<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO ________
COMMISSION FILE NUMBER 0-23560
XCELLENET, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1749705
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 CONCOURSE PARKWAY, SUITE 850
ATLANTA, GA 30328
(Address of principal executive offices) (Zip Code)
(770) 804-8100
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 par value - 8,248,985 shares as of July 31, 1997
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
XcelleNet, Inc. and Subsidiaries
Consolidated Statements of Operations - Unaudited
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Software license fees $ 7,695 $ 7,381 $16,566 $ 14,312
Software upgrade fees and services 4,344 2,745 8,823 5,264
12,039 10,126 25,389 19,576
- ----------------------------------------------------------------------------------------
Costs and expenses
Costs of license fees 566 524 1,136 1,001
Costs of software upgrade fees and services 1,812 856 3,500 1,587
Sales and marketing 5,938 5,471 11,345 9,839
Product development 2,363 1,561 4,404 2,902
General and administrative 1,666 1,393 3,533 2,882
12,345 9,805 23,918 18,211
- ----------------------------------------------------------------------------------------
Operating income (loss) (306) 321 1,471 1,365
Other income, net 250 265 340 553
- ----------------------------------------------------------------------------------------
Income (loss) before income taxes (56) 586 1,811 1,918
Provision (benefit) for income taxes (24) 223 714 689
- ----------------------------------------------------------------------------------------
Net income (loss) $ (32) $ 363 $ 1,097 $ 1,229
- ----------------------------------------------------------------------------------------
Net income (loss) per share $ 0.00 $ 0.05 $ 0.13 $ 0.16
- ----------------------------------------------------------------------------------------
Weighted average shares outstanding 8,160 7,883 8,594 7,866
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
2
<PAGE>
XcelleNet, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
Unaudited
June 30, December 31,
- ----------------------------------------------------------------------------------------------
1997 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $13,045 $ 10,587
Short-term investments 11,263 2,157
Trade receivables, net of allowance for doubtful accounts of
$503 and $503 12,231 13,306
Prepaid expenses and other current assets 1,763 1,049
Income tax receivable - 793
- ----------------------------------------------------------------------------------------------
Total current assets 38,302 27,892
- ----------------------------------------------------------------------------------------------
Furniture, fixtures and equipment, net 5,572 5,378
Capitalized software development costs, net of accumulated
amortization of $2,115 and $1,566 2,651 2,231
Intangible assets, net of accumulated amortization of $181 2,584 -
Deferred income tax assets 754 754
Other noncurrent assets 357 428
- ----------------------------------------------------------------------------------------------
$50,220 $ 36,683
- ----------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities $ 5,867 $ 4,694
Long-term liabilities 817 859
Shareholders' equity 43,536 31,130
- ----------------------------------------------------------------------------------------------
$50,220 $ 36,683
- ----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
balance sheets.
3
<PAGE>
XcelleNet, Inc. and Subsidiaries
Consolidated Statements of Cash Flows - Unaudited
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
- -------------------------------------------------------------------------------
1997 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $1,097 $ 1,229
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,128 1,465
Change in assets and liabilities, net of effects
of purchase of XIS:
Decrease (increase) in trade receivables 1,475 (1,590)
Increase in prepaid expenses and other current assets (590) (643)
Decrease in income tax receivable 711 170
Increase in current liabilities 188 872
(Decrease) increase in long-term liabilities (66) 27
- -------------------------------------------------------------------------------
Total adjustments 3,846 301
- -------------------------------------------------------------------------------
Net cash provided by operating activities 4,943 1,530
- -------------------------------------------------------------------------------
Cash Flows from Investing Activities
(Increase) decrease in short-term investments (9,106) 432
Purchases of furniture, fixtures, and equipment (1,505) (1,521)
Additions to capitalized software development costs (970) (929)
Purchase of XIS, net of cash acquired (719) -
Repayment of XIS assumed liabilities (388) -
Other (373) (374)
- -------------------------------------------------------------------------------
Net cash used in investing activities (13,061) (2,392)
- -------------------------------------------------------------------------------
Cash Flows from Financing Activities
Proceeds from issuance of common stock, net of related
costs 10,408 317
Income tax benefits related to exercise of stock options 100 -
Other 68 (80)
Net cash provided by financing activities 10,576 237
- -------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 2,458 (625)
Cash and cash equivalents, beginning of period 10,587 9,304
- -------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 13,045 $ 8,679
- -------------------------------------------------------------------------------
Supplemental disclosures
Interest paid $ 45 $ -
Income taxes paid $ 264 $ 798
Non Cash Investing Activities:
The Company purchased all of the capital
stock of XIS, Inc. In conjunction with
the acquisition, liabilities were assumed
as follows (in thousands):
Fair value of noncash assets acquired 687
Amount paid in excess of fair value 2,565
Less: Purchase price:
Cash paid, net (719)
Common Stock issued (775)
Note Payable issued (1,200)
--------
Total purchase price (2,694)
-------
Liabilities assumed $ 558
=======
- ------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE>
XCELLENET, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements - Unaudited
1. In the Company's opinion, the accompanying consolidated interim financial
statements include all adjustments, consisting only of normal, recurring
adjustments, necessary to present fairly the Company's consolidated results
of operations, condensed financial position and cash flows for the periods
indicated. The results of operations for interim periods are not
necessarily indicative of results expected for the entire year. The interim
financial statements should be read in conjunction with the audited
consolidated financial statements as of December 31, 1996 and the notes
thereto included in the Company's Form 10-K for the year ended December 31,
1996 filed with the Securities and Exchange Commission. Certain prior year
amounts have been re-classified to conform with the current year
presentations.
2. Net income per share is computed using the weighted average number of
shares of common stock outstanding plus common equivalent shares. Common
equivalent shares from stock options have been included in the computation
when dilutive. The effect of stock options was anti-dilutive for the three
months ended June 30, 1997 and was excluded from the calculation. The
difference between primary and fully diluted earnings per share is not
material for any periods presented, and fully diluted earnings per share
have therefore been excluded.
3. The Company expenses the production costs of advertising at the time
incurred, except for direct-response advertising, which is capitalized and
amortized over its expected period of future benefits. Direct-response
advertising consists primarily of advertisements in business, financial,
and software magazines and newspapers. The cost of each advertisement is
amortized over the four-month period following the issuance of the
publication in which it appears. Advertising expenditures totaled $457,000
and $516,000 in the three months ended June 30, 1997 and 1996, and $904,000
and $1,175,000 for the six months ended June 30, 1997 and 1996,
respectively. Advertising expense was $457,000 and $480,000 in the three
months ended June 30, 1997 and 1996, and $995,000 and $902,000 for the six
months ended June 30, 1997 and 1996, respectively. Unamortized advertising
costs included in prepaid expenses were $0 and $273,000 at June 30, 1997
and 1996, respectively.
4. On January 2, 1997, the Company completed the acquisition of XcelleNet
Integration Services, Inc. ("XIS", formerly Electronic Commerce, Inc.) for
a total consideration comprising cash, future payments and stock of
approximately $2,675,000. The transaction was accounted for as a purchase.
The excess of the purchase price over the tangible assets acquired totaled
$2,535,684 and is being amortized over 10 years. The operating results of
XIS since the date of acquisition are included in the accompanying
financial statements.
5. On April 1, 1997, the Company successfully completed a secondary public
offering of its common stock. The offering was comprised of 655,953 shares
issued by the Company (which included 54,544 shares classified as treasury
stock in the Company's accompanying Consolidated Condensed Balance Sheets)
and 777,047 shares sold by existing shareholders at an offering price of
$17.00 per share. The net proceeds to the Company (after underwriting
discounts and commissions and other related costs associated) totaled
approximately $10,000,000.
6. Effective for periods beginning after December 15, 1997, the Financial
Accounting Standards Board has adopted Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share". This statement sets out
new guidelines for the calculation and presentation of earnings per share.
The following tables represent a reconciliation of basic and diluted
weighted average shares and a pro forma calculation of earnings per share
using the guidelines of SFAS No. 128. The Company does not anticipate that
the adoption of the statement will materially impact its earnings per share
calculation.
5
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except per share data) 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic weighted average shares outstanding 8,160 7,204 7,816 7,167
Shares of common stock assumed issued upon
exercise of stock options using the "treasury
stock" method as it applies to the computation
of diluted earnings per share -- 679 778 699
--------- ------- -------- --------
Diluted weighted average shares outstanding 8,160 7,883 8,594 7,866
========= ======= ======== ========
Net earnings (loss) used in the computation of
basic and diluted earnings per share $ (32) $ 363 $ 1,097 $ 1,229
========= ======= ======== ========
Earnings (loss) per share
Basic $ 0.00 $ 0.05 $ 0.14 $ 0.17
========= ======= ======== ========
Diluted $ 0.00 $ 0.05 $ 0.13 $ 0.16
========= ======= ======== ========
</TABLE>
No shares were included for the exercise of stock options for the three month
period ended June 30, 1997 as the effect was anti-dilutive.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
In addition to historical information contained herein, this Quarterly Report
may contain forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
update any such forward-looking statements. Any forward-looking statements
contained herein are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in such forward-looking
statements. Factors that might cause such divergence include, but are not
limited to, those discussed in the Company's filings under the Securities
Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended.
Readers should review such risk factors, including those set forth in the
Company's prospectus filed with the Securities and Exchange Commission, as
amended on March 26, 1997.
REVENUES. Total revenues increased 19% to $12,039,000 and 30% to $25,389,000
for the three and six months ended June 30, 1997 as compared to the prior year
periods. The increase in total revenues was due to increases in both license
fees and in software upgrade fees and services. Software license fees increased
4% to $7,695,000 and 16% to $16,566,000 in the three and six months ended June
30, 1997 respectively, as compared to the prior year periods. Software license
fees from RemoteWare for NT products accounted for 66% and 62% of total software
license fees for the three and six months ended June 30, 1997 compared with 5%
and 3% for the same periods in 1996, reflecting increasing market acceptance of
the RemoteWare for NT products released beginning in 1996. Software license fees
as a percentage of total revenues were 64% and 65% for the three and six months
ended June 30, 1997 compared with 73% for each of the same periods in 1996. The
decrease in the software license fees as a percentage of total revenues reflects
the growth in software upgrade fees and services revenues associated with the
January 1997 acquisition of XcelleNet Integration Services ("XIS", formerly
Electronic Commerce, Inc.), the Company's larger installed base and the high
participation rate of RemoteWare customers in the Company's software upgrade and
maintenance programs. See Note 4 of Notes to Consolidated Financial Statements.
License fees from new customers decreased 22% to $2,577,000 and increased 26% to
$7,070,000 for the three and six months ended June 30, 1997 as compared to the
same periods in 1996. License fees from new customers as a percentage of total
license fees decreased to 33% from 44% for the three months ended June 30, 1997
as compared to the same period in 1996 and increased to 43% from 39% for the six
months ended June 30, 1997 compared with the same period in 1996. The Company
added 87 new customers in the second quarter of 1997 and 171 in the six months
ended June 30, 1997, compared with 93 and 147 in the same periods in 1996. The
average initial RemoteWare purchase for new customers was $30,000 and $41,000 in
the three and six months ended June 30, 1997, compared with $35,000 and $38,000
in the same periods in 1996. The Company believes that the decrease in new
customer license fees in the second quarter was due to a transition in its
marketing and sales model. During the past few quarters, the Company has taken
steps to leverage its historically direct sales model by signing several co-
marketing and OEM agreements. However, these agreements have not yet resulted
in significant revenue. Concurrently, the Company phased out a number of lead-
generation programs that related to a previous marketing message, decreased
advertising expenditures and reduced the number of direct sales people, all of
which negatively impacted the direct sales model.
Software license fees from existing customers increased 25% to $5,118,000 and 9%
to $9,496,000 in the three and six months ended June 30, 1997 as compared to
the same period in 1996. Software license fees from existing customers
increased as a percentage of total license fees to 67% from 56% in the three
months ended June 30, 1997 as compared to the same period during 1996 and
decreased to 57% from 61% for the six months ended June 30, 1997 as compared to
the prior year.
Software license fees generated by Solution Providers decreased to 27% from 41%
and to 27% from 46% in the three and six months ended June 30, 1997, as compared
to the prior year periods, due to changes to the Company's Solution Provider
program that have resulted in fewer Solution Providers authorized to remarket
RemoteWare and lower remarketer discount rates.
7
<PAGE>
Software upgrade fees and services increased 58% to $4,344,000 and 68% to
$8,823,000 in the three and six months ended June 30, 1997 as compared to the
same periods in 1996. Software upgrade fees increased 41% to $3,549,000 and 47%
to $6,941,000 in the three and six months ended June 30, 1997, as compared
to the same periods in 1996, primarily due to the Company's growing customer
base and their significant participation rate in the Company's software upgrade
and maintenance programs. Services revenues increased 258% to $795,000 and 251%
to $1,882,000 in the three and six months ended June 30, 1997 as compared to the
same periods in 1996, primarily due to the Company's acquisition in January 1997
of XIS.
COSTS OF LICENSE FEES. Costs of license fees increased 8% to $566,000 and 13%
to $1,136,000 in the three and six months ended June 30, 1997 as compared to the
same periods in 1996. Costs of license fees remained constant as a percentage
of software license fees at 7% in the three months ended June 30, 1997 as
compared to the prior year period and stayed constant at 7% for the six months
ended June 30, 1997 as compared to the same period 1996. The increase in
absolute dollar expenses is due primarily to the increased amortization of
capitalized software associated with the RemoteWare for NT products.
COSTS OF SOFTWARE UPGRADE FEES AND SERVICES. Costs of upgrade fees and services
increased 112% to $1,812,000 and 121% to $3,500,000 in the three and six months
ended June 30, 1997 as compared to the same periods in 1996. Costs of upgrade
fees and services increased as a percentage of software upgrade fees and
services revenues to 42% and 40% for the three and six months ended June 30,
1997 from 31% and 30% for the three and six months ended June 30, 1996. The
increase in costs of upgrade fees and services is primarily due to the Company's
January 1997 acquisition of XIS, which expanded the Company's systems
integration business.
SALES AND MARKETING. Sales and marketing expenses increased 9% to $5,938,000
and 15% to $11,345,000 in the three and six months ended June 30, 1997 as
compared to the same periods in 1996. Sales and marketing expenses decreased as
a percentage of revenues to 49% and 45% from 54% and 50% in the three and six
months ended June 30, 1997 as compared to the prior year periods. The increase
in absolute dollar expenses was due primarily to increased sales commissions and
the expenses associated with Company-sponsored Remote Access Solution
conferences in both the United States and Europe.
PRODUCT DEVELOPMENT. The following table summarizes product development
expenditures:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Product development expenditures $ 2,599 $ 2,060 $ 5,374 $ 3,831
Less: capitalized software development cost 236 499 970 929
- ---------------------------------------------------------------------------------------------------
Net product development expenses $ 2,363 $ 1,561 $ 4,404 $ 2,902
- ---------------------------------------------------------------------------------------------------
As a percentage of revenues:
Product development expenditures 22% 20% 21% 20%
Less: capitalized software development cost (2)% (5)% (4)% (5)%
- ---------------------------------------------------------------------------------------------------
Net product development expenses 20% 15% 17% 15%
- ---------------------------------------------------------------------------------------------------
Capitalized product development rate 9% 24% 18% 24%
- ---------------------------------------------------------------------------------------------------
</TABLE>
Product development expenditures (expenses plus capitalized software development
costs) increased 26% to $2,599,000 and 40% to $5,374,000 in the three and six
months ended June 30, 1997 as compared to the same periods in 1996. The
increase in product development expenditures was primarily due to personnel
costs (including outside contractors) for development of RemoteWare for NT
products. Capitalized software development costs were $236,000 and $970,000 for
the three and six months ended June 30, 1997, respectively. Capitalized
software development costs were $499,000 and $929,000 in the three and six
months ended June 30, 1996, respectively. The decrease in capitalized software
for the second quarter is due to the May 1997 release of the RemoteWare for NT
products. All capitalized software development costs in the second quarter of
1997 related to the development of RemoteWare for NT. Net product development
expenses (product development expenditures less capitalized software) increased
51% to $2,363,000 and 52% to $4,404,000 for the three and six months ended June
30, 1997 as compared to the same periods in 1996. Net product development
expenses as a percentage of revenues increased to 20% and 17% from 15% for the
three and six months ended June 30, 1997 as compared to the prior year periods.
8
<PAGE>
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 20%
to $1,666,000 and 23% to $3,533,000 in the three and six months ended June 30,
1997 as compared to the same periods in 1996. General and administrative
expenses remained constant as a percentage of revenues at 14% in the three
months ended June 30, 1997 as compared to the prior year period. General and
administrative expenses decreased as a percentage of total revenues to 14% from
15% for the six months ended June 30, 1997 as compared to the prior period. The
absolute dollar increase in general and administrative expenses was primarily
due to additional personnel costs and the amortization of the goodwill
associated with the January purchase of XIS.
OTHER INCOME, NET. Other income decreased 6% to $250,000 and 39% to $340,000 in
the three and six months ended June 30, 1997 as compared to the same periods in
1996. The decrease in interest income is due primarily to lower average cash
balances as a result of acquisitions in late 1996 and early 1997. The increase
in interest expense is related to the future payments associated with the
acquisition of XIS.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company had cash and cash equivalents, and short term
investments of $24,308,000, working capital of $32,435,000 and no long-term
debt.
