USPS Electronic Postmark License Agreement

License Agreement

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AUTHENTIDATE HOLDING CORP

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Title: USPS Electronic Postmark License Agreement
Governing Law: New York Date: 9/13/2007
Industry: Computer Hardware Sector: Technology

USPS Electronic Postmark License Agreement, Parties: authentidate holding corp

Exhibit 10.37

This USPS Electronic Postmark License Agreement (the “Agreement” or “License Agreement”) is entered into by and between Authentidate Holding Corp., a corporation organized under the laws of the State of Delaware, with an address at 300 Connell Drive, Fifth Floor, Berkeley Heights, NJ 07922 (hereinafter “Authentidate”) and the United States Postal Service, an independent establishment of the executive branch of the Government of the United States of America, 39 U.S.C. § 201, headquartered at 475 L’Enfant Plaza, S.W., Washington, DC 20260, (hereinafter referred to as “USPS” or the “Postal Service”), effective as of August 1, 2007(“Effective Date”).

Introduction

The United States Postal Service owns certain intellectual property relating to the provision of electronic content integrity and time and date stamp services. This License Agreement concerns the non-exclusive grant of rights from the Postal Service to Authentidate to utilize this intellectual property according to the terms set forth herein.

1. DEFINITIONS

1.1.

“Application Developer (Sub)license Provisions” means

1.1.1.

the (sub)licensing provisions set forth in Exhibit D to be included in any agreement Authentidate enters into with a commercial entity for the purpose of providing individuals and/or other entities with the ability to indirectly access the EPM Service via software applications and/or services;

1.1.2.

provided, however, that it is not a requirement that Authentidate execute such license agreement by physically signing a written document, but instead may be bound to it by the licensee’s action of, for example, clicking on a “click-on license”; and

1.1.3.

it is understood that Authentidate may act in the capacity of an application developer; provided that Authentidate agrees to be bound by the terms of such Application Developer (Sub)license Provisions without the need to execute an agreement.

1.2.

“Applied EPM” means an EPM that has been applied to an electronic file by an End User pursuant to use of the EPM Service.

1.3.

“Approval Process” means the process set forth in Section 6.5 below.

1.4.

“Confidential Information”

1.4.1.

means all non-public information of a Party, including without limitation, information relating to the EPM Service and its use, modification, development, methodology, strategy, equipment, specifications, engineering, licensing, sales, revenues, financial or other business information, and assessment of the EPM Service as well as any information marked “restricted” or “confidential” and,

1.4.2.

does not include information that either Party can establish (a) was in its possession before receipt from the disclosing Party; (b) is or becomes generally known to the public through no fault of the receiving Party; (c) is received in good faith by the receiving Party from a third party that is not subject to an obligation of confidentiality owed to the disclosing Party; or (d) is independently developed by the receiving Party without reference to Confidential Information received hereunder.

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[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [****], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

1.5.

“Date of Application” means the date on which an EPM is applied to an electronic file by an End User pursuant to use of the EPM Service.

1.6.

“Electronic Postmark Service” or “EPM Service” means the provision of an electronic content integrity and time and date service (as more fully described in Exhibit B attached hereto and incorporated herein), which includes the use of rights in USPS IP identified in Exhibit A, including the USPS Marks, and is offered either in a customized set-up or in a publicly-available set-up to the market.

1.7.

“End Users” means individuals or entities who are able to directly access the EPM Service as provided by Authentidate (e.g., via client-side Plug-ins); or commercial entities (including Authentidate) that provide individuals or entities indirect access to the EPM Service via other software applications and services and who are properly licensed by Authentidate according to the terms of the Application Developer (Sub)license Provisions.

1.8.

“End User (Sub)license Provisions” means the (sub)licensing provisions set forth in Exhibit F to be included in any agreement Authentidate enters into with an End User prior to an End User being given access to the EPM Service, which agreement must include terms at least as protective of USPS’ rights as provided in this Agreement, provided, however, that it is not a requirement that Authentidate execute an agreement containing these provisions by physically signing a written document, but instead may be bound to it by the licensee’s action of, for example, clicking on a “click-on license.” It is understood that Authentidate may act in the capacity of an End User; provided that Authentidate agrees to be bound by the terms of the End User (Sub)license Provisions without the need to execute an agreement.

