SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT (the "Agreement") entered into this
30th day of September, 1999 ("Effective Date") by and between Witness Systems,
Inc., a corporation existing under the laws of the state of Delaware with its
principal address at 1105 Sanctuary Parkway, Suite 210, Alpharetta, Georgia
30004 ("WSI"), and Advanced Integrated Recorders, Inc., a corporation existing
under the laws of the state of Delaware with its principal address at 121
Whittendale Drive, Building 1, Moorestown, New Jersey 08057 ("Air").
RECITALS
A. WSI is the owner of a software application identified on
Exhibit A (the "Software"); and
B. Air is desirous of obtaining a license to use the Software
under the terms of this Agreement and WSI is willing to license the Software to
Air under the terms of this Agreement.
NOW THEREFORE, in consideration of the terms and covenants herein, and
other good and valuable consideration, WSI and Air agree as follows:
1. LICENSE.
1.1. GRANT OF LICENSE. Subject to the terms and conditions herein,
WSI hereby grants to Air, and Air hereby accepts, a world-wide, fully paid,
irrevocable and non-cancelable royalty free and perpetual license to use,
reproduce, modify, distribute and sublicense (except as provided in Section 5)
the Software (in object code and source code form) and create derivative works
(as defined in the U.S. Copyright Act, as amended) ("Derivative Works") of the
Software in the following markets:
(i) the Air Traffic Control Market defined in Exhibit
B-1 (such license relative to the Air Traffic Control Market is
referred to as the "Air Traffic Control Market License");
(ii) each market segment of the Air Exclusive Field
defined in Exhibit B-2 (each such market segment is referred to as a
"Market Segment" and are collectively referred to as the "Market
Segments," and such license relative to each Market Segment is
referred to as the "Market Segment License"); and
(iii) any market other than the markets covered by the WSI
Exclusive Field (such WSI Exclusive Field being defined in Exhibit
B-3), Air Traffic Control Market, or the Market Segments (such other
markets are referred to collectively as the "Other Markets," and such
license relates to the Other Markets is referred to as the "Other
Markets License").
1.2. APPOINTMENT OF DISTRIBUTORS. WSI grants Air the right to
further grant to parties who will further sublicense or distribute the Software
(each, a "Distributor" and collectively, the "Distributors") the rights in
Section 1.1 and this Section 1.2, in whole or in part; provided, however, that
(i) WSI is provided written notice of the name of the Distributor that is
appointed; and (ii) Air enters into a written agreement with each Distributor
that is consistent with the rights granted in Section 1.1 and includes
provisions that are substantially similar to the provisions of Sections 1.2
46
and 1.3, if applicable, and 1.5, 1.6, 1.8, 3.1, 3.3, 3.5, 4, and 5 as if such
provisions applicable to Air were with respect to the Distributor.
Notwithstanding the terms of this paragraph, Air shall have no obligation to
provide WSI the name of a Distributor if the Distributor is only granted a
license to the object version of the Software and the Distributor is only
authorized to distribute the object version of the Software to a limited number
of end users identified to Air through one or more of a series of other
Distributors.
1.3. SOURCE CODE LICENSES GRANTED BY AIR AND ITS DISTRIBUTORS.
Except with respect to Compilation Licenses, defined in Section 1.6 below, and
Section 1.2 above, the right of Air and its Distributors to sublicense Software
source code under the license granted in Section 1.1 and Section 1.2 with
respect to the Software source code is contingent upon Air's and the
Distributor's compliance with the following requirements:
(i) WSI is provided written notice of the name of the sublicensee
to whom the Software source code license is granted;
(ii) The Software source code is only licensed and distributed to
Air's licensees ("Source Code Licensees") after a written agreement is
executed by the Source Code Licensee that includes provisions
substantially in the form of Sections 1, 2(b), (c), (d), (f) and (g),
4, and 6 (the "Required Provisions"), set forth on Exhibit C (the
"License Agreement"), Exhibit D (the "Source Code License
Supplement"), and Exhibit E, if applicable; and
(iii) Air provides WSI prompt written notice of any material breach
or alleged material breach by the Source Code Licensee of the license
provisions of the Source Code License Agreement and Air cooperates
with WSI's request of Air to enforce the license provisions of Source
Code License Agreement if WSI reasonably believes that such breach has
occurred.