During the first six months of 1997, the Company generated $4,943,000 of cash
from operating activities, primarily from net income plus depreciation and
amortization. Net cash used in investing activities was $13,061,000 primarily
due to investment of the proceeds from the Company's secondary public offering
in short-term investments and fixed asset additions. Net cash provided by
financing activities was $10,576,000 primarily due to proceeds from the sale of
stock in the secondary public offering effective April 1, 1997, which totaled
approximately $10,000,000, net of issuance costs.
The Company believes that its current cash balances and cash flows from
operations will be sufficient to meet its working capital and capital
expenditure requirements for at least the next twelve months.
9
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On April 29, 1997, the Company held its Annual Meeting of Stockholders.
The results of the proposals submitted for vote at such meeting were as follows:
1. Election of Directors (there were no abstentions or broker non-votes in
connection with the election of directors).
FOR WITHHELD
Stephen P. Bradley 5,734,269 15,869
Dennis M. Crumpler 5,734,096 16,042
Donald L. House 5,734,269 15,869
Richard C. Marcus 5,734,106 16,032
Geoffrey A. Moore 5,577,692 172,446
Shereef W. Nawar 5,534,403 15,735
Richard C. Nolan 5,577,692 172,446
Jeffrey P. Parker 5,734,269 15,869
2. Adoption and approval of the XcelleNet, Inc. Long Term Incentive Plan.
NUMBER OF SHARES
For 3,810,917
Against 855,017
Abstain 3,583
Broker Non Vote 1,080,621
3. Ratification of Arthur Andersen LLP as the independent public accountants of
the Registrant for the year ended December 31, 1997.
NUMBER OF SHARES
For 5,745,854
Against 3,497
Abstain 787
Broker Non Vote 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.26 OEM Software License Agreement Between the Registrant and McAfee
Software, Inc. effective as of June 17, 1997.
10.27 System Integration Remarketer Agreement Between the Registrant
and Avalan Technology effective as of May 5, 1997.
11 Statement re: computation of per share earnings
27.01 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the registrant during the quarter
ended June 30, 1997.
10
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
XcelleNet, Inc.
(Registrant)
Date: August 14, 1997 By: /s/ DAVID F. HELD
-------------------------
David F. Held
Chief Financial Officer
(Principal Financial and
Authorized Officer)
13
<PAGE>
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
Exhibits
to
Quarterly Report
on
Form 10-Q
For the quarter ended
JUNE 30, 1997
____________________
XCELLENET, INC.
(Exact name of registrant as specified in its charter)
- -------------------------------------------------------------------------------
<PAGE>
Exhibit
Number Exhibit Description
- ------- -------------------
10.26 OEM Software License Agreement Between the Registrant and McAfee
Software, Inc. effective as of June 17,1997.
10.27 System Integration Remarketer Agreement Between the Registrant and
Avalan Technology effective as of May 5, 1997.
11 Statement re: computation of per share earnings
27.01 Financial Data Schedule
<PAGE>
EXHIBIT 10.26
CONFIDENTIAL
This OEM Software License Agreement (the "Agreement") is made and entered into
by and between MCAFEE SOFTWARE, INC. ("MCAFEE"), a Delaware corporation, with
offices at 2710 Walsh Avenue, Santa Clara, California 95051 and XCELLENET, INC.
("OEM"), a _________ corporation, with offices at 5 Concourse Parkway, Suite
850, Atlanta, Georgia 30328. This Agreement and the Licenses (hereinafter
defined) herein granted shall be effective when this Agreement is executed by
MCAFEE. The date of MCAFEE's execution of this Agreement shall be the
"Effective Date" of this Agreement for all purposes hereunder.
1. DEFINITIONS
In this Agreement, the terms:
"License" means the nonexclusive, nontransferable right of OEM to Use,
reproduce, market, distribute and sublicense to end users pursuant to the End
User License Agreement the Licensed Program subject to the provisions of this
Agreement.
"Licensed Program" means MCAFEE's computer programs specified in the EXHIBIT "A"
attached hereto and made a part hereof, and, if upgrades are indicated on
EXHIBIT "A", all corrections, modifications, and enhancements to such program
made by MCAFEE and provided hereunder during the term of this Agreement.
Licensed Program does not include Source Code.
"Use" means copying any portion of a Licensed Program into a microcomputer
and/or transmitting it to a microcomputer, for processing of the machine
instructions or statements contained in such material or distributing the
Licensed Program bundled with other software programs. Licenses hereunder to
Use a Licensed Program do not include a license by OEM to use such Licensed
Program internally (except as set forth in Section 2.3), unless an internal use
license is specified in EXHIBIT "A".
"Initial Ship Date" means the date that the applicable Licensed Program ships as
part of or as an option to the OEM Defined Hardware/Software.
"Documentation" means any materials provided by MCAFEE with its electronic or
boxed version of the Licensed Program provided to instruct end users in the use
of the Licensed Programs.
"Defined Hardware/Software" means only those computer products developed or
manufactured by or for OEM, which are identified in the EXHIBIT "A" and which
are marketed under OEM's tradenames or trademarks.
"Per Copy Royalty" means the royalty rate set forth on EXHIBIT "A".
------------
"Product" means a Licensed Program or Documentation and any combination of a
Licensed Program and Documentation.
"End User License Agreement" means the standard MCAFEE End User License
Agreement distributed with the Licensed Program separately or as part of an
electronic file, which shall be shipped with the Defined Hardware/Software and
shall not be altered or deleted by OEM.
"Redistribution Kit" means a Licensed Program and Documentation deliverables
that are shipped to OEM for each Licensed Program as specified in the EXHIBIT
"A".
"Source Code" means the form of the Licensed Program in which the program logic
is easily deduced by a human being, such as a printed listing of the program, or
in an encoded machine-readable form, such as might be recorded on magnetic tape
or disk, from which a printed listing can be made by processing it with a
computer. Source code includes all unlinked object files or modules created
from the Source Code of the Licensed Program.
1
<PAGE>
CONFIDENTIAL
"Executable Code" means the form of a Licensed Program resulting from the
compiling and linking of Source Code (including object files or modules) by a
computer into machine language, and thus is in a form permitting execution or
interpretation by a computer without any additional compiling, linking, or human
processing.
"Derivative Works" means a revision, modification, translation, abridgment,
condensation or expansion of a Product or any other form in which such Product
may be recast, transferred or adapted.
2. LICENSE
2.1 MCAFEE Licenses the Licensed Program to OEM for the limited purpose of
Using the Licensed Program solely bundled with the Defined Hardware/Software, or
as an add-on option to the Defined Hardware/Software, or as part of Maintenance
services provided to End Users of the Defined Hardware/Software pursuant to
Section 9 of EXHIBIT "A". Any such add-on option to Defined Hardware/Software
shall be marketed only as an add-on to Defined Hardware/Software to Defined
Hardware/Software purchasers and licensees and shall be presented in a manner so
that there is significant integration with the Defined Hardware/Software. The
Licensed Program shall not be the primary or principal feature of the Defined
Hardware/Software. OEM shall have the right to distribute each Licensed Program
to end users and resellers as part of such distribution pursuant to the terms
and limitations of Section 10 hereof, through the use of the End User License
Agreement. Such License shall also be subject to the provisions of the EXHIBIT
"A". OEM may not reproduce or distribute any Licensed Program as a stand-alone
product, except as part of Maintenance services provided to End Users of the
Defined Hardware/Software pursuant to Section 9 of EXHIBIT "A".
2.2 OEM shall have no rights to Source Code to any Licensed Program and OEM
shall not have any rights to create any Derivative Works or make translations of
the Licensed Program(s) and shall not disassemble, decompile, reverse assemble,
reverse compile, recompile or make extracts from such Licensed Program(s) or
attempt to determine the Source Code or permit others to do so.
2.3 OEM may Use a Licensed Program internally for OEM's own use for
testing, demonstrating, training, and sales purposes by its own personnel, but
not for other internal purposes, unless the parties expressly agree otherwise on
EXHIBIT "A". All copies distributed for testing, demonstrating, training, and
sales purposes by its own personnel shall not count in any royalty calculation
and any quantity limitation under this Agreement.
2.4 No License is granted for any Use or reproduction of any Product for
which the required Per Copy Royalty has not been made by OEM.
3. DELIVERY.
Upon receipt and execution of this Agreement, MCAFEE agrees to deliver the
Redistribution Kit and any other applicable deliverables specified in the
EXHIBIT "A". All deliveries of any Redistribution Kit under this Agreement
shall be F.O.B. MCAFEE, Santa Clara County, California. Except as to Licensed
Program(s) for which a specific version only is licensed hereunder, (a) update
of the Licensed Program(s) shall be downloaded from time to time by OEM from
MCAFEE's OEM Bulletin Board Service, unless MCAFEE delivers the updates to OEM
by another means and (b) OEM shall make a best effort to commence the use of the
current OEM version of the Licensed Program with the next release of the Defined
Hardware/Software.
4. DISTRIBUTION, MARKETING, ROYALTIES
4.1 Commencing as described in Section 3 and continuing thereafter through
the term of this Agreement, OEM shall then have the right to distribute the
Licensed Program as set forth in Section 2, subject to any quantity limitations
set forth in the EXHIBIT "A". OEM shall use reasonable, good faith efforts to
promote and market the Defined Hardware/Software, with which the Licensed
Program is bundled.
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4.2 In consideration of the rights and licenses granted to OEM under this
Agreement, OEM agrees to pay MCAFEE a Per Copy Royalty for each copy of a
Licensed Program the OEM sells, licenses or distributes, except for those copies
distributed for internal purposes as stated in Section 2.3.
4.3 Per Copy Royalties shall accrue upon distribution of any copy of the
Licensed Program bundled with the Defined Hardware/Software. All accrued Per
Copy Royalties shall be paid by OEM within thirty (30) days after the end of
each calendar quarter. Payments shall be accompanied by a written report signed
by an officer of OEM stating the number of copies of the Licensed Program
distributed in such quarter and the calculation of the royalty payment.
5. PAYMENT; TAXES
5.1 All payments provided for in this Agreement to MCAFEE are net of, and
OEM shall pay, all taxes, (except for income taxes imposed on MCAFEE's income),
customs duties, insurance, shipping and other charges. All payments shall be
made in United States currency only.
5.2 In no event shall OEM be entitled to a refund of prepaid royalties
specified on EXHIBIT "A."
------------
5.3 If any payment, or any other sum due from OEM under this Agreement,
should become past due, MCAFEE may, without declaring OEM to be in default,
charge OEM a late payment charge of five-sixths of one percent (.833%) per month
on the past due balance, but not in excess of the lawful maximum rate of
interest.
5.4 OEM shall pay or reimburse MCAFEE for amounts equal to any taxes,
including, but not limited to, withholding taxes, other duties, tax penalties,
interest, or amounts in lieu thereof however designated, now or hereafter
imposed on or based upon payments due under this Agreement, any License granted
hereunder, the transfer, use or distribution of Licensed Programs by OEM, or on
the program storage media, exclusive of taxes based upon MCAFEE's net income.
5.5 OEM shall provide to MCAFEE upon demand a tax or other levy
exemption certificate acceptable to the taxing or levying authority, in
substantially the form attached hereto as EXHIBIT "E" for each jurisdiction in
which the Defined Hardware/Software is distributed.
6. RECORD KEEPING AND REPORTS.
6.1 OEM agrees to maintain shipment records relating to the disposition of
Products. OEM shall prepare and submit quarterly reports to MCAFEE no later
than thirty (30) days following the last business day of each calendar quarter.
Each report must specify the quantities of any Product distributed during that
quarter.
6.2 MCAFEE may inspect the records described in Section 6.1 upon demand from
time to time, but no more frequently than once every six (6) months. In
addition, OEM agrees to allow MCAFEE's independent auditors to audit and analyze
appropriate accounting records of OEM from time to time, but no more frequently
than annually, to ensure compliance with all terms of this Agreement. Any such
audit shall be permitted by OEM within fifteen (15) days of OEM's receipt of
MCAFEE's written request to audit, during normal business hours. The cost of
such an audit will be borne by MCAFEE unless a material discrepancy indicating
inadequate or inaccurate record keeping is discovered, in which case the cost of
the audit shall be borne by OEM. A discrepancy shall be deemed material if it
involves payment or adjustment of more than Five Thousand Dollars ($5,000.00) in
favor of MCAFEE for any quarterly reporting period. Audits and inspections
shall not interfere unreasonably with OEM's business activities. Any
underpayment of Per Copy Royalties disclosed by any such audit shall be paid to
MCAFEE, together with the applicable late payment charges, upon demand.
7. TRADEMARKS; COPYRIGHT NOTICES
7.1 The trademarks and trade names under which MCAFEE markets any Product are
the property of MCAFEE. This Agreement gives OEM no rights therein, except the
restricted License to reproduce such trademarks and trade names in any
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authorized reproduction of any Product, provided that MCAFEE is referenced as
the owner of the trade name or trademark. OEM may not market the Product under
any other or different name than those specified by MCAFEE. The Software
Redistribution Guide attached hereto as EXHIBIT "B" is incorporated herein by
reference. Such Guide may be revised by MCAFEE from time to time upon written
notice to OEM.
7.2 OEM agrees to maintain and respect the trademark, trade name and
copyright notices of any Licensed Program and Documentation in connection with
its advertisement and distribution of any Product. OEM hereby agrees to include
a reference to MCAFEE or MCAFEE Associates, Inc. and the Licensed Program(s) in
any advertisement for the Defined Hardware/Software. OEM shall use reasonable
commercial efforts to ensure compliance hereto by all OEM's distributors and
dealers. MCAFEE retains the right to specify the quality and standards of all
materials upon which a MCAFEE trademark or trade name is used. Failure by OEM
to adhere to such standards of quality shall constitute a failure to meet OEM's
obligations under this Agreement for purposes of Section 15.2.
8. LICENSED PROGRAM REPRODUCTION
8.1 OEM is authorized to reproduce the Licensed Program(s) only at the
location of its principal office specified on the first page of this Agreement
unless an alternate location is specified on EXHIBIT "A". No subsidiary or
affiliate of OEM shall have any right to reproduce the Licensed Program(s),
without the prior written consent of MCAFEE.
9. DOCUMENTATION
9.1 OEM shall distribute a single copy of the Documentation, in either
written or electronic form, with each copy or unit of the Defined
Hardware/Software.
9.2 OEM may purchase from MCAFEE additional Documentation at the price set
forth in MCAFEE's then current published MCAFEE OEM Price List for distribution
to end users of the Defined Hardware/Software. OEM shall imprint or sticker the
Documentation with OEM's name and address, in addition to that of MCAFEE. This
placement shall not obscure MCAFEE's names, marks or intellectual property
notices. OEM may not distribute the Documentation as a stand-alone item at any
time.
9.3 Unless OEM purchases Documentation reprint rights from MCAFEE, OEM may
not reproduce or modify Documentation. Payments due for Documentation reprint
rights shall be specified in a EXHIBIT "A". If Documentation reprint rights are
purchased, OEM may reproduce the existing version or a modified version of the
Documentation. Such rights shall not include the right to translate. OEM shall
promptly furnish MCAFEE with a copy of, and promptly register with the U. S.
Copyright Office, in the joint names of MCAFEE and OEM, all modified versions of
the Documentation, as a Derivative Work based upon the original MCAFEE
copyrighted material. All copyright notices of MCAFEE shall be maintained in
any modified version of the Documentation. OEM shall copyright all modified
versions of the Documentation in the joint names of MCAFEE and OEM in every
country in which it is published. OEM shall, at its cost, file or register such
copyrights where required to obtain protection in a particular country. MCAFEE
shall have an exclusive right to all modified versions of the Documentation.
Upon termination of this Agreement, all rights to modified versions of
Documentation shall vest in MCAFEE. In such latter event, OEM shall cooperate
and take such actions as MCAFEE may reasonably request to assign all rights in
and to modified versions of Documentation to MCAFEE.
10. DISTRIBUTION; EXPORT RESTRICTIONS
10.1 OEM shall contractually require each entity in OEM's chain of
distribution to market and distribute the Licensed Program(s) and the Defined
Hardware/Software as a unit, and shall use reasonable commercial efforts to
enforce such requirements and prohibit any sale or distribution of the Licensed
Program separate from the Defined Hardware/Software. OEM shall use reasonable
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commercial efforts to monitor, prevent, and cause the discontinuance of any
separation of the Licensed Program(s) and the Defined Hardware/Software prior to
their delivery to the final end user.
10.2 OEM shall include a copy of the End User Program License Agreement
electronically with each copy of any Licensed Program distributed and shall ship
the Defined Hardware/Software under an end user license no less protective than
that set forth in EXHIBIT "C".
10.3 OEM shall contractually require that each intermediate entity in its
chain of distribution to the final end user respects MCAFEE's copyrights, trade
names and trademarks, complies with the Product handling and licensing
requirements of this Agreement, and makes no unauthorized copies of MCAFEE
Products and shall use reasonable commercial efforts to enforce such
requirements.
10.4 End users may use the Licensed Program(s) for the term and in the
manner provided for in the End User Program License Agreement. End user rights
and obligations set forth therein will survive any termination of the
relationship between OEM and MCAFEE.
10.5 OEM warrants and hereby gives written assurance to MCAFEE that it will
do all things necessary to comply with the U. S. Export Administration and other
applicable export laws and regulations as they apply to Licensed Program(s),
Documentation, Products and all other things delivered to, or derived from
things delivered to, OEM under this Agreement.