1.9.

“USPS Intellectual Property Rights” or “USPS IP” mean USPS’ intellectual property relating to the provision of the Electronic Postmark Service, as specifically defined in Exhibit A.

1.10.

“USPS Marks” or “USPS Trademarks” mean the trademarks Electronic Postmark, USPS Electronic Postmark, and such other trademarks as are identified in Exhibit A.

1.11.

USPS Trademark Guidelines” mean the guidelines for use of the USPS Trademarks set forth in Exhibit E.

2. RIGHTS GRANTED TO AUTHENTIDATE.

2.1.

Grant: Subject to the terms set forth herein, USPS grants Authentidate, under the USPS Intellectual Property Rights, a non-exclusive, worldwide, terminable license to make, use, offer for sale, sell, provide, advertise, promote, and market the Electronic Postmark Service using the USPS Trademarks to End Users in consideration for the Fees to be paid by Authentidate

2.2.

Scope:

2.2.1.

This Agreement covers an electronic content integrity and time and date stamping service as described in Exhibit B that falls within the scope of the USPS Intellectual Property Rights and that is used, provided, advertised, promoted, marketed, distributed, or sold using the USPS Marks identified in Exhibit A.

2.2.2.

Any modifications or alterations to or any improvements or enhancements to the Electronic Postmark Service requires the advanced written approval of the USPS, which approval shall not be unreasonably withheld or delayed.

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2.2.3.

Any advertising, promotion, marketing, distribution or sale of the Electronic Postmark Service not in accordance with Sections 2.1 or 2.2 without USPS approval risks violating USPS trademark rights, risks violating other USPS Intellectual Property Rights, and constitutes a breach of this License Agreement.

2.2.4.

Use of USPS trademarks in connection with any services or products other than the EPM Services is outside the scope of this License Agreement.

2.3.

USPS Trademarks: The right to use the USPS Trademarks is limited to use only by display on packaging or promotional material and customer-interface documentation for the EPM Service and in software applications for and electronic files processed by the EPM Service, provided that each use is always in the manner already approved by the USPS pursuant to Article 6.

2.4.

Sub-license: Within the scope of the Grant stated above, Authentidate may grant sub-licenses under the USPS IP and USPS Marks, provided such sub-licenses include Application Developer (Sub)license Provisions contained in Exhibit D to allow its sublicensees to develop and/or provide applications that incorporate the EPM. Authentidate agrees to enforce the Application Developer (Sub)license Provisions in sublicenses it executes to the full extent of the law.

3. DUTIES AND OBLIGATIONS OF AUTHENTIDATE

3.1.

Authentidate will present a complete EPM Service to prospective customers. A complete EPM Service consists of, at a minimum, the hardware, software, billing systems, transactions, management reports, archiving, updates, upgrades, and all activities supporting an EPM.

3.2.

Other IP Licenses: Authentidate acknowledges its responsibility to obtain any other intellectual property rights (licenses or ownership other than those detailed in Exhibit A) that may be required to offer Electronic Postmark Services and will reimburse the Postal Service for any costs and damages the Postal Service may incur as a result of Authentidate’s failure to honor this representation.

3.3.

No Authorization & Consent: Authentidate acknowledges the U.S. Postal Service has not exercised 28 USC 1498 with respect to any Intellectual Property that may concern this Agreement or that concerns its interactions with Authentidate.

3.4.

Backup Archive and Verification System: Within six (6) months from the Effective Date or later, if agreed to in writing by Authentidate and the USPS, Authentidate shall provide USPS with a fully operating backup archive and verification system having a capacity and meeting performance standards substantially the same as Authentidate’s primary archive and verification system. Subsequent to Authentidate providing the USPS with the backup archive and verification system, during the Term Authentidate shall promptly provide to the USPS all updates and upgrades that Authentidate implements in the primary archive and verification system.

3.5.

Authentidate shall maintain and make available to the USPS, quarterly and upon request, complete contact information (name, address, telephone number, email address, etc.) for all End Users, to the extent that such detailed End User data is available to Authentidate.

3.6.

