delays estimated
           by VeriSign), the Change Order will be deemed to amend and become
           part of the Statement of Work and VeriSign will perform the
           Consulting Services in accordance with such amended Statement of

           for so long as VeriSign's CA services and products are superior or
           competitive (at a minimum, in terms of pricing, performance and
           features) with similar products available in the market, as
           determined by SDTI in its sole discretion, SDTI will purchase and use
           VeriSign's CA products and services for its internal use only.

     7.6   To the extent SDTI personnel are provided or take action at
           VeriSign's site pursuant to this Agreement, such personnel shall be
           provided solely at SDTI's cost, and upon VeriSign's reasonable
           request, SDTI shall provide evidence of satisfaction of all state and
           federal employment laws and worker compensation requirements in
           connection with such personnel. Such personnel shall, at VeriSign's
           reasonable request, execute confidentiality agreements containing
           terms and conditions substantially similar to those in Section 10,
           and shall agree to 

           abide by all reasonable VeriSign visitor regulations. SDTI
           understands that VeriSign operates a secure facility and that there
           are portions of such facility that SDTI's personnel will not be
           permitted to enter unless entry to such facility is necessary in
           order to allow SDTI to exercise its rights hereunder. In the event
           that VeriSign determines that any SDTI personnel has breached a
           VeriSign visitor regulation, SDTI shall, upon receipt of notice from
           VeriSign, immediately cause such person to be removed from VeriSign's
           facility and provide a replacement.


           Unless otherwise stated in the Statement of Work, SDTI shall advise
           VeriSign in writing within forty five (45) days of receipt of the
           completed Developed Technology for testing or evaluation whether SDTI
           accepts or rejects such Developed Technology in accordance with the
           Acceptance Criteria. In the event that SDTI does not respond in
           writing within such forty five (45) day period, then the Developed
           Technology shall be deemed accepted. If SDTI rejects the Developed
           Technology, then SDTI shall provide to VeriSign a written statement
           of the reasons for such rejection. Upon rejection, VeriSign shall
           prepare an Error Correction within twenty (20) business days and
           resubmit such Developed Technology to SDTI for evaluation pursuant to
           this Section. In the event the Developed Technology still fails to
           conform to the Acceptance Criteria after two (2) attempts to correct
           and resubmit the Developed Technology, the matter shall be escalated
           to the respective management of the parties for resolution. If the
           parties cannot reach an agreement in good faith after such executive
           escalation, either party may pursue whatever remedies it may have
           under this Agreement, at law or in equity.

     9.1   LICENSE FEE. SDTI shall make the nonrefundable license payments to
           VeriSign in accordance with Exhibit E attached hereto. Additional
           license fees for subsequent projects shall be as set forth in the
           applicable Statement of Work.

     9.2   MAINTENANCE AND SUPPORT. In exchange for the receive maintenance and
           support services and Updates and Enhancements for the Products from
           VeriSign under Section 12, SDTI will pay VeriSign the nonrefundable
           amounts specified in Exhibit E for such services.

     9.3   PAYMENT TERMS. SDTI will make all initial payments to VeriSign when
           specified in Exhibit E. SDTI will make all ongoing payments to
           VeriSign due under Exhibit E within thirty (30) days after receipt of
           VeriSign's invoice, unless otherwise set forth in a SOW. Payments
           made under this Agreement after their due date will incur interest at
           a rate equal to 1.5% per month or the highest rate permitted by
           applicable law, whichever is lower.

     9.4   TAXES. All amounts payable under this Agreement are exclusive of all
           sales, use, value-added, withholding, and other taxes and duties.
           SDTI will pay all taxes and duties assessed in connection with this
           Agreement and its performance by any authority within or outside of
           the U.S., except for taxes payable on VeriSign's net income. VeriSign
           will be promptly reimbursed by SDTI for any and all taxes or duties
           that VeriSign may be required to pay in connection with this
           Agreement or its performance.