11. PATENT AND COPYRIGHT INDEMNIFICATION
11.1 MCAFEE will defend any action brought against the OEM to the extent that
it is based upon a claim that a Licensed Program, furnished hereunder and used
within the scope of a License granted hereunder, infringes a United States
copyright or United States patent. MCAFEE will pay resulting costs, damage
awards and legal fees finally awarded against OEM in such action which are
attributable to such claim provided that (1) the OEM notifies MCAFEE promptly in
writing of any claim and (2) MCAFEE has sole control of the defense of any such
claim and all related settlement negotiations. MCAFEE shall have no liability
for any claim based upon (1) Use of other than a current unaltered version of
the Licensed Program or (2) Use, operation or combination of the Licensed
Program with non-MCAFEE programs or data if such infringement would have been
avoided but for such Use, operation or combination.
11.2 Should the Licensed Program become, or be likely to become, in MCAFEE's
opinion, the subject of a claim of infringement of such copyright or patent,
MCAFEE may, at its option, procure for OEM the right to continue using the
Licensed Program, or replace or modify it to make it non-infringing.
11.3 This Section 11 states the entire liability of MCAFEE with respect to
infringement of copyrights or patents.
12. WARRANTY; SUPPORT; MAINTENANCE.
12.1 MCAFEE warrants only to OEM that any Licensed Program described in
EXHIBIT "A" will substantially conform to the specifications in the published
Documentation for such Licensed Program in effect when the Licensed Program is
shipped to OEM. If OEM finds what it believes to be errors or a failure of the
Licensed Program to meet specifications which significantly affect performance,
and provides MCAFEE with a written report, MCAFEE will use reasonable efforts to
correct promptly, at no cost to OEM, any such errors or failures. This is OEM's
sole and exclusive remedy for any express or implied warranties hereunder other
than the warranty against infringement specified in Section 11 hereof. MCAFEE's
warranty and obligation is solely for the benefit of OEM, who has no authority
to extend MCAFEE's warranty to any other person or entity. MCAFEE MAKES NO
WARRANTY THAT ALL ERRORS OR FAILURES WILL BE CORRECTED.
12.2 MCAFEE agrees to make available to OEM, for a period of Twelve (12)
months from the date MCAFEE first delivers the Licensed Program to OEM, MCAFEE's
current OEM support services which consists of verbal and written communication
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regarding problems and technical advice for each MCAFEE Licensed Program, at no
charge to OEM.
12.3 MCAFEE agrees to make available to OEM, at no charge, as published during
the term of this Agreement and only for so long as such Product is distributed
by MCAFEE, Executable Code patches and corrections and Documentation which
correct errors or problems discovered in the Product. Such patches, corrections
and Documentation may be distributed in written or machine readable form, or as
an entirely new reproduction diskette, or by electronic distribution, at
MCAFEE's option, and shall be considered part of the Product hereunder.
12.4 OEM is solely responsible for all media provided to end users and for
passing on to its distributors, dealers and end users all maintenance materials,
and for making the changes required in the master reproduction diskettes
provided as part of the Redistribution Kit, all of which OEM agrees to do. OEM
is solely responsible for all verbal and written contact with its end users of
Licensed Programs in connection with software support: operational instruction,
problem reporting, and technical advice regarding the Defined Hardware/Software.
MCAFEE shall provide second-tier technical assistance to OEM's technical support
staff regarding the Licensed Program as outlined in EXHIBIT "D", OEM Technical
Support Procedures, at no charge to OEM.
12.5 EXCEPT AS PROVIDED IN PARAGRAPH 12.1 AS TO OEM, MCAFEE MAKES NO
WARRANTY, EXPRESS OR IMPLIED, RESPECTING THE PRODUCT AND MAKES NO WARRANTY TO
ANYONE OTHER THAN OEM. AS BETWEEN MCAFEE AND OEM, MCAFEE DISCLAIMS ALL OTHER
WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE AND MERCHANTABILITY.
13. CONFIDENTIAL INFORMATION.
13.1 All documentation and information which is designated by the Delivering
Party (herein so called) as proprietary or confidential, including without
limitation drawings, Source Code, computer program listings, techniques,
algorithms and processes and technical and marketing information ("Confidential
Information") which is supplied by the Delivering Party to the Receiving Party
in connection with this Agreement (other than documentation and information
intended for distribution to third parties) shall be treated confidentially by
the Receiving Party and its employees and shall not be disclosed by the
Receiving Party without the Delivering Party's prior written consent.
Information shall not be considered to be Confidential Information if it (1) is
already or otherwise becomes publicly known through no act of the Receiving
Party; (2) is lawfully received from third parties subject to no restriction of
confidentiality; (3) can be shown by the Receiving Party to have been
independently developed by it subsequent to such disclosure: (4) was lawfully in
the Receiving Party's possession prior to receipt from the Delivering Party; or
(5) is generally made available to third parties by the Delivering Party without
restrictions on disclosure.
13.2 OEM shall not copy, reproduce, remanufacture, disassemble the Executable
Code or in any way duplicate all or any part of the Confidential Information,
including translating it into another software language, except in accordance
with the terms and conditions of this Agreement. OEM shall have an appropriate
agreement with each of its employees having access to Confidential Information,
sufficient to enable OEM to comply with all terms of this Agreement. The
Receiving Party agrees to protect the Confidential Information with the same
standard of care and procedures which it uses to protect its own trade secrets
and proprietary information.
14. LIMITATION OF LIABILITY.
14.1 In no event shall MCAFEE be liable for any loss of profits, loss of
business, loss of use or of data, interruption of business, or for indirect,
special, incidental or consequential damages of any kind whether under this
Agreement or otherwise, even if MCAFEE has been advised of the possibility of
such damages, or for any claim against OEM by any other party, except to the
limited extent provided in the section entitled "Patent and Copyright
Indemnification". In no case will MCAFEE be liable for any representation or
warranty made to any third party by OEM, any agent of OEM, any distributor or
dealer or other person or entity in the distribution chain.
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14.2 Notwithstanding anything in this Agreement to the contrary, MCAFEE's
entire liability to OEM for damages concerning performance or nonperformance by
MCAFEE or in any way related to the subject matter of this Agreement and
regardless of whether the claim for such damages is based in contract or in
tort, shall not exceed the amount of the payments made hereunder by OEM to
MCAFEE in the six months prior to such claim.
15. TERM; TERMINATION.
15.1 The term of this Agreement shall commence on the Effective Date and
shall terminate two years later, unless earlier terminated as provided in this
Section 15 or otherwise rightfully terminated. Unless either party shall give
the other written notice sixty (60) days prior to the expiration of the then
current term, this Agreement shall automatically renew for successive periods
of one year each subject to the notice and termination rights herein contained.
15.2 Either party may, at its option, terminate this Agreement and, the
Licenses granted hereunder, if either (1) the other party fails to make any
payment to the non-breaching party hereunder when due, (2) the other party fails
to meet any of its other obligations under this Agreement, and such failure
continues uncured ten (10) days following written notice thereof, (3) the other
party declares bankruptcy or is adjudicated bankruptcy, or (4) a receiver or
trustee shall be appointed for the other party or substantially all of its
assets.
15.3 The obligations of OEM in Section 13 shall survive termination of this
Agreement and shall remain in effect until the earlier of such time as the
Confidential Information becomes in the public domain or three (3) years after
termination of this Agreement. Upon termination of this Agreement, OEM shall
discontinue marketing and reproduction of the Product, provided, that unless the
termination was by reason of default by OEM, OEM may fulfill orders received
through the date of termination, subject to payment of the applicable Per Copy
Royalty. Upon termination OEM shall promptly return and make no further use of
property, materials and other items and all copies thereof belonging to MCAFEE
relating to this Agreement.
15.4 This Agreement is executory in nature and so long as OEM has any
continuing obligations hereunder, MCAFEE shall be entitled to protect the master
reproduction diskettes of the Licensed Program(s) by impounding in the event
that OEM fails to promptly perform any obligation under this Agreement which
would fully protect MCAFEE's proprietary rights. No trustee, receiver or debtor
in possession may retain the Licensed Program(s) in any form or sell or License
any Product(s), unless all of the provisions of 11 U.S.C Section 365 of the
United States Bankruptcy Act have been complied with and MCAFEE is adequately
protected.
15.5 OEM understands and acknowledges that violation of OEM's obligations
pursuant to this Agreement and the EXHIBIT "A" and EXHIBITS may cause MCAFEE
irreparable harm and damage, which may not be recovered at law, and OEM agrees
that MCAFEE's remedies for breach of this Agreement may be in equity by way of
injunctive relief, as well and any other relief available, whether in law or in
equity.
16. ASSIGNMENT.
This Agreement and the Licenses granted hereunder are to a specific entity or
legal person, not including corporate subsidiaries or affiliates of OEM, and are
not assignable, by OEM, nor are the obligations imposed on OEM delegable. Any
attempt to sublicense, assign or transfer any of the rights, duties or
obligations under this Agreement in derogation hereof, shall be null and void.
17. GENERAL.
17.1 In the event that any one or more of the provisions of this Agreement
shall be found to be illegal or unenforceable, then notwithstanding, this
Agreement shall remain in full force and effect, and such term or provision
shall be deemed stricken.
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17.2 Neither party's right to require performance of the other party's
obligations hereunder shall be affected by any previous waiver, forbearance, or
course of dealing.
17.3 This is a License agreement. No agency, partnership, joint venture or
other joint relationship is created hereby and neither OEM nor OEM's agents have
any authority of any kind to bind MCAFEE in any respect whatsoever.
17.4 Neither party is responsible for failure to fulfill its obligations
under this Agreement due to causes beyond its control.
17.5 This Agreement constitutes the entire understanding between MCAFEE and
OEM and supersedes all proposals, oral or written, and all communications
between the parties relating to the subject matter of this Agreement. The terms
and conditions of this Agreement shall prevail, notwithstanding any variance
with any purchase order or other written instrument submitted by OEM, whether
formally rejected by MCAFEE or not. This Agreement may be amended or modified
only by a written document signed by each party.
17.6 Notices under this Agreement shall be sufficient only if mailed by
certified or registered mail, return receipt requested or personally delivered
to the parties. Notice by mail shall be deemed received three days after
deposit. Notices to MCAFEE or OEM as appropriate shall be sent to the address
of such party specified as first shown above. Any changes to such notice
address by either party shall be in writing to the other party.
17.7 This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
MCAFEE and OEM have caused this Agreement to be executed by their duly
authorized representatives on the respective dates entered below.
MCAFEE SOFTWARE, INC. XCELLENET, INC.
By: /s/ Mark Woodward By: /s/ Sidney V. Sack
---------------------------- ----------------------------------
Authorized Signature Authorized Signature
Mark Woodward Sidney V. Sack
----------------------------- -----------------------------------
Name (Print or Type) Name (Print or Type)
Vice President / Officer Chief Financial Officer
----------------------------- -----------------------------------
Title Title
6-17-97 6/3/97
---------------------------- -----------------------------------
Date Date
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EXHIBIT "A" TO
MCAFEE OEM SOFTWARE LICENSE AGREEMENT
1. Programs Licensed: The Licensed Programs are the following versions only of
the following MCAFEE Products:
<TABLE>
<CAPTION>
<S> <C> <C>
PRODUCT NAME VERSION UPGRADES INCLUDED
VirusScan for Win 3.1, Win95, NT 3.0 Yes, 2 years
Equip Module Each version released during Yes, 2 years
the term of the Agreement.
</TABLE>
2. Defined Hardware/Software: RemoteWare, and upon notice to MCAFEE, the
Defined Hardware/Software may be expanded by OEM to include its XcelleNet
ESSENTIALS product so long as it does not include functionality (other than
functionality licensed from OEM) which competes with other MCAFEE products.
Upon such notice, all terms and conditions of this Agreement shall apply to the
XcelleNet ESSENTIALS product.
3. No more than the following number of copies of the Licensed Programs may be
distributed under the terms of this Agreement (check one).
[ ] __________ number of permitted distributions
[ ] _____X_____ unlimited distributions permitted
4. VIRUSSCAN Redistribution Kit and Equip Module Components:
A. VIRUSSCAN REDISTRIBUTION KIT: End User License Agreement, one (1) complete
set of Licensed Program(s) Documentation in printed or machine readable form
which details operational specifications and functions of the Licensed
Program(s), master disks for the Licensed Program(s) and the MCAFEE Software
Redistribution Guide.
B. EQUIP MODULE COMPONENTS:
MCAFEE agrees to provide the following components and related functionality
for the Equip Module:
SOFTWARE INVENTORY AGENT
. Scans, captures, and collects client and server software inventory
information.
. Software Database - recognition of more than 4,300 software titles.
. Inserts inventory information into SQL Server Database.
. Disclosure of formats of software inventory files.
. Open access to software inventory information collected.
. Queries/Logic to access software inventory information.
. Reporting of software inventory information.
. Pre-formatted reports of inventory information.
HARDWARE INVENTORY AGENT
. Scans, captures, and collects client and server hardware inventory
information.
. Inserts inventory information into SQL Server Database.
. Disclosure of formats of hardware inventory files.
. Open access to hardware inventory information collected.
. Queries/Logic to access hardware inventory information.
. Reporting of hardware inventory information.
. Pre-formatted reports of inventory information.
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NETWORK INFORMATION AGENT
. Scans, captures, and collects network inventory information.
. Inserts inventory information into SQL Server Database.
. Disclosure of formats of inventory files.
. Open access to inventory information collected.
. Queries/Logic to access network inventory information.
. Reporting of network inventory information.
. Pre-formatted reports of inventory information.
USER INTERFACE
. User Interface for all components.
OTHER REQUIREMENTS
. Removal of Automation Support/MFC code for client inventory
. Access to an assigned developer resource.
5. Permitted manufacturing locations, other that principal address of OEM:
XcelleNet Limited, XcelleNet House, Amersham Hill, High Wycombe, Bucks, UK
HP136NA
6. A confidential portion of this document has been omitted and filed
separately with the Commission.
7. Permitted Name for use with Licensed Program if other than current name:
_______________________________________________________________.
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8. Documentation Reprint Rights. None, unless initialed by MCAFEE
representative and applicable fee provisions are included:
(a) If Documentation Rights are granted, initial _____ Yes _____
OEM MCAFEE
(b) Reprint Rights Fee: -$0- Included at no charge.
Said Fees are payable at the same time and in the same manner as Per Copy
Royalties.
9. Maintenance. If maintenance rights are granted, initial _____ Yes _____
OEM MCAFEE
The Per Copy Royalty stated in Paragraph 6 above includes the right to provide
the initial two years of maintenance provided to End Users of the Defined
Hardware/Software. Maintenance shall mean providing the OEM the right to
provide End Users the right to download the current version of the Licensed
Program purchased and any updates to the virus signature files before incurring
additional royalties for that end user for a period of up to two years from the
date of purchase by the end user from the OEM. If maintenance rights are
granted, as indicated above, then OEM shall have the right to provide End Users
maintenance of the License Program during the terms of this Agreement provided
the applicable Per Copy Royalty has been paid by OEM.
10. Additional Agreements:
A. ADDITIONAL CONDITIONS TO THE AGREEMENT BETWEEN
XcelleNet ("XcelleNet")
AND
MCAFEE ("MCAFEE")
Within 30 days of signing this Agreement, MCAFEE agrees to:
- -----------------------------------------------------------
. Provide hot-links to XcelleNet's web site for the period of the Agreement on
MCAFEE's home page at the following sites (or equivalents, if the page is
reorganized): www.mcafee.com/prod/av/av.html and
www.mcafee.com/prod/av/mscc.html.
. Implement bi-lateral identification and references in electronic media, print
advertising and promotion, including being prominently featured in the anti-
virus and Security Command Center areas of the MCAFEE web site.
. Co-author a white paper on product fit and benefits.
. Issue a joint press release regarding the joint marketing and development
efforts between XcelleNet and MCAFEE.
. License SessionXpress (royalty-free) for the sole purpose of initial
distribution and software updates of MCAFEE anti-virus products from the
MCAFEE Security Command Center to remote access clients.
. Join in press interviews with XcelleNet to discuss the use of XcelleNet
technology; and speak with press and industry analysts in support of the
joint press interviews.
. Not to promote or publicly disclose the product of any competitor of
XcelleNet that is used to distribute and update MCAFEE products over a
corporate Intranet for the term of the Agreement.
. Use SessionXpress as a SecureCast alternative to distribute MCAFEE products
from MCAFEE's web site to corporate systems administrators, from August 1,
1997, to the end of the term of the Agreement. Upon launch of the system
administrator's client, a bug/hotlink will be available to the system
administrator back to XcelleNet's web site.
. To bundle SessionXpress evaluation software and promotional media with MCAFEE
Security Command Console packaging (on disk or otherwise) and ship to MSCC
customers for the term of the Agreement.
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EXHIBIT "B"
MCAFEE SOFTWARE, INC.
OEM
SOFTWARE REDISTRIBUTION GUIDE
Copyright Guidelines
Trademark Guidelines
Distribution Guidelines
Issued November 18, 1996
The OEM Software Distribution Guide is subject to change without notice.
You may contact the MCAFEE OEM Department at (214) 706-2547 for a current issue
of this document.
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COPYRIGHT GUIDELINES
I OVERVIEW
MCAFEE Associates, Inc. has developed and published, in machine-readable and
printed form, microcomputer software programs. These programs and related
documentation are protected by the United States and international copyright
laws and conventions. Any OEM of MCAFEE Associates, Inc., shall reproduce a
copyright notice on a media containing authorized copies of MCAFEE products and
on all documentation.