1.4. EXCLUSIVITY.
(a) DEFINITION; EXCLUSIVE; DISTRIBUTOR. As used in this
Agreement, the term "Exclusive" has the meaning in subparagraph (i) below as
such term is used in connection with the Air Exclusive Field, and the meaning
in subparagraph (ii) below as such term is used in connection with the Air
Traffic Control Market. For purposes of Section 1.4, "distributor" means any
third party which is not an end user.
(i) AIR EXCLUSIVE FIELD. WSI shall use its reasonable
efforts to obtain the written agreement of WSI's existing (as of the Effective
Date) and future distributors not to distribute the Software, in whole or in
part, to third parties in or to a Market Segment. If (i) WSI's distributors do
not agree in writing to the limitations set forth in the preceding sentence, or
(ii) WSI's distributors agree to such limitations, but in any event distribute
the Software, in whole or in part, in or to a Market Segment, then WSI shall
pay Air the royalties set forth in Section 2.2(ii) applicable to such
distribution of Software by WSI's distributors. WSI shall not distribute the
Software, in whole or in part, directly to end users in or to a Market Segment
unless WSI pays Air the royalties set forth in Section 2.2(i).
(ii) AIR TRAFFIC CONTROL MARKET. WSI shall use its
reasonable efforts to obtain the written agreement of WSI's existing (as of the
Effective Date) and future distributors not to distribute the Software, in
whole or in part, to third parties in the Air Traffic Control Market. If (i)
WSI's distributors do not agree in writing to the limitations set forth in the
preceding sentence, or
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(ii) WSI's distributors agree to such limitations, but in any event distribute
the Software, in whole or in part, in or to the Air Traffic Control Market,
then, WSI shall pay Air the royalties set forth in Section 2.3(ii) applicable
to such distribution of Software by WSI's distributors. WSI shall not
distribute the Software, in whole or in part, directly to end users in the Air
Traffic Control Market, except that if Witness unintentionally and
inadvertently sells or distributes the Software or if an end user uses the
Software, in whole or in part, in the Air Traffic Control Market, then WSI
shall pay Air the royalties set forth in Section 2.3(i).
(b) DEFINITION; NON-EXCLUSIVE. As used in this Agreement, the
term "Non-exclusive" has the meaning in subparagraph (i) below as such term is
used in connection with the Air Exclusive Field, and the meaning in
subparagraph (ii) below as such term is used in connection with the Air Traffic
Control Market and the meaning in subparagraph (iii) below as such term is used
in connection with the Other Markets License.
(i) AIR EXCLUSIVE FIELD. WSI and its distributors will
not owe royalties for and will not be restricted in any way from distributing
the Software, in whole or in part, in a Market Segment.
(ii) AIR TRAFFIC CONTROL MARKET. WSI and its distributors
will not owe royalties for and will not be restricted in any way from
distributing the Software, in whole or in part, to the Air Traffic Control
Market.
(iii) OTHER MARKET LICENSE. WSI and its distributors will
not owe royalties for and will not be restricted in any way from distributing
the Software, in whole or in part, to the Other Markets.
(c) AIR TRAFFIC CONTROL MARKET LICENSE. Air's Air Traffic Control
Market License shall be Exclusive as of the Effective Date and shall continue
to be Exclusive through and until such time as (i) WSI (or its successor or
potential purchaser) pays Air $2,500,000 in cash, and (ii) upon the occurrence
of a WSI Change of Control (as defined below). Upon the occurrence of both of
the foregoing events, the Air Traffic Control Market License shall immediately
and automatically convert from an Exclusive license to a Non-exclusive license.