Authentidate acknowledges the Postal Service’s need to protect its public image, reputation, goodwill, operations and revenues. Therefore, Authentidate shall not knowingly offer, sell, or facilitate Electronic Postmark Services to any entity that promotes a cause or product that is likely to bring the USPS, its officers, employees, or Board of Governors into public disrepute, scandal or ridicule, or that are derogatory or detrimental to the interests of USPS, or that harm its goodwill in any manner.

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3.7.

Authentidate acknowledges full responsibility for ensuring that End Users understand the USPS’ role in providing EPM Services and agrees to include as one of the End User (Sub)license Provisions to which each End User must be bound (whether through written agreement, “click-on,” “shrink-wrap,” or the like) in order to receive or use EPM Services, in addition to the provisions set forth in Exhibit F, the following:

“The Electronic Postmark (EPM) is a service offered by <<name of the EPM Service provider->> under a non-exclusive licensing agreement with the USPS. In this licensing agreement, USPS licenses <<name of the EPM Service provider >>and its licensees the right to provide EPM Services using certain trademarks and other intellectual property owned by the USPS. As the provider of the services, <<name of the EPM Service provider>> is solely responsible for the performance of the EPM Service offered and for providing the necessary customer support. <<name of the EPM Service provider>> is also solely responsible for serving as the verifier of any EPMs applied by its customers. The USPS will serve as a backup verifier of any EPM applied by a customer of <<name of the EPM Service provider>>. The USPS backup verification service for an EPM is assured for the life of the Applied EPM, but in no event for a period greater than seven years from the original Date of Application.”

3.8.

Authentidate acknowledges that as an EPM Service provider it will be solely responsible for product development, operation of its EPM Service in accordance with best industry standards and practices, marketing and sales, customer support, integration and interoperation of its EPM Service into other systems and other matters relating to its EPM Service, in accordance with Exhibit B.

3.9.

Authentidate will meet with the Postal Service on at least an annual basis to review Authentidate’s use of this License Agreement. Such meeting may also include other authorized licensees.

3.10.

Authentidate agrees that it will extend, without additional payment or compensation to the USPS, the expiration date of all unused USPS EPMs purchased (including those purchased by, or assigned to, Authentidate and the USPS) prior to August 1, 2007, to no later than December 31, 2008. Should Authentidate fail to comply with the provisions of Section 3.4, any unused EPMs purchased by or assigned to Authentidate prior to August 1, 2007 will expire upon such failure.

4. DUTIES AND OBLIGATION OF USPS

4.1.

In the event that Authentidate, due to extraordinary events, is unable to fulfill its responsibility of providing verification services for Applied EPMs in accordance with the terms of this Agreement, the USPS will provide support as a backup verifier for the EPM Service, consistent with the representation required as one of the End User (Sub)license Provisions to customers, as set forth in Section 3.7 above.

5. FEES

5.1.

Authentidate acknowledges that the USPS requires licensed vendors of Electronic Postmark Services to pay a quarterly licensing fee to offer USPS branded Electronic Postmark Services. The fee shall be [ * * * *] per calendar quarter for [ * * * * ] Applied EPMs in each calendar quarter (“EPM Threshold”), to be paid on the first day of the first month of each calendar quarter, and [ * * * * ] for each additional Applied EPM in any given calendar quarter, to be paid by the 25 ^th day of the month immediately following the close of each calendar quarter (“Fees”). EPMs that were purchased by Authentidate, its End Users, or the Postal Service prior to the Effective Date that are applied after the

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Effective Date shall not be included within the calculation of Fees payable under this Agreement. The Fees and EPM Threshold shall be appropriately prorated for any period during which this Agreement is not effective for the entire calendar quarter.

5.2.

Should Authentidate fail to pay any amounts that become due under Section 5.1, Authentidate shall be charged interest daily at the annual rate of three percent (3%) over the current prime rate (Citibank’s or its predecessor’s rate as accurately published in the Wall Street Journal) or the maximum rate permitted by law, whichever is lower, on each unpaid amount that is not paid within thirty (30) calendar days from the first day payment becomes due. For payments made by check, the date of payment shall be the date of postmark of the envelope containing the check. For payments by electronic funds transfer, the date of payment shall be the date payment is received into the account of USPS.

5.3.