II GENERAL COPYRIGHT INFORMATION
The symbol "c" is inserted in the notice after the word "Copyright" wherever
possible and as "(C)" in machine-readable format.
The date included in the notice is the year in which the work was first
published. If the work is a derivative work which contains some previously
copyrighted material published in an earlier year (i.e., a revision or update),
the notice must include both dates in chronological order. Licensee is
responsible for ensuring that the appropriate dates are inserted in the
appropriate Copyright Notice.
SAMPLE REQUIRED MINIMUM COPYRIGHT NOTICE:
"Copyright "c" MCAFEE Associates, Inc., VIRUSSCAN V1.5 1993, 1994. All Rights
Reserved.
III EXTERNAL NOTICE ON MAGNETIC MEDIA
Licensee must place a label bearing the appropriate copyright notice and the
following license requirements in printed form on the exterior of magnetic
recording media. It is the Licensee's responsibility to determine which
appropriate Copyright Notice to use. (Such appropriate copyright notice is
hereinafter referred to as "Copyright Notice".)
NOTICE OF LICENSE RESTRICTIONS
All software on this diskette is copyrighted and may be used and copied only
under the terms of the MCAFEE End User License Agreement (EULA). This
diskette may be used only by the registered user, and may not be resold or
transferred except in accordance with the terms and conditions of the EULA.
Disassembly of code is prohibited. Unauthorized reproduction, transfer, or
use this material may be a criminal offense [insert appropriate Copyright
Notice].
IV INTERNAL NOTICE ON MAGNETIC MEDIA
MCAFEE Associates, Inc. includes an internal copyright notice in machine-
readable code. This may not be altered or removed by OEM. A notice with the
appropriate product name, release, and version number and copyright year(s)
should be located in each MCAFEE Licensed Program.
V ROM BASED LICENSED PROGRAMS, IF APPLICABLE
A. OEM shall mark, externally and in the same place that OEM affixes its own
product identification and/or serial number, the words: "Software contained
with the ________________________ (insert the "Defined Hardware" from the MCAFEE
OEM License Agreement) is used under license from MCAFEE Associates, Inc.
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B. OEM shall mark upon the external surface of the ROM chip by silkscreen or
other non-destructible material the appropriate Copyright Notice.
VI DOCUMENTATION REPRINT RIGHTS
If OEM is granted Documentation Reprint Rights from MCAFEE Associates, Inc.,
OEM must include an appropriate Copyright Notice in MCAFEE documentation on the
title page or the reverse thereof or on either side of the cover page of the
product, related books, manuals, or pamphlets distributed.
TRADEMARK GUIDELINES
I FUNCTION OF TRADEMARKS
Trademarks, when property used, serve the important function of identifying
MCAFEE Associates, Inc. as the source of MCAFEE products. Trademarks help users
and other members of the public recognize MCAFEE products and the high quality
and dependability associated with those products.
II GENERAL RULES
A. MCAFEE Associates, Inc. trademarks must be displayed in printed or logo
form.
B. Authorization for Licensee to use MCAFEE marks must be obtained in
writing from MCAFEE Associates, Inc. OEM may not use MCAFEE marks to identify
their business or to identify any products other than those from MCAFEE.
C. For each mark which is a registered MCAFEE trademark, the first
occurrence of the mark in a publication or advertisement should include an
indication that the mark is a MCAFEE registered trademark. In the United
States, this indication is made by using a "" symbol after the product name.
For example, "VIRUSSCAN". For use in footnotes the legend should read "(PRODUCT
NAME) is a Registered Trademark of MCAFEE Associates, Inc." Outside of the
United States, an "*" is sometimes used instead of the "" with the same
footnote.
D. For each mark which is an unregistered MCAFEE mark, the first occurrence
of the mark in a publication or advertisement shall include an indication that
the mark is a MCAFEE trademark. In the United States, this indication is made
by using the "(PRODUCT NAME)" reference symbol and the footnote, "(PRODUCT NAME)
is a trademark of MCAFEE Associates, Inc."
E. Any firm marketing software products or otherwise referring in
promotional materials and the like to MCAFEE trademarked products that originate
from MCAFEE Associates, Inc., e.g. "VIRUSSCAN" or "NETSHIELD", must identify
that the MCAFEE names for those products are trademarks.
Correct: "NETSHIELD" software.
F. MCAFEE trademark must never identify any product or service not
originating from MCAFEE Associates, Inc.
G. The trademark identifies ("" and "") together with a footnote should be
in a readable style of type.
H. Trademarks must be used as proper adjectives. Trademarks should not be
used as verbs, in plural form, or in possessive form.
Incorrect:
MCAFEE compatible software.
Correct:
Software compatible with MCAFEE products.
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III EXAMPLES OF USES OF MCAFEE TRADEMARKS
A. MCAFEE trademarks may never be used to describe a person and should be
used to describe a MCAFEE product.
Incorrect:
"VIRUSSCAN users."
Correct:
"VIRUSSCAN software users."
B. MCAFEE trademarks may never be used to describe a product that does not
come from MCAFEE Associates, Inc. unless, and to the extent that permission is
granted in writing, by MCAFEE Associates, Inc. or a MCAFEE subsidiary.
IV TRADEMARKS REGISTERED IN THE UNITED STATES
MCAFEE Associates, Inc., the MCAFEE logo, VirusScan, Netshield, NetTools and
SiteMeter are registered trademarks of MCAFEE Associates, Inc.
These marks must be followed by the "" symbol. For publication outside the
United States, local trademark laws must be followed.
V OTHER TRADEMARKS OR TRADENAMES
The following marks shall be treated as unregistered trademarks in accordance
with Paragraph II.E above:
BRIGHTWORKS(TM) SITEMETER
NETTOOLS LANINVENTORY(TM)
VIRUSSCAN NETREMOTE+(TM)
NETSHIELD BRIGHTWORKS UTILITIES(TM)
MCAFEE SERVICE DESK WEBSCAN(TM)
SITEEXPRESS(TM) ROMSHIELD(TM)
BOOTSHIELD(TM) SERVERSTOR(TM)
WEBSTOR(TM) PCCRYPTO(TM)
VYCORWEB(TM) VYCORENTERPRISE(TM)
DP UMBRELLA REMOTE DESKTOP 32(TM)
GROUPSHIELD(TM) SABERTOOLS(TM)
GROUPSCAN(TM) SABER LAN WORKSTATION(TM)
WEBCRYPTO(TM) PCFIREWALL(TM)
NETCRYPTO(TM) NTSSENTIAL(TM)
VI SABER NAMES
Certain MCAFEE products use the trademark "SABER" (the "Mark"). Products
currently bearing the Mark are SABERTOOLS and SABER LAN WORKSTATION. The Mark
is a trademark of American Airlines, Inc. ("American") and is licensed for use
to MCAFEE, which is not otherwise affiliated with American or SABRE Travel
Information Network. OEM acknowledges and agrees that: (a) the Mark is owned by
American; (b) it will make no claim to the Mark superior to the claims of
American and MCAFEE in the applicable computer software, hardware and
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peripherals industry; (c) it will not take any action to deceive or confuse the
public regarding the Mark; (d) it will provide MCAFEE at least annually with
representative materials showing the use of the Mark in the preceding twelve
(12) month period; and (e) it will use best efforts in all of "SABER" marked
Products advertisements greater than one-quarter page where the proprietary
legend of MCAFEE is used to include the following notice with the same
prominence that such proprietary legends of MCAFEE are given:
"SABER is a trademark of American Airlines, Inc. and is licensed for use to
MCAFEE Associates, Inc. MCAFEE Associates, Inc. is not affiliated with
American Airlines, Inc. or SABRE Travel Information Network."
SUMMARY
No representation shall be made that MCAFEE has reviewed or authorized any
publication or product, or endorses any publication, product or contents
thereof, without express prior written permission from MCAFEE.
We hope these guidelines give you a clear understanding of the policies of
MCAFEE regarding advertising and outside publications. Please contact MCAFEE at
(214) 706-2547 if you have further questions regarding these policies.
16
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EXHIBIT "C"
IMPORTANT
READ CAREFULLY BEFORE USING THE SOFTWARE.
XCELLENET SOFTWARE LICENSE AGREEMENT
THIS IS A LEGAL AGREEMENT (THIS "LICENSE AGREEMENT") BETWEEN YOU, THE END USER,
AND XCELLENET, INC., OR ONE OF ITS AFFILIATED ENTITIES ("XCELLENET"). BY
INSTALLING OR USING THE SOFTWARE PRODUCT(S) ORDERED BY YOU AND ACCOMPANYING THIS
LICENSE AGREEMENT, INCLUDING ANY UPDATES THERETO AND ANY ASSOCIATED ELECTRONIC
OR WRITTEN DOCUMENTATION (TOGETHER, THE "SOFTWARE"), YOU ARE AGREEING TO BE
BOUND BY THE TERMS OF THIS LICENSE AGREEMENT. IF YOU DO NOT AGREE TO THE TERMS
OF THIS LICENSE AGREEMENT, YOU SHOULD CLICK THE DO NOT ACCEPT BUTTON AND THE
INSTALLATION/DOWNLOAD PROCESS WILL NOT CONTINUE. YOU MAY THEN, WITHIN 30 DAYS
OF PURCHASE, CONTACT THE PLACE WHERE YOU OBTAINED THE SOFTWARE AND EITHER RETURN
THE SOFTWARE INCLUDING ALL COPIES THEREOF, OR CERTIFY IN WRITING THE DESTRUCTION
OF SAME, TO RECEIVE A FULL REFUND OF ANY LICENSE FEES PREVIOUSLY PAID BY YOU.
If you ordered a trial version of the Software, the Software may be time
disabled. "Time Disabled" means that all Software functions and features will
cease to operate after that period of time specified by XcelleNet when you
ordered the Software. If you wish to purchase a license for continued use,
please contact XcelleNet on the Internet at http://www.xcellenet.com or by
writing to XcelleNet, Inc., 5 Concourse Parkway, Suite 850, Atlanta, Georgia
30328 U.S.A. Phone: 770/804-8100.
1. GRANT OF LICENSE. Subject to the terms and conditions of this License
Agreement, XcelleNet hereby grants and you hereby accept a nonexclusive and
limited license to use the Software with the understanding that the license
granted in this License Agreement places certain limits on you, including:
(i) You agree to use the Software for your internal use only in processing
your data and any third-party data you have a right to process or
distribute. You agree not to use the Software on a timesharing basis or
to operate a service bureau facility for the benefit of third-parties.
(ii) You agree not to sublicense, assign, rent, sell, lease, distribute or
otherwise transfer the Software or any of the rights granted by this
License Agreement, to any third party, except for the distribution of
Client Software as provided in Section 3 and except that you may
physically transfer the Software from one computer to another within
your own licensed organization provided that you do not retain any
copies of the Software on the prior computer.
(iii) You agree to take all reasonable precautions, which will at least be
equal to those precautions that you take to protect your own similar
proprietary information, to prevent unauthorized persons from obtaining
access to or use of the Software.
(iv) You agree not to cause or knowingly allow disassembly, decompiling or
reverse engineering of the Software or any portion thereof except to
the extent and for the express purposes authorized by applicable law
notwithstanding this limitation.
(v) You agree not to cause or knowingly allow modification or alteration of
the Software without the prior written consent of XcelleNet. You
acknowledge that XcelleNet retains all rights and title to any
modifications or enhancements to, or derivative works of, the Software,
except as otherwise agreed to by XcelleNet. Use of the menus, options,
tools and other features contained within the Software to configure the
Software does not constitute modification of the Software, and
XcelleNet does not claim any ownership of any data entered, or of any
forms, templates, applications or interfaces that were not created by
XcelleNet (or based on XcelleNet's intellectual property) and that
allow other applications to work in conjunction with the Software. If
you wish to develop an interface to the Software or merge the Software
with any other software, you shall inform XcelleNet and XcelleNet, at
its option, may provide you with information sufficient to enable
interoperability between the Software and such other software or
products.
2. INTELLECTUAL PROPERTY. The Software is protected by the copyright laws of
the United States and international treaty provisions. There are severe
penalties, both civil and criminal, for copyright infringement. To further
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protect XcelleNet's ownership rights in the Software, you agree to: (i) not
cause or knowingly allow violation of any of XcelleNet's copyrights, trade
secrets or other proprietary rights related to the Software; (ii) not cause
or knowingly allow alteration, removal or concealment of any copyright, trade
secret or other proprietary rights notices that may appear on or within the
Software, and you agree to reproduce such notices on any copies of the
Software; and (iii) not cause or knowingly allow copying of the Software, in
whole or in part, without the prior written consent of XcelleNet, except to
provide a backup copy and to load the Software into the computer as part of
executing the Software. Solely with respect to the electronic documentation
included with the Software, you may make an unlimited number of copies
(either in hardcopy or electronic form), provided that such copies shall be
used only for internal purposes and are not republished or distributed to any
third party. Any and all other copies of the Software and/or the
documentation made by you are in violation of this License Agreement.
3. CLIENT AND SERVER SOFTWARE. The Software includes "Server Software" and
"Client Software". Server Software is defined as those modules of the
Software installed on the Server that manage and control the automated
exchanges of information with Clients through various telecommunication
channels, including the Internet. Client Software is defined as those modules
of the Software, including plug-ins and ActiveX controls, that run on remote
computers ("Clients") and facilitate communications with the Server. You
agree to use each licensed copy of the Server Software ordered by you only on
a single network or file server ("Server") located in the United States and
its territories, or any other country to which this Software is legally
exported, to manage up to the number of concurrent Client connections ordered
by you. The Software is "in use" on a Server when it is resident in memory
(i.e., RAM) or when executable and other files are installed on the hard
drive or other storage device of that Server. The Client Software may be
distributed to Clients upon their connection to the Server and subsequent use
of the Server Software, but may not otherwise be further distributed. The
Client Software may also include sample work objects developed by XcelleNet
which are pre-programmed routines demonstrating some of the functions which
the Software can be configured to perform. These sample work objects,
including any additional work objects developed by you, may only be
distributed to, and/or used by, Clients when accessing your Server and
performing the functions associated with such work objects. You agree to be
solely responsible for all claims and liabilities resulting from the use by
third parties of any work objects or other Client applications developed by
you.
4. OWNERSHIP. You agree that XcelleNet and/or its suppliers retain all right,
title and interest in and to the Software and all copies at all times,
regardless of the form or media in or on which the original or other copies
may subsequently exist. You agree that you neither own nor hereby acquire
any claim or right of ownership to the Software or to any related patents,
copyrights, trademarks or other intellectual property. XcelleNet and its
suppliers reserve all rights not expressly granted to you. XcelleNet's
suppliers are the intended third party beneficiaries of this License
Agreement and have the express right to rely upon and directly enforce the
terms set forth herein. All content accessed through the Software is the
property of the applicable content owner and may be protected by applicable
copyright law. This License Agreement gives you no rights to such content.
5. LIMITED WARRANTY/EXCLUSIVE REMEDY. For a period of thirty (30) days after
installation of the Software by you (the "Warranty Period"), you may
terminate this License Agreement for any reason and receive a full refund of
any license fees previously paid by you by providing written notice to
XcelleNet within the Warranty Period and either returning the Software and
all copies thereof to XcelleNet or by certifying in writing the destruction
of same. Unless XcelleNet is notified in writing otherwise, the date of
installation shall be deemed to be ten (10) days after the Software is
downloaded by you or otherwise shipped to you by XcelleNet. TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING RIGHT OF REFUND IS YOUR
EXCLUSIVE REMEDY FOR ANY PROBLEMS YOU MAY EXPERIENCE WITH THE SOFTWARE AND IS
LIEU OF ALL WARRANTIES, CONDITIONS, REPRESENTATIONS OR GUARANTIES OF ANY
KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY,
SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE. XCELLENET DOES NOT
WARRANT THAT THE OPERATION OF THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR
FREE. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY XCELLENET OR AN
XCELLENET AUTHORIZED REPRESENTATIVE SHALL CREATE A WARRANTY. THIS DISCLAIMER
OF WARRANTY CONSTITUTES AN ESSENTIAL PART OF THIS LICENSE AGREEMENT. SOME
STATES/JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE
ABOVE EXCLUSION MAY NOT APPLY TO YOU, AND YOU MAY HAVE OTHER LEGAL RIGHTS
THAT VARY FROM STATE TO STATE OR BY JURISDICTION.
6. LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
IN NO EVENT WILL XCELLENET OR ITS OFFICERS, DIRECTORS, EMPLOYEES,
DISTRIBUTORS, LICENSORS OR AGENTS BE LIABLE FOR: (I) COSTS OF SUBSTITUTE
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GOODS OR SERVICES; (II) SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY CHARACTER, WHETHER IN AN ACTION OF CONTRACT OR TORT, EVEN IF
XCELLENET HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; (III) ANY
CLAIM AGAINST YOU BY ANY THIRD PARTY; AND (IV) ANY DAMAGES, LOSSES OR
INJURIES TO YOU, OR THOSE CLAIMING THROUGH YOU, IN EXCESS OF THE LICENSE FEE
PAID BY YOU FOR THE SOFTWARE. SOME STATES/JURISDICTIONS DO NOT ALLOW THE
LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES, SO THE ABOVE LIMITATION MAY NOT APPLY TO YOU .