As used in this paragraph, a "WSI Change of Control" means the sale to another
person or entity of 50% or more of the voting securities of WSI, the sale to
another person or entity of all or substantially all of WSI's assets, or a
person or entity obtains the right to appoint or elect a majority of WSI's
Board of Directors.
(d) AIR EXCLUSIVE FIELD LICENSE. With respect to each Market
Segment, Air's Air Exclusive Field License in that Market Segment shall be
Exclusive as of the Effective Date and shall continue to be Exclusive through
and until such time as (i) the cumulative amount of royalties paid by WSI to
Air according to the terms of Section 2.2 for that Market Segment equal to or
greater than $400,000, or (ii) the cumulative amount of royalties paid by WSI
to Air according to the terms of Section 2.2 for all Market Segments is equal
to or greater than $1,000,000. Upon the occurrence of the event described in
item "(i)" of the preceding sentence, Air's Exclusive for the applicable Market
Segment shall immediately and automatically convert from an Exclusive license
to a Non-exclusive license; and upon the occurrence of the event described in
item "(ii)" of the preceding sentence, Air's Exclusive for all Market Segments
shall immediately and automatically convert from an Exclusive license to a
Non-exclusive license to the extent the Market Segments have not previously
converted to a Non-exclusive license.
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(e) OTHER MARKETS LICENSE. Air's Other Markets License shall be
Non-exclusive.
(f) LIMITATION ON REMEDIES. Notwithstanding the other terms of
this Agreement, Air shall not be entitled to injunctive or equitable relief of
any kind for a breach or violation of the exclusivity terms set forth in this
Agreement by WSI, WSI's distributors, and their respective Software licensees.
The royalties set forth in Section 2 shall be Air's sole and exclusive remedy
in the event of any breach or violation of the exclusivity terms set forth in
this Agreement by WSI, WSI's distributors, and their respective Software
licensees plus reasonable and verifiable fees (including attorneys fees), costs
and expenses incurred in the enforcement of its rights under this Agreement.
(g) ACCELERATED TERMINATION OF EXCLUSIVE RIGHTS. Upon the
occurrence of a WSI Change of Control (as defined in Section 1.4(c)), WSI, its
successor, or potential purchaser may pay in cash the remaining balance of the
amounts set forth in Section 1.4(d) to convert Air's Exclusive license in one
or more Market Segments to a Non-exclusive license.
1.5. TRADEMARKS. Air may not use any of the identifying marks of
WSI, including without limitation, any trademarks, service marks or trade names
of WSI, without the express prior written consent of WSI. WSI may not use any
of the identifying marks of Air, including without limitation, any trademarks,
service marks or trade names of Air, without the express prior written consent
of Air.
1.6. AIR SUBLICENSE AGREEMENTS. Air shall require sublicensees of
the Software to execute a written agreement that is (i) not inconsistent with
this Agreement, and (ii) includes, at a minimum, provisions that are
substantially similar to the terms of (a) the Required Provisions of the
License Agreement, (b) if applicable, the Integrator License, Distributor
License or Compilation License, and (c) if Air grants a license to modify
source code, the Source Code License Supplement. "Integrator License" means a
license to integrate the Software into other products, as more fully described
in Exhibit E; "Distributor License" means a license to further distribute the
Software, as more fully described in Exhibit E; "Compilation License" means the
right to use the source code exclusively to compile the Software into object
code, as more fully described in Exhibit E. Notwithstanding the foregoing, Air
need not replace its agreements with licensees as of the Effective Date,
provided, that all such licensees are listed on Exhibit F and all such
licensees are licensing the Software only according to the terms of Air Shrink
Wrap License Agreement attached to Exhibit F.
1.7. LIMITATION ON SOURCE CODE LICENSES GRANTED BY WSI.
Notwithstanding anything herein to the contrary, for a period of twenty four
(24) months after the Effective Date, WSI agrees not to license the Software
source code unless WSI enters into a written agreement with the licensee of the
Software source code that provides for the Licensee's agreement to be bound by
the terms of exclusivity set forth in Section 1.