     9.5   RECORDS AND AUDITS. SDTI shall keep all proper records and books of
           account and all proper entries therein relating to its distribution
           of Products under this Agreement. To the extent that SDTI is to pay
           ongoing royalties under the terms of the initial or a subsequent SOW,
           on no less than 30 days' prior written notice and no more than once
           annually, VeriSign may request that an independent certified public
           accountant audit the applicable records during regular business hours
           at SDTI's offices to verify statements rendered hereunder. VeriSign
           shall bear the expenses of any such audit; provided that if such
           audit reveals that royalties paid by SDTI for any period are less

           than 95% of what should have been paid by SDTI, on VeriSign's
           request, SDTI shall pay the costs of such audit in addition to
           royalties then due and owing to VeriSign.


     10.1  CONFIDENTIAL INFORMATION. VeriSign and SDTI agree and acknowledge
           that in order to further the performance of this Agreement, they will
           be required to disclose to each other certain confidential
           information which will be identified as such in writing or, if
           disclosed orally, will be reduced to writing within thirty (30) days
           thereafter ("Confidential Information"). The Developed Technology
           will be regarded as Confidential Information whether or not it is
           identified in writing as "Confidential."

     10.2  PROTECTION OF CONFIDENTIAL INFORMATION. The receiving party agrees to
           protect the confidentiality of the disclosing party's Confidential
           Information with at least the same degree of care that it utilizes
           with respect to its own similar proprietary information, including
           without limitation agreeing:

           (a)  Not to disclose or otherwise permit any other person or entity
           access to, in any manner, the Confidential Information or any part
           thereof in any form whatsoever, except that such disclosure or access
           shall be permitted to an employee, agent or contractor of the
           receiving party requiring access to the Confidential Information in
           the course of his or her engagement in connection with this Agreement
           and who has signed and agreement obligating the employee, agent or
           contractor to maintain the confidentiality of the confidential
           information of third parties in the receiving party's possession;

           (b)  To notify the disclosing party promptly and in writing of the
           circumstances surrounding any suspected possession, use or knowledge
           of the Confidential Information or any part thereof at any location
           or by any person or entity other than those authorized by this
           Agreement; and

           (c)  Not to use the Confidential Information for any purpose other
           than as explicitly set forth herein.

     10.3  EXCEPTIONS. Nothing in this Section 10 shall restrict the receiving
           party with respect to information or data, whether or not identical
           or similar to that contained in the Confidential Information, if such
           information or data: (a) was rightfully possessed by the receiving
           party before its received from the disclosing party; (b) is
           independently developed by the receiving part without reference to
           the disclosing party's information or data; (c) is subsequently
           furnished to the receiving party by a third party not under any
           obligation of confidentiality with respect to such information or
           data, and without restrictions on use or disclosure; (d) is or
           becomes available to the general public otherwise than through any
           act or default of the receiving party; or (e) is required to be
           disclosed by the receiving party by law or government regulation.

     10.4  INJUNCTIVE RELIEF. Because the unauthorized use, transfer or
           dissemination of any Confidential Information provided hereunder may
           diminish substantially the value of such materials and may
           irreparably harm the disclosing party, if a receiving party breaches
           the provisions of this Section 10, the disclosing party shall,
           without limiting its other rights or remedies, be entitled to
           equitable relief, including but not limited to injunctive relief.


           Each party may retain third parties ("Contractors") to furnish
           services to it in connection with the performance of its obligations
           hereunder and permit such Contractors to have access to the
           Confidential Information of the other but only to the extent and
           insofar as reasonably required in connection with the performance of
           such party's obligations under this Agreement; provided that 

           all such Contractors shall be required by the applicable party to
           execute a written agreement: (a) sufficient to secure compliance by
           the Contractors with such party's obligations of confidentiality
           concerning Confidential Information set forth in Section 10; and (b)
           acknowledging the Contractor's obligation to assign all work product
           to such party in connection with performance hereunder.