7. HIGH RISK ACTIVITIES. The Software is not fault-tolerant and is not
designed, manufactured or intended for use as on-line control equipment in
hazardous environments requiring fail-safe performance, such as in the
operation of nuclear facilities, aircraft navigation or communication
systems, air traffic control, direct life support machines, or weapons
systems, in which the failure of the Software could lead directly to death,
personal injury, or severe physical or environmental damage ("High Risk
Activities"). XcelleNet and its suppliers specifically disclaim any express
or implied warranty of fitness for High Risk Activities.
8. TERMINATION. This License Agreement is effective until terminated. You may
terminate this License Agreement at any time by returning the Software and
all copies thereof to XcelleNet or by destroying same. However, you shall
receive a refund of your license fee only if this License Agreement is
terminated in compliance with Section 5 hereof. If you ordered a trial
version of the Software which is time disabled, this License Agreement will
automatically terminate after that period of time specified by XcelleNet
when you ordered the Software, and you agree not to avoid, or attempt to
avoid, any applicable time limitation. This License Agreement may be
terminated by XcelleNet if (i) you fail to pay the license fee set forth at
the time of your order, or (ii) you fail to comply with any of the terms and
conditions set forth in this License Agreement. Upon any termination of this
License Agreement, you agree to immediately cease all use of the Software,
and (ii) either return the Software and all copies thereof to XcelleNet or
destroy same.
9. EXPORT CONTROLS. None of the Software or underlying information or
technology may be downloaded or otherwise exported or re-exported (i) into
(or to a national or resident of) Cuba, Iraq, Libya, North Korea, Iran,
Syria or any other country in violation of the laws and administrative
regulations of the United States or any other applicable jurisdiction; or
(ii) to anyone on the U.S. Treasury Department's List of Specially
Designated Nationals or the U.S. Commerce Department's Table of Deny Orders.
By downloading, installing and/or using the Software, you are agreeing to
the foregoing and you are representing and warranting that you are not
located in, under the control of, or a national or resident of any such
country or on any such list.
10. U. S. GOVERNMENT RIGHTS. If the Software is acquired for or on behalf of the
United States of America, its agencies and/or instrumentalities ("U.S.
Government"), the Software is provided to the U.S. Government as commercial
computer software under FAR 12.212 and DFARS 227.7202, or an equivalent
provision (e.g., in supplements of various U.S. government agencies, as
applicable), and the restrictions set forth in this License Agreement.
Manufacturer is XcelleNet, Inc., 5 Concourse Parkway, Suite 850, Atlanta,
Georgia 30328 U.S.A.
11. GENERAL. This License Agreement shall be governed in accordance with the
laws of the State of Georgia, U.S.A., without reference to conflict of laws
principles and without regard to the United Nations 1980 Convention on
Contracts for the International Sale of Goods and any amendments thereto.
You acknowledge that a violation of this License Agreement may cause
irreparable harm to XcelleNet, and you agree that, in addition to any other
remedies provided by law, XcelleNet shall be entitled to seek injunctive
relief against any such violation without having to post a bond. If any
provision of this License Agreement is held to be unenforceable, such
provision shall be reformed only to the extent necessary to make it
enforceable. All terms of any purchase order or other ordering document
submitted by you shall be superseded by this License Agreement. This
License Agreement may only be amended in writing and only if executed by an
authorized representative of XcelleNet and you. If you have received this
software in Australia or New Zealand, you may have the benefit of certain
rights or remedies pursuant to the Trade Practices Act and similar state and
territory laws in Australia or the Consumer Guarantees Act in New Zealand,
in respect of which certain liability may not be excluded. Should you have
questions concerning this License Agreement, please contact your local
XcelleNet sales office or write to: XcelleNet, Inc., Sales Operations, 5
Concourse Parkway, Suite 850, Atlanta, Georgia 30328.
YOU ACKNOWLEDGE THAT YOU HAVE READ THIS LICENSE AGREEMENT, UNDERSTAND IT AND
AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. YOU FURTHER AGREE THAT IT IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US WHICH SUPERSEDES
ANY PROPOSAL OR PRIOR AGREEMENT, ORAL OR WRITTEN, AND ANY OTHER COMMUNICATIONS
BETWEEN US RELATING TO THE SUBJECT MATTER OF THIS LICENSE AGREEMENT.
_____ Accept ______ Do Not Accept
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EXHIBIT "D"
OEM TECHNICAL SUPPORT PROCEDURE'S
---------------------------------
OVERVIEW:
- ---------
MCAFEE's OEM technical support policy has been developed to provide each OEM
with direct access to MCAFEE's senior technical support personnel to assure
timely and thorough responsiveness. MCAFEE's OEM technical support personnel
may be reached via telephone, fax, email or mail. Listed below is detailed
information on how to reach MCAFEE's technical support personnel along with our
responsiveness for each method of communication. We would recommend that your
personnel use the communication process that is most appropriated for the
specific issue. To assist us in facilitating our OEM technical support, we
would request that you provide your MCAFEE OEM sales representative with the
name, email address, telephone and fax number of your technical support
personnel(s). Finally, if you have any questions regarding this policy please
contact your MCAFEE OEM representative.
EMAIL INQUIRIES
- ---------------
* Address your email inquiries to [email protected]
Messages sent to these electronic addresses will be routed to the appropriate
MCAFEE technician. Support Supervisors will follow up to ensure each issue is
resolved. All emails will be answered within forty-eight (48) hours.
FAXED INQUIRIES
- ---------------
Fax questions to the appropriate supervisor listed below.
Supervisor Fax Number Products
Brian Mann 408-988-5982 VirusScan, NetShield, NetRemote, WebScan
Karla Johnson 214-361-1014 All other MCAFEE products
Use the word "OEM" clearly on your fax to ensure fastest possible attention.
Support questions received will be routed to the appropriate MCAFEE Technician.
All faxes are logged and the Support Supervisors will follow up to ensure each
issue is resolved. All faxes will be answered within forty-eight (48) hours.
TELEPHONE SUPPORT
- -----------------
You may gain telephone access by dialing 408-988-3832. When calling for
technical assistance as an OEM please state that you are an OEM of MCAFEE's,
your company name and the product you are calling about. To ensure that you are
placed into the proper queue it is important to let the operator know that you
are an OEM of MCAFEE's. Your companies OEM history is on file and will be
referenced by the support technician during your call. The average hold time in
the queue is approximately five (5) minutes. Messages will be returned within
four (4) hours.
SURFACE MAIL
- ------------
If you would like to send in a support request via US mail please send it to:
MCAFEE Associates, Inc.
Attn: OEM Support
2710 Walsh Avenue
Santa Clara, CA 95051
All mail inquiries will be replied within four (4) working days
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EXHIBIT "E"
FIRM NAME
I HEREBY CERTIFY,
that I hold valid seller's permit No._______________________
issued pursuant to the Sales and Use Tax law of the State of _______________,
that I am engaged in the business of selling:
____________________________________________________________________________
that the tangible personal property described herein which I shall purchase
from:
____________________________________________________________________________
will be resold by me in the form tangible personal property; PROVIDED, HOWEVER,
that in the even any of such property is used for any purpose other than
retention, demonstration, or display while holding it for sale in the regular
course of business, it is understood that I am required by the Sales and Use Tax
Law of the State of ________ to report and pay for the tax, measured by the
purchase price of such property.
Description of property to be purchased: ____________________________
________________________________________________________________
Dated: _____________________ 19_____ Signature:_______________________
at: _______________________________ By and Title:____________________
Phone: ____________________________ Address: ________________________
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EXHIBIT 10.27
[LOGO OF XCELLENET APPEARS HERE]
XcelleNet, Inc.
5 Concourse Parkway, Suite 850
ATLANTA, GEORGIA 30328
770/804-8100
SYSTEM INTEGRATION REMARKETER AGREEMENT
This System Integration Remarketer Agreement ("Agreement") is by and between
XcelleNet, Inc., located at 5 Concourse Parkway, Suite 850, Atlanta, Georgia
30328 ("XcelleNet") and the following "Vendor":
Vendor Name: AVALAN Technology
-----------------
Address: Box 6888
-----------------
7 October Hill Road
--------------------
Holliston, Massachusetts 01746
-------------------------------
PLEASE SIGN AND RETURN BOTH COPIES FOR SIGNATURE BY XCELLENET. A FULLY EXECUTED
AGREEMENT WILL BE RETURNED TO YOU.
Accepted by: Vendor Accepted by: XcelleNet
By: /s/ Anthony Amundson By: /s/ Jeanne N. Bateman
--------------------------- -------------------------------
Print Name: Anthony Amundson Print Name: Jeanne N. Bateman
-------------------- ------------------------
Title: President Title: Vice President - Finance
------------------------- -----------------------------
Date: 5-8-97 Date: May 5, 1997
-------------------------- ------------------------------
THE FOLLOWING TERMS AND CONDITIONS ARE INCORPORATED IN AND MADE A PART OF THIS
AGREEMENT.
TERMS AND CONDITIONS
--------------------
SECTION 1: SOFTWARE AND SYSTEM
1.1 BACKGROUND. Vendor has developed the line of computer software
programs and documentation, as further identified on Schedule A (the
"Software"), compatible with XcelleNet's RemoteWare product line, as further
described on Schedule B (the "System"). Vendor desires to appoint XcelleNet as
a remarketer for the Software, and XcelleNet desires to accept such appointment,
for the purpose of identifying and pursuing potential customers for the Software
to be used in combination with XcelleNet's System. In addition, Vendor agrees
to make its services available to XcelleNet for purposes of modifying and
enhancing the Software in accordance with the terms of this Agreement and the
requirements and specifications set forth in the Software Enhancements Addendum,
which is attached hereto as Schedule D (the "Software Enhancements Addendum").
For purposes of this Agreement, the Software shall include Vendor's computer
software programs in object code, machine-readable form, as modified for
XcelleNet pursuant to the Software Enhancements Addendum, and all upgrades,
fixes, updates, future releases and related user documentation supplied by
Vendor, pursuant to the Software Support Addendum (described in Section 2.3) or
otherwise. XcelleNet and Vendor desire to enter into this Agreement upon the
terms and conditions set forth herein.
1.2 SOFTWARE OWNERSHIP. Except as set forth in this Agreement, nothing
herein shall grant to XcelleNet any title or ownership interest in the Software;
all portions, extracts, adaptations, compilations, selections, arrangements,
inherited characteristics and portions of the Software programming foundation;
any modifications or enhancements thereto and derivatives thereof; and all
supporting documentation; and all patents, copyrights, trade secrets and other
intellectual property rights relating to the Software, such portions, extracts,
adaptations, compilations, selections, arrangements, inherited characteristics,
portions of the Software programming foundation, modifications, enhancements and
documentation shall at all times remain and vest solely with Vendor.
1.3 SYSTEM OWNERSHIP. Nothing in this Agreement shall grant to Vendor any
title or ownership interest in the System or any other products of XcelleNet now
or hereafter the subject of this Agreement, and all of XcelleNet's patents,
copyrights, trade secrets and other intellectual property rights relating to
said products, shall at all times remain and vest solely with XcelleNet.
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Nothing in this Agreement shall grant to Vendor any title or ownership interest
in any trademarks, service marks or trade names of XcelleNet. Vendor shall not
use such XcelleNet trademarks, service marks or trade names in any marketing,
licensing, or promotional activities without the prior written approval of
XcelleNet.
SECTION 2: APPOINTMENT OF REMARKETER
2.1 REMARKETER. Vendor hereby appoints XcelleNet to act as Vendor's
non-exclusive, worldwide remarketer of the Software solely as an integral part
of the System developed and marketed by XcelleNet. XcelleNet may not offer the
Software except for use as a component of the System, and may not market or sell
the Software in a manner other than as contemplated by this Agreement.. Vendor
hereby grants XcelleNet a non-exclusive, nontransferable (subject to Section
7.7), worldwide license to copy and use the Software only to the limited extent
necessary to: (i) incorporate the Software into the System; (ii) support the
Software and System; and (iii) make the Software and System available to
customers on a commercial basis, either directly or through XcelleNet's
authorized distributors, resellers, remarketers, OEMs and marketing
representatives ("Distributors"). Vendor shall deliver copies of the Software
to XcelleNet pursuant to the schedule set forth in the Software Enhancements
Addendum. XcelleNet hereby represents and warrants (i) that each Distributor
will be bound by written agreement(s) which protect the Software and Vendor's
intellectual property therein, and its confidential information, to
substantially the same degree as provided under this Agreement; (ii) that
XcelleNet will, in its reasonable discretion, promptly enforce each such
agreement against each Distributor and will immediately inform Vendor if
XcelleNet learns of any material breach of such provisions; (iii) that XcelleNet
does not purport to create a direct contractual relationship between Vendor and
any Distributor or any liability of Vendor to any Distributor; (iv) that
XcelleNet shall defend, indemnify and hold Vendor harmless from and against any
and all claims, causes of action and damages asserted by third parties arising
as a result of the wrongful acts or omissions of any Distributor(s); and (v)
that XcelleNet will provide assistance as reasonably requested by Vendor to help
Vendor in enforcing its intellectual property rights against XcelleNet's
Distributors.
2.2 RIGHT TO SUBLICENSE. The Software may be sublicensed to
customers of XcelleNet only for use in conjunction with each customer's use of
the System. To enable XcelleNet to market and sublicense the Software to its
customers, Vendor grants XcelleNet (and its Distributors) a non-exclusive,
nontransferable (subject to Section 7.7), worldwide license to demonstrate,
distribute and issue sublicenses for the Software as an integral part of the
System, including sublicensing the Software to the then-currently installed
customer base for the System. XcelleNet's rights to sublicense the Software are
limited to sublicensing the Software to customers in conjunction with the
concurrent or prior licensing of XcelleNet's System and under the same
proprietary rights limitations as XcelleNet uses when licensing its System;
provided, that Vendor's liability shall be limited, and its rights protected, to
substantially the same degree as under XcelleNet's standard license agreements
with its own customers, a current copy of which is attached hereto as Schedule
I. In addition to the foregoing, XcelleNet, including its subsidiaries, may on
a royalty-free basis: (i) use the Software internally, or as reasonably
requested to Vendor; and (ii) distribute copies at any given point in time of
the Software to its Distributors, customers and prospects, provided the Software
is properly licensed as provided in the preceding sentence, and provided that
such parties use the Software only for product evaluation, which shall be for a
limited time period and/or limited number of clients, training, demonstrations,
beta test sites, disaster recovery, backup, test beds, or other purposes
approved by Vendor, and not for resale and further provided, XcelleNet does not
receive revenue for the foregoing uses. Notwithstanding the foregoing, XcelleNet
and its Distributors shall be permitted to distribute licensed copies of the
Software on a royalty-free basis, provided the revenue does not exceed twenty-
five percent (25%) of the list price for each licensed copy of the System
provided such copies are used only for Disaster recovery or backup purposes.
Furthermore, XcelleNet and its Distributors and affiliates may use and
distribute the Software to customers in conjunction with systems supplied
expressly for the purpose of Test and Evaluation, such as "Discovery Systems" or
"4 session servers" without paying Vendor the server royalty fee (as described
further on Schedule G). Any future systems designated as Test and Evaluation
will be royalty-free only after such systems are approved as royalty-free by
Vendor. Vendor reserves the right to terminate the royalty-free Test and
Evaluation licenses if it reasonably determines that XcelleNet is abusing the
intent of its right to distribute these royalty free licenses. Upon the
migration or upgrade of a user from the Test and Evaluation Systems to a full-
licensed version of the Software, XcelleNet will pay Vendor the applicable
royalty fee (as further described on Schedule G). For purposes of this
Agreement, a customer of XcelleNet that has been provided with the Software as
an integral part of the System pursuant to this Section 2.2 shall be termed a
"Sublicensee".
2.3 SUPPORT. Vendor authorizes XcelleNet (and its Distributors) to
provide support and maintenance of the Software to Sublicensees, and XcelleNet
hereby agrees to provide commercially reasonable support and maintenance to
Sublicensees, and thus to serve (either directly or through its Distributors) as
the primary point of contact for Sublicensees in providing such support and
maintenance. Vendor shall have no direct contractual or other obligation to any
Distributor or Sublicensee. Any warranty, commitment regarding support or
maintenance, or representation that the Software contains functions, features or
performance characteristics made by XcelleNet, which exceed those expressly set
forth in Section 4 of this Agreement, shall be the sole responsibility of
XcelleNet and XcelleNet shall indemnify Vendor against any damages arising as a
result of any breach of this provision. To assist XcelleNet with its
obligations hereunder, and in consideration of the payment of the fees under
Section 5.4, Vendor shall provide XcelleNet with general support and maintenance
of the Software according to the terms and conditions of the Software Support
Addendum attached hereto as Schedule C (the "Software Support Addendum"). For
purposes of this Agreement, "support" shall consist of training and instruction,
assistance with installation and operation of the Software, and investigation
and correction of alleged defects in the Software; "maintenance" shall consist
of updates and enhancements of the Software as may be released by Vendor in its
discretion from time to time, for no charge to Vendor's customers; and "service"
shall consist of "support", "maintenance" and new releases of the Software.
Vendor reserves the right to charge XcelleNet for any enhancement, feature,
release or version of the Software which adds significant new functionality and
for which Vendor generally charges a separate fee, provided that any such fee
charged to XcelleNet shall be no greater than generally available in published
pricing and volume discount schedules. Notwithstanding the foregoing, all error
corrections, bug fixes, enhancements, updates and new releases of the Software
will be provided by Vendor to XcelleNet per the Service fees provided in
Schedule G, and at no additional charge. For example, any update, enhancement,
or new release of the Software for purposes of compatibility with the then
current version of Microsoft Operating system shall be provide to XcelleNet
under the Service fees described in Schedule G. XcelleNet and its Distributors
shall provide Sublicensees with any updates, enhancements and new releases of
the Software prepared by Vendor upon acceptance of such releases by XcelleNet
and XcelleNet's successful integration of such releases into the System.