1.8. WSI AUDIT RIGHTS. With respect to Air's Software license
agreements with Air's Distributors (whether the Software source code or object
code is licensed) and with respect to Air's agreements with its Source Code
Licensees and with respect to Air's agreement with a permitted assignee of this
Agreement, WSI shall have the right to one of the following options, such
option to be determined by Air: (i) have an independent third party who is
reasonably acceptable to Air audit, upon reasonable notice to Air, the Required
Provisions and the provisions of the Integrator License,
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Distributor License, Compilation License and Source Code Supplement; permitted
assignees; provided that such third party is obligated to terms of
non-disclosure protecting the confidentiality of the records and documents
reviewed and that such third party provides WSI only a summary of the results
of such audit, excluding the identity of the parties (other than Air) thereto;
or (ii) Air shall provide WSI a copy of Air's agreements with the Distributor,
Source Code Licensee, or permitted assignee, provided, that Air may redact any
confidential information in said agreements.
2. FEES.
2.1. AIR LICENSE FEES. The rights granted to Air in this Agreement
are royalty-free. Air shall be liable for all sales, use, value-added or
similar taxes payable on the Software arising from Air's license and
distribution of the Software.
2.2. ROYALTIES; AIR EXCLUSIVE FIELD.
(i) WSI DIRECT LICENSES. During the term that Air's
rights in a Market Segment are Exclusive, WSI shall pay Air three percent (3%)
of (x) all net Software license fees received by WSI from end users in respect
of that Market Segment less (y) the amounts described in Section 2.4.
(ii) DISTRIBUTOR LICENSES. During the term that Air's
rights in a Market Segment are Exclusive, WSI shall pay Air three percent (3%)
of (x) all net Software license fees received by WSI from WSI distributors in
respect of an application in that Market Segment, less (y) the amounts
described in Section 2.4.
2.3. ROYALTIES; AIR TRAFFIC CONTROL MARKET.
(i) WSI DIRECT LICENSES. During the term that Air's Air
Traffic Control Market License is Exclusive, WSI shall pay Air ten percent
(10%) of (x) all net Software license fees received by WSI from end users in
respect of the Air Traffic Control Market, less (y) the amounts described in
Section 2.4.
(ii) DISTRIBUTOR LICENSES. During the term that Air's Air
Traffic Control Market License is Exclusive, WSI shall pay Air ten percent
(10%) of (x) all net Software license fees received by WSI from WSI's
distributors in respect of the Air Traffic Control Market, less (y) the amounts
described in Section 2.4.
2.4. ROYALTY DEDUCTIONS. WSI shall deduct from all amounts owed to
Air hereunder, all taxes, duties, sales taxes, value added taxes, and similar
taxes and duties arising from WSI's and its distributor's distribution and
license of the Software. WSI shall have the right to make reasonable allowances
and price adjustments and to accept reasonable returns from WSI's and its
distributor's licensees. In each case, WSI shall charge back to Air's account
any amounts previously paid or credited to Air with respect to such allowances,
adjustments, or returns.
2.5. SOFTWARE LICENSE FEES. WSI may determine in its sole
discretion the price offered for the Software. WSI may bundle the Software with
other products (the "Other Products") and offer the resulting product (the
"Bundled Product"). Air shall pay the royalties set forth in this Section 2
based on the proportionate value of the Software in comparison to the
proportionate value of the Other Products. The fees that WSI generally charges
for the Other Products and the Software separately shall be presumed to
represent the relative values of the unbundled products.
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2.6. PAYMENT TERMS. No later than thirty (30) days after the last
day of each calendar quarter (the "Reported Calendar Quarter"), WSI will
deliver to Air (i) a report indicating those licenses that WSI and its
distributors granted during the Reported Calendar Quarter that WSI owes a
royalty according to the terms of this Agreement together with supporting
documentation, and (ii) payment in U.S. dollars in immediately available funds
of the applicable royalty amount according to the terms of this Agreement. Upon
termination of all of Air's Exclusive licenses set forth herein, WSI shall no
longer be obligated to deliver the report described in this paragraph.
2.7. AIR AUDIT RIGHTS. Upon delivery of reasonable written notice
to WSI, Air and its representatives shall from time to time have the right to
have an independent third party reasonably acceptable to WSI audit all records
and documents that are related to the Software licenses granted by WSI and its
distributors in the Air Traffic Control Market and the Market Sections during
the time that Air has an Exclusive license in such markets and for a period
equal to the statute of limitation in Georgia pertaining to contract claims.
WSI shall grant such access to such records and documents during the times
described in the preceding sentence.
3. PROPRIETARY RIGHTS; SOFTWARE.
3.1. Air hereby acknowledges and agrees that the Software,
excluding any public domain code and third party code, is the exclusive
property of WSI subject to the rights of Air and that notwithstanding any other
provision of this Agreement, title to the Software, excluding any public domain
code and third party code, shall remain exclusively vested in WSI. Air hereby
acknowledges and agrees that WSI shall retain all right, title and interest in
and to any modifications or improvements made by WSI to the Software, and Air
shall have no right or license in or to such Derivative Works.
3.2. WSI hereby acknowledges and agrees that Air shall retain all
right, title and interest in and to any modifications or improvements made by
Air to the Software, and WSI shall have no right or license in or to such
Derivative Works.
3.3. WSI reserves all rights not expressly granted herein. Except
as set forth in this Agreement, no express or implied license or right of any
kind is granted to Air regarding the Software.
3.4. Air shall take reasonable measures, at WSI's cost and expense
if such measures are outside of the ordinary course of Air's business, to
protect the ability of either WSI or Air or both, to prevent unauthorized
persons or entities from knowing, using, receiving, reproducing, marketing,
selling, distributing, transferring, translating, modifying, disassembling,
decompiling, or reverse engineering the Software or creating Derivative Works
based on the Software.
3.5. Air shall include the following notice on the Software's
splash screens, any media that contains the Software, and related
documentation:
"Portions. Copyright (C) [INSERT DATE OF FIRST PUBLICATION]-1999 by
Witness System, Inc. All rights reserved worldwide."
3.6. Air agrees to notify WSI of any infringements, unauthorized
use or possession of the Software, WSI's other Confidential Information, or of
any patents, copyrights, trade secrets, or other proprietary or property rights
belonging to WSI. Air agrees to provide reasonable assistance to
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WSI, at WSI's cost and expense, in connection with any matter pertaining to
protection of WSI's patents, copyrights, trade secrets, or other proprietary or
property rights belonging to WSI.
4. CONFIDENTIALITY AND NONDISCLOSURE.
4.1. WSI'S CONFIDENTIAL INFORMATION. Air hereby acknowledges and
agrees that the Software source code, excluding any public domain code and
third party code, together with all information, material and data contained
therein, is confidential and proprietary to WSI (collectively, the "WSI
Confidential Information").
4.2. NONDISCLOSURE. Except as expressly authorized herein, Air
hereby agrees that it shall hold in strict confidence, and shall not permit the
disclosure or reproduction of the WSI Confidential Information and all
information or data contained therein, including without limitation,
proprietary computer programs, documentation, generated output, modifications
and conversions. The terms of the non-disclosure obligations set forth in this
Section 4 shall remain in effect for as long as such WSI Confidential
Information remains a trade secret, but in any event for a period of five (5)
years after the WSI Confidential Information is disclosed to Air; except that
notwithstanding the above such terms shall not apply to information that (i) is
disclosed to Air by a third party under no obligation of confidentiality to
WSI, (ii) is or becomes generally known through no fault of Air; or (iii) is
approved for release by WSI.
4.3. RESTRICTION OF ACCESS. Air agrees to take all commercially
appropriate and necessary steps to insure that unauthorized persons shall not
have access to the Software source code Air and agrees to restrict access to,
and the display of, all materials, information and data referred to in Sections
4.1 and 4.2 above to such employees, independent contractors and sublicensees
of Air who:
(i) need to have direct access to the Software source code or a
visual display thereof to enable Air or its sublicensees to utilize the
Software source code as contemplated by this Agreement; and
(ii) have agreed in writing to treat the Software source code and
such other material, information and data which WSI treats as being
confidential or proprietary in accordance with this Section 4 and to comply
with all other provisions of this Agreement.
5. SUBLICENSE TERMINATION AND REMEDIES.
5.1. WSI may terminate a License Agreement or Source Code License
Supplement, respectively, (whether or not such agreement is with an end user or
a Distributor) upon the occurrence of either of the following events, or both,
with respect to such agreement:
(i) A Software sublicense is granted to a sublicensee that does
not comply with Section 1.6 hereof and Air or the Distributor granting such
sublicense, as the case may be, fails to correct the inconsistency within sixty
(60) days after WSI provides Air a written request to correct such
inconsistency.
(ii) A sublicensee commits a material breach of the Required
Provisions, Distributor License, Integrator License, or Compilation License or
the terms of the Source Code License Supplement and the sublicensee fails to
cure such breach within sixty (60) days after WSI provides Air written notice
of such breach. Upon termination of a sublicense, the sublicensee whose rights
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are terminated shall promptly return all copies of the Software to Air or have
an officer of the sublicensee certify in writing that all copies of the
Software in the sublicensee's possession or control have been destroyed.
5.2. If a sublicensee continues to use or distribute the Software
after such termination or if Air, its Distributor or their sublicensees breach
the terms of Section 4, then WSI will not have an adequate remedy at law;
therefore, injunctive or other equitable relief (without the necessity of
posting bond) would be appropriate to restrain such unauthorized use or
disclosure, whether threatened or actual.
6. RESPONSIBILITIES OF AIR.
6.1. Air shall be exclusively responsible for the supervision,
management and control of its use of the Software, including, but not limited
to, (i) assuming proper operating methods, (ii) establishing adequate back-up
plans, when permissible, and (iii) providing support to end users to whom it
distributes the Software.
6.2. Air acknowledges that as a part of its obligations to WSI,
that Air's agreement with its Distributors and Air's sublicensees may not (i)
impose any liabilities upon WSI, and (ii) grant any warranty of any kind to any
third party on behalf of WSI.
6.3. WSI may not (i) enter into any agreement with a third party
that imposes any liabilities on Air, or (ii) grant any warranty of any kind to
any third party on behalf of Air.
6.4. Upon WSI's request, Air shall enforce the terms of the
Required Provisions with its sublicensees, its Distributors, and its
Distributor's sublicensees. If Air decides to file a legal action against a
sublicensee, its Distributor, or its Distributor's sublicensee for a breach of
one or more of the Required Provisions, then prior to filing such action Air
shall provide WSI reasonable written notice of such action and shall provide
WSI an opportunity to join as a party to the litigation.
6.5. Air shall not be liable for any breach by any sublicensee
(including Distributors) or any third party of any provisions of this
Agreement, any sublicense agreement or otherwise; provided, however that
nothing in this paragraph shall limit the provisions of Section 6.4.
7. WARRANTY DISCLAIMER; LIMITATION OF LIABILITY.
THE SOFTWARE IS PROVIDED "AS-IS." WSI DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.
NEITHER AIR NOR WSI SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST DATA OR USE OR LOST
PROFITS, HOWEVER ARISING, EVEN IF WSI OR AIR, AS APPLICABLE, HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. WSI SHALL HAVE NO LIABILITY FOR DAMAGES
UNDER THIS AGREEMENT (WHETHER IN CONTRACT OR TORT) FOR THE SOFTWARE UNLESS SUCH
LIABILITY ARISES DIRECTLY FROM WSI'S BREACH OF THE TERMS OF SECTION 6.3 IN
WHICH CASE WSI'S LIABILITY SHALL BE LIMITED TO THE AMOUNT OF AIR'S DIRECT
DAMAGES ARISING THEREFROM. THE FOREGOING LIMITATION OF LIABILITY SHALL BE
APPLIED SEPARATE AND APART FROM ANY LIMITATION OF
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LIABILITY IN ANY OTHER AGREEMENT. AIR SHALL HAVE NO LIABILITY FOR DAMAGES UNDER
THIS AGREEMENT (WHETHER IN CONTRACT OR TORT) UNLESS SUCH LIABILITY ARISES
DIRECTLY FROM AIR'S BREACH OF THE TERMS OF SECTION 6.2 IN WHICH CASE AIR'S
LIABILITY SHALL BE LIMITED TO THE AMOUNT OF AIR'S DIRECT DAMAGES ARISING
THEREFROM. WSI SHALL HAVE NO LIABILITY FOR DAMAGES UNDER THIS AGREEMENT
(WHETHER IN CONTRACT OR TORT) UNLESS SUCH LIABILITY ARISES DIRECTLY FROM WSI'S
BREACH OF THE TERMS OF SECTION 6.3 IN WHICH CASE WSI'S LIABILITY SHALL BE
LIMITED TO THE AMOUNT OF AIR'S DIRECT DAMAGES ARISING THEREFROM.
NOTWITHSTANDING THE TERMS OF THIS PARAGRAPH, NOTHING IN THIS AGREEMENT SHALL
LIMIT WSI'S ABILITY TO RECOVER ECONOMIC DAMAGES RESULTING FROM UNAUTHORIZED USE
OF THE SOFTWARE BY AIR, ITS DISTRIBUTORS OR THEIR SUBLICENSEES SUBJECT TO THE
PROVISIONS OF SECTION 6.5; PROVIDED THAT ANY SUCH LIABILITY OF AIR SHALL NOT
EXCEED $2,500,000 IN THE AGGREGATE. NOTWITHSTANDING THE TERMS OF THIS
PARAGRAPH, NOTHING IN THIS AGREEMENT SHALL LIMIT AIR'S ABILITY TO RECOVER THE
ROYALTIES OWED UNDER THIS AGREEMENT OR OTHERWISE. THE PARTIES AGREE TO THE
ALLOCATION OF LIABILITY RISK SET FORTH IN THIS SECTION. THIS LIMITATION OF
LIABILITY IS INTENDED TO APPLY WITHOUT REGARD TO WHETHER OTHER PROVISIONS OF
THIS AGREEMENT HAVE BEEN BREACHED OR HAVE PROVEN INEFFECTIVE.
8. INDEMNIFICATION.
8.1. Air shall indemnify, defend and hold WSI and its directors,
officers, employees and agents harmless (collectively, the "WSI Indemnified
Parties"), from and against the any Adverse Consequences (as defined below)
that any of the WSI Indemnified Parties may suffer, sustain or become subject
to, arising out of a breach of Section 6.2.
8.2. WSI shall indemnify, defend and hold Air and its directors,
officers, employees and agents harmless (collectively, the "Air Indemnified
Parties"), from and against any Adverse Consequences (as defined below) that
any of the Air Indemnified Parties may suffer, sustain or become subject to,
arising out of a breach of Section 6.3.
8.3. For purposes of this Section 8, "Adverse Consequences" means
all charges, complaints, actions, suits, proceedings, hearings, investigations,
claims, demands, costs of defense, judgments, orders, decrees, stipulations,
injunctions, damages, dues, penalties, fines, costs, amounts paid in
settlement, liabilities, taxes, security interests, losses, expenses, and fees,
including without limitation all reasonable attorneys' fees and court costs.
8.4. This Section 8 does not affect the indemnification
obligations of the parties under the Asset Purchase Agreement between the
parties hereto, of even date herewith.
9. MISCELLANEOUS.
9.1. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties relating to the subject matter hereof and shall
be binding on them and on their permissible successors, heirs and assigns, and
shall inure to their respective benefits. Any amendments, or
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alternatives or supplementary provisions must be made in writing and duly
executed by an authorized representative or agent of each of the parties
hereto.
9.2. NON-WAIVER. The failure in one or more instances of a party
to insist upon performance of any of the terms, covenants or conditions of this
Agreement, or to exercise any right or privilege in this Agreement conferred,
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as thereafter waiving any
such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or
waiver had occurred.
9.3. ASSIGNMENT. This Agreement and all rights and obligations may
not be assigned in whole or in part by either party (by operation of law or
otherwise) without the prior written consent of the other, except that (i)
either party may assign its rights indivisibly in connection with a
reorganization, sale or other disposition of substantially all the assets or
voting stock of that party's business relating to the licensed software to an
acquiring person or entity, provided, that prior written notice is provided to
the non-assigning party, and (ii) nothing in this paragraph shall limit the
right to grant Software sublicenses. The acquiring person or entity must agree
in writing to comply with the assigning party's obligations under, and to be
bound by, this Agreement. This Agreement shall be binding upon, and inure to
the benefit of and be enforceable by, the parties and their respective
successors and permitted assigns.
9.4. COMPLIANCE WITH LAWS. Each of WSI and Air shall comply in all
material respects with applicable laws in the performance of its respective
obligations under this Agreement. With respect to any applicable export laws, a
party exporting or importing the Software shall be responsible for complying
with all applicable laws and regulations relating to such export or import of
the Software.
9.5. NOTICES. All communications between the parties with respect
to any of the provisions of this Agreement ("Notices") shall be in writing, and
shall be sent by personal delivery or by airmail, facsimile transmission or
other commercial means of rapid delivery, postage or costs of transmission and
delivery prepaid, to Air or WSI as set forth in the preamble of this Agreement,
until such time as either party provides the other not less than ten (10) days'
prior written notice of a change of address in accordance with these
provisions. Notices sent by facsimile transmission or by other means of rapid
delivery (means intended to be delivered to the receiving party within at least
two (2) business days of being sent) shall be deemed given on the day such
Notice was transmitted or delivered, provided that reasonable proof of
transmission or delivery is retained by the sending party. Other Notices shall
be deemed to have been given upon receipt by the other party.
9.6. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.
[SIGNATURES CONTAINED IN FOLLOWING PAGE]
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9.7. CONSTRUCTION AND APPLICABLE LAW. The parties understand and
acknowledge that they have each been represented by counsel in connection with
the preparation, execution and delivery of this Agreement. This Agreement shall
not be construed against any party for having drafted it. This Agreement shall
be governed and controlled as to validity, enforcement, interpretation, effect
and in all other respects by the internal laws of the state of Georgia.
9.8. DISPUTE RESOLUTION. The parties agree to the dispute
resolution provisions set forth in Exhibit G.
9.9. LEGAL FEES. If any dispute arising out of this Agreement is
litigated between the parties, the prevailing party shall be entitled to
recover its reasonable attorneys' fees in addition to any other relief to which
it may be entitled.
9.10. SEVERABILITY. If any provision of this Agreement shall be
found invalid or unenforceable for any reason, in whole or in part, then such
provision shall be deemed modified, restricted, or reformulated to the extent
and in the manner necessary to render the same valid and enforceable, or shall
be deemed excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by
law, as if such provision had been originally incorporated herein as so
modified, restricted, or reformulated or as if such provision had not been
originally incorporated herein, as the case may be. The parties further agree
to seek a lawful substitute for any provision found to be unlawful; provided,
that, if the parties are unable to agree upon a lawful substitute, the parties
desire and request that a court or other authority called upon to decide the
enforceability of this Agreement modify those restrictions in this Agreement
that, once modified, will result in an agreement that is enforceable to the
maximum extent permitted by the law in existence at the time of the requested
enforcement.
9.11. EXHIBITS AND RECITALS. All Exhibits attached hereto are
specifically incorporated herein by reference and the recitals set forth above
are hereby incorporated as part of this Agreement as if fully set forth herein.
WITNESS SYSTEMS, INC., a Delaware ADVANCED INTEGRATED RECORDERS,
corporation INC., a Delaware corporation
SIGNATURE: SIGNATURE:
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NAME: NAME:
----------------------------- --------------------------
TITLE: TITLE:
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