Payments for all Fees should be sent to:

USPS Licensing Programs

PO Box 7247-7087

Philadelphia, PA 19170-7087


Account Name:		USPS Licensing Programs
Routing Number:		021000089
Account Number:		40672311

5.4.

The USPS reserves the right to change the existing licensing fee structure (as described in Section 5.1 above) under the following conditions:

5.4.1.

if required by regulation or other legal action in accordance with Section 9.5. Any such change will provide for a ninety (90) day notice period, unless such change is required earlier pursuant to such regulation.

5.4.2.

if the USPS enters into an agreement with another company to participate in providing a USPS EPM. Any such change will provide for a ninety (90) day notice period; provided that any such change in the licensing fee structure shall be subject to Authentidate being offered a fee structure at least as beneficial to Authentidate as the lowest of the fee structures offered to such other companies.

5.4.3.

by mutual consent of the Parties.

5.5.

The Postal Service will not reimburse Authentidate for any refunds of any payments received by Authentidate for Electronic Postmark Services that Authentidate may chose to offer its customers.

6. INTELLECTUAL PROPERTY

6.1.

Ownership:

6.1.1.

USPS represents that it owns all right, title, and interest in the USPS Intellectual Property Rights.

6.1.2.

Nothing contained herein shall be deemed to convey any title or ownership interest therein to Authentidate. Authentidate receives only the non-exclusive rights expressly granted by this Agreement.

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6.2.

Trademark Use: Authentidate acknowledges that the USPS Trademarks are trademarks owned solely and exclusively by the USPS and agrees to use the USPS Trademarks only in the form and manner (with appropriate legends) prescribed by the USPS pursuant to the USPS Trademark Guidelines attached hereto as Exhibit E and approved by USPS. Other than as set forth in Section 6.6, Authentidate agrees not to use any other trademark or service mark in connection with any of the USPS Trademarks without prior written approval of USPS, which approval shall not be unreasonably withheld or delayed. Authentidate agrees to mark all advertising and other materials that include the USPS Trademarks with a legend indicating that the USPS Trademarks are the property of the USPS and that they are being used under license from the USPS, together with any other legends or markings that may be required by law. All use of the USPS Trademarks shall inure to the benefit of the USPS.

6.3.

Quality Control: To assure that the production, appearance, and quality of Authentidate’s services under the USPS Marks are consistent with the USPS’s reputation for high quality and with the goodwill associated with the USPS’s reputation and the USPS Marks, and to ensure the preservation of the USPS Marks and the USPS’s rights in them, Authentidate agrees to the following:

6.3.1.

EPM Services shall comply with all applicable USPS regulations, and all relevant Federal, state, and local laws, regulations, and ordinances.

6.3.2.

Authentidate will maintain technical performance, process and security standards for the EPM Service hardware and software infrastructure in accordance with USPS ISA process standards (or equivalent standards) as defined by the USPS. Such technical infrastructure will be consistent with any recurrent certification processes that may be required by the USPS.

6.4.

EPM Service branding: Authentidate agrees that any files processed using the EPM Service will include the USPS Marks which will be viewable when such file is displayed, to the extent that visual display of such file is possible. The location, selection, and appearance of the USPS Marks on such files will be subject to the USPS’ Trademark Guidelines.

6.5.

Approval Process: To ensure that the appearance of the USPS Marks is appropriate and proper and to facilitate the preservation of the Postal Service’s rights in USPS Marks, Authentidate agrees to the following:

6.5.1.

Authentidate agrees that it will not use the USPS Marks in a manner that is likely to be viewed as violent, sexually provocative, offensive, obscene, in violation of “hate crime” laws, or otherwise likely to shock or offend the community or in such a way as to bring the Postal Service, its officers, employees, or Board of Governors, or any other of its trademarks, service marks or logos into public disrepute, scandal or ridicule, or that derogates from the public image or reflects unfavorably or negatively upon them.

6.5.2.