2.4 TRADEMARKS. Vendor grants to XcelleNet (and its Distributors)
the non-exclusive, nontransferable (subject to Section 7.7), worldwide right and
license to only use those trademarks, service marks, trade names and other logos
of Vendor set forth on Schedule E (the "Trademarks") to denote the proper
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identity, origin, and authenticity of the Software in connection with
XcelleNet's marketing and sublicensing of the Software as part of the System,
all subject to Vendor's then-current reasonable marketing communications
guidelines, an initial set of guidelines is found on Schedule E. Except as set
forth in this Agreement, nothing herein shall grant to XcelleNet any rights,
title or ownership interest in the Trademarks.
2.5 INITIAL TRAINING. Vendor, at its own expense (other than travel
expenses), shall provide up to two (2) days of standard training and consulting
services to XcelleNet at XcelleNet's location by qualified Vendor personnel.
Vendor's reasonable and documented travel expenses for one (1) trainer (coach
travel) shall be paid by XcelleNet. Such training and consulting shall be
scheduled upon the mutual agreement of both parties, but prior to XcelleNet's
acceptance of the enhancements to the Software described on the Software
Enhancements Addendum. Additional training is available at the daily rate of
$2,500 plus expenses.
2.6 INDEPENDENT PRODUCTS. Nothing in this Agreement shall be
construed to prevent XcelleNet from independently developing, licensing or
otherwise acquiring (for itself or third parties) any software, even if such
software is functionally similar in whole or in part to any of the Software,
provided XcelleNet does not use Vendor's supplied code or confidential
information.
SECTION 3: PROPRIETARY PROTECTION OF SOFTWARE
3.1 ACKNOWLEDGMENT OF PROPRIETARY FEATURES. XcelleNet acknowledges
that the Software is represented by Vendor to be a commercially valuable,
proprietary product of Vendor and to contain substantial trade secrets of
Vendor, which Vendor has entrusted to XcelleNet in confidence to use and
disseminate only as expressly authorized by this Agreement. XcelleNet agrees to
use reasonable security measures, but in no event less stringent than those it
applies to its own related proprietary and trade secret products, to protect the
Software from unauthorized disclosure and/or release.
3.2 RESTRICTIONS ON USE. In addition to those limitations on
XcelleNet's rights set forth in Section 2, XcelleNet will allow access to the
Software (and any trade secrets embodied therein and any supporting
documentation) only to its employees and contractors who are required to have
access to the Software in connection with the performance of their duties for
XcelleNet and who have signed written agreements with provisions protecting the
Software and Vendor's confidential information substantially similar to
XcelleNet's obligations as provided herein. Under no circumstances may
XcelleNet or any affiliate, Distributor, Sublicensee, contractor or other third
party obtaining access to the Software through or on behalf of XcelleNet reverse
compile or reverse assemble the object code version of the Software, or
otherwise derive or attempt to reproduce the Software source code..
3.3 LEGENDING. As appropriate for the bundling of the Software
within the System and the branding of the System, XcelleNet will reproduce and
include in all copies of the Software and documentation prepared by XcelleNet
the copyright notice(s) and proprietary legend(s) of Vendor as they appear in
the Software and documentation supplied by Vendor. In order to comply with the
foregoing, XcelleNet will include an intellectual property rights attribution
statement in all documentation referring to the Software, on the product media,
packaging and collaterals, splash screens and "help about" dialogue box as
mutually agreed by the parties during the development of the enhancements for
the Software pursuant to the Software Enhancements Addendum.
3.4 NONDISCLOSURE AGREEMENT. The Nondisclosure Agreement executed
concurrently or previously by the parties (the "NDA"), attached hereto as
Schedule F, shall apply to each party's activities pursuant to this Agreement.
3.5 SOURCE CODE ESCROW. Upon XcelleNet's acceptance of the
enhancements for the Software pursuant to the Software Enhancements Addendum,
Vendor will place a complete copy in machine-readable form of the unencrypted,
commented source code for the Software, including any documentation and other
materials describing the procedure for compiling and linking such source code
into executable code (collectively, the "Source Code"), into escrow for the
benefit of XcelleNet subject to the terms of an escrow agreement (the "Escrow
Agreement") to be entered into between Vendor and Data Securities International,
Inc. (the "Escrow Agent") which document shall govern the release of the Source
Code. Vendor agrees to update, enhance, or otherwise modify the escrowed Source
Code promptly upon its release of any updates, fixes, enhancements or new
versions of the Software, but not more frequently than quarterly. If XcelleNet
or any of its Sublicensees operates or uses different versions of the Software,
such escrowed Source Code shall include all such different versions, including
only the then-current version and all version(s) which were released during the
twelve months prior to release of such version. A true and correct copy of the
Escrow Agreement is set forth in Exhibit H attached hereto. XcelleNet's access
to the Source Code shall be as provided in the Escrow Agreement but shall, at a
minimum, allow access in the event Vendor (i) is forced into bankruptcy,
liquidation or receivership or ceases to do business in the ordinary course, or
ceases altogether to offer maintenance for the version(s) which are required to
be placed into escrow; or (ii) with respect to a Critical Problem, materially
breaches it obligations to provide maintenance support and correct defects as
such obligations are set forth in this Agreement and the Software Support
Addendum and fails to cure such breach within ninety (90) days of written notice
by XcelleNet. The Escrow Agreement shall also allow for auditing and
verification of the Source Code by an independent third party to determine the
completeness and accuracy of each deposit. Vendor grants to XcelleNet a non-
exclusive, nontransferable (subject to Section 7.7) license to use, copy, modify
and compile the Source Code to the extent necessary to provide support and
maintenance to Sublicensees in accordance with this Agreement. Upon release of
the Source Code from escrow, XcelleNet may use the Source Code, but only to the
extent necessary to provide support and maintenance to Sublicensees and then
under the strictest security. Under no circumstances may XcelleNet disclose or
disseminate the Source Code to any persons who are not employed or contracted by
XcelleNet to conduct support and maintenance of the Software for Sublicensees
(and then only pursuant to a written confidentiality agreement as set forth in
Section 3.2 herein). Except for the foregoing, in no event may XcelleNet
transfer the Source Code to an affiliate, Distributor, contractor, Sublicensee
or any third party for any reason whatsoever. Title to any media on which the
Source Code is stored shall be transferred to the Escrow Agent at the time of
deposit. All escrow fees shall be shared equally by the parties. The Escrow
Agreement shall remain in effect during the term of this Agreement, including
any renewals.
SECTION 4: LIMITED WARRANTY; LIMITATION OF LIABILITY
4.1 LIMITED WARRANTY. Vendor represents and warrants, for the
benefit only of XcelleNet, that: (i) Vendor owns or has the right to license
the Software and to enter into this Agreement; (ii) there are no claims alleging
that the Software infringes any copyright, patent or trade secret intellectual
property right of any third party based on the laws of any country in which
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XcelleNet distributes the Software as part of the System; and (iii) to the best
of Vendor's knowledge the Software does not and will not infringe any copyright,
patent or trade secret right of any third party based on the laws of any country
in which XcelleNet distributes the Software as part of the System. Vendor also
warrants that the Software shall substantially conform in all respects to the
documentation and published functional specifications associated with the
Software, including but not limited to calendar year 2000 date conversion and
compatibility capabilities and those requirements and specifications set forth
in the Software Enhancements Addendum (the "As Documented Warranty"). This As
Documented Warranty shall apply only for six (6) months from the date the
Software enhancements are accepted by XcelleNet as set forth in the Software
Enhancements Addendum and shall not be construed to require Vendor to maintain
obsolete versions (i.e., any version released more than 12 months prior to the
current release) of the Software or to require Vendor to modify the Software for
operation with different computer hardware, operating systems or with any
software supplied to XcelleNet's Sublicensees by any third party (other than
that hardware and software for which the Software is represented to be
compatible in the As Documented Warranty.. Vendor will periodically provide
XcelleNet with a known bug list for the Software and any suggested work-arounds.
4.2 REMEDY. In the event there is any breach of the As Documented
Warranty, Vendor shall use its best commercial efforts promptly to remedy such
breach in accordance with the response times, procedures and other terms and
conditions set forth in the Software Support Addendum.
4.3 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 4, NO
EXPRESS OR IMPLIED WARRANTY IS MADE BY VENDOR WITH RESPECT TO THE SOFTWARE,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE OR OF NON-INFRINGEMENT. VENDOR DOES NOT
WARRANT THAT THE SOFTWARE WILL OPERATE WITHOUT ANY ERROR OR INTERRUPTION, OR
THAT THE FUNCTIONALITY OF THE SOFTWARE WILL MEET XCELLENET'S OR ANY OF ITS
SUBLICENSEE'S REQUIREMENTS.
4.4 LIMITATION OF LIABILITY. IN NO EVENT WILL VENDOR OR XCELLENET BE
LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR
CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT EVEN IF THAT PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY DAMAGES IN EXCESS OF THE
FEES RECEIVED BY VENDOR HEREUNDER DURING THE TWELVE (12) MONTHS PRIOR TO THE
EVENT WHICH ULTIMATELY GAVE RISE TO THE DAMAGE.
4.5 EXCLUSIONS. THE LIMITATION OF LIABILITY SET FORTH IN SECTION 4.4
SHALL NOT APPLY TO: (I) VENDOR'S OBLIGATIONS SET FORTH IN SECTIONS 4.6 AND 4.7
HEREOF, OR (II) DIRECT DAMAGES TO REAL OR TANGIBLE PERSONAL PROPERTY, OR FOR
BODILY INJURY OR DEATH, (III) ANY DAMAGES ARISING FROM A PARTY'S
MISAPPROPRIATION OF THE OTHER PARTY'S PATENT, COPYRIGHT, TRADE SECRET OR OTHER
INTELLECTUAL PROPERTY RIGHTS (INCLUDING BREACH OF A PARTY'S CONFIDENTIALITY
OBLIGATIONS AS SET FORTH IN SECTION 3.4), AND WITH RESPECT TO XCELLENET, ANY
DAMAGES ARISING FROM DISTRIBUTION OF THE SOFTWARE IN VIOLATION OF THE RIGHTS
GRANTED UNDER THIS AGREEMENT; OR (IV) XCELLENET'S INDEMNIFICATION OBLIGATIONS AS
SET FORTH IN SECTION 2.3.
4.6 INFRINGEMENT INDEMNIFICATION. Vendor, at its expense, agrees to
defend and indemnify XcelleNet, including its Distributors and Sublicensees,
from and hold it harmless against any loss, liability, damage, judgment, action,
cause of action, cost or expense (including without limitation reasonable
attorneys' fees) arising out of a claim that the Software infringes, violates or
misappropriates any patent, copyright, trademark or trade secret right of a
third party based on the laws of any country in which XcelleNet distributes the
Software; provided that XcelleNet gives Vendor written notice within a
reasonable time of the commencement of any claim of infringement, sole control
of the defense and settlement of such claim, and all reasonable assistance (at
Vendor's expense) to defend such claim. XcelleNet may appear in such action
with counsel of its choice, at its own expense (such expense not being
indemnified by Vendor). Vendor shall have no obligations under this Section 4.6
to the extent such claims, damages and liabilities result from: (i)
modifications of the Software that were not designed and supplied by Vendor, if
the Software would not be infringing absent such modification, or (ii) use of
the Software in combination with any other software, hardware, systems or
applications not provided by Vendor, if the Software would not be infringing
absent such combination.
4.7 ALTERNATIVE REMEDIES. If a claim described in Section 4.6 may be
or has been asserted, XcelleNet will permit Vendor, at Vendor's option and
expense, to (i) procure the right to continue using the Software free of such
claim, (ii) replace or modify the Software to eliminate the infringement while
providing functionally equivalent performance or (iii) accept the return of the
Software in exchange for a refund of the royalty that XcelleNet actually paid to
Vendor for such Software, less depreciation based on a 5-year straight-line
depreciation schedule, and a pro rata share of the Service Fees that XcelleNet
actually paid to Vendor for the portion of the then-current period of
maintenance and support that the Software was not available. The foregoing
remedies shall not relieve Vendor from its obligations pursuant to Section 4.6
with respect to XcelleNet's use of the Software prior to the effective date of
any such remedy .
SECTION 5: PAYMENT
5.1 ROYALTY FEES. XcelleNet shall pay Vendor those royalty fees set
forth on Schedule G for any Software licensed to a Sublicensee. Such royalty
fees shall be due and payable within thirty (30) days after the end of each
calendar quarter and shall be accompanied by a detailed royalty calculation
report, which shall include the name of each Sublicensee, Distributor,
contractor, affiliate and other party who has been licensed to use or received a
copy of the Software for any purpose.
5.2 NO LICENSE FEE RESTRICTION. XcelleNet shall be entitled to retain
all sublicense fees and support and maintenance charges that XcelleNet may
charge Distributors or Sublicensees in connection with sublicenses of the
Software. XcelleNet is free to set any license fee for the System.
5.3 ENHANCEMENT SERVICES. XcelleNet shall pay Vendor the amounts set
forth in the Software Enhancements Addendum as compensation for the enhancement
services provided under this Agreement. All amounts paid by XcelleNet to Vendor
pursuant to the Software Enhancements Addendum shall be considered prepaid
royalty fees toward any future distribution of the Software and shall be subject
to recovery by XcelleNet according to the terms and conditions set forth in
Schedule G.
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5.4 SUPPORT SERVICES. XcelleNet shall pay Vendor the amounts set
forth in Exhibit G as compensation for the support and maintenance services
provided under this Agreement (Service Fees).
5.5 INSPECTION OF RECORDS. Vendor shall, at its own expense, be
entitled, by an independent certified public accounting firm and during normal
business hours and upon reasonable advance notice, to inspect the relevant books
and records of XcelleNet for the sole purpose of verifying payments to be
provided under this Agreement. Such inspections may be performed no more than
once per twelve (12) month period. The representatives of the accounting firm
shall be deemed to be agents of Vendor and, as such, Vendor shall ensure that
such representatives agree in writing, prior to conducting the audit, to be
bound by confidentiality obligations similar to those found in the NDA. In
addition, the accounting firm shall report to Vendor only whether correct
amounts were paid by XcelleNet and, if not, any discrepancy. If any discrepancy
is more than five (5.0%) percent of the total amount owed for the period in
question, XcelleNet shall bear the costs of the audit, and pay interest on the
overdue amount at one (1.0%) percent per month from the date originally due.
5.6 TAXES. XcelleNet shall pay all federal, state, and local taxes
designated, levied, or based upon XcelleNet's possession, distribution, or
sublicensing of the Software; Sublicensees' possession or use of the Software;
or the compensation and fees payable under this Agreement or under any
sublicenses of XcelleNet, exclusive of taxes based on the net income derived by
Vendor.
SECTION 6: TERM AND TERMINATION
6.1 TERM. This Agreement shall become effective on the date executed
by XcelleNet as written above and shall, unless terminated hereunder, continue
in full force and effect, as provided herein, for an initial term of one (1)
year, and thereafter shall automatically renew for successive terms of one (1)
year each, unless and until either party gives written notice of termination to
the other party at least three (3) months prior to expiration of the then
current term. In addition, upon the affirmative, written agreement of the
parties, this Agreement may be renewed for successive terms of one (1) year
each. Either party may withhold its consent to an extension entirely in its
discretion, with or without cause and without any liability as a result. In no
event shall either the extension of the initial term as provided herein, or the
re-execution of this Agreement upon expiration or otherwise, operate to construe
or characterise this Agreement as being a perpetual agreement, or having a term
in excess of the period specifically provided herein. In addition, XcelleNet
shall not oppose the exercise by Vendor of its right to not extend the term
beyond the initial term and/or any twelve (12) month renewal period as
specified.
6.2 TERMINATION. This Agreement may be terminated if at any time
either party to this Agreement materially defaults in the performance of, or
otherwise materially breaches, this Agreement; and if such default or breach
continues for a period of thirty (30) days after the other party has given
written notice to such party specifying the nature of such default or breach and
demanding that it be remedied, then the party giving such notice shall have the
right to terminate this Agreement by giving further written notice to that
effect to such party in default or breach, effective thirty (30) days after the
receipt of such further notice. Notwithstanding the foregoing, with respect to a
breach by a party for which an effective remedy is not readily apparent, a party
will be deemed to have cured such breach if within the cure period it takes
steps reasonably necessary to alleviate any actual or potential damage resulting
from the breach and to prevent a similar future breach. Nothing contained herein
shall limit, restrict or delay Vendor from immediately exercising its rights as
provided under Section 7.8.
6.3 CONSEQUENCES OF TERMINATION. Except as expressly set forth in
this Section 6.3, upon any termination or expiration of this Agreement,
XcelleNet shall: (i) immediately cease marketing and distributing the Software;
(ii) immediately cease using the Trademarks; (iii) return to Vendor, or certify
the destruction of, any Software, materials and other information of Vendor,
including all copies, portions, extracts, summaries and derivatives thereof, in
XcelleNet's possession or control, and require the return or certification of
destruction of any such materials in the possession or control of any
contractor, Distributor or affiliate of XcelleNet or any third party who
received access or possession of the Software directly or indirectly from
XcelleNet; and (iv) immediately pay all outstanding amounts to Vendor which are
due through the effective date of such termination. Notwithstanding the
foregoing, should this Agreement terminate or expire for any reason other than a
wilfull misappropriation by XcelleNet of Vendor's intellectual property rights
in the Software, XcelleNet may continue using those releases of the Software
then in its possession, subject to all the restrictions of this Agreement
(including Section 7.8 and the payment to Vendor of the applicable royalty fees
and Service fees), solely for the purpose of continuing end-user support for
sublicenses of the Software granted in accordance with this Agreement. Provided
XcelleNet continues to pay the applicable Service fees, Vendor shall continue to
provide XcelleNet with the same releases, upgrades and fixes for the Software as
provided prior to termination or expiration of this Agreement pursuant to the
Software Support Addendum, and XcelleNet may continue to provide such releases,
upgrades and fixes to its Sublicensees with respect to all copies of the
Software properly licensed thereto. XcelleNet's post-termination use of the
Software, including delivery of updates to Sublicensees of the Software who
participate in XcelleNet's software maintenance and support program, shall be
for any remaining term (including renewals) under then-currently effective
support agreement(s) with its Sublicensees. Additionally, XcelleNet's post-
termination distribution of the Software to new Sublicensees shall not exceed
six (6) months from termination of this Agreement: provided that those
sublicenses which are distributed after the termination are for existing
customers of or active proposals for the XcelleNet System(s) that include the
Software or as otherwise approved by Vendor; and provided that if on the
termination date XcelleNet is internally developing a product (which for
purposes herein shall not include integration of third-party products) to
replace the Software within the System then XcelleNet's post-termination
distribution rights shall immediately terminate on the termination date of this
agreement except for deliveries associated with previous license commitments
made by XcelleNet . No termination or expiration of this Agreement shall affect
any sublicenses granted in accordance with this Agreement, and those
Sublicensees may continue to use the Software as part of any System then in
their possession, regardless of whether XcelleNet has upgraded or otherwise
transitioned such Sublicensees to replacement software. If termination of this
Agreement is initiated by Vendor during the first 2 years of its term and before
any prepaid royalty fees are fully exhausted, XcelleNet shall receive a full
refund of any unused prepaid royalty fees unless such termination is due to a
breach by XcelleNet. In addition to those Sections of this Agreement expressly
stated as surviving termination or expiration of this Agreement, Sections 1.2,
1.3, 2.6, 3.1, 3.2, 4.3, 4.4, 4.5, 4.6, 6.3 and 7 shall also survive such
termination or expiration. Upon the expiration of this Agreement or its
termination in accordance with this Section 6, a party will not be entitled
under local law or otherwise to receive any indemnity or payment from the other
party as a result of such expiration or termination, whether for actual,
consequential, indirect, special or incidental damages, costs or expenses,
whether foreseeable or unforeseeable (including, but not limited to, labor
claims and loss of profits, investments or good will), any right to which each
party hereby waives and disclaims.
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SECTION 7: MISCELLANEOUS
7.1 NON-WAIVER. Neither the exercise nor the waiver by either party
hereto of any right or remedy provided hereunder shall be construed as limiting
such party's other rights and remedies at law or equity with respect to either
different or continuing breaches by the other party.
7.2 OTHER ACTIVITIES. This Agreement shall not be construed to limit
XcelleNet's right to obtain services or software programs from other sources,
nor shall this Agreement be construed to limit Vendor's right to appoint or
engage other persons or entities to conduct business activities on behalf of
Vendor, or to license or sublicense to any person or entity the Software or any
other software program.
7.3 INDEPENDENT CONTRACTORS. Each party is an independent contractor
under this Agreement, and nothing herein shall be construed to create a
partnership, joint venture, or agency relationship between the parties hereto.
Neither party shall have the power or authority to bind or obligate the other in
any manner to any third party except as expressly set forth in this Agreement.
7.4 SEVERABILITY. If any provision of this Agreement is ruled to be
invalid under any applicable statute or rule of law, it is, to that extent,
omitted, but the remainder of this Agreement shall continue to be binding upon
the parties hereto.
7.5 NOTICE. Any notice, demand, or request required or permitted to be
given hereunder shall be made in writing and shall be deemed effective three (3)
business days after having been deposited in the United States mail, postage
prepaid, registered or certified, or when sent by a third-party courier service
where receipt is verified by the receiving party's acknowledgment, and addressed
to the party's address first written above. Any party may change its address
for purposes of this Agreement by written notice given in accordance herewith.
7.6 COMPLETE AGREEMENT. All Schedules attached hereto are incorporated
herein by this reference. This Agreement and the attached Schedules contain the
whole understanding of the parties relating to the subject matter hereof and
shall supersede all prior oral or written representations and agreements between
the parties. This Agreement may not be varied except by a writing duly executed
by both parties. If either party issues a purchase order, memorandum or invoice
or other instrument, such purchase order, memorandum or instrument, shall be for
that party's internal purposes only, and any terms and conditions contained
thereon, whether printed or written, shall not vary or add to the terms and
conditions of this Agreement.
7.7 ASSIGNMENT. This Agreement may not be assigned or transferred to a
third party by either party without the prior written consent of the other
party, which shall not be unreasonably withheld. Notwithstanding the foregoing,
either party may assign and/or transfer this Agreement to any entity
controlling, controlled by or under common control with such party (defined as
51% voting power or other indicia of majority ownership if a non-corporate
entity), or to any successor in interest of all or substantially all of such
party's business without the consent of the other; provided, that XcelleNet may
not assign this Agreement in whole or in part to any company which markets a
product directly competitive with the Software. Any assignee or transferee
shall assume all the rights and obligations of the assignor or transferor under
this Agreement. Any unauthorized assignment or transfer of this Agreement shall
be void. Subject to the foregoing limitation upon assignment, this Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the parties.
7.8 Each party acknowledges that any unauthorized use or disclosure of
the other party's confidential information (including the Software) may cause
irreparable damage to such other party or its licensors. If an unauthorized use
or disclosure occurs, each party will promptly notify the other of those acts of
which it has knowledge and take all commercially reasonable steps to recover the
information and to prevent its subsequent unauthorized use or dissemination,
including availing itself of actions for seizure and injunctive relief. In the
event that either party breaches or threatens to breach any of its obligations
under this Agreement, then the other party shall be entitled to receive
equitable relief (including without limitation injunction(s) and order(s) for
specific performance), in addition to any other rights and remedies such other
party may have.
7.9 ARBITRATION; CHOICE OF LAW. Any dispute arising out of this
Agreement or the subject matter therein, shall be submitted to final and binding
arbitration by three (3) independent arbitrators pursuant to the Commercial
Arbitration Rules of the American Arbitration Association (AAA). All
arbitrators shall be experienced in computer technology and intellectual
property law matters. The arbitration shall be conducted in the United States
city selected by the party not initiating the arbitration process. This
Agreement and the arbitration proceedings shall be governed by the laws of the
State of Georgia, exclusive of the provisions governing conflict of laws.
Before initiating arbitration, it is understood but not required that the
parties shall use their best endeavors for a period of thirty (30) days from
written notice of a dispute to amicably resolve any dispute or difference
arising from this Agreement. Judgment upon the award rendered by the
arbitrators may be entered in any court of competent jurisdiction. Nothing
contained in this Section 7.9 shall delay, restrict or hinder Vendor in any way
from exercising its rights and/or pursuing its remedies as provided under
Section 7.8.
7.10 BANKRUPTCY. All rights and licenses granted under or pursuant to
this Agreement by Vendor to XcelleNet are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code or
replacement provision therefor (the "Code"), licenses of rights to "intellectual
property" as defined in the Code. Vendor acknowledges that if it as a debtor in
possession or if a trustee in bankruptcy appointed under the Code rejects this
Agreement or the Escrow Agreement, XcelleNet may elect to retain its rights
under this Agreement and/or the Escrow Agreement as provided in the Code. Upon
written request of XcelleNet to Vendor or the bankruptcy trustee, Vendor or such
trustee shall not interfere with the rights of XcelleNet as provided in this
Agreement or the Escrow Agreement to obtain the Source Code from any third party
escrow agent, and shall, if requested, cause a copy of the Source Code to be
available to XcelleNet.
7.11 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
7.12 U.S. EXPORT RESTRICTIONS. XcelleNet acknowledges that the Software
------------------------
and all related technical information, documents and materials are subject to
export controls under the U.S. Export Administration Regulations. XcelleNet
will (i) comply strictly with all legal requirements established under these
controls, (ii) cooperate fully with Vendor in any official or unofficial audit
-6-
<PAGE>
or inspection that relates to these controls and (iii) not export, re-export,
divert or transfer, directly or indirectly, any such item or direct products
thereof to Cuba, Libya, North Korea or any country that is embargoed by
Executive order, unless XcelleNet has obtained the prior written authorization
of Vendor and the U.S. Commerce Department. This list shall be deemed
automatically modified to conform to changes in the U.S. Export Administration
Regulations.
[END OF TERMS AND CONDITIONS]
-7-
<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE A
VENDOR SOFTWARE
---------------
1. "Remotely Possible" line of computer software, including
A. The Client version(s):
a) 32-bit Host version compatible with Microsoft Windows 95 and Windows NT
(Intel compatible platform) that will enable special features as described
in Schedule B
b) 16-bit Host version compatible with Microsoft Windows 3.x and Windows for
Workgroups that will enable special features as described in Schedule B.
B. The Server version:
32-bit Viewer and Host version compatible with Microsoft Windows NT Server
(Intel compatible platform) that will enable special features as described
in Schedule B
2. Documentation associated with that software described in 1 above.
-8-
<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE B
XCELLENET SYSTEM
----------------
1. "RemoteWare" line of computer software including both the server and
client components
-9-
<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE C
SOFTWARE SUPPORT ADDENDUM
-------------------------
Subject to the terms and conditions of this Software Support Addendum (this
"Addendum"), Vendor hereby agrees to provide to XcelleNet on-going support and
maintenance for the Software specified on the accompanying System Integration
Remarketer Agreement (the "Agreement"). Capitalized terms shall have the
meanings set forth in the Agreement or as otherwise defined herein.
SECTION 1: SERVICES PROVIDED
During the term of this Addendum, Vendor will provide the following maintenance
and support services for the Software to XcelleNet:
1.1 TELEPHONE SUPPORT. Vendor will make available to XcelleNet
trained and qualified personnel (trained on those versions of the Software used
by XcelleNet), between the hours of 8:00 a.m. and 7:00 p.m. EST, Monday through
Friday, to provide complete off-site support via telephone (and electronic mail,
if available), in the form of: (i) assistance and advice on the use, design and
operation of the Software; and (ii) responding to reported errors, defects,
malfunctions or non-conformities of the Software.
1.2 SOFTWARE RELEASES. Vendor agrees to notify and make available to
XcelleNet of all updates, maintenance releases, modifications, interfaces,
enhancements, new versions, releases or additions (collectively, "Updates"), if
any, developed or distributed by Vendor for those versions of the Software
covered by this Addendum as such Updates may become available and are generally
offered by Vendor to its other customers or licensees. Vendor will provide
written documentation or instructions describing the installation, functions and
design of all Updates, as well as copies of all changes and modifications to the
documentation for the Software. All Updates furnished under this Addendum shall
be subject to the license and restrictions set forth in the Agreement.
Notwithstanding the foregoing, Vendor shall notify XcelleNet at least six (6)
months prior to: (i) delivery of any Updates that incorporate a change in
design that shall affect the marketability of the System or Software as
distributed by XcelleNet or which necessitate a migration to a new release of
the Software; and (ii) subject to the release support requirements set forth in
Section 1.4, discontinuance of support for any Software releases then-currently
distributed by XcelleNet. Vendor shall maintain and update that version of the
Software distributed by XcelleNet at the same time it maintains and updates
other versions of the Software.
1.3 ERROR CORRECTION. Vendor shall maintain the Software (including
all new, upgraded, enhanced or modified versions of or interfaces with the
Software which XcelleNet has been licensed to use) so that it operates in
compliance with the As Documented Warranty. In the event that XcelleNet or one
of its Sublicensees detects any error, defect, malfunction or bug in the
Software which breaches the As Documented Warranty (without application of the 6
month limitation set forth in Section 4.1 of the Agreement), Vendor shall
furnish complete off-site telephone support as set forth above, in the form of
consultations, assistance and advice, for the purpose of correcting the reported
noncompliance, and shall respond to XcelleNet and provide additional services
depending on the nature of the reported problem. In the event XcelleNet or one
of its Sublicensees experiences an error, deficiency or nonconformity which
significantly and adversely affects the use of any one or more of the features
and functionalities of the Software (a "Critical Problem"), Vendor shall
promptly correct, modify or replace the Software as appropriate. With respect
to each Critical Problem, Vendor shall respond as soon as practicable but in any
event within eight (8) hours following the report of the Critical Problem to
Vendor by XcelleNet, which report identifies the problem as a Critical Problem.
Response to a Critical Problem shall include the attention of qualified
technical support personnel on a dedicated basis until the problem is diagnosed
and corrected by means of a correction or modification of the Software or a
reasonable work-around procedure for avoiding the problem causing the error,
deficiency or nonconformity. Vendor will make best efforts to respond to
support requests relating to errors, nonconformities or deficiencies of the
Software which are not identified by XcelleNet as a "Critical Problem", within
twenty-four (24) hours. For such non-Critical Problems, Vendor shall exercise
its best efforts and work in a diligent manner, including devising work-arounds,
corrections and modifications of the Software that may be required, to resolve
such reported error, problem or malfunction in a reasonable period of time,
determined in light of the nature and scope of the reported error, deficiency or
nonconformity. Notwithstanding the foregoing, Vendor agrees to use its best
efforts to remedy any Critical or non-Critical Problem within twenty (20) days
of receiving notice thereof and acknowledges that its inability to correct such
problems may result in a warranty breach by XcelleNet to its Sublicensee
resulting in an adjustment of royalty fees as described in Schedule G to the
Agreement (in addition to any other rights and remedies that may be available to
XcelleNet).
1.4 SUPPORTED RELEASES. Vendor's obligation to provide support and
maintenance services extends to the then-current and the immediately two (2)
preceding releases for the Software. Notwithstanding the foregoing, following
release of an Update, Vendor agrees to continue to support the immediate prior
release of the Software for a period of at least twelve (12) months.
SECTION 2: RESPONSIBILITIES OF XCELLENET
Throughout the term of this Addendum, XcelleNet agrees to: (i)
provide or obtain from its Sublicensees all information reasonably requested by
Vendor to assist in identifying and solving reported errors; and (ii) follow, in
all material respects, all of Vendor's installation, operation and maintenance
instructions for the Software.
SECTION 3: PAYMENT
3.1 SERVICE FEE. The fee payable by XcelleNet for the support and
maintenance services (herein referred to as Service) provided by Vendor
hereunder shall be as outlined in Schedule G (the "Service Fee"). Any
maintenance releases distributed to Sublicensees are not subject to royalty fees
set forth on Schedule G, provided the Sublicensees of the Software participate
in XcelleNet's software maintenance and support program.
3.2 BILLING AND PAYMENT. The Service Fee shall be due and payable in
advance of each calendar quarter within thirty (30) days of receipt of an
invoice by XcelleNet.
-10-
<PAGE>
SECTION 4: TERM AND TERMINATION
The term of this Addendum is coterminous with the Agreement, and
therefore, this Addendum shall automatically terminate upon the termination,
cancellation or expiration of the Agreement, subject to XcelleNet's right of
post-termination support as set forth in Section 6.3 of the Agreement.
Notwithstanding the foregoing, XcelleNet may elect to terminate this Addendum,
or any portion of the Service, at any time upon thirty (30) days prior written
notice to Vendor. Unless expressly stated otherwise in the Agreement,
termination of this Addendum shall not affect the rights and obligations of the
parties with respect to the Agreement. In the event of any termination of this
Addendum, Vendor shall refund to XcelleNet any unused portions of the Service
Fee on a pro-rata basis.
SECTION 5: CONFLICT
In the event of any conflict between this Addendum and the Agreement,
the Agreement shall control.
[END OF SOFTWARE SUPPORT ADDENDUM]
-11-
<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE D
SOFTWARE ENHANCEMENTS ADDENDUM
------------------------------
Subject to the terms and conditions of this Software Enhancements Addendum
(this "Addendum"), Vendor hereby agrees to provide to XcelleNet the
enhancements described herein for the Software specified on the accompanying
System Integration Remarketer Agreement (the "Agreement"). Capitalized terms
shall have the meanings set forth in the Agreement or as otherwise defined
herein.
SECTION 1: DESIGN AND DEVELOPMENT OF ENHANCEMENTS
1.1 DEVELOPMENT UNDERTAKING. Vendor shall, immediately upon final
execution of the Agreement, commence work upon and diligently proceed with the
design and development of the modifications, additional functions and changes
to the Software, which are more particularly defined in Exhibit A attached
hereto (the "Enhancements"). After execution of the Agreement, Vendor and
XcelleNet may define the Enhancements, including the requirements and
specifications therefor, in more detail by mutually agreeing to such in
writing.
1.2 DEVELOPMENT TIMETABLE. Vendor shall commit and utilize sufficient
resources to meet the development milestones and complete development of the
Enhancements according to the development timetable set forth in Exhibit B
attached hereto (the "Development Timetable"). Vendor agrees to notify
XcelleNet promptly of any factor, occurrence, or event coming to its attention
that may affect Vendor's ability to meet the requirements for the Enhancements
as set forth in Exhibit A, or that is likely to occasion any delay in delivery
of the Enhancements according to the schedule set forth in the Development
Timetable.
SECTION 2: ACCEPTANCE
2.1 TESTING. Upon delivery to XcelleNet by Vendor of the Enhancements,
XcelleNet shall have the period of time specified in the Development Timetable
(including any extensions mutually agreed to by the parties) in which to
review, inspect and test the Enhancements in order to determine whether in
XcelleNet's sole discretion, the Enhancements comply with the specifications
and requirements therefor. Acceptance testing shall include the tests
XcelleNet reasonably deems necessary and shall be performed by representatives
of XcelleNet, provided that Vendor shall be entitled to have its
representatives present during the testing. To facilitate XcelleNet's testing
of the Software, Vendor agrees, at no additional charge, to provide XcelleNet
with copies of: (i) the system and API documentation for the Software; and
(ii) the automated test scripts used by Vendor to test the Software.
2.2 ACCEPTANCE. Upon completion of its review and testing, XcelleNet
shall notify Vendor of its acceptance or rejection of the Enhancements. To the
extent that the Enhancements have been rejected, Vendor shall have the period
of time set forth in the Development Timetable, or as otherwise agreed to by
the parties, to correct any problems or defects identified by XcelleNet and re-
deliver the Enhancements for re-review, which corrections shall not be deemed
completed until XcelleNet determines in good faith that the Enhancements meet
all applicable specifications and requirements. The Enhancements shall not be
deemed accepted by XcelleNet until XcelleNet notifies Vendor in writing that
the Enhancements meet all applicable specifications and requirements.
2.3 REJECTION. If any of the Enhancements are not accepted hereunder by
XcelleNet within the applicable acceptance testing period, XcelleNet shall have
the right and option to terminate this Addendum and/or the Agreement, and
receive a full refund of all sums paid to Vendor for all Enhancements developed
under this Addendum.
SECTION 3: PAYMENT
For the services rendered by Vendor pursuant to this Addendum, XcelleNet
will pay to Vendor compensation in the amounts, and according to the payment
schedule, set forth on the Development Timetable. Any increase in compensation
for the development of the Enhancements must have the prior written approval of
XcelleNet. Vendor will receive no compensation for its services hereunder
other than as set forth in this Addendum, and Vendor's personnel will not be
entitled to participate in any benefit program (however described) now
maintained or hereafter established for any employee of XcelleNet. XcelleNet
will not be liable for Vendor's debts, expenses, accounts, obligations or other
liabilities related to the development of the Enhancements, including without
limitation Vendor's obligation to withhold social security and income taxes.
All amounts paid by XcelleNet to Vendor for the development of the Enhancements
shall be considered prepaid royalty fees toward any future distribution of the
Software and shall be subject to recovery by XcelleNet according to the terms
and conditions of the Agreement.
SECTION 4: TERM AND TERMINATION
This Addendum shall automatically terminate upon the earlier of: (i)
XcelleNet's acceptance or rejection of the Enhancements pursuant to Section 2
of this Addendum; or (ii) the termination or expiration of the Agreement. If
termination occurs due to XcelleNet's rejection of the Enhancements, XcelleNet
shall be relieved of its obligations to pay Vendor any amounts owed pursuant to
this Addendum. Unless expressly stated otherwise herein or in the Agreement,
termination of this Addendum shall not affect the rights and obligations of the
parties with respect to the Agreement.
SECTION 5: CONFLICT
In the event of any conflict between this Addendum and the Agreement, the
Agreement shall control.
[END OF SOFTWARE ENHANCEMENTS ADDENDUM]
-12-
<PAGE>
SOFTWARE ENHANCEMENTS ADDENDUM
EXHIBIT A - ENHANCEMENTS
1. Vendor and XcelleNet Engineering will work together so that appropriate
measures are instituted to enable the Software to function on equipment that
incorporates the System (Client and Server components), but that prevents the
Software from operating in a stand-alone fashion.
2. Vendor will add mutually acceptable information to the Help "About Box " to
refer users of the Software to XcelleNet.
3. Vendor and XcelleNet will mutually determine whether to add certain
customization features, such as special installation and/or user interface
routines, or product renaming for the purpose of private labeling.
-13-
<PAGE>
SOFTWARE ENHANCEMENTS ADDENDUM
EXHIBIT B - DEVELOPMENT TIMETABLE
A. 32-BIT ENHANCEMENTS:
--------------------
The following schedule sets forth the target dates, payments and
performance milestones for the preparation and delivery by Vendor of the
Enhancements for the 32-bit solution:
Performance Milestone Target Date Payment
------------------------------ -------------- ----------------------
Development work to begin April 29, 1996 50% (adjusted for any
up-front payments
made prior to
execution of the
Agreement)
Beta-test version completed June 28, 1996 25%
and delivered to XcelleNet
Final Enhancements delivered March 25, 1996 25%
and accepted by XcelleNet
For and in consideration of the completion of the 32-bit Enhancements
rendered by Vendor, XcelleNet shall pay to Vendor compensation in the amount of
Twenty-Five Thousand Dollars ($25,000.00). Vendor will invoice XcelleNet for
the 32-bit Enhancements in accordance with the schedule set forth above.
Payments hereunder will be contingent upon satisfaction of the performance
milestones set forth above and are due and payable within thirty (30) days after
XcelleNet receives an itemized invoice from Vendor and has approved in writing
completion of the appropriate performance milestones.
B. 16-BIT ENHANCEMENTS:
--------------------
The following schedule sets forth the target dates, payments and
performance milestones for the preparation and delivery by Vendor of the
Enhancements for the 16-bit solution:
Performance Milestone Target Date Payment
---------------------------- ------------------------ --------
Development work to begin TBD 50%
Final Enhancements Maximum of 2 weeks after 50%
delivered and accepted by execution of Agreement
XcelleNet
For and in consideration of the completion of the 16-bit Enhancements
rendered by Vendor, XcelleNet shall pay to Vendor compensation in the amount of
Twenty Thousand Dollars ($20,000.00). Vendor will invoice XcelleNet for the 16-
bit Enhancements in accordance with the schedule set forth above. Payments
hereunder will be contingent upon satisfaction of the performance milestones set
forth above and are due and payable within thirty (30) days after XcelleNet
receives an itemized invoice from Vendor and has approved in writing completion
of the appropriate performance milestones.
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<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE E
VENDOR TRADEMARKS
-----------------
OWNERSHIP. All trademarks, service marks, trade names, logos or other words or
- ---------
symbols identifying the Software or Avalan's business (the "Marks") are and will
remain the exclusive property of Avalan or its licensors, whether or not
specifically recognized or perfected under applicable laws. XcelleNet will not
acquire any right in the Marks, except the limited use rights specified in "Use"
below. XcelleNet will not register, directly or indirectly, any trademark,
service mark, trade name, company name or other proprietary or commercial right
that is identical or confusingly similar to the Marks or that constitute
translations thereof into the language(s) spoken within the territory where
XcelleNet distributes the Software. Upon Avalan's request, XcelleNet will
execute, at Avalan's expense, the instruments that may be appropriate to
register, maintain or renew the registration of the Marks in Avalan's or its
licensor's name within the territory where XcelleNet distributes the Software.
USE. XcelleNet will use the Marks exclusively to advertise and promote the
- ---
Software and the bundled products. All advertisements and promotional materials
will (i) clearly identify Avalan or its licensors as the owner of the Marks,
(ii) conform to Avalan's then-current reasonable trademark and logo guidelines,
and (iii) otherwise comply with any local notice or marking requirement
contemplated under any applicable laws. Upon Avalan's request, XcelleNet will
deliver a sample of the advertisement or promotional materials to Avalan for
approval. If Avalan notifies XcelleNet that the use of the Mark is
inappropriate, XcelleNet will not further publish or otherwise disseminate the
advertisement or promotional materials until they have been modified to Avalan's
satisfaction.
INFRINGEMENT. XcelleNet will immediately notify Avalan if XcelleNet learns (i)
- ------------
of any potential infringement of the Marks by a third party or (ii) that the use
of the Marks may infringe the proprietary rights of a third party. Avalan will
determine the steps to be taken under these circumstances. XcelleNet will (i)
provide Avalan, at Avalan's expense, with the assistance that Avalan may
reasonably request and (ii) take no steps on its own without Avalan's prior
approval.
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<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE F
NDA
---
RECITALS
A. Avalan Technology, Inc., and XcelleNet wish to exchange certain information
pertaining to potential business opportunities as set forth in the System
Integration Remarketer Agreement between the parties (the "Integration
Agreement"), whereby the receiving party has requested the other party's product
and confidential product information.
This exchange includes all communication of information between the parties
in any form whatsoever, including oral, written and machine readable form,
pertaining to the above.
B. Avalan Technology, Inc., and XcelleNet, Inc. wish to exchange the
information and each party regards certain parts of the information it possesses
to be secret and desires to protect those parts from unauthorized disclosure or
use (such secret parts being hereafter collectively referred to as
"Information").
C. Avalan Technology, Inc., and XcelleNet, Inc. are willing to disclose
Information (as "Owning Party") and receive information (as "Receiving Party")
on the terms and conditions set forth herein.
AGREEMENTS
Therefore, XcelleNet, Inc. and Avalan Technology, Inc. as a receiver, agree as
follows:
I. The Receiving Party will:
a) (1) Not disclose to any other person the Information received from the
Owning Party except as permitted by the Integration Agreement, and (2) use at
least the same degree of care to maintain the Information secret as the
Receiving Party uses in maintaining as secret its own secret Information, but
always at least a reasonable degree of care;
b) Use the Information only for the above purpose;
c) Restrict disclosure of the Information of the Owning Party solely to
those employees and contractors of Receiving Party having a need to know such
Information in order to accomplish the purpose stated above;
d) Advise each such employee and contractor, before he or she receives
access to the Information, of the obligations of Receiving Party under this
Agreement, and require each such employee and contractor to maintain those
obligations; and
e) Within 15 days following termination of the Integration Agreement,
return to the Owning Party all documentation, copies, notes, diagrams, computer
memory media and other materials containing any portion of the Information, or
confirm to Owning Party, in writing, the destruction of such materials, subject
to XcelleNet's right to continue to support the Software as set forth in Section
6.3 of the Integration Agreement.
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<PAGE>
II. This Agreement imposes no obligation on Receiving Party with respect to any
portion of the Information received from Owning Party which (a) (1) was known to
the Receiving Party prior to disclosure by the Owning Party and (2) as to which
the Receiving Party has no obligation not to disclose or use it, (b) is lawfully
obtained by the Receiving Party from a third party under no obligation or
confidentially, (c) is or becomes generally known or available other than by
unauthorized disclosure, (d) is independently developed by the Receiving Party
or (e) is disclosed by the Owning Party to a third party without any obligation
on this third party.
III. The Information shall remain the sole property of Owning Party.
IV. NEITHER OWNING PARTY MAKES ANY REPRESENTATION WITH RESPECT TO AND DOES NOT
WARRANT ANY INFORMATION PROVIDED UNDER THIS AGREEMENT, BUT SHALL FURNISH SUCH IN
GOOD FAITH, WITHOUT RESTRICTING THE GENERALITY OF THE FOREGOING. NEITHER OWNING
PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, WHETHER WRITTEN OR ORAL,
STATUTORY, EXPRESSED OR IMPLIED WITH RESPECT TO THE INFORMATION WHICH MAY BE
PROVIDED HERE UNDER, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. NEITHER OWNING PARTY
SHALL BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
NATURE WHATSOEVER RESULTING FROM RECEIPT OR USE OF THE INFORMATION BY THE
RECEIVING PARTY. THE FOREGOING SHALL NOT BE INTERPRETED TO LIMIT OR RESTRICT
THE WARRANTIES OF EITHER PARTY AS SET FORTH IN THE INTEGRATION AGREEMENT.
V. In the event of a breach or threatened breach or intended breach of this
Agreement by either party, the other party, in addition to any other rights
and remedies available to it by law or in equity, shall be entitled to
preliminary and final injunctions, enjoining and restraining such breach or
threatened breach or intended breach.
VI. The Receiving Party will not export, directly or indirectly, any technical
data acquired from the Owning Party or any product utilizing any such data to
any country for which the U.S. Government or any agency thereof at the time of
export requires an export license or other governmental approval, without first
obtaining such license or approval. In the event that the Owning Party believes
that any information, technology or products being provided to the Receiving
Party constitute "technical data" as defined under US export control laws, the
Owning Party will inform the Receiving Party of the US export restrictions which
apply.
VI. Receiving Party acknowledges that Owning Party will not disclose any
information to Receiving Party unless Receiving Party acknowledges and agrees to
comply with such restrictions. In the event that Receiving party refuses to
acknowledge and comply with such restrictions, Owning Party shall have the right
to immediately terminate this Agreement without liability as a result, and
Receiving Party shall return or destroy all copies and portions of the
technology, information and products in its possession.
VII. The validity, construction, and performance of this Agreement are governed
by the laws of Massachusetts and suit may be brought in Massachusetts to enforce
the terms of this Agreement.
VIII. The rights and obligations of the parties under this Agreement may not
be sold, assigned or otherwise transferred, except this Agreement may be
assigned and/or transferred to any party to which assignment or transfer of the
Integration Agreement is permitted.
IX. If any arbitration, litigation or other legal proceeding related to this
Agreement occurs, the prevailing party shall be entitled to recover from the
other party (in addition to any other relief awarded or granted) its reasonable
costs and expenses, including attorney's fees, incurred in the proceeding.
X. The terms of confidentiality under this Agreement shall not be construed to
limit either party's right to independently develop or acquire products without
use of the other party's Information. Further, either party shall be free to
use for any purpose the residuals resulting from access to or work with such
Information, provided that such party shall maintain the confidentiality of the
Information and abide by the other restrictions as provided herein. The term
"residuals" means information in non tangible form, which may be retained by
persons who have had access to the Information, including ideas, concepts, know
how or techniques contained therein. Neither party shall have any obligation to
limit or restrict the assignment of such persons or to pay royalties for any
work resulting from the use of residuals. However, the foregoing shall not be
deemed to grant to either party a license under the other party's copyrights or
patents.
-17-
<PAGE>
This Agreement is binding upon XcelleNet, Inc. and Avalan Technology, Inc., and
upon the directors, officers, employees and agents of each. This Agreement is
effective as of the date of execution of the Integration Agreement and will
continue coterminous with the Integration Agreement. However, Receiving Party's
obligations of confidentially and restrictions on use of the Information
disclosed by Owning Party shall survive termination of this Agreement for the
longer of: (i) three (3) years, or (ii) for so long as such Information remains
a trade secret under applicable law.
-18-
<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE G
ROYALTY FEES
------------
A confidential portion of this document has been omitted and filed separately
with the Commission.
-19-
<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE H
ESCROW AGREEMENT
----------------
Please refer to Section 3, Proprietary Protection of Software, Paragraph 3.5,
Source Code Escrow, for the Escrow Agreement.
-20-
<PAGE>
SYSTEM INTEGRATION REMARKETER AGREEMENT
SCHEDULE I
XCELLENET STANDARD FORM OF END-USER LICENSE AGREEMENT
-----------------------------------------------------
[SEE ATTACHED XCELLENET SLA]
-21-
<PAGE>
EXHIBIT 11
XCELLENET, INC. AND SUBSIDIARIES
Computation of Earnings Per Share of Common Stock
For the Three and Six Months Ended June 30, 1997 and 1996
(amounts in thousands, except per share)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- -----------------------
1997 1996 1997 1996
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
Weighted average number of common shares outstanding 8,160 7,204 7,816 7,167
Add - Shares of common stock assumed issued upon exercise of
stock options using the "treasury stock" method as it
applies to the computation of primary earnings per share -- 679 778 699
------- -------- ------ -------
Number of common and common equivalent shares outstanding 8,160 7,883 8,594 7,866
Add - Additional shares of common stock assumed issued upon
exercise of stock options using the "treasury stock"
method as it applies to the computation of fully diluted
earnings per share -- -- -- --
------- -------- ------ -------
Number of common and common equivalent shares outstanding
assuming full dilution 8,160 7,883 8,594 7,866
======= ======== ====== ======
Net income (loss) $ (32) $ 363 $1,097 $1,229
======= ======== ====== ======
Earnings (loss) per share:
Primary $ (0.00) $ 0.05 $ 0.13 $ 0.16
======= ======== ====== ======
Fully diluted $ (0.00) $ 0.05 $ 0.13 $ 0.16
======= ======== ====== ======
</TABLE>
A single presentation of primary earnings per share is made on the Consolidated
Statements of Operations because the effect of assuming full dilution is
insignificant in each period presented.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 13,045
<SECURITIES> 11,263
<RECEIVABLES> 12,733
<ALLOWANCES> 502
<INVENTORY> 0
<CURRENT-ASSETS> 38,302
<PP&E> 12,872
<DEPRECIATION> 7,300
<TOTAL-ASSETS> 50,220
<CURRENT-LIABILITIES> 5,867
<BONDS> 0
0
0
<COMMON> 82
<OTHER-SE> 43,454
<TOTAL-LIABILITY-AND-EQUITY> 50,220
<SALES> 7,695
<TOTAL-REVENUES> 12,039
<CGS> 566
<TOTAL-COSTS> 2,378
<OTHER-EXPENSES> 9,967
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20
<INCOME-PRETAX> (56)
<INCOME-TAX> (24)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (32)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