     12.1  SUPPORT. Upon payment of the support fees set forth in Exhibit E,
           VeriSign shall provide the documentation and support to SDTI as set
           forth on Exhibit F for the Term of this Agreement. Additional or
           different support and documentation and the corresponding support fee
           may require for subsequent projects and shall be as set forth in the
           applicable Statement of Work. Support services hereunder shall
           commence on the Effective Date, shall extend for a period of three
           (3) years, and shall continue for successive annual terms, which may
           be terminated by either party upon (60) days notice prior to the end
           of the then current term. Further, SDTI may terminate the support
           services set forth herein at any time upon sixty (60) days written
           notice to VeriSign.
     12.2  MAINTENANCE. For a period of three (3) years from the Effective Date,
           upon payment of the maintenance fees set forth in Exhibit E, VeriSign
           shall provide to SDTI all Enhancements and Updates to the Developed
           Technology that VeriSign may, in its sole discretion, choose to
           develop. VeriSign shall deliver all Updates to SDTI promptly upon
           their creation. SDTI shall receive such Enhancements simultaneous
           with their release to VeriSign's similarly situated customers, and in
           any event shall deliver such available Enhancements at least once per
           year. VeriSign agrees to use its reasonable efforts to synchronize
           its release of Enhancements and Updates to SDTI with SDTI's release
           cycles of its Products. Upon delivery, Updates and Enhancements shall
           be deemed part of and incorporated into the Developed Technology.
           After the three (3) year maintenance period, the parties agree to
           negotiate in good faith for the terms of extended maintenance
           services as set forth in this Section. VeriSign agrees that it shall
           offer maintenance rates to SDTI that are no less favorable than the
           fees offered to any other third party purchasing similar products at
           similar volumes under similar commercial terms and conditions.

     13.1  WARRANTY RE DEVELOPED TECHNOLOGY. VeriSign represents and warrants to
           SDTI that (i) each Deliverable hereunder developed by VeriSign will
           substantially conform to and perform in accordance with the
           applicable Specifications and Documentation when delivered and (ii)
           the Developed Technology, when delivered by VeriSign to SDTI, will
           substantially conform to and perform in accordance with the
           Specifications and Documentation, be free of material defects in
           design, both for a period of ninety (90) days following acceptance by
           SDTI of the applicable Deliverable (the "Warranty Period"). During
           the Warranty Period, as SDTI's exclusive remedy for breach of the
           above warranties, VeriSign shall promptly correct all Errors and
           shall otherwise provide to SDTI, free of charge, the maintenance and
           support services described in Section 12 above.

     13.2  AUTHORIZATION AND ORIGINALITY. VeriSign represents and warrants that
           it has the right to enter into this Agreement, and that there exist
           no prior commitments or other obligations which prevent VeriSign from
           making all of the grants and undertakings provided for in this
           Agreement. VeriSign warrants that VeriSign has the right to make the
           assignments and grant the licenses granted herein. SDTI represents
           and warrants that it has the right to enter into this Agreement, and
           that there exist no prior commitments or other obligations which
           prevent SDTI from making all of the grants and undertakings provided
           for in this Agreement. SDTI warrants that SDTI has the right to make
           the assignments and grant the licenses granted herein.


           AND NONINFRINGEMENT. No oral or written information or advice given
           by VeriSign's employees or representatives which is not contained in
           this Agreement shall create a warranty or in any way increase the
           scope of VeriSign's obligations.

           representation or warranty concerning any SDTI Pre-Existing
           Technology licensed to VeriSign hereunder. The SDTI Pre-Existing
           Technology is licensed on an "AS IS" basis and solely for the
           convenience of VeriSign in performing its obligations hereunder.





           (a)  VeriSign will indemnify, defend and hold SDTI harmless from and
                against any and all losses, damages, liabilities and expenses
                (including but not limited to reasonable legal fees, settlement
                costs, judgments and awards) to the extent resulting from or
                incurred in connection with any claim or legal proceeding
                brought against SDTI and based on a claim that a Deliverable,
                the Developed Technology, or any part thereof, or SDTI's use,
                manufacture or distribution thereof, infringes any issued United
                States patent or copyright or misappropriates any trade secret
                of a third party except to the extent that such claim arises out
                of (a) any SDTI Pre-Existing Technology or any modification to
                the Deliverable or Developed Technology made by SDTI or not made
                by VeriSign; or (b) any combination of the foregoing with
                Technology not provided or recommended in writing by VeriSign.
                The remedies set forth in this Section 15.1 shall be SDTI's sole
                and exclusive remedy, and VeriSign's sole and exclusive
                obligations with regard to third party claims of intellectual
                property infringement.

           (b)  VERISIGN'S EFFORTS. Should SDTI's use and/or distribution of the
                Developed Technology be enjoined or become the subject of a
                claim of infringement, VeriSign shall use all reasonable
                commercial efforts to either (a) procure for SDTI the right to
                continue to use and distribute the Developed Technology , as the
                case may be, or (b) replace or modify the Developed Technology,
                as the case may be, to make it non-infringing without materially
                changing the form, fit, operation and function of the Developed
                Technology. If none of such alternatives is reasonably possible,
                then the use and distribution of the particular Developed
                Technology may be terminated at the option of VeriSign without

                further obligation or liability except as otherwise provided
                herein. In the event of such termination, VeriSign shall refund
                to SDTI any and all monies paid by SDTI with respect to such
                Developed Technology less depreciation for use on a straight
                line basis amortized over _____ years.

           (c)  CONDITIONS TO INDEMNIFICATION. The foregoing indemnity is
                conditioned on (i) prompt written notice by SDTI of any claim or
                proceeding subject to indemnity; (ii) VeriSign's sole control of
                the defense and settlement of any claim under this Section and
                (iii) all reasonable cooperation and assistance by SDTI party in
                the defense and settlement of such claim at VeriSign's expense.

     15.2  SCOPE OF SDTI INDEMNIFICATION. Subject to Section 15.1, SDTI shall
           defend, indemnify and hold VeriSign harmless from any and all
           damages, liabilities, costs and expenses (including but not limited
           to attorney's fees) incurred by VeriSign arising out of (i) claims
           described in items (a) and (b) of Section15.1(a), or (ii) any acts or
           omissions of SDTI in connection with their activities under this
           Agreement. As a condition to such defense and indemnification,
           VeriSign will provide SDTI with prompt written notice of the claim,
           the opportunity to assume the defense of the claim at SDTI's expense,
           and information and assistance, at SDTI's expense, in connection


     16.1  TERM OF AGREEMENT. This Agreement shall commence on the Effective
           Date and continue in perpetuity unless terminated as set forth below
           (the "Term").

     16.2  TERMINATION FOR CAUSE. If either party commits a material breach of
           the terms and conditions of this Agreement, the other party may
           terminate this Agreement upon forty-five (45) days' prior written
           notice to the defaulting party describing in reasonable detail such
           breach unless, within such forty-five (45)day period after receipt of
           such Notice, all breaches specified therein shall have been remedied.

     16.3  TERMINATION FOR INSOLVENCY EVENT. To the fullest extent permitted by
           law, this Agreement may be terminated at the option of the
           terminating party upon written notice to the other party upon the
           occurrence of any of the following events with respect to the other
           party: (i) a receiver is appointed for such party or its property;
           (ii) such party makes a general assignment for the benefit of its
           creditors; (iii) such party commences, or has commenced against it,
           proceedings under any bankruptcy, insolvency or debtor's relief law,
           which proceedings are not dismissed within sixty (60) days; or (iv)
           such party is liquidated or dissolved.

           of Sections 3, 4.2, 4.3, 10, 12, 13, 14, 15, 16, and 17 shall survive
           any expiration or termination of this Agreement.

     16.5  RETURN OF MATERIALS UPON TERMINATION. Upon termination or expiration
           of this Agreement, all materials containing the SDTI Pre-Existing
           Technology or Confidential Information of SDTI shall be returned
           promptly to SDTI or destroyed and certified as same by an officer of
           VeriSign. Unless otherwise provided in this Agreement, upon
           termination of this Agreement, all materials containing the VeriSign
           Pre-Existing Technology, Developed Technology, and VeriSign
           Proprietary Information of VeriSign shall be returned promptly to
           VeriSign or destroyed and certified as same by an authorized
           representative of SDTI.


     17.1  FORCE MAJEURE. Neither party shall be liable to the other (except for
           failure to pay) for delays or failures in performance resulting from
           causes beyond the reasonable control of that party, including but not
           limited to acts of God, labor disputes or disturbances, material
           shortages or 

           rationing, riots, acts of war, governmental regulations,
           communication or utility failures or casualties.

     17.2  ASSIGNMENT. SDTI may not assign or otherwise transfer this Agreement,
           or any of its rights or obligations under this Agreement to a third
           party without the prior written consent of VeriSign. .

     17.3  RELATIONSHIP OF PARTIES. The parties are independent contractors
           under this Agreement and no other relationship is intended, including
           a partnership, franchise, joint venture, agency, employer/employee,
           fiduciary, master/servant relationship, or other special
           relationship. Neither party shall act in a manner which expresses or
           implies a relationship other than that of independent contractor or
           binds the other party.

     17.4  WAIVER OR DELAY. Waiver of any term, condition or provision of this
           Agreement, or a delay in the enforcement of any right hereunder,
           shall not be construed as a waiver of any other term, condition, or
           provision, nor shall such waiver be deemed a waiver of any subsequent
           breach thereof.

     17.5  SEVERABILITY. If any term or provision of this Agreement is found to
           be invalid under any applicable statute or rule of law then, that
           provision notwithstanding, this Agreement shall remain in full force
           and effect and such provision shall be deemed omitted.

     17.6  BENEFICIARIES. This Agreement is made for the benefit of the parties
           hereto and not for the benefit of any third parties.

     17.7  GOVERNING LAW AND JURISDICTION. Any action related to this Agreement
           will be governed by California law and controlling U.S. federal law.
           No choice of law rules of any jurisdiction will apply. Any action
           brought hereunder shall be brought exclusively in the United States
           District Court for the Northern District of California, San Jose
           Branch, or the California Superior Court for the County of Santa
           Clara, as applicable.

     17.8  ATTORNEYS' FEES. In addition to any other relief, the prevailing
           party in any action arising out of this Agreement shall be entitled
           to attorneys' fees and costs.

     17.9  NOTICES. Any notices required or permitted to be given pursuant to
           this Agreement shall be in writing, and may be personally delivered,
           telecopied (with confirmation by recognized overnight courier), or
           sent by recognized overnight courier to the addresses set forth on
           the first page of this Agreement or to such other address as may be
           specified from time to time by notice in writing. Any such notice
           shall be deemed to have been given when received.

     17.10 HEADINGS.  Headings used in this Agreement are for ease of reference
           only and shall not be used to interpret any aspect of this Agreement.

     17.11 ENTIRE AGREEMENT. This Agreement, together with its Exhibits, is the
           parties' entire understanding and agreement with respect to its
           subject matter and supersedes (a) all prior or contemporaneous oral
           or written communications, proposals, understandings, and
           representations with respect to its subject matter; and (b) any
           conflicting terms of any quote, order, acknowledgment, or similar
           communication between the parties. This Agreement may not be modified
           or amended, in whole or in part, except in a writing executed by duly
           authorized representatives of each party.

     17.12 COMPLIANCE WITH EXPORT LAWS SDTI shall not export, directly or
           indirectly, the Developed Technology or other materials or
           information provided by VeriSign hereunder, to any country for which
           the United States or any other relevant jurisdiction requires any
           export license or other governmental approval at the time of export
           without first obtaining such license or approval.

     17.13 COUNTERPARTS. This Agreement may be executed in two counterparts,
           each of which shall be an original and together which shall
           constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

SECURITY DYNAMICS                       VERISIGN, INC.
TECHNOLOGIES, INC. ("SDTI")             ("VeriSign")

By: /s/ Marian O'Leary                  By: /s/ Dana L. Evan
    ----------------------------            ---------------------------

Name: Marian O'Leary                    Name: Dana L. Evan
      --------------------------              -------------------------

Title: Chief Financial Officer          Title: Chief Financial Officer
       -------------------------               ------------------------

                                   EXHIBIT A
                             DEVELOPMENT EQUIPMENT

                               [TO BE COMPLETED]

                                   EXHIBIT B
                               [TO BE COMPLETED]
                                   EXHIBIT C
                               STATEMENT OF WORK
                               [TO BE COMPLETED]
                                   EXHIBIT D
                              THIRD PARTY TECHNOLOGY
                               [TO BE COMPLETED]

                                   EXHIBIT E
                         LICENSE AND ROYALTY PAYMENTS

1.  LICENSE FEE.  SDTI shall pay to VeriSign an initial license fee of U.S.
[*] for the Developed Technology as more particularly described in the
Statement of Work dated  ______  , 1997.  Such license fee shall be payable as
DELIVERABLE  DATE                                                   PAYMENT
Execution of Agreement                                              $  900,000
Per Achievement of Milestones set forth in the Statement of Work    $1,800,000 
     TOTAL                                                          $2,700,000

2.   SUPPORT FEE:  Support for the Developed Technology as set forth in Section
12.1 of the Agreement shall be provided by VeriSign without charge for a period
of six (6) months from the Effective Date.  Thereafter, SDTI shall pay VeriSign
a support fee of [*] per month.

3.  MAINTENANCE FEE:  Maintenance services as set forth in Section 12.2 of the
Agreement shall be provided by VeriSign without charge for a period of twelve
(12) months from the Effective Date.  Thereafter, SDTI shall pay VeriSign an
annual support fee of [*] payable upon the anniversary of the Effective
[*] Confidential treatment has been requested with respect to certain portions
of this exhibit. Confidential portions have been omitted form the public filing
and have been separately filed with the Securities and Exchange Commission.

                                   EXHIBIT F

                               [TO BE COMPLETED]

                                   EXHIBIT G
                        LOGO AND TRADEMARK USAGE GUIDE
VeriSign encourages its customers and partners to use VeriSign logos and
trademarks on customer and partner product data sheets, packaging, Web pages and
advertising - but it is important to use them properly.

When using VeriSign trademarks and service marks in ads, product packaging,
documentation or collateral materials, be sure to use the correct trademark
designator: (SM) for claimed or pending servicemarks, O for claimed or pending
trademarks, and (R) for registered trademarks. VeriSign trademarks and their
correct designators are depicted below. To ensure proper usage, please allow
VeriSign's Corporate Marketing department to review any materials using or
mentioning VeriSign trademarks prior to general release.

Using these VeriSign logos does not require prior written permission; in fact,
we encourage you to use them on your product packaging, Web pages and marketing
collateral. However, text of written materials which mention VeriSign services
and/or products should be reviewed by VeriSign's Corporate marketing department
at the draft stage.

VeriSign updates its Logo and Trademarks Usage Guide--available at on a regular basis and will
distribute the information to its customers and partners. This information will
also be located on the VeriSign Web site and updated often.

Logos/Marks (see the website for actual logos):
Digital ID(SM)
Digital ID Partner(SM)
Digital ID Center(SM)
Authentic Site(TM)