Other than as set forth in Section 6.6, Authentidate shall not use or publicly display or distribute any material (hard copy or soft copy) displaying the USPS Marks (the “Material”) until after the Postal Service has reviewed and approved it in writing, which approval shall not be unreasonably withheld or delayed. Authentidate shall not depart from the approved Materials in any material respect without the Postal Service’s prior written approval, which approval shall not be unreasonably withheld or delayed. The Postal Service will make best efforts to inform Authentidate of its approval or disapproval in writing within ten (10) business days of any request from Authentidate. Failure to approve or disapprove within such ten (10) business day period shall always be deemed disapproval. After the ten (10) day period, Authentidate should

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immediately (if desired) resubmit its Material and/or telephone to request an explanation of the disapproval, but in no event will the lack of a response from the Postal Service ever be taken as approval.

6.5.3.

Authentidate acknowledges that any violation of this Section may result in irreparable harm to the Postal Service, and the Postal Service may be entitled to seek immediate, preliminary and permanent injunctive relief against the further violation of the Postal Service’s rights, in addition to all other remedies available to it.

6.5.4.

Authentidate shall abide by such other demands, changes, and instructions as issued from time to time as provided to Authentidate in writing by the USPS to maintain the quality of the USPS Marks.

6.6.

If Authentidate has already received explicit approval in writing from the USPS prior to the Effective Date for a specific use of a USPS Mark, then Authentidate may continue that use of that USPS Mark for at least one year from the Effective Date. After one year from the Effective Date USPS has the right to raise an objection to such use in writing and to require Authentidate to stop such use, which use shall cease no later than three months after such written objection.

6.7.

If Authentidate has already been using a USPS Mark in a specific manner—a specific context—since at least one year prior to the Effective Date without objection from the USPS, then Authentidate may continue that use of that USPS Mark for at least six months from the Effective Date. After six months from the Effective Date USPS has the right to raise an objection to such use in writing and require Authentidate to stop such use, which use shall cease no later than three months after such written objection.

7. REPORTS AND EXAMINATION OF RECORDS

7.1.

Reports:

7.1.1.

Throughout the duration of this Agreement, Authentidate shall submit to the USPS monthly usage reports, and a consolidated quarterly usage report with each quarterly payment of Fees for excess EPMs, if any, no later than the 25 ^th day of the month immediately following the close of each calendar month or quarter as applicable. This report should exclude those USPS EPMs which were purchased prior to the Effective Date of this Agreement (as set forth in Section 3.9). The usage reports are to be in the format included in Exhibit C.

7.1.2.

For the period, starting one month after the Effective Date of this Agreement and ending on December 31, 2008 Authentidate shall also file monthly usage reports for all USPS EPMs purchased prior to the Effective Date of the Agreement (as set forth in Section 3.9).

7.2.

Examination of Records:

7.2.1.

Records. “Records” includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form that relate specifically to the EPM Services and EPM use.

7.2.2.

Examination. The USPS contracting officer or any authorized representative of the Postal Service, including the Postal Service Office of the Inspector General, will have the right to examine and audit the supporting records and materials, for the purposes of evaluating:

7.2.2.1.

compliance by Authentidate with its reporting requirements; and

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7.2.2.2.

the data reported.

7.2.3.

Availability: Authentidate must maintain and make available, upon request, the records, materials, and other evidence described in this clause, for examination, audit, or reproduction, until three (3) years after final payment under this Agreement or any longer period required by statute or other clauses in this Agreement. In addition Authentidate must make available records relating to appeals under the claims and disputes clause or to litigation or the settlement of claims arising under or related to this Agreement. Such records must be made available until such appeals, litigation or claims are finally resolved.

8. TERM

This Agreement shall remain in effect for a period of three (3) years from the Effective Date (“Term”). This Agreement may be renewed for additional consecutive one (1) year terms upon written agreement of each of the Parties, where each additional term shall begin immediately following the prior term.

9. TERMINATION

9.1.

Termination for Convenience: This Agreement may be terminated by either Party for convenience, including pursuant to Section 9.5, upon one hundred twenty (120) calendar days’ prior written notice at no cost to the parties other than the obligations that are deemed to survive.

9.2.

Termination as a Result of Change of Control or Ownership. This Agreement may be terminated by the Postal Service within twenty (20) calendar days from its receipt of notification from Authentidate pursuant to Section 11. Any termination pursuant to this Section 9.2 shall be effective upon the later of (i) ten (10) business days following written notice of termination from the USPS, or (ii) a date se